I seem to be one of the few persons commenting so far who actually lives in the region and regularly reads local reporting on issues in North Dakota (a state neighboring my state). Western North Dakota, where the Bakken Shale oil boom is occurring, is very sparsely populated and historically had minimal infrastructure. It takes TIME to build pipelines to move the natural gas brought up by oil drilling operations to natural gas customers. Pipeline proposals are currently in regulatory review. There isn't even pipeline infrastructure in place yet for all of the petroleum production in North Dakota--much of the oil produced there is brought to broader markets in tanker trucks, and the truck traffic volumes are putting a lot of stress on highway roadbeds until the highways can be upgraded.
Right now there is a boom economy in western North Dakota, with extremely high wages, low unemployment, a shortage of single women,
and established businesses in the region importing workers from as far away as Illinois just to keep up normal operations as workers quit to join oil field crews. There hasn't been time to build infrastructure yet to move away the natural gas to markets that will pay for the gas--especially because the price of natural gas all over the United States has crashed because of the huge increase in production in the last few years. But given time, yes, there will be infrastructure in place to transport Bakken Shale gas to other markets, and I'm sure that we here in Minnesota will be as glad to have North Dakotan natural gas to supplement our nuclear-powered energy grid as we already are to have North Dakotan petroleum brought in by truck. Once more pipelines are built, the entire United States energy economy will become more flexible.
Still to be figured out is the economics of converting natural gas deliquefaction terminals (those cost BILLIONS of dollars and years to build or convert) along the Gulf Coast into liquefaction terminals, so that the United States can get into the business of exporting liquified natural gas. It could happen. North Africa and the Arabian Peninsula used to flare off all of their natural gas incidentally brought up during petroleum production--there was no local market for it. It took a long time to develop natural gas liquefaction; now there is international trade in natural gas that was undreamed of when I was growing up.
The amount of gas being flared in North Dakota is about 150 million cubic feet per day [0], worth (at $3.95/thousand cubic feet, at the wellhead [1]) $220 million per year.
The amount of oil being sold is 728,000 barrels per day [2], at $95/barrel, worth $25.3 billion (B) per year.
For the oil producers, this flaring is a financial rounding error (<1%). I think it's credible that $200M/year of gas, distributed over hundreds of oil wells, can be unprofitable to recover.
In various metrics: the natural gas flared / oil produced is
The problem is less capturing the gas profitably as it is shipping it. Natural gas can be transported in pipes or multi-modally as liquefied natural gas (LNG). LNG liquefaction/gasification terminals, however, are , politically volatile multi-billion dollar, multi-year [1] fixed investments.
Localisation is an un-solved problem - natural gas trades at 3.48 USD/MMBtu in the U.S [2]. Japan is importing LNG at 16.49 USD/MMBtu [3] - that's nearly five times the American price.
North Dakota presently lacks the pipeline capacity to export even its crude - lorries are commissioned to truck the stuff to refineries. As mentioned, you can't truck gas. So it's a choice between (a) releasing it into the atmosphere directly, (b) flaring it into the atmosphere, or, (c) delaying American crude production until a natural gas pipeline can be constructed. B is less environmentally harmful than A. C is economically a bad decision (time value of money/resources).
The issue with that, is that here in North Dakota, we don't have the infrastructure in place to take that electricity out of state. We already have a coal plant along with a hydroelectric plant that produce more than the state needs (along with some wind towers in several places).
In September 2012 a Boston-based energy group announced that it expected to complete an 800MW natural gas power plant in Oregon within 4 years at an expected cost of $850 million [1]. Let's use this as our naïve project cost paid up-front in equity. Thus, production begins at t+4 (2017).
Let's use uvdiv's estimate [2] of $220 million of natural gas being flared each year. Let's create a paramater, capture, for the fraction of the flared gas one is able to burn in the plant. I have no idea how to estimate this; it shall be the variable we solve for. Given that from 2008 to 2011 Chesapeake Utilities Corporation (NYSE:CPK), a natural gas distributor (close enough), ran a quck-and-dirty EBITDA margin of about 40% [3] we'll assume our annual cash flows from the operation be around $220 million * capture * 40%.
The State of North Dakota believes the Bakken wells "will take 15-20 years to develop" [4]. Some guy on the internet (in the Oil & Gas Journal) thinks the fields could sustain for 30 years [5]. Thus, we are going to assume a constant quantity of natural gas gets flared each year from now until 2045. Actually, it's worse than that, since we're assuming a constant $220 million of natural gas being flared (you hedged natural gas prices for the next thirty years with IKB Deutsche Industribank).
Chesapeake Utilities pays about 6% YTM on its 2031 non-callable bond [6]; we're going to use that as our discount rate.
Assuming the universe explodes in 2045, i.e. ignoring the salvage value/cost of the plant after thirty years, our hypothetical natural gas power plant breaks even provided you can capture at least 85% of the flared gas.
