New ND Flaring Regs Make Statoil's Nat Gas Container System Timely

Fuel Fix ^ | July 02, 2014 | Gene Lockard

[thackney]

Statoil ASA recently announced a container system to reduce flaring in the Bakken. The company’s timing could not have been better, considering that North Dakota just approved new flaring regulations.

More restrictive regulations covering flaring on existing wells were passed by the North Dakota Industrial Commission – the state’s regulating entity for oil and gas – July 1. The goal of the commission is to reduce flaring to 26 percent by the fourth quarter of 2014, 23 percent by the first quarter of 2016, and 10 percent – with the potential of 5 percent – by the fourth quarter of 2020, according to the commission’s website.

Previously, about 30 percent of natural gas in North Dakota was flared.

Operators that do not comply with the new flaring restrictions will be subject to restrictions in oil production. Operators will be restricted to producing 200 barrels a day if they do not collect at least 60 percent of their natural gas. There will be a 90-day grace period for an operator not meeting the new rules to produce at a maximum rate before being subject to a penalty.

The new regulations on existing wells fall on the heels of more restrictive regulations covering flaring on new gas wells, which were approved and went into effect June 1. The regulations require energy companies that are filing for permits to also submit a plan to capture natural gas that is likely to be released by the new wells. No new wells will be approved without a plan, according to North Dakota state officials.

Estimates prior to the new regulations found that as much as 30 percent of natural gas found in the Bakken was flared, compared with a national average of less than 1 percent. The amount of emissions produced by flaring in the Bakken has been nearly 13 billion pounds annually, compared to about 365 billion pounds of emissions that are produced from the oil that comes from the Bakken annually, according to a December 2013 story in Forbes.

While the comparative amount of emissions from natural gas flaring in a year might not seem like much, estimates are that as much as $1 million worth of energy a day is being wasted, according to Bentek Energy in a Jan. 14 story on National Public Radio (NPR).

STATOIL'S SOLUTION TO FLARING

Statoil does not accept continual flaring as a cost of doing business, the company said. Current flaring is less than .4 percent of global gas flaring, and the company set out to reduce its level of flaring in the Bakken.

Flaring in the Bakken is a dynamic problem, Lance Langford, Statoil’s vice president of Bakken Development and Production in North America, said in a statement. New wells initially overwhelm existing pipeline infrastructure, and because wells come into production all around the formation, flaring continually moves around, Langford explained. That meant that a system to capture the gas that would have been flared needed to be mobile. Statoil sought a solution that would increase efficiency, increase production and reduce the company’s environmental footprint.

General Electric Oil & Gas Inc. (GE) is another company that recognized and was worried about the amount of flaring in the Bakken. GE believed that the technology needed for a solution existed already, according to Commodities Now, so the company began working with Statoil and Ferus Natural Gas Fuels on solving the problem.

The collaboration between the companies recently resulted in a mobile container system capable of capturing and compressing the natural gas that would otherwise have been flared. Because the container system is mobile, the captured and compressed natural gas (CNG) can be transported to other locations, where it can be utilized as a fuel. The system is therefore able to reduce emissions, with the added benefit of maximizing energy efficiency by utilizing fuel that would otherwise be wasted, according to Langford.

To take advantage of the compressed natural gas, Statoil converted its drilling fleet from diesel-powered to a bi-fuel fleet that can also run on natural gas. That allowed the company to replace 40-50 percent of the diesel used for fuel, thus reducing emissions and fuel costs, Langford said, adding that Statoil is planning to test the bi-fuel approach on its fracking fleet. In the future, the company may use the compressed natural gas for other uses, as well, including generators, truck fleets and more, the company added.

The container system is particularly useful in the Bakken, where the existing infrastructure of pipelines and processing plants is inadequate to keep up with demand. And while more pipelines and processing plants are being built, the infrastructure in the state is likely to continue lagging behind the amount of natural gas produced in the formation.

[thackney]

CNG In A Box system
http://www.ge-energy.com/solutions/CNG_in_a_Box.jsp

[Nervous Tick]

>> The company’s timing could not have been better, considering that North Dakota just approved new flaring regulations.

Do you think that’s a coincidence? ;-)

[thackney]

Statoil tackles Bakken flaring with innovation
http://www.ogj.com/articles/uogr/print/volume-2/issue-3/statoil-tackles-bakken-flaring-with-innovation.html
06/10/2014

Statoil North America Inc. is at the forefront of efforts to reduce flaring in the Bakken shale in North Dakota, pilot-testing a mobile system that converts associated gas into CNG at the wellsite.

The system, called the Last Mile Fueling Solution, uses a device the size of a standard 8 ft-by-20 ft shipping container to compress associated gas.

“We were trying to come up with a system that would allow us to go where the flaring problem is,” said Statoil Regional Manager Lance Langford. The system was the result of a collaborative effort with GE Oil & Gas Inc., and Ferus Inc.

...

