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North Dakota oil wells drain energy and money

Dan Gorenstein Jul 4, 2014
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North Dakota oil wells drain energy and money

Dan Gorenstein Jul 4, 2014
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A defining sight in the booming oil fields of North Dakota is flames flaring from the top of wells — burning off natural gas that escapes during pumping.

Today oil wells in the state burn about a third of the natural gas that comes when fracking for oil. North Dakota officials estimate that’s like burning about $50 million dollars a month.

The problem is drillers have rushed to extract oil and ignored building pipelines to capture natural gas needed to ship to market. Basically, economist Philip Verleger says ,it’s cheaper to burn money than build pipelines.

“The economics of constructing a pipeline to every one of these large number of wells becomes prohibitive,” he says.

After getting input from industry, this week state officials said that by the fall, wells must capture 76 percent of natural gas or be forced to cut oil production.

Western Environmental Law Center Senior Policy Advisor Thomas Singer says state leaders and industry officials know the current level of flaring is unsustainable.

“They recognize that a gold rush in the Wild West where everybody goes out and starts poking holes is really a very wasteful way to develop these resources,” he says.

Singer says the test now is to see if the state enforces its own rules. 

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