The North Dakota Industrial Commission announced that it will begin to enforce regulations that reduce flaring of natural gas produced as a byproduct at oil wells. The state is currently burning significant quantities of natural gas because of inadequate pipeline and processing infrastructure.

• Flaring is the burning of excess natural gas from wells. Flaring occurs because pipelines are not available to transport the natural gas from a producing well, typically:
  • In the period it takes to build the pipeline to reach the functioning well (usually up to three years after the well begins producing); or
  • When natural gas is a byproduct of an oil well and will never justify the cost of a gas pipeline.
• In April 2014, North Dakota burned off as much as 30% of the natural gas produced at oil wells (this figure does not include natural gas wells).
• The volume of gas burn totaled 10.3 billion cubic feet valued at $50 million at spot-market prices.
• Beginning in September 2014, oil producers must comply with production allowances at new and existing wells that limit flaring.
• In addition, North Dakota has set goals to limit flaring to 23% of all gas by 2015, 10% by 2020, and potentially 5% beyond 2020.
• Texas, which leads the United States in oil production, flares just 0.8% of the gas it produces, in part, because its more conventional wells have scale and concentration that make pipeline access less of a problem than the more dispersed fracking wells.

More Information

WSJ: http://online.wsj.com/articles/north-dakota-regulator-sets-tough-gas-flaring-rules-1404257684

This report is part of the Clean Tech & Sustainability Minute series. To view all featured Minutes, please click here.