Energy Companies Seek Ways To Capture Natural Gas From North Dakota Oil Boom on

ibtimes ^ | February 26 2014 6:04 AM | By Meagan Clark

[ckilmer]

Energy Companies Seek Ways To Capture Natural Gas From North Dakota Oil Boom

By Meagan Clark

on February 26 2014 6:04 AM

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Collapsing natural gas prices were an unexpected boon for North Dakota's shale oil bonanza, easing a shortage of fracking crews that had tempered the biggest U.S. oil boom in a generation. Reuters

The oil pumped out of the Bakken Shale fields in North Dakota brings natural gas above ground too, but the state doesn’t have the infrastructure yet to store or move the gas to processors. So about 30 percent of the natural gas rising to the North Dakota prairies is burned, emitting carbon and losing the value the methane could have had if processed into ethane, butane and other liquids.

 

 

Right now, about 1 billion cubic feet of natural gas in the state is burned into the air, Gov. Jack Dalrymple said Monday at the Bloomberg Energy 2020 conference in Washington.

“Everybody feels it’s a huge waste, to say nothing of the environmental impact,” he said. “And the companies are scrambling as fast as they can to gather up this gas and hook up the pipelines they need to move it to processing plants.”

General Electric Company (NYSE:GE), Statoil (NYSE:STO) and Ferus Natural Gas Fuels say they have an answer: their “Last Mile Fueling System.” The trio is capturing the natural gas escaping Statoil’s Bakken oil wells and stripping out propane and butane from the liquids to transport it to processors. The rest of the gas is compressed on-site in GE’s “CNG in a box” system, an 8-by-20-foot fueling station, to be used for trucks and other equipment. So far, Statoil has converted 10 rigs to run on half diesel and half natural gas. The CNG system will help power those rigs.

 

“Eventually, most of the flaring will be gone,”Lance Langford, vice president of Statoil’s North American Production and Development segment, said. “I think it’s a win-win for everyone.”

The natural gas replacing some of the diesel is less expensive, and the gas burns cleaner, reducing carbon pollution. “We want to replace diesel as much as possible,” Langford said. “We know we’re going to reduce emissions at the rig, but we don’t know exactly how much yet.”

It just makes good economic sense, agreed John Westerheide, general manager of unconventional resources at GE Oil & Gas.

The primary problem for the industry is that the sheer number of wells is outrunning the infrastructure needed to transport gas, but the Last Mile project could overcome this hurdle, Stewart Wilson, vice president of commercial development at Ferus, said. “We’ve just got to build out the capacity,” he said.

The companies tested the CNG system on Monday to power hydraulic fracturing equipment. In a separate collaboration, GE and Statoil are in the “early stages” of researching how to use carbon dioxide instead of water to hydraulically fracture shale rock and retrieve crude, Westerheide said. 

[ckilmer]

fyi

[South Dakota]

Everywhere you look you see at least one flare stack and on pads with multiple wells you see one for each well. At night they are visible for great distances.
It’s funny because you can see a well flare stack and it’s 5 miles away as the crow flies but to get to it you have to drive 20 miles one way and twenty miles back because it’s on the other side of the Missouri river

[South Dakota]

Everywhere you look you see at least one flare stack and on pads with multiple wells you see one for each well. At night they are visible for great distances.
It’s funny because you can see a well flare stack and it’s 5 miles away as the crow flies but to get to it you have to drive 20 miles one way and twenty miles back because it’s on the other side of the Missouri river

[Paladin2]

Build the darn pipeline infrastructure.

[Smokin' Joe]

Actually, the amount of gas flared has been reduced over the past few years, from nearly 33% to in the high 20s.

But it is a question of infrastructure construction keeping up with drilling and completions.

Pad well setups will reduce the pipeline gathering system infrastructure needed, but processing facilities are still under construction in many areas.

For the oil companies, though, the idea of producing 1000 BOPD and burning 1000 MCF to do it is a no-brainer. The oil is worth multiples of the value of the gas, and recovering on the investment in the well in a timely fashion is the key. The gas is a byproduct, and will be captured when it can, but the oil pays the bills.

[Smokin' Joe]

It is getting done, but it is slower when the ground is frozen 6 months out of the year.

[Paladin2]

Does Williston have all the "natural" gas that it could use to combat Global Warming in the Winter?

Bismark?

Glendive?

Circle?

etc?

[Smokin' Joe]

Hey! We're doing our best to warm the planet, one flare stack at a time...

Seriously, though, the old Flying J refinery was sold to some outfit in Africa decades ago, dismantled, and hauled away. I, personally want our state to have the ability to refine our own oil, just because it would be good trading stock if things really go to crap and the US ever gets Balkanized.

That, and maybe our gasoline prices might dip a bit.

At present a topping facility is going in near Dickinson, I'm not sure who the Utility companies are buying gas from, although there are a few gas plants running in the region and have been for years (Bear Paw, over by the Mon-Dak Field, and The Hess Gas Plant in Tioga (Beaver Lodge Field) come to mind, but those were around major fields where there was major production).

The game changer for that paradigm in the Bakken/Three Forks, is that the hydrocarbons are present in economically producible concentrations through most of the subsurface extent of the formations. Which means that the wells are no longer in a specific field area within the region, but the whole region. That's why there are a host of smaller gas plants being constructed over the whole area, and also why getting pipeline infrastructure (feeder pipelines) is a problem, just because of the tremendous area involved.

[Paladin2]

The greater Billings metro area has three refineries.

No reason Bismark shouldn't have two and Williston one.

Maybe Rapid City needs one too.

[Paul R.]

From an engineering / practical side I understand this article, but from the side of a consumer hit by the gas shortage and high prices in my area, it still makes me want to choke...

[Rodamala]

Having seen all these flares in the Permian Basin... I don’t understand why they don’t have trailerable packaged gas turbines running off of the waste gas, generating power for the pump jacks in the area... or just backfeeding the grid.

[thackney]

losing the value the methane could have had if processed into ethane, butane and other liquids

That is an announcement, by the author, that he has no idea at all what he is talking about.

[bert]

The assumption is that there is carbon pollution. There is carbon emission but not pollution

[ckilmer]

I think that the idea of using the flared gas to run all the equipment plus anything else in the neighborhood is a winner.

[ckilmer]

agree.

[Smokin' Joe]

I’d love to see it, personally.

[Smokin' Joe]

It is a great idea except for one thing. The BTU yield of the gas varies with composition from well to well. Some are more methane rich, others more butane rich. For the same reason propane and natural gas burners are differently jetted, depending on which is in use, that would leave equipment underpowered or overheated. The gas needs to be processed first, and separated into component gases with a controlled range of BTU output, which gets right back to getting it to processing facilities first.

Note, it isn't the same wells flaring endlessly, just the ones which have gone on line and not been hooked into gas processing facilities yet.

As more wells are connected into feeder lines, other wells are coming on line and going on the waiting list (and flaring gas).