SHALE Magazine Nov/Dec 2018

Page 40


By: Bette Grande


ake no mistake, the Bakken is a tight oil play, and a very good one. But the Bakken, especially in the core areas, is a bit gassy. The latest challenge facing operators and regulators in North Dakota is what to do about the natural gas produced as wells are brought online. The answer, much like when they first ‘cracked the code’ in the Bakken, will likely come from the cooperation and ingenuity of producers, service providers, regulators and advanced technology. Despite significant investment in gas gathering pipelines and gas processing that has already reached $13 billion and climbing, the amount of gas being produced in the Bakken has made it a challenge to meet the stateimposed flaring targets. The most recent ‘Director’s Cut’ from the North Dakota Department of Mineral Resources stated that 18.2 percent of the gas produced in North Dakota was flared, up slightly from the prior month. There is work to be done because the state’s gas capture goal increases to 88 percent on Nov. 1, 2018. The increasing gas capture requirement is forcing producers to restrict well production and defer well completions. Most agree that throttling back production is not a viable long-term solution. This is not fair to all the stakeholders involved including the private mineral owners. The industry is responding with additional gas processing plants are being planned and built. North Dakota is looking at seven new plants over the next seven years. Based on plans, there will be three new plants oin operation by the end of 2019, two more by 2020, and another two by 2025. Each of these will require new investment of at least $4.5 billion per plant, including the pipelines. This is a large investment to keep up with production in an area that is considered an oil play, not a gas play. While the associated gas from Bakken oil production is a significant challenge today, industry and regulators are committed to reducing the flaring of natural gas. There are logistical and economic challenges to capturing and processing natural gas, but the associated gas is a valuable commodity. That value has everyone in North Dakota looking outside the box for solutions. Recently, the Houston Chronicle ran a three-part article on natural gas production in the Gulf Coast and, specifically, the value of ethane. From Part Three of that story: “Nobody could have foreseen the U.S. becoming a ma-



a commitment to develop the resource prudently and economically by focusing on improvements in drilling and completion techniques and, more recently, controlling costs. The next advancement may be the underground storage of natural gas, allowing time for gas processing infrastructure to catch up, or better yet value-added petrochemical investments in North Dakota. Thinking Outside the Box The North Dakota Industrial Commission recently requested a study of the storage of natural gas in underground geological formations in North Dakota, focusing mainly on the Broom Creek Formation (Minnelusa Group). This creative solution is a twist on an idea that has been under study by the Energy & Environmental Research Center (EERC) for a few years. The EERC has been studying the feasibility of capturing and



jor exporter of plastics,” said Neil Chapman, a Senior Vice President at ExxonMobil. “It’s a byproduct of shale gas. That is what’s truly amazing about this breakthrough.” The Houston Chronicle feature focused on Texas gas production, but it also applies directly to the Bakken. While associated gas production is small compared to oil production in the Bakken, the gas, especially in the core Bakken area, is very wet, with ethane and propane being significant components. The Bakken has unique logistical disadvantages as compared to the Gulf Coast and, while significant investment is being made in gas processing infrastructure, the industry and regulators are looking for new ways to prudently manage this valuable resource. The history of the Bakken as a test site, a laboratory of technological advancements, over the past 10-plus years shows