Oil Industry Tackles Issue of Flaring Gas - KXNet - Bismarck/Minot/Williston/Dickinson

Oil wells continue to come on line at the same pace despite a dip in the number of rigs in western North Dakota.

A sign the oil industry is doing more with less.

Except when it comes to natural gas.

The amount of gas being flared or wasted at well sites is up -- at 30%.

And Director of Mineral Resources, Lynn Helms, says that's one of his top concerns.

Donnell Preskey has the story.

Six gas plants have plans to build new or expand in the next two years.

But even with those additions along with our current gas plants, the demand will require double that capacity.

Lynn Helms is the Director of ND Mineral Resources.   "We want to get everything on the table for tax incentives and royalty incentives because this is going to be a hard problem to solve."

Gas is being flared at 1300 well sites, that natural gas is being wasted.

And Helms says the solution isn't simple...

The biggest barrier is with easements, getting permission to build pipelines.

Oil companies are allowed to flare gas for one year, exemptions are given after the year because of the slow process of getting additional gas gathering systems running.

Helms says, "Expect discussion during next leg. session. on whether 1 year exemption is too liberal when talking about an oil field of this magnitude."

However Helms says there could be consequences to stricter rules.

 "In current environment we should grant variances and allow more flaring rather than strict rules because we would negatively impact profit of Bakken well by 20%, in an environment to get a gathering system in," says Helms.

There are companies looking at non-traditional uses for natural gas.

At two well sites natural gas is being turned into electricity and put on the grid.

And next year a company will have facilities at well sites turning natural gas into anhydrous ammonia.

"Fall of 2013 when we'll be applying fertilizer made from previously flared gas," says Helms.

While the new technologies will keep more natural gas from being wasted, Helms says it will take most of this decade to get the flaring problem under control.