Let's allow natural gas flaring, and thus our cash flow production, to decline by 3% annually (approximate decline in U.S. petrol production from 1980 to 2000) for 20 years from 2045 through 2065. Given that we built our model around the cost of an 800MW plant, I allowed both the cost of the plant and capture efficiency to vary; here are the results: http://imgur.com/h9yaa. I'd say plausibility is sustained.
∴ Back-of-the envelope it doesn't look like a strikingly profitable proposal, but with proper connections to the national electricity grid and some clever financing it could be a deal. Bakken & Three Forks is only half a decade old.
* The extra flaring is temporary, because gas pipeline which could/would be built isn't there [0]. The issue isn't capturing gas in general, but capturing it right away, this year. Your four-year power plant construction doesn't solve this.
North Dakota even has a shortage of oil pipelines [1]; they are shipping out oil by rail, at a $5-$10/barrel premium, rather than delay.
* The "interesting" part of the cost is the capture/distribution at the well. These wells are small and remote. There are 8,000 of them [2]. The amount of flared gas is just $25,000/year per well (naive average).
Already 70% of the associated gas is captured; presumably, the 30% that is flared is more difficult.
* If they extract shale gas on a large scale, they can build long-distance pipelines cheaply. There is no economic need to site power plants near the gas field -- this is a solution in search of a problem.
* If they extract shale gas on a large scale, the amounts would be much larger than the amount being flared: they will purposefully seek out gas pockets. What they're flaring now is gas they don't want to extract.
* There's incentive to delay shale gas projects: there's an enormous gas glut in the US, which is depressing prices. Things which could be otherwise profitable are temporarily not.
This is not proposing a shale gas project. No pipes. It's best thought of as a waste-to-product project, similar to companies who bake slag into bricks.
There is a supply of gas in search of demand. The infrastructure to move the gas does not exist and is costly to erect. The infrastructure to move electricity is easier to erect (do-able in the 4 years a plant would take to put up). The arbitrage is in converting the natural gas into electricity, which can more easily be exported. Again, no pipes.
Yes, there is good reason to delay shale gas projects. But this is not a shale gas project. The gas is an input. Low gas prices are a plus.
How would you get it from the 8 000 wells to the plant? Initially, probably by truck (they do this in Kazakhstan). Laughing? I recently worked on a deal that transported oil, by truck, from Oklahoma to the Gulf of Mexico, because there was insufficient rail or pipe capacity. The cracking spread was wide enough. The argument here is that the oil companies would be willing to part with the waste gas for a nominal fee, particularly if one could get an environmental agency on one's side. You'd be "buying" natural gas below market and selling electricity at market.
"Back-of-the envelope it doesn't look like a strikingly profitable proposal"
I think this requires more than a look at the bottom line of the gas companies. You've got to include the heath risks and quality of life from the prospective of the residents of the state.
If a gas power plant is more environmentally friendly than flared stacks (I have no idea if it is) then it would be amazing just to break even on this deal because you're profit is the health of the citizens.
Continuing this thought, the gas companies are theoretically losing $200 million a year by not doing anything. That means, if a gas plant is more environmentally friendly, they don't even have to break even on the deal. The gas companies can lose ~$200 million a year on a project like this, have the same financial outcome and still come out ahead environmentally.
Edit: My math was off. I was figuring that they were spending ~$220/year, which they are not. That means my last statement is incorrect though I still feel that losing money on a more environmentally safe solution could be worth it.
"If a gas power plant is more environmentally friendly than flared stacks (I have no idea if it is) then it would be amazing just to break even on this deal because you're profit is the health of the citizens."
If I were proposing this deal, I would approach the State of North Dakota and surrounding localities with a request for tax incentives, etc. to increase the probability of the project going through on precisely those grounds.
This is a perfect opportunity for government regulation. Tax the waste so that it becomes something more than a rounding error. Government gets a source of revenue, get the environmental benefits of increased natural gas use, and it's not like the oil companies are going to pack up and leave because of a tax, because the oil isn't going to leave with them.
Tax the waste so that it becomes something more than a rounding error.
So what exactly, an arbitrary 1,000% tax just to make it expensive, because of a subjective emotional reaction that says this particular 3% ineffeciency is pure evil, where 3% ineffeciencies elsewhere are natural and understandable engineering compromises?
The incentives are absolutely correct in my view. The "waste" here is apparently less expensive than the alternative (low-value gas pipelines). Maybe some peoples' guts say gas flares are an "evil" type of waste, whereas the human labor spent installing thousands of miles of unproductive pipelines is a "good" waste. I hope those peoples' guts aren't put in decision-making positions.
The incentives are completely screwed, because flaring off that gas represents a mere opportunity cost to the oil company, yet imposes a heavy externality on the rest of the world. The waste is only "less expensive than the alternative" because the person doing the wasting isn't the one paying the price.
So yes, absolutely: impose a carbon tax, where the person burning any fossil fuel pays a price that actually reflects the externalities of their choice. That's not arbitrary at all. If it still makes financial sense to flare rather than capture, fine. But there's no pretending that everything is all right with the existing equation.
