Stranded Gas Flaring in North Dakota's Bakken Formation Gives Landowners Concern

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Researched by Industrial Info Resources (Sugar Land, Texas)--Millions of tons of natural gas is being flared of in the Bakken each year from an estimated 9,000-plus working well sites. By 2030, the number is expected to grow to more than 50,000 working wells. Flares dot the landscape and can be seen from space.

Even area livestock have figured out how to get into the pits to keep warm in the flat, chilly countryside. But not everyone is happy, as many landowners are complaining they are losing revenue. Landowners have filed 10 class-action lawsuits in North Dakota state district court against oil companies operating in the state's Bakken oilfield.

The lawsuits seek to force operators to comply with state law and pay royalties to mineral owners on the value of flared gas. Attorneys say that Bakken natural gas is some of the most valuable gas in the country, due to its density of natural gas liquids.

Operators find it is cheaper just to flare off and waste the gas rather than invest capital to capture. New technologies, such as biological systems similar to those used to produce biofuel, are being studied to liquefy the gas to make it easier to transport out of the play.

But natural gas has become a by-product of drilling for oil. Drillers want the crude oil, and natural gas can be basically discarded. Operators that flare natural gas are permitted to do so without paying taxes or royalties during their first year of production. And if they want to pay for the losses, they just simply drill another hole.

Estimates say that at least 70% of the natural gas is captured and sold, leaving 30% to be burned off. Other estimates show that 85% of what is coming out of the ground is crude; because so little is natural gas, the economics are not there to build expensive pipelines to get the gas to market.

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