CNG from Statoil’s system can be dispensed on location or loaded onto tube trailers, owned by Ferus, and trucked to Statoil operations elsewhere. “Now we can get gas to wherever our equipment is … Basically, when we get up and running full-scale, we'll be able to supply gas reliably to all of our rigs no matter where they are,” Langford told UOGR.

...

Pipeline and energy services group WBI Energy is in the early stages of planning a natural gas pipeline in the Bakken—a project that would ease the capacity constraints that contribute to flaring.

The Dakota Pipeline is slated to have an initial capacity of 400 MMcfd, expandable to 500 MMcfd. The line would extend 375 miles from western North Dakota to northwestern Minnesota. In the east, it may tie into TransCanada Corp.’s Northern Border pipeline. In the west, it may link with TransCanada Corp’s Great Lakes Gas Transmission line and ONEOK Partners LP’s Viking Gas Transmission lines, granting Bakken gas producers access to eastern Canada and the US Midwest (See figure).

- - - - - - -

http://www.ge.com/stories/last-mile-fueling-solution

[thackney]

Statoil has been talking and working on this aspect for a couple years.

http://www.statoil.com/annualreport2012/en/sustainability/casestudies/pages/shalegasandtightoil.aspx

- - - - -

And so has North Dakota. They have been pushing the issue for a long time.

[Nervous Tick]

>> They have been pushing the issue for a long time.

And while it’s fun to joke about GE/Statoil being in bed with ND state government, I’m thrilled to see they’re doing something about all that natural gas waste. I’m no greenie, but it always bothered me that they were flaring so much off for no benefit.

The technology is pretty cool, too.

I just wish someone would build fertilizer plants to mop up that cheap NG — and maybe bring fertilizer prices down from the stratosphere a bit.

[q_an_a]

YOU still da MAN!! when they put out a dictionary about people that share Information not just data, you will be in the hall of fame. THANK YOU again

[thackney]

And while it’s fun to joke about GE/Statoil being in bed with ND state government

There may be some actual truth to the timing not be just a coincidence. Not in a conspiracy or underhanded reason.

But it would make sense for North Dakota pushing the issue with talk for years, then once a company proves a technology that will meet the need, make it a requirement.

It makes far more sense than the US government way of requiring technology and performance that does not exist, like the cellulose ethanol requirement.

[X-spurt]

I’ll second that!

Keep it up Thack.

[ckilmer]

I like this kind of solution. It reduces both wastes and costs.

[thackney]

I wish I could find more about what clean-up they have to do with the gas. I found on their web site talking about separating out the natural gas liquids, but little else.

Typically, it takes a Natural Gas Processing plant to bring wellhead gas to pipeline quality for use by consumers, regardless if that consumer is residential or industrial.

[Nervous Tick]

>> It makes far more sense than the US government way of requiring technology and performance that does not exist, like the cellulose ethanol requirement.

... and so many other examples. Good point.

[ckilmer]

The article mentions that the vehicles are run on either diesel or natural gas. Are you saying that the vehicles are specially designed to take gas right out of the ground or that the article doesn’t mention that the portable CNG trucks have to take their CNG to a secondary refiner before it can be used by the drilling company vehicles.

[thackney]

Are you saying that the vehicles are specially designed to take gas right out of the ground

No.

that the portable CNG trucks have to take their CNG to a secondary refiner before it can be used

No.

They are doing some processing on site. They only briefly talk about it at the web site:

http://www.ge.com/stories/last-mile-fueling-solution

I have been trying to find more detail.

[ckilmer]

They are doing some processing on site.
...........
Yeah, we’ve seen stories about this from time to time over the last two years or so.

I think I’ve seen numbers to the effect that the oil companies flare off something like 100 million in natural gas in the bakken. If they can capture that for fuel, there’ll be some real cost savings...maybe. If the cost of the capture doesn’t exceed the cost of the fuel.

I guess we don’t know whether this is a net added expense or net reduced cost.

[thackney]

The new regulations make it an economic choice, as the other choices is not producing much oil.

From what I can tell, the Nat Gas coming out of the Bakken has little contaminants besides Natural Gas Liquids. Many Nat Gas fields have more CO2 and H2S. More info at:

http://ndpipelines.files.wordpress.com/2012/11/eerc-slides-2-27-2013-revised.pdf

[ckilmer]

The new regulations make it an economic choice,
.......
Yeah there’s that. But I wonder if the actual cost of compressing and refining the natural gas under low volume conditions produces a fuel that is cheaper than the diesel they buy off the open market for their operations.

[thackney]

if the actual cost of compressing and refining the natural gas under low volume conditions produces a fuel that is cheaper than the diesel they buy off the open market for their operations.

No one would use it otherwise.

[ckilmer]

if the actual cost of compressing and refining the natural gas under low volume conditions produces a fuel that is cheaper than the diesel they buy off the open market for their operations.

No one would use it otherwise.
................
I don’t know. The cost of regulatory fines could make it more costly to NOT to use the flared gas.

[thackney]

I’m not sure the consumer of the NatGas is the same as the owner of the oil.