But isn't the point that the externality is in fact not that heavy? That implies that the process is at most 97% efficient, which is actually pretty damn good (of course, there'll be other inefficiencies, but nobody's complaining about those). If the rest were burnt in internal combustion engines to move cars about, it's almost certainly < 30% efficient and very often < 20%, which implies most of the externality comes from people further down the chain.
Just to make sure we're on the same page: I'm talking about the externality of global warming, which at present is completely absent from the oil pricing system.
As a result, I'm not sure it's as simple as a straightforward efficiency calculation, because under a system where the consumer bears the currently externalised costs of burning fossil fuels, both the cost of flaring would go up, and the oil value captured by the drilling company would go down. I have no idea what a sane level for a carbon tax would be, and I'm certainly not economist enough to predict the ramifications for global fuels pricing; like I say, it may well work out that flaring remains cost-effective. But the costs of an action should be borne by the party that benefits, otherwise the incentives are, as I say, totally screwed.
I believe the implication is that the environmental impact of building natural gas pipelines criss-crossing the U.S. so we don't have to see flares in North Dakota may outweigh the marginal impact of the CO2.
It's not entirely subjective. I think the underlying reasoning is that regardless of current prices, gas and oil are non-renewable resources that should not be wasted.
That may not be entirely true: using hydrolitic disproportionate of super-critical water and heated crushed coal slurry, dropped 10000 feet down in a closed continuous feed chamber, the coal slurry will break into shorter segments and reform as hydrocarbons using the hydrogen from the super-critical water. The same process may also be applicable to bio-mass, such as plant material.
Punitive tax -> higher oil price -> shipping oil from overseas is more competitive -> more fuel used and environmental impact to get the oil from overseas
You should probably just be advocating a carbon tax since that addresses this externality in a more general way.
A carbon tax makes sense, but probably wouldn't impact this behavior explicitly, since the natural gas is being burned before it even reaches the market.
A carbon tax can apply here as well. In fact, it's probably best to make producers pay carbon tax where possible, since they will be simpler to tax (and the tax will be harder to evade for them).
It seems barely anybody is concerned by this. Sure if it's 2.6%, 97.4% will be released in some form at some point, but those 2.6% are lost with a utility/greenhouse ratio of effectively zero. That's 150 million cubic feet per day flared into heat+CO2 for naught. I don't know how this stacks up against other means of getting oil.
FWIW, France could economically benefit from fracking, but it has been decided at the political level to ban the practice until it can be made provably safe and sound.
So what? Since when is French Politics any indicative of good decisions? France has the tradition for like 20-30 years now to ban stuff out of "precautionary principle", meaning that they do not even consider the possibility of doing anything if there is any single risk involved, instead of thinking of how to manage the risks.
Sure if it's 2.6%, 97.4% will be released in some form at some point, but those 2.6% are lost with a utility/greenhouse ratio of effectively zero.
But the marginal utility of capturing that gas is negative: less than zero.
(By the way it's 4.2%, not 2.6%; my post has an error and I can't edit it. There's a mismatch between the gas flaring and oil production figures: one is from 2011 (NYT article), the other 2012 (WSJ). It's a large error because oil production doubled in the space of a few months).
Given their current estimates, it looks like this will keep going for at least another decade and a half. It has had a affect on attendance at some of the community colleges in the western part of the state as young folks with homes in the area get paid extremely good wages with little time to spend it.
It does have an effect on other parts of the region. Road construction projects that needs lots of trucks to haul rock / dirt take longer because most drivers are hauling oil / equipment in Western ND. Welders are getting bumps in pay to keep them from going with some welders being recruited from Canada. Many of the towns along the highways have bypasses paved to lessen the problems of so many trucks. A lot of the lights at night are trucks snaking down the highways. Traffic is Twin Cities rush hour 24x7 and no hotels are available.
The state is socking the money away and a lot of the mayors are pretty smart about how they are expanding their towns.
Food trucks are a fact of life as well as man camps and RV parks. If I had the cash I would have put up a capsule hotel in the area with a Walgreens-type place, lockboxes, and laundry.
Like anything there are problems with adding so many people and I am a little worried since this winter looks to be a cold one by local standards (-21°F to -40°F at night or -29.4°C to -40°C without windchill). It hurts a bit to have anti-fracking movies funded by Abu Dhabi Media hit the big screens[1]. It probably doesn't jive with some people's core belief that "the USA cannot be energy self sufficient".
Delta bought a refinery and is looking at getting crude from ND[2].
It takes TIME to build pipelines to move the natural gas brought up by oil drilling operations to natural gas customers.
Perhaps it would be prudent to wait for that TIME to pass before beginning extraction? If my excuse for dumping trash in a nearby river was that it takes TIME to come up with a way to dispose of it, and I could be being doing other things meanwhile, I don't think the authorities would look kindly on it.
No one is history has ever built a pipeline before doing the drilling. It cost money and you need to the drilling to justify the pipeline both economically and regulatory. Your trash analogy does not fit the situation.
