Bakken flares enough gas to heat 0.5 million homes

(npr)

Produces enough oil to heat 10 million. That is, to anyone stupid enough to simply burn it for heat, when its monetary value as fuel is quadruple that.

The issue: natural gas being flared (burned as waste) in the new oil fields of the Bakken shale in North Dakota (USA).

The numbers: (North Dakota/2011)

		Heat content	CO2 content	Value
(i) Oil production	153 million barrels	936 PJ (9.36*1017 Joules)	64.8 million tons	$14.5 billion
(ii) Gas production	97 billion ft3	105 PJ	5.3 million tons	$384 million
(iii) Gas flaring	50 billion ft3	54 PJ	2.7 million tons	$196 million
ratio (iii)/(i)		5.7%	4.2%	1.4%

(Heat contents: 5.8 million btu per barrel crude oil, 1023 btu per ft³ natural gas. At 2011 mean prices of $94.88/barrel (WTI spot), $3.95/ft³ gas (at wellhead). CO2 intensities of 161, 117 kg/million btu respective)

(Note this 2011 data is quite obsolete. The most recent data is an annualized oil production rate of 273 million barrels, nearly twice as high. I don't have gas flaring numbers more recent than 2011).

A recent NYT article explains the (probably obvious) economics behind this:

[NYT] In North Dakota, Flames of Wasted Natural Gas Light the Prairie

The oil companies say economic reality is driving the flaring in the Bakken, the biggest oil field discovered in the United States in four decades. They argue that they cannot afford to pay for pipelines and processing plants to capture and sell the gas until they actually drill oil wells and calculate how much gas will bubble out of the oil. And reinjection of the carbon dioxide, commonly done in conventional oil fields, is more difficult and expensive in less permeable shale fields.

...

With oil prices high amid strong global demand and leases as short as five years for land in the Bakken, drillers have found it more profitable to just grab the oil and burn the gas. Building out the infrastructure to handle gas would substantially raise costs and slow development, and efforts so far to use the gas for electrical generation have had limited success because it contains components that burn too hot.

“I’ll tell you why people flare: It’s cheap,” said Troy Anderson, lead operator of a North Dakota gas-processing plant owned by Whiting Petroleum. “Pipelines are expensive: You have to maintain them. You need permits to build them. They are a pain.”

The oil expansion is growing faster than the ability to build gas pipelines.

It goes beyond natural gas. According to the WSJ, they don't even have pipelines to get the oil out -- the main product. With oil pipes under construction, they are moving crude by freight rail, at an extra cost estimated at $5-10 per barrel.

[WSJ] Riding the Dakota Oil Boom

North Dakota's output has grown in the last three years from a trickle to nearly 450,000 barrels a day—trailing only Texas, Alaska and California—and could double by the middle of the decade, according to analyst and industry projections. But pipelines in the region already are operating at capacity, and major new lines aren't expected to start going into service until 2013.

In response, companies are building rail terminals. Rail terminals can be developed quickly, giving them an advantage for now over pipelines. The North Dakota Pipeline Authority estimates a doubling in rail-terminal capacity next year alone to more than 700,000 barrels a day.

Most of the oil gets to the train depots by truck, picked up from thousands of wells scattered off dirt roads. At night, natural gas being flared from the oil wells casts an eerie glow over the vast prairie lands.

Note that, like flaring, the absence of oil pipelines has a substantial cost in energy waste. To push a ton of oil 1,000 miles by rail, about 2 gallons of diesel are burned -- about 1% of the cargo.