As oil production drops, natural gas production climbs

Jul 23, 2012

A study of natural gas produced in the Bakken formation shows as oil production declines, natural gas production will increase.

"Traditionally with oil wells, gas production declines along with the oil decline," said North Dakota Mineral Resources director Lynn Helms. "But these Bakken wells indicate that, after they're 8 to 10 years old, the natural gas production actually starts to increase. This means we could eventually produce twice as much natural gas than we were anticipating 12, 15 years from now."

Helms said this means more infrastructure -- gas processing plants and pipelines -- will need to be built in western North Dakota.

"We're going to have to start talking to industries about building increased capacity -- gathering systems, doubling-down on processing plants," Helms said. "Right now, we're in the process of investing $3.5 billion in gas processing infrastructure. It looks like we're going to need twice that amount."

But Helms said building that infrastructure is easier said than done.

"It takes time to build the gathering infrastructure and the processing infrastructure," said Helms. "It takes time for them to raise the venture capital to build those things."

Helms also said there are issues with rights-of-way.

"It's very hard now to purchase right of way to lay a gas gathering line, in order to get that gas to market," said Helms.

The state currently flares about a third of the Bakken gas. Helms said he hopes to dramatically reduce that.