If there is not proven money to support infrastructure, then it won't be built, and to prove it with oil, requires pumping. People who build the infrastructure first in some grand plan fail at a pretty high rate (see the history of the USSR and some MN small towns that thought they would be bigger).
You need to drill before you'll know where/if that pipeline will be needed. Once you have estabilished that the oil is coming from that exact spot, only then you can start pouring in money to connect that spot and not the dozens of others which are dry.
There's an old army joke - the sargeant tells the troops: "You start digging here, here, and there; while I'll go find out which direction is needed".
Interesting. I have a friend who works in the shipbuilding industry in Korea; he says that they're booked for the next few years for LNG ships. They're even experimenting with making larger ships than what currently exist. I always assumed that this was because of demand from the US. But if you're thinking of exporting gas...where is the market? Which countries want gas so badly?
I guess the usual suspects are India and China. Somehow, I expected the demand from US would dwarf that from China and India.
The market is global, LNG is a commodity like any other. Unless a producer has a particular contract it will be sold to a broker who will sell it to a consumer. All that LNG is likely being sold on the open market.
A lot of demand is transfer: due to shale extraction technology, the cost of US gas is significantly lower than the cost many consumers pay in other countries. Therefore, they can replace their current supply with US production at a lower cost (even after the relatively high cost of liquefaction and transport).
Exactly, but I don't know the exact numbers.
I'm waiting impatiently for the fracking to begin in Europe so we can say "bye bye" to the expensive Russian gas and petrolum.
This is the 'other side' of the development argument. These things take time, OR money. You have to be willing to invest one or the other. It happens all over the world. China has the same issue, not enough time to build infrastructure, so 'waste' is disposed of via undesirable methods. This triggers protest, which triggers debate, which I think is good. Probably speeds the development of infrastructure. Now in the interest of full disclosure, I've worked with Halliburton moving between Houston and DC. So I'm pretty big on infrastructure.
I'm also familiar with all sides of this argument. I'm unsure how you accomplish what we are trying to accomplish, without incurring some downsides. I think it's important to ask, in an informed manner, whether the good outweighs the bad. Everyone has to do this, America, China, Indonesia, Malaysia etc. Now you, personally, may not like the answers that the policy makers agree on. But that's how it works.
Sometimes that means that there are fires visible from space. But it also means that there will be less conflict in the MidEast region in the future. A lot of these things are connected.
The "We should do bad things, else someone else will" defence isn't really valid. It is a false dichotomy, as it assumes an 'either or' circumstance. You can not do bad things, and assist in stopping others from doing so as well.
I would suggest that what we are missing is credible
Agreed plans to minimise the downside costs
Perhaps these exist, but I would like to see seni-contractural agreements between the regulator and each frakker piblically available with defined milestones so we can be reasonably assured that the damaged being caused is going to be dealt with and done so to a piblically decent timescale
(Yes this is partly what regulators do anyway, but the important part is the transparency - cos we have no expectations regulators are independent of industry)
The oil isn't going anywhere, what's the hurry? Why not wait until the fossil energy resources can be fully captured before extracting it, especially given that once it's used up there won't be anymore.
The "obvious"[1] solution would seem to be to find a way of storing it until the transport/processing infrastructure can be implemented.
There are afaik existing schemes already using depleted gas fields as storage reservoirs[2] into which they pump the gas, for re-extraction later. Other underground gas storage such as for compressed air[3] is another possibility (although the problems of leakage/explosion/fire would be much more serious with NG).
I wonder if it wouldn't even be possible to re-inject the gas back into the wells via the water/mud/whatever pumping systems they're using to extract the oil in the first place.
[1] Disclaimer: from someone who knows very little about the practicalities of such things, per https://xkcd.com/793/
We have a 3000km+ long gas pipeline coming all the way from Bolivia to the south of Brazil, crossing a dozen mountains and rivers. How long did it take to build? Two and a half years, at a $2B "cost" (which pays for itself).
The current administration in the US is not really a friend to pipelines (see Keystone). Not to get conspiratorial, but I cannot shake the thought that Warren Buffet (a billionaire friendly to the administration) bought a railroad (BNSF) that stands to make a lot of money if no pipeline is ever constructed.
I thought that the export potential was limited because the competitive edge of American natural gas will vanish once fracking technology reaches those countries?
Where abouts do you live? I am planning on visiting Rapid City, South Dakota in a month or two and would love to have a Hacker News meetup somewhere nearby.
It might be worthwhile to just require flaring sites to have local storage and dispensing equipment for say two days worth of gas, and only when that was full could they flare it off. Nearly-free is a powerful motivator for innovation.
every day drillers in North Dakota burn off enough gas to heat half a million homes
Oh that will end well. We should definitely let them drill in the arctic.
And note how it's not reducing the cost of gas, it's massively profitable because gas prices are so high. [1]
So all those "drill baby drill" chants, well there you have it. Prices as high as ever and destroy the environment as a bonus.
