North Dakota Oil Output Cut Back To Meet Gas Capture Rules

Credit: Eric Gay/AP.
In this 22 October 2015 file photo, workers tend to oil pump jacks behind a natural gas flare near Watford City, N.D. Fearing sanctions by the state, some North Dakota oil drillers have begun cutting output to control the amount of natural gas that’s being burned off at well sites and wasted as a byproduct of crude production, industry and state officials say.

Fearing sanctions by the state, some North Dakota oil drillers have begun cutting output to control the amount of natural gas that’s being burned off at well sites and wasted as a byproduct of crude production, industry and state officials say.

Rebounding oil prices and technology advances in western North Dakota’s oil patch have goosed crude production, spurring unanticipated record levels of natural gas that comes with it, said Justin Kringstad, director of the North Dakota Pipeline Authority.

The state’s gas-gathering and -processing capability is 2.1 Bcf/D. In November, the latest figures available, the industry was right at that ceiling—with a record 2.09 Bcf/D of natural gas produced.

Pipeline capacity is adequate to move the natural gas to market, but it’s the lack of gas-gathering and -processing facilities in between that’s the problem. That forces some drillers to restrict oil output at some wells to meet gas flaring rules, said Ron Ness, president of the North Dakota Petroleum Council.

“We don’t want to be restricted by the state,” said Ness, whose group represents hundreds of companies working in North Dakota’s oil-producing region.

Ness said an industry group task force is being formed this month to pinpoint where gas-gathering and -processing infrastructure is needed most.

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