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Energy play to last generations

Nick Smith, Bismarck Tribune

The state’s top oil and gas industry regulator told Williston Basin Petroleum Conference attendees Thursday the possibilities in the region are nearly limitless if the energy play is managed properly.

Department of Mineral Resources Director Lynn Helms called the boom in western North Dakota a generations-long energy play.

“We need to think long term but act short term,” Helms said. “Our grandchildren’s grandchildren will be impacted by what we do today.”

Helms said he expects the state to come close to or reach the 1 million barrels of oil per day production mark upon the release of April numbers, which will be released in mid-June. Preliminary March figures put production at 977,051 barrels per day

With a majority of the acreage secured in the two major formations producing the lion’s share of the oil, Bakken and Three Forks formations, Helms said “we’ve got a harvest phase that’s … in full swing.”

Helms said so far it’s unclear exactly how many wells will need to be drilled and in what density on well sites to access all the oil through primary recovery.

He also discussed efforts to rein in the flaring of natural gas.

A new policy effective June 1 requires all new drilling applications to include a gas capture plan.

Related: Bakken oil fields mark billionth barrel of oil

New rules were approved by the North Dakota Industrial Commission earlier this year as the result of several months’ work by a natural gas flaring task force. The goal is to reduce flaring to 15 percent within two years and 10 percent within six.

Helms said previously companies would drill a well in western North Dakota and it would be somewhere between day 366 and day 730 that industry would begin looking at addressing flaring.

“This is no longer the paradigm in North Dakota,” Helms said.

Flaring as a percentage in the state began a downward trend in March to 33 percent. This followed months where the state equaled a record high of 36 percent. Hess Corp.’s Tioga gas plant was offline during the final stage of an expansion project until late March, which was a major reason for the spike. Beginning in April’s oil and gas numbers from the state this percentage is expected to drop to about the mid-20s.

“We’re going to spend six months learning (how) to make this process work,” Helms said.

North Dakota flaring remains in contrast as a percentage compared to the rest of the country as infrastructure catches up.

According to the U.S. Energy Department’s Energy Information Administration approximately 1 percent of all natural gas in the country is flared. Department data also says while North Dakota accounted for only 0.5 percent of all natural gas drawn from plays in the U.S. from 2008 to 2012 it has accounted for 22 percent of the nation’s flared gas.

Helms said it’ll take continued cooperation between industry and the state in order to continue development, build out infrastructure and ensure a balanced regulatory regime is in place.

 

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