Following the release earlier this year of a report on alternative technologies for using flared natural gas, the Energy and Environmental Research Center (EERC) in North Dakota is set to launch a bi-fuel (natural gas/diesel) drilling rig power source in a demonstration project starting early next year, the center’s associate director told NGI‘s Shale Daily Thursday.
The center’s report looks at various alternatives involving the natural gas liquids (NGL)-rich associated gas in the Bakken and transformation of the gas into compressed natural gas (CNG) options for power generation, transportation and other uses. Another option regarding liquefied natural gas (LNG) has been looked at, but it has not been pursued as aggressively as in some other shale basins (see Shale Daily, Oct. 29).
“I am unaware of any LNG usage for well site power generation here in North Dakota, although bi-fuel generation seems to be growing in popularity,” said John Harju, associate research director at EERC. “I do believe there is growing interest in the potential installation of liquefaction, but I am not aware of any actual installations. It may pose the classic chicken/egg problem, [but] this could change quickly.”
CNG and power production were identified in the EERC report as “feasible applications,” noting that none of the applications assessed in the report “appear to be highly compelling from a purely economic perspective.”
EERC’s report recognizes that not all of the technological applications, albeit feasible, may be economic in the Williston Basin. Fast-growing drilling site electric power needs, for example, may make sense economically while applying CNG or LNG to transportation needs may not.
“The demand for power in the Williston Basin has grown rapidly,” EERC’s end-use technology study said. “In addition to meeting this growing demand, utilities are also faced with ensuring grid reliability. Forecasts suggest a tripling of the electric load in oil-producing areas of western North Dakota and eastern Montana.”
In transportation, the report noted cost advantages CNG currently has over gasoline, but it said the rich gas in the Bakken cannot be easily used in natural gas vehicles because of emission and engine performance concerns. In power generation the technology matches nicely “the scale and temporal nature of the associated gas resource.”
EERC’s report concludes that small-scale NGL recovery, despite being less efficient than large centralized facilities, may be what was described as an “enabling technology.”
Reiterating the record pace of growth in North Dakota’s oil and gas resources (see Shale Daily, Nov. 26), the report stressed that the flared gas is not a “low-value by-product” to oil production. In contrast, Bakken shale gas is rich in NGLs and at gas prices about 10% of the equivalent amount of oil, NGLs ethane, propane, butane and higher-carbon-number hydrocarbons support wider gathering and processing of the associated gas.
Gas and NGL conversion to chemicals and fuels was one of the three major applications the EERC report examined, along with CNG and LNG for transportation and distributed power generation in oilfields.
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