Flaring is a problem in the US fracking industry, especially in North Dakota, but the true extent of that problem has not been fully understood until the release of a recent report which suggests as much as $1 billion of natural gas was wasted in North Dakota last year due to flaring activities.
Energy companies are more interested in the oil produced by fracking, due to the far higher price it fetches on the market compared to natural gas, so few are willing to invest in the necessary technology and infrastructure to capture the natural gas and natural gas liquids that are rise up from the ground alongside the oil.
The study was performed by Ceres, and used official data from the North Dakota Industrial Commission. They found that in May 2013 29 percent of the natural gas produced was flared, and that the amount of natural gas flared in 2012 was equivalent to adding an extra one million cars on the roads.
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Flaring natural gas in North Dakota. (Foreign Policy)
Ryan Salmon, the lead author and manager of Ceres’ oil and gas program, said that“the US is now one of the top 10 flaring countries in the world, primarily due to the rapid growth of flaring in North Dakota. Although the state's oil and gas industry is stepping up its efforts to curb flaring, the total volume of flared natural gas continues to grow. Investors are looking for producers and regulators to take more aggressive action to prevent the loss of this valuable fuel.”
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Investors and state officials in North Dakota are expected to increase pressure on developers to force them to reduce the amount of natural gas that they flare, collecting more to sell on the market. One effort suggested is to set a flaring limit of 10 percent of production, however no date has been set for when this target will be introduced. The report warns that production in North Dakota continues to expand at a similar rate, and the amount of flaring does not fall below 21 percent, then the overall amount of gas wasted will just continue to increase.
Pat Zerega, a senior director at Mercy Investment Services, explained that “the flaring of natural gas is a tremendous economic waste, and it threatens the oil and gas industry's license to operate, as well as the environment. As oil and gas developments expand into more remote regions like North Dakota, the issue of flaring will continue to be a concern for investors, the environment and the industry.”
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By. Joao Peixe of Oilprice.com