Let taxpayers pay to clean it up in a decade after they've burnt out the state, simply dissolve the corporation so there is no responsibility, just like the toxic ash piles the coal industry leaves behind.
Maybe I'm the ignorant one but are you conflating gas from oil with natural gas, which actually has been driven to record low prices[1], so much so that utilities have switched from coal to natural gas at such a fast pace that it reduced our greenhouse gas emissions by a considerable amount in 2012[2]? "Prices as high as ever and destroy the environment as a bonus" may be doubly wrong.
You would be correct. Gasoline comes from Oil using a process called cracking which separates out the heavier components from the lighter ones used to fuel cars. Natural gas (not from oil) has prices that are still extremely low in North America.
It's still a tragic waste showing gluttonous consumption. If North America were to switch cars/homes over to natural gas then they would solve two problems, 1. Reduce emissions from Oil use 2. Not be so damn wasteful.
Prices of gas from oil are at all time high (except irregularities). Draw a line on that chart above to see.
Every penny gas goes up extracts millions from the economy.
Natural gas prices being so low is why they are burning it off instead of investing in the equipment to capture it - because no-one dares regulate their massive profit from oil.
It's worth noting that if they didn't burn the escaping methane, it would be a far worse greenhouse gas than the CO2 the burnt methane turns into.
In other words if you can't capture 100% of the gas (which presumably is almost never going to be possible) it's actually critical that you burn the rest.
Someone please write an algorithm that tests HN comment submissions against the transcripts of both Fox News and MSNBC. If your comment text appears in either, it doesn't get posted.
Yes I think the safe assumption is "How much gas does it take to heat half a million homes for 1 day = how much gas the oillfields burn off in one day"
Half a million homes is pretty much all of North Dakota, where heating bills in BRUTAL winters have been driven to insane lows because of the abundance of natural gas. We'd need to export it, and we don't have the infrastructure, and that's not going to be a priority until the oil infrastructure is built out which will take quite some time.
>>> Decades ago, energy companies bought "mineral rights" to the land below those farms — so the companies can move in, create drilling pads where they please, move in trucks and workers, without the farmers' consent...
Huh? Without the farmers consent? When you sell your mineral rights, you're giving consent. What usually happens is that the gas companies lease your mineral rights and in that lease agreement are provisions that give the gas company the right to drill on your property, which includes equipment, trucks, etc. If the mineral rights were actually sold and not leased, I'd suspect the contract included writing in easements on the title for access and equipment.
Since the story is painting sort of a doom and gloom scenario, my guess is that whoever owned the property "decades ago" either bought the property without the mineral rights, sold them off, or did a very long-term lease on them. When this happened, the rights probably weren't very valuable because fracking technology didn't exist. Now that the land is worth a fortune, it's a missed opportunity of the farmer. Whatever the case, the owner either initiated the action or the terms should have come up when the property was sold.
I live in a part of Ohio that is currently in the early stages of a fracking "boom". Whether or not it comes to full fruition is unknown but the industry is certainly developing. I hear lots of stories about people who missed out on fracking leases because they had leased their mineral rights previously. The old scenario used to be next to no upfront lease money, a modest royalty, and free gas if they put a well on your property. When the fracking technology became available and the shale area was suspected to be ripe with gas, the whole game changed. Leases were being written that gave in the range of $800-$5000 per acre up-front, along with longer-term royalties. These were significantly more valuable than previous leases. I've heard stories of people missing out on upwards of $1,000,000 in upfront lease money because they already had leased their property to someone else. Of course, if gas hits on that land, the up-front money pales in comparison to the long-term royalites.
If I were a farmer, I wouldn't buy land knowing that I didn't own the mineral rights to it. You're making a bet that nobody will ever come in and claim those rights, which is unrealistic. If I'm a farmer and I sell of my rights through sale or lease, I'm making a bet that the sale of the rights or the lease and subsequent royalties are worth more than the production of my farm.
I've been told that in northern New Mexico most of the mineral rights where sold off long ago, in the 20's and 50's, and sold off pretty comprehensively. Meaning there are parts of the state you just couldn't live in if you refused to live on land that no longer had its mineral rights. Also meaning those people there now where not directly compensated for them, thus have not thought of the issue. (Presumably, this is priced into the market and land values are lower, but with real estate pricing being so dynamic people probably don't consider this either)
---
It should be noted that my sources are people I vaguely knew about 10 years ago, who where whinging about oil men. So not reliable. But if true, it makes a more compelling story for people complaining about oil men. Also it must be said - oil men are probably going to elicit complaints where ever they move in as their personalities, and manners, are not, as a rule, refined...
Interesting. My grandfather and five of his college friends bought into some oil rights in Western ND back in the 1950's. When he passed away, he willed the rights to his six kids (My Dad was one of them).
Nobody thought they were worth anything, but continued to hold on to them for whatever reason. Imagine the families surprise when several oil companies started calling to get permission to start taking field samples on the plots they owned.
They've continued to make good money on the plots and are now just waiting to see if the "big payout" ever comes, where an oil company would want to buy the family out of its ownership.
