I missed the most recent iteration of the Department of Mineral Resources “director’s cut” report yesterday, but some of the numbers are pretty interesting. Especially in the area of natural gas.
Gas flaring has captured a lot of negative headlines for the state. Back in July of last year Reuters reported that the state was burning up $100 million a month worth of natural gas due to flaring. But, if you put North Dakota flaring into the context of the increase in the amount of gas produced, and the increase in the amount of gas captured, the problem isn’t quite as dire as some make it out to be:
What you’re looking at is a 122% increase in the amount of gas produced from 2011 to 2013, and a 135% increase in the amount of gas captured. Because gas capture is growing faster than gas production, the percentage of gas flared has actually decreased from 2011:
The year-end numbers for 2013 would be even lower if it weren’t for a major gas plant near Tioga going down for upgrades late last year. As we can see from this trend line comparing gas captured versus gas flared from July of 2010 through December of 2013, that plan going offline decreased the amount of gas captured significantly the last couple of months of last year:
The oil industry has made major strides toward capturing more of the gas produced in North Dakota, even as the amount of gas produced has skyrocketed. And the North Dakota Petroleum Council, which represents the industry, has announced an aggressive agenda to lower the percentage of gas flared to 20% within the next two years.
When people complain about flaring in North Dakota, the oil industry doesn’t often get credit for the extraordinary increase in the amount of gas captured they’ve already implemented (despite rock-bottom-low prices for gas). And, if they can execute on their flaring plan going forward, what they’re about to do to reduce flaring will be even more remarkable.