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North Dakota natural gas flaring

Natural gas is flared at a well site north of Killdeer along North Dakota Highway 22 on Dec. 12.

Natural gas flaring reached record volumes in North Dakota in 2018, enough in October to heat 4.25 million average U.S. homes.

The volume flared — 527 million cubic feet per day in 2018 — could have met the natural gas needs for all of North Dakota and South Dakota, including industrial and commercial demand.

Oil operators burned off the natural gas associated with oil production due to a lack of processing plant and pipeline capacity in the state.

But while the volume of gas lost to flaring reached unprecedented numbers this year, so did the level of investment announced by the oil industry to capture gas.

Several gas processing plants and pipeline projects were announced or under construction in 2018, representing investments of more than $3 billion, said Justin Kringstad, director of the North Dakota Pipeline Authority.

“This would be the most active investment period that we’ve seen in North Dakota in order to address gas capture,” Kringstad said.

Industry leaders are hopeful North Dakota will make significant progress on gas capture in 2019.

Four major natural gas processing plants are expected to be complete next year, adding a total processing capacity of 690 million cubic feet per day — greater than the volume currently being flared.

Most projects aren’t expected to be complete until mid-2019 or the end of year, however.

“Getting through winter and getting through the first quarter, things are going to remain likely challenging from the gas capture perspective,” Kringstad said.

The state is expected to catch up on gas processing capacity by the end of 2019. But gas volumes are projected to nearly double from current levels, requiring even more long-term investments for 2020 and beyond.

Ron Ness, president of the North Dakota Petroleum Council, estimates the industry has invested a total of $18 billion for gas capture in the Bakken.

“We’re probably going to need at least another $10 billion or more in order to build the necessary infrastructure. It’s not going to all come right away,” Ness said. “Our productivity has just outpaced the expectations on gas so much.”

Meanwhile, changes are coming next year to how the Bureau of Land Management regulates flaring in North Dakota and the Fort Berthold Reservation. Under the revised Waste Prevention Rule, the BLM intends to defer to state and tribal regulation of flaring.

If an operator is determined to be flaring natural gas in violation of state or tribal regulations, a royalty payment would be owed to the federal government.

The Tribal Business Council for the Mandan, Hidatsa and Arikara Nation is developing a flaring resolution that would be adopted by the BLM.

Tribal Chairman Mark Fox said tribal leaders believe if they have more control of regulations for wells on the reservation they can improve gas capture better than the state can. In October, flaring was highest on Fort Berthold trust lands at 30 percent, while statewide flaring was 20 percent.

“If we capture, we go to market, it gets paid out,” said Fox, referring to royalties. “We protect the environment, we get royalties to our membership and to the tribe, and we use those resources to help develop and it puts us in a hopefully good working relationship with industry as well.”

North Dakota produced 2.56 billion cubic feet per day of natural gas in October, the most recent figures available. Oil production reached 1.39 million barrels per day that month, a record for the state.

By the end of 2019, Kringstad projects North Dakota will produce 2.9 billion cubic feet per day of natural gas and 1.49 million barrels of oil per day.

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(Reach Amy Dalrymple at 701-250-8267 or Amy.Dalrymple@bismarcktribune.com)

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