I mean that as a legitimate comment! The guy who owns the farm now who is getting fucked over by the oil companies having mineral rights, was actually fucked over by his grandfather when he owned the land, selling off the rights.
The only way I can see a reporter getting this totally wrong is some confusion of farmers that rent their land versus the actual owners. A lot of farmers in the region are making quite a bit of cash, but the ones who are renting the land (it happens, a couple gets too old and doesn't have children that farm) are not getting paid mineral rights. Hell, a lot of family homesteads are paying out to the kids in different places.
It should also be noted that their was an earlier non-fracking boom in the area and many of the mineral rights were leased then.
No. Mineral rights were likely sold off long ago for gas and coal, which have always been known to be out in western ND. It's the oil people haven't been able to get at until fracking.
> When you sell your mineral rights, you're giving consent. What usually happens is that the gas companies lease your mineral rights and in that lease agreement are provisions that give the gas company the right to drill on your property, which includes equipment, trucks, etc
I think it is more suspect when the new drilling technology destroys aquifers and other parts of the land.
I read a lease agreement a year or so ago and don't remember if it prohibited civil action if the water supply on the property is contaminated or destroyed. Even if it did, I'm not sure if such a clause would even hold up in court.
The people who really lose out in the whole situation are the home owners who own small parcels of land for just their homes. They are still living in a rural area, relying on well water, but aren't getting any substantial oil money. If their water supplies are contaminated, they're entirely reliant on the legal system for saving their investment in their home. At least the people with leases are probably getting enough money to move elsewhere if the water supply is damaged.
I college I worked at exxonmobil in their lease accounting department so I do know something about this. It would be highly unusual for ANY lease to have language like this, oil companies have entire departments that pay out money for damage done to surface property owners.
I know there was one guy who's prize bull would ALWAYS die from drinking saltwater from the oil well every year in April and demand $5,000 which was paid without a peep. Everyone was pretty sure that there was no bull, but it wasn't worth fighting for $5,000.
Also if the lease did have language prohibiting civil action state mineral laws would make that a contract term that is void, except Louisiana you can never be sure about law there.
It's funny you mention this. In 2005 they got an exemption from the Clean Water Act. Good luck proving they are the source of your contamination you have an exemption like this:
They are injecting the water 6,000 and 10,000 feet and aquifers are about 500 feet down. They had to get the exception according to current law even if they were somehow injecting directly into the earth's core. The exception was given because the water cannot get into the aquifer.
> Now that is circular reasoning. In 10 years, we'll really know how well everything holds up.
The natural gas and oil haven't got into the aquifer in all the years they have been some miles farther down. We are talking more than a mile of solid rock. It isn't circular reasoning, it is basic logic, physics, and geology.
> Except that isn't true. They only needed the exception if they didn't want to follow the rules set up by the EPA.
The EPA rules (specifically Safe Drinking Water Act) dates back to 1973. Modern fracking happened in 1998. This is two years after Clinton signed the Safe Drinking Water Act Amendments in 1996.
The EPA rules didn't take into account depth of injection, thus the reason of the exception. You might want to look at how many other activities have exceptions because the rules don't fit new situations.
> The EPA rules didn't take into account depth of injection, thus the reason of the exception.
The EPA rules are inconvenient because they don't want anyone to know the proprietary methods used for fracking, not because EPA rules prevent it. That's actually the best part. It's declared safe because the people with the vested interest to make billions of dollars say so.
> You might want to look at how many other activities have exceptions because the rules don't fit new situations.
You mean like coal waste runoff into waterways? The rules don't fit those kinds of situations on purpose.
I'm certainly not an expert, but I'm naturally suspicious when money + regulators + special concessions collide. These are two arbitrary links I found from a quick search:
"The disclosure requirements in several states allow energy companies wide latitude to claim “trade secret” status for the chemical makeup of their fracking fluids. And at least two states place unreasonable restrictions on doctors and other health officials who learn about any of these “proprietary” ingredients. "
"“While we support disclosing our ingredients, it is critical to our business that we protect our recipe,” Tara Mullee Agard, a spokeswoman for Halliburton, one of the world’s largest oil and gas service companies, told ProPublica in an email."
It's hard to model the risk from fracking, if protecting the business is more important than our health and the environment's health. I don't think we can just take their word that they are being safe.
You've got the ingredient and there are several companies who sell their own version. There are universities that do the research also.
Look, they are doing stuff several miles of stone under any aquifer extract natural gas and oil that would have seeped into the water supply if it could (much like the methane in PA). [deleted section on edit since it was supposed to go on the other thread]
Well, I can certainly imagine that there may be a difference between a mile of solid rock that's been there for millenia; and a mile of solid rock with holes drilled through it to apply fracking technology that's intentionally designed to break down barriers of solid rock.
Maybe the tech doesn't leak stuff to the aquifer - then the exemption isn't needed, since aquifier is undamaged.
Maybe the tech does leak stuff to the aquifer, say, if you do the drilling sloppily or whatever - then the exemption isn't needed, since you should pay for damages.
