The Issue of Flaring: North Dakota's Modern Day MacGuffin

This story at PennEnergy does not cite the author, but it must have been sent in by the Bismarck Tribune. Just a hunch.

As companies continue developing the plentiful shale oil and natural gas resources in North Dakota, the state has seen a dramatic rise in the amount of gas that does not make it to market, according to the U.S. Energy Information Administration.

Over the past six years, natural gas production has nearly tripled in North dakota, reaching more than 485 million cubic feet per day, with the development of the Bakken shale formation using previously unavailable extraction methods.

Much of this production boom, however, has followed the development of oil resources in the region and the necessary infrastructure for utilizing and transporting natural gas - namely pipelines - has not grown as quickly. As a result the percentage of natural gas wasted through flares and other means of disposal has risen from around 10 percent through the first half of the last decade to more than 35 percent today, peaking above 40 percent in early 2009.

Just to keep things in perspective: a) the US is awash in natural gas; it hardly missed the natural gas from North Dakota; b) the Bakken is an oil field; not a natural gas field; the natural gas coming from the Bakken represents four (4) percent of the hydrocarbon economic values of the Bakken; and, c) natural gas is a natural by-product of oil production.

This is not rocket science.

Even if is an issue, it will be resolved over time. North Dakota does not allow operators to flare gas from a well for more than a year.

The whole issue is a red herring.

Like the Ogallala aquifer, the issue of flared natural gas is a modern day MacGuffin.

One Miracle State -- North Dakota -- Carpe Diem -- The Bakken, North Dakota, USA

Link here.

The chart above shows the "Coincident Economic Activity Indexes" for the U.S. and a sample of U.S. states (New York, Florida, California, Arizona, Minnesota, Illinois, and Wisconsin).  The coincident economic indexes are based on four variables: nonfarm payroll employment, the unemployment rate, average hours worked in manufacturing, and wages and salaries.  

When you read the comments to that post, you will understand one reason I quit taking comments; the number of inane comments was overwhelming.  

And, of course, Carpe Diem's cartoon of the day was right on target (no pun intended, when you see the cartoon). 

Week 47: November 19 -- November 25, 2011

Whiting's Pronghorn Prospect; and, here

Crude-by-rail; Louisiana sweet crude prices

New active drilling rig record: 204

Waterflooding and the Bakken

The Madison

Frac sands specs

Diesel shortage in the Bakken

New fracking company in town: Liberty Liberty Oilfield Services

Gas lift systems in the Alger oil field

1,000 vehicles per day through Belle Fourche on way to the Bakken

Number of ND "income millionaires" rises 40 percent

BEXP's 5-well pad

500,000 bopd by end of year -- guaranteed

Mike Filloon's multi-part series on the KOG acquisition of North Plains Energy

RIG in Trouble -- Rigzone

Link here.

Transocean Ltd. said it is offering 26 million shares of its common stock as the offshore oil drilling giant looks to raise funds to help refinance a recent acquisition of a Norway-based rival.

Shares were down 8.3% to $42.11 as the company said the offering represents up to 8.9% of its total issued and outstanding shares. The move casts a pall on Transocean's $1.43 billion purchase of Aker Drilling ASA at a time when the company has been dealing with disappointing quarterly earnings, a downgrade in credit ratings, and unsettled litigation related to the Deepwater Horizon oil spill.

The offering, and its dilutive effect, highlight the fact that the Aker acquisition "has now devolved from looking like a regrettable deal to a borderline catastrophic deal," said analysts with Simmons & Co. The analysts said they had previously criticized the deal as overpriced and ill-timed due to the strain it placed on the company's balance sheet.

See disclaimer at top of the sidebar at the right. This is not an investment site. Make no investment decisions based on what you read at this site. 

Big Oil Will Have Tough Time Cracking Shale Success Overseas -- Rigzone

Great article from Rigzone.com.

References to lessons learned from the Bakken throughout. Again, more proof that, although the Bakken may not be unique, it is extremely rare.