The picture presented is found here on the Minnesota Public Radio’s website. This picture, from space, highlights a discussion that is taking place in the oil industry and environmental community. According to the North Dakota Industrial Commission Department of Mineral Resources, over 30% of the gas produced in the state of North Dakota is flared. To put that in perspective, North Dakota has over 5000 producing oil and gas wells. I will admit, it is pretty cool driving through Western North Dakota at night and seeing the gas flares light the sky. But, it is also sad that the energy is going to waste.
Enviornmental groups point these facts out when they attempt to get local and federal regulators to slow down the industry. It’s not like the energy companies want to flare this gas! It is worth money to them! However, there is not enough gas processing capacity to handle the explosion in drilling – yet. Companies like Hess and OneOk are expanding and building huge processing plants to handle the huge amounts of gas which are produced along with the more expensive oil. Since the price of gas has tanked, it makes economic sense for these companies to go after the oil and think about the gas later. Thankfully, North Dakota has been understanding when it comes to flaring laws and allowed many extensions for E&P’s who are unable to get their gas to a processing facility economically.
Even though it is cool to see the North Dakota sky on fire at night, let’s hope the gas processing plants and gas gathering systems get built quickly in order to get the microscope off the oil industry and focus more on the job creation aspects.