Look, research how fracking is done and what how it actually works. I'll start you off with the first step, they are not drilling straight down. The number and size of these new holes is pretty much a non-issue.
Gasland has a giant hoax in it. Let's talk about the iconic scene in this "documentary": the lighting of the water coming out of the pipe. It is blamed on natural gas and the scene takes place in Pennsylvania.
The problem with the scene, beyond the allegations it was faked[1], is that methane is naturally occurring in the water supply of Pennsylvania[2]. In fact, long before fracking, George Washington and Thomas Paine did a bit of of an experiment involving it[3].
Add to this the fun fact the fracking is occurring at 6,000 and 10,000 feet and aquifers are about 500 feet down. Meaning that the gas released would still have to find a way up through a lot of rock.
There are some environmental concerns with fracking, but this isn't one of them.
Sure, that might explain the PA cases (I trust the oil and gas industries self-interested "explanation" for the phenomenon even less than I trust a muckraking documentary maker's, and a plausible — to me — alternative explanation is offered in the Wikipedia link).
> Huh? Without the farmers consent? When you sell your mineral rights, you're giving consent.
Tell that to Kentuckians and Tennesseans displaced by mountain top removal coal mining. Even if your land isn't displaced directly by the mining, tailing fill, slag waste, and other effects can render your property useless.
Fracking's a different technology, but the property-rights aspects aren't dissimilar.
Interesting--what part of Ohio? We have some farm land in the Scio area, which is just getting started on the shale gas boom. We had no idea when we bought it 14 years ago what was going to happen...
I currently live in western Mahoning County. Lots of people around here either inherited or cheaply purchased large plots of current or old farmland. Some are getting very nice returns on those purchases considering some of the advance money on the leases represent several multiples of the original purchase price.
My understanding is that wells further south where your property is are already up, running, and producing. In my area, we have one or two wells running and lots of testing being done and permits being drawn.
Yes, the first well in our area (the nationally-known Buell well in the Scio area, about 2 miles from our place) has produced some of the most amazing figures for oil plus wet gas ever seen. Other early wells are also turning in highly encouraging results. But you never know if they're massaging/optimizing the reported results to encourage investors or if they're for real. We'll see...
Most mineral lease are exactly that, you get upfront cash and a percentage of the production value. If the company doesn't drill in a period of time, or if there is a nearby well the option becomes worthless. A big problem for companies right now is that they have a lot of drill it or lose it lease which has them pumping up production in a period of very low prices.
This is correct. I believe the standard contracts around here are a 10 year option to drill. If a well is built within 10 years, the option is automatically extended to some longer period of time.
Also, I'm not entirely sure exactly how the fracking laws work in regards to mineral rights, but just because your property doesn't have a well doesn't mean you're not involved in production. The horizontal fracturing generally extends well beyond property lines and the oil companies are putting multiple lots into drilling lines. So if my neighbor physically has a well on his property and is producing, I'm probably getting paid a share of that for the acreage I leased next to him.
I'd guess this is designed specifically for the "I DRINK YOUR MILKSHAKE!" thing in There Will Be Blood.
Second was an NY Times story about how the overwhelming number of single men in Williston makes, in the best case, dating difficult, and in the worst case, has caused an increased in reported sexual assaults: "An Oil Town Where Men Are Many, and Women are Hounded": http://www.nytimes.com/2013/01/16/us/16women.html
The pay at McDonald's in Williston is around $18/hour starting. Kids keep leaving for the fields, though, because if they have a skill, they can make twice as much.
It's not without problems, though. Public school teachers in Dickinson are being bunked in community housing because the rent has skyrocketed. Most people will building skills aren't building houses, either, so many of these men working the fields are living in their trucks or in temporary housing or in RVs at Walmarts.
Is this really disgusting? There's very little context given at any point during the article. My understanding is there are around 85,000,000 barrels produced per day globally. Is ND now responsible for 10% more gas being burned globally? 0.5%? It's great that it shows up at night but there's a reason they have to circle the thing. It still pales in comparison to the intensity of Chicago nearby let alone the East Coast or Bay Area.
Fracking worries me and the wild west mentality that shows up whenever there are quick riches - be it energy, internet stocks or real estate - always leads to an ugly hangover. I just think it's better to take a step back and wonder about context vs getting sucked straight to this point.
We have plenty of use for it, but nowhere to put the abundance.
Natural gas might as well be free in ND. Half a million homes is all of ND. For reference, I have a 104-year-old, drafty as hell ~2200 square foot home in Fargo, where I pay about $50/month for gas. I heat my home, my water and cook with natural gas. Our average winter temp is about 12 degrees F. I pay more for city garbage, sewage and other city services per month than I pay for gas.
The issue is how in the hell do you export it? You have to run billions of dollars of lines out, when gas is a fraction of the value as the oil. Also, the boom is a recent phenomena. This is going to take a long time before we build out the infrastructure.
Assumptions assumptions new poster. Several cities in the US get significant percentage of power from renewables thanks to the power of local politics.
