Bakken tech boomlet?


Viewed from space at night, North Dakota’s sparsely populated Northern Plains appear to harbor a mysterious mega-city. But really, the burst of lights on the prairie is natural gas burning in the state’s oil patch. Enough energy is wasted through natural gas flaring each day to heat half a million homes daily.

When oil is pumped to the surface it’s accompanied by much-less valuable natural gas. In most of the U.S., including Montana’s share of the Bakken, the majority of oil-associated natural gas gets captured and processed. But not in North Dakota, where gas processing and capture infrastructure hasn’t arrived on a large scale and about 30 percent of it is flared. While burning gas from an oil well adds carbon dioxide to the atmosphere, it’s better than venting it, which spews a more potent greenhouse gas, methane.

Flaring is not yet regulated at a national level—the EPA is giving producers until 2015 to invest in equipment that will reduce it. North Dakota’s current regulations allow for one year of flaring before a well needs to be capped or 75 percent of the gas needs to be captured. However, if companies claim that it’s not economically feasible to connect to a gas pipeline, or build one, they can get further exemptions from taxes and royalties. A bill in the North Dakota legislature is trying to discourage flaring by giving oil companies a two-year tax break if they capture natural gas as soon as an oil well becomes active.

But a tax break may not remedy the underlying reasons for why oil companies flare natural gas. You can’t immediately transport natural gas in a truck or rail car, and pipelines are slow to permit and expensive to build, especially to remote oil wells. Also, the low price of natural gas relative to oil means producers lack a strong incentive to capture it in the first place. And finally, because the Bakken shale is so permeable, well operators can’t re-inject the gas into the ground like they do in other oil fields.

“I’ll tell you why people flare: It’s cheap,” Troy Anderson, lead operator of a North Dakota gas-processing plant owned by Whiting Petroleum, told the New York Times in 2011. “Pipelines are expensive: You have to maintain them. You need permits to build them. They are a pain.”

With natural gas pipelines moving in more slowly than new Bakken oil wells, the U.S. became world’s fifth worst waster of flare gas in 2011, putting us in the company of Russia, Nigeria, Iran and Iraq. “It’s an embarrassment for North Dakota to be viewed as wasting a resource and not taking care of this problem,” said Wayde Schafer, conservation organizer for the Dacotah Chapter of the Sierra Club. “If we’re not embarrassed, we should be.”

Waiting for a pipeline may not be the only way to reduce the number of wells sending fossil energy skyward. It’s possible to capture some natural gas without mega-infrastructure, and a suite of companies with different ideas for turning waste gas into wealth are flocking to the Bakken. Here are some of their ideas:

Convert natural gas to fertilizer:

According to the energy infrastructure company Beowulf Energy, the U.S. imports 60 percent of its nitrogen fertilizer. Since natural gas is a major ingredient for synthetic fertilizer, Beowulf developed a technology that recovers natural gas liquids at the well and produces ammonia—with the added benefit of powering the site with natural gas. Beowulf plans to sell the ammonia locally, and link North Dakota’s top industry­—agriculture—with oil and gas.

Use it to generate power for the grid:

At well sites that already have power line connections, natural gas can power a generator and that sends energy back to the grid. Mark Wald, the president of Blaise Energy, said that as far as he can tell, his company is the first in the U.S. to generate third party verified “renewable” energy credits from captured natural gas, something allowed by North Dakota’s renewable energy law.

Use it to power a tiny grid:

Wald describes this as a way to provide off-the-big-grid power for an industrial site with lots of buildings and equipment, like a gas-processing site or an oil patch mancamp. An oil producer would run a gas pipe from many wells to a central processing location in the oil patch. Extra exhaust gas that’s left over after the refined gas is transported off-site would be used for power. Wald said their first microgrid is about a week away from going online.

Blaise Energy generators using natural gas to power an oil well.

Power a well site with natural gas instead of diesel:

Weld says this is possible, but tricky, because the gas must safely and reliably be the sole source of power for a multi-million dollar oil well. Still, Blaise currently has 12 such sites operating.

Convert from gas to natural gas liquids on site:

The Billings Gazette reported on Billings-based G2G Solutions, which hauls around mini-natural gas processing plants that convert natural gas to liquid at the well site and pump the liquids into 18,000-gallon tanks. Then the well owner is responsible for hauling the liquefied natural gas to a buyer, like a natural gas power plant.

If North Dakota adopts the proposed anti-waste tax incentives, it will likely benefit companies that peddle flaring-inspired innovations, according to Justin Kringstad, the director of the North Dakota Pipeline Authority. The pipeline authority assembled eight of the companies at a meeting last December, and some of them have received grants from the state.

Scattering these technologies around the Bakken won’t replace pipelines, but they are stopgaps until pipelines arrive, or they can be longer-term solutions for extremely isolated parts of the oil field, said Kringstad. While distributed gas capture isn’t the ultimate answer to flaring on a large scale, it’s good to see some innovation rising with the Bakken oil bubble.

Bakken at night image courtesy of NASA and Oil rig photo courtesy Blaise Energy.

Sarah Jane Keller is an intern at High Country News.

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