Methane Emissions from Two Main Sources says UT Study

alt="Methane Emissions"
alt="Methane Emissions"

A new study led by researchers from The University of Texas hopes to provide clues to better understand the correlation between well technology and methane emissions during the natural gas production process.

The findings, published December 9th in Environmental Science & Technology, indicate that the overwhelming majority of methane emissions are from two types of wells; those that use pneumatic devices and those that use liquid unloading.

According to the study, 19% of Pneumatic Devices were responsible for 95% of methane emissions and were highest in the Gulf Coast Region, which was a similar result to the first part of the study conducted in 2013. As for Liquid Unloading, 20% of these devices account for 65-85% emissions. Conversely, this finding showed emissions were highest (~50%) in the Rocky Mountain Region due to the higher number of wells that utilize Unloading.

David Allen, principal researcher and professor at Cockrell School gives some perspective on the findings by sharing that “over the past several decades, 10 percent of the cars on the road have been responsible for the majority of automotive exhaust pollution,” said Allen. “Similarly, a small group of sources within these two categories are responsible for the vast majority of pneumatic and unloading emissions at natural gas production sites.

Hopefully this study, and others like it, will provide important data to help industry leaders as they work to create solutions to the growing concern over methane emissions in the Bakken and around the country.

To view a full research summary, visit Cockrell School of Engineering.

North Dakota Breaks Records for Oil & Gas Activity - Sep. 2014

Bakken Oil Workers
Bakken Oil Workers

The State of North Dakota hit 1,184,635 b/d oil in September 2014, setting a new record, according to the Department of Mineral Resources’ (DMR) November Director's Cut. That's 50,000 more b/d than August. During the same month, North Dakota also had record monthly gas production (1,403,448 mcf/d), and reported the highest number of producing wells to date (11,741).

But this month, the state's record breaking oil and gas activity is overshadowed by falling crude oil prices. September was a relatively good month for oil at ~93.00 on average for a barrel of West Texas Intermediate (WTI), but prices have dropped nearly ~$20 in the last two months.

According to the DMR's report, released on November 14, 2014, the current rig count is down 15% in the states five most active counties:

  • Divide - down 54%
  • Dunn - down 29%
  • McKenzie - down 4%
  • Mountrail - down 24%
  • Williams- down 19%

DMR Director Lynn Helms blames the recent drop in the Bakken rig count directly on lower oil prices. The cost of drilling a Bakken well is high - anywhere between $8-million to $9-million. If the price of oil continues to fall, some producers, depending on their location in the play and a host of other factors, will scale back their Bakken drilling programs.

Read more: Bakken Study Analyzes Impact of Oil Prices on Development

Flaring Down in North Dakota Bakken

The natural gas flaring rate dropped from 27% in August to 24% in September. By comparison, the highest flared percent of natural gas was 36% in September of 2011.

New regulations have called for producers to reduce flaring to below 26%, starting with their October production figures. Helms recently pointed out that in addition to lower oil prices, flaring regulations could also impact Bakken development, because producers may face production restrictions if they fail to meet the new standards.

Beginning on June 1st, the North Dakota Industrial Commission (NDIC) began implementing its first in a series of policy changes aimed at reducing flaring in the Bakken.

Read more:NDIC Implements New Bakken Flaring Rule

Seismic Activity Up in North Dakota Bakken, But Leasing is Down

Seismic activity is up with seven surveys active or recording and five permitted. New leasing on the other hand has dropped off sharply. Most leases consist of renewals and top leases in the Bakken - Three Forks area.

NDIC Implements New Bakken Flaring Rule - June 1, 2014

North Dakota flaring
North Dakota flaring

Beginning on June 1st, the North Dakota Industrial Commission (NDIC) began implementing its first in a series of policy changes aimed at reducing flaring in the Bakken.

The NDIC's new "gas capture plan" (GCP) rule will require E&P companies to submit a document with their application for a permit to the commission specifying how they plan to capture gas produced from their drilling operations.

In May of 2014, the North Dakota Pipeline Authority (NDPA) released production data for March of 2014, indicating 33 % of natural gas was flared in the state. With the new policies implemented, the NDIC hopes to capture 85% of natural gas produced in the state in the next two years, and at least 90% by 2020.

