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When production gallops ahead of infrastructure

July 31, 2013

Drilling intensity is one major key to success in bringing shale fields into play.  However, that very same intensity can lead to tremendous amounts of waste if and when production rushes ahead of the infrastructure to support it.  Such is the case in the Bakken shale region of North Dakota.  Drillers are producing much more gas each day than the existing infrastructure can move out of the region, so the excess gas is simply flared off.  For the last two years, as production has really come on line, Bakken companies have been flaring off around 30% – and as much as 36% in some months – of all the gas they produce (link opens a pdf file).  This amounts to an average of about $3.6 million a day or $100 million a month in potential profits being literally lit on fire, because adequate pipeline infrastructure does not exist to move it to market.

A large scale federal effort to rationalize the national pipeline infrastructure is a policy proposal that a critical mass of both Democrats and Republicans should be able to agree on.  Given the fact that it would also support the President’s Climate Action Plan, it should also be a bone he could throw to Republicans as he is apparently ready to kill Keystone XL.

flaring  bakken1

 

 

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