Gov. Jack Dalrymple (R) said Hess is “showing the way” in reducing flaring.
“It’s an example of what we need to see, which is more capturing of natural gas and more added value to the product,” Dalrymple said in the release.
The expansion doubles the capacity of the plant. Hess officials say it will reduce the amount of natural gas flared at Hess’ operations from about 25 percent before the plant was shut down for the expansion project to 15 to 20 percent today.
The plant is fully operational and is currently processing about 120 million standard cubic feet of gas per day (MMSCFD). Hess said it expects to process at least 250 MMSCFD once it is processing more gas from other companies. That could increase beyond 300 MMSCFD. Prior to expansion, the plant processed about 100 MMSCFD.
Hess has 640,000 net acres under lease in the Bakken. The company’s full-year 2014 production forecast for the Bakken is 80,000 to 90,000 barrels of oil.
The Bakken field, which pushed North Dakota’s oil production to 951,000 barrels a day in February, produces large amounts of gas mixed with its oil. High oil prices make it affordable to collect the oil using trucks and trains. A lack of gas pipelines — combined with prices that dipped to 10-year lows last year — means that it’s often cheaper to burn the gas than to ship it to market (EnergyWire, April 22).
North Dakota also allows producers to avoid paying royalties and production taxes on flared gas for the first year of a well’s life, when production is at its peak.
A group of landowners is suing the largest producers in the Bakken, saying flaring is cutting into royalties they’re owed. Flaring in 2012 alone produced as much carbon dioxide as 1 million cars, according to the Environmental Law and Policy Center.
Environmental groups such as the Dakota Resource Council have said the state should bar flaring completely in some areas, including around Theodore Roosevelt National Park; do away with exemptions to the rules; monitor air quality in the Bakken Shale field; and require drillers to use better technology, such as smokeless flares, to reduce emissions.