Since the boom began, flaring has conceivably prevented the state from collecting untold amounts of money in revenue from production. North Dakotan mineral owners, whom have also felt slighted, began filing class action lawsuits against oil companies in late 2013 for royalty payments lost due to flaring. Recently, in May of 2014, a federal judge dismissed 13 of 14 lawsuits filed against oil and gas operators. These among other reasons have been the impetus for NDIC's policy changes relative to flaring.

Read more: Mineral Owners Sue Over Bakken Flaring

Under the GCP, flaring is limited to one year after first production from the well. After that time frame elapses, the well must be connected to a gas gathering line or capped. The well can also be equipped with an electrical generator, or compression or liquefaction system that consumes at least 75% of the gas.

The new regulations are based on recommendations from the North Dakota Petroleum Council (NDPC). The NDPC is a trade association that represents more than 500 companies involved in all aspects of the oil and gas industry including oil and gas production, refining, pipeline, transportation, mineral leasing, consulting, legal work, and oilfield service activities in ND, SD and the Rocky Mountain Region.


WBI Energy's Bakken Natural Gas Pipeline Enters Open Season - Dakota Pipeline

WBI Dakota Pipeline
WBI Dakota Pipeline

The open season to secure commitments for WBI Energy's natural gas "Dakota Pipeline" began on January 30th.

WBI Energy, a subsidiary of MDU Resources, announced plans to build a 400 mile natural gas pipeline at an estimated cost between $650 - 700 million dollars in June 2013. Costs for the project will remain at $650 million, but only cover 375 miles, shaving off 25 miles of pipeline.

Natural Gas Pipelines will Alleviate Bakken Flaring

It may not come as a surprise to readers on this site, but according to the North Dakota Industrial Commission (NDIC), ~30% of natural gas produced in the state is flared.

Without effective infrastructure in-place, no other economically viable choice exists for companies targeting the oil rich Bakken Shale.

The Dakota Pipeline offers another avenue to move Bakken-produced natural gas out of the area and complements our other ongoing activities to build connections to several natural gas processing facilities,” said David Goodin, CEO of MDU Resources. “The increase in natural gas pipeline capacity out of the region will provide additional transportation opportunities for new production as it comes on line, as well as more capacity for natural gas captured through industry’s efforts to reduce the flaring of this valuable resource.

WBI Expects Positive Response to Dakota Pipeline Open Season

WBI CEO, Steven Bietz, is optimistic about the "Dakota Pipeline", and indicated in a statement released by the company that there is viable interest in the marketplace.

This project provides access to markets in the Mid-Continent and Great Lakes regions... Through the open season process, we intend to secure capacity commitments for the Dakota Pipeline and begin the process for obtaining the necessary permits and regulatory approvals.

Pipeline Route and Construction

The proposed route for the natural gas pipeline will provide access to interconnections with other pipelines operated by Great Lakes Gas Transmission Limited Partnership, Viking Gas Transmission Company and possibly TransCanada Pipelines Limited. Interconnection points would be in Northwestern Minnesota.

According to the company, construction on the new pipeline could begin in 2016, with completion expected in 2017.


Mineral Owners Sue Over Bakken Flaring

Bakken Natural Gas Flaring
Bakken Natural Gas Flaring

North Dakota mineral owners have started filing class action lawsuits (10 to date) against oil and gas companies that are flaring gas produced from their property.

Roughly 30% or 300 mmcfd of the natural gas produced in North Dakota is flared.

Mineral owners, and the lawyers working for them, hope to force operators to pay them based on the market value of the flared gas. Even though I consider many estimates for losses high because they assume Henry Hub or a similar benchmark natural gas price, there are millions in lost royalties each month.

No matter how you look at it, operators will be more highly scrutinized and might have a bigger financial incentive to decrease flaring. This could be the straw that forces operators to build necessary infrastructure that will minimize flaring. Now that most acreage is held by production in the region, operators can be more deliberate in their development drilling.

One result might be that operators allocate resources in central locations that have access to necessary infrastructure.

The companies named in the suits include:

  • Continental Resources
  • ConocoPhillips
  • Crescent Point Energy
  • ExxonMobil (XTO Energy)
  • HRC Operating
  • Marathon Oil
  • Samson Resources
  • SM Energy
  • Statoil
  • WPX Energy

The industry will be forced to address this issue in the courts, but watch for operators to accelerate plans to reduce flaring on all fronts. Coincidentally, the ND Petroleum Council announced a new task force dedicated to flaring the day before the law suits became public.