Since 2007, oil production in North Dakota’s Bakken formation has increased 40-fold, making it the second-largest oil producing state after Texas. Driven by technological advances such as hydraulic fracturing, this oil boom brought with it another product — natural gas. Due to a lack of infrastructure for storing, transporting, and compressing the gas, nearly 30 percent of North Dakota’s natural gas is flared, or burned off. This is both economically wasteful and environmentally costly — An estimated $100 million worth of gas is flared in North Dakota each month, emitting substantial amounts of greenhouse gases into the atmosphere.
On Wednesday, the North Dakota Petroleum Council’s flaring task force, made up of hundreds of companies, pledged to address this issue and significantly reduce the amount of gas being burned. “The industry can increase natural gas capture to 85 percent within two years, 90 percent capture in six years, and could capture up to 95 percent of gas,” the Council said in a press release.
The gas being flared releases “roughly six million tons of carbon dioxide into the atmosphere every year, roughly equivalent to three medium-sized coal plants,” according to the New York Times, which also reported that “experts expect a 40 percent increase in the gas produced from the Bakken field by the end of 2015.” That means a lot of wasted energy.
Right now, just over half of the flaring occurs at wells that are unconnected to the gas gathering infrastructure. The rest occurs along pipelines at overcapacity or where compression demands can’t be met, according to a July 2013 report from CERES.
“Natural gas requires its own infrastructure to be collected and marketed, necessitating further investment,” reads the report. “In the absence of a strong regulatory framework that
prohibits flaring, companies working with a limited amount of capital (which is to say all companies) have a strong incentive to put their capital toward oil production, given its higher return relative to natural gas.”
Natural gas has a much lower relative value than oil, with the North Dakota Industrial Commission reporting that the oil to gas price ratio was 30 to 1 in 2013.
“Where would your emphasis be?” Ron Ness, president of the North Dakota Petroleum Council, told NPR. “If you’ve got a barrel of oil that’s worth $95 and you’ve got [1,000 cubic feet] of gas … that’s worth $4.25, which infrastructure would you build first?”
Ness told NPR that “$6 billion has been spent on new plants and equipment so far.”
While more money is needed to build out the infrastructure necessary to keep up with oil and gas production, one alternative would be to slow things down, put the proper regulations in place and make sure that necessary safety protocols are addressed. This would relegate the short-term incentive to capitalize the fuel behind the long-term environmental, safety and climate concerns.
An early January derailment and explosion of a train carrying crude oil across North Dakota resulted in calls for moderation to the boom.
“I think it’s a good wake up call for all of us, both local and state officials,” Robert Harms, the chairman of North Dakota’s Republican party and energy industry consultant, told Reuters, “as well as the people with the oil and gas industry and the transportation industry.”
The oil boom takes a toll on workers as well, who often travel from far away to get the well-paying jobs and work extremely long hours. According to the U.S. Department of Labor, the death rate for oil and gas extraction workers is around eight times higher than the average across other industries.
Lawsuits have also become an issue. Landowners have filed class-action lawsuits against oil and gas companies for basically burning away their royalties.
“The lawsuits seek to force operators to comply with state law and pay royalties to mineral owners on the value of flared gas,” says the North Dakota Gas Flaring Litigation website. “And by so doing create a compelling economic incentive for producers to reduce and eliminate the wasteful practice of flaring.”
Methane leaks are also a major concern when it comes to producing natural gas. Methane, which makes up most of natural gas, is a potent greenhouse gas and contributes significantly to climate change when leaked. The Environmental Protection Agency says natural gas leakage from production is around 1.5 percent, but many studies estimate higher. So reducing pipeline and storage leaks is just as important as reducing flaring, which emits carbon dioxide.