Whaaat? Dude, like seriously,how dumb do you have to be that burning all of that gas just CANNOT be good for environment. And no, I'm not leftist, I don't support greenpeace(they can all go to hell), but this is just a massive waste of resources, that damages our planet for no reason other than corporate greed.
How is it that possessing mineral rights underneath land allows companies to violate land rights by putting their drilling pads on a farmer's land? And how did they buy mineral rights underneath someone's land, anyway? The farmers had to have had some say in such a sale, right?
http://en.wikipedia.org/wiki/Mineral_rights may help. In particular, selling mineral rights includes selling the right to use as much of the surface as is "reasonably necessary" to get the ore, oil, or whatever.
In most places mineral rights and land rights are separate. I may own land but if diamonds are found under it by somebody else, I have no particular right to extract them. It appears the US may be different though.
But if I start of owning both the land and the mineral rights, surely I can sell off the mineral rights and continue to "own" and farm the land? It would seem a surpising legal requirement that the land and the mineral rights always remain part of the same item.
[NB I come from somewhere with quite remarkable land ownership issues, so perhaps I'm introducing complexities where they don't exist].
Isn't that a real thing though? I thought that slant drilling from Kuwait into a disputed region in Iraq was one of the claimed causes of the Iraqi invasion of Kuwait.
The issue is primarily that mineral rights were sold years ago to acquire the natural gas and coal in the region. We always knew there was oil in Bakken (never this much, though) but couldn't extract it until fracking came along.
The problem comes from a couple of things: First, many farmers rent land. It's the renters who are pissed. Second, those land owners that sold their rights years before fracking lost out quite a bit to what mineral rights are going for now that we can frack the oil out.
It depends on where you are in western ND. Ranching is a big industry there. Much of the alfalfa and oats are grown to sustain the ranching. The "farms" as you'd more traditionally think of them are more to the central and eastern portion of the state, where wheat, soy, canola and some corn is grown. As you get toward the Red River, you'll find a lot of sugar beets, too.
How do you know? I actually don't see how even one milliwatt of it could be "wasted": Even if it arrives in the midst of the ocean, this milliwatt is still heating the water, which allows for clouds, which gives us rain, and life.
The only possibly wasted energy is the rays the Sun sends to the nil, and maybe artificial satellites could grad a piece of it.
That gas is already being fed through pipes to the burn stacks. The cost of doing something with it is a lot less than trying to capture the terawatts of solar falling on the planet.
Is that the same one that shows someone burning gas coming of their faucet, which was debunked a long time ago as a result of poor well construction (or was it ground contamination).
It was both; unless the well goes down to the same depth as the fracking level (unlikely as no water percolates down to those depths), and as upward migration of fracking media would require moving against gravity through impermeable layers of rock, the water table isn't touched by the target formation of fracking.
That, of course, doesn't negate the potential for surface contamination from spills, agricultural/industrial/mining runoff, previously unknown underground tanks, historical industrial concerns (such as smelters) to be effecting the supply on a well that was placed without a thorough (and thus expensive) search and impact assessment. In less affluent areas, the likelihood that a well was sited by a hydrologist (instead of a man with a stick) varies in inverse proportion to the likelihood that the driller is actually siting the well and acting as the hydrologist.
[EDIT: "goes up in direct proportion" changed to "varies in inverse proportion to the likelihood"; I proof-read myself terribly]
I didn't see the movie, and I'm sure it sensationalized things as movies have to do (matt damon!).
But. You're saying "oh that won't happen unless people screw up". Guess what, in the real world, people screw up all the time. Screwups should be a major part of the math when people make decisions about fracking.
"Regarding Mike Markham - In a scene from the film, Weld County landowner Mike Markham is shown with director Josh Fox igniting gas from a well water faucet in his home with a cigarette lighter, which the film attributes to natural gas exploration in the area. In 2008, The Colorado Oil & Gas Conservation Commission (COGCC) investigated a complaint made by Markham alleging that nearby natural gas operations impacted his domestic water well. A Colorado Oil and Gas Information System (COGIS) report stated that Markham’s water "appears to be biogenic in origin."
The Colorado Oil and Gas Conservation Commission uses the origin of the methane, either biogenic or thermogenic, to determine whether or not the groundwater contamination can be attributed to natural gas drilling. According to the agency, natural gas drilling does not lead to the presence of biogenic methane. The 2008 COGIS report concluded that "there [were] no indications of oil & gas related impacts to [Markham's] water well." Markham’s water well was drilled through four different coal beds containing biogenic methane gas."
I for one am not sick about this at all as others here are. Cutting our energy dependence by 20% and unemployment under 1% when the nation is at 8%. There are trade offs in life, and this is a good one. I'm sure they are working on the infrastructure needed to capture the gas, but its not like that can be done in a day. Give it time.
In a decade the jobs will be gone, the energy will be gone, and you're left with large areas of f* up land, pollution and health issues. It's not worth it in the long term.
i wonder how this relates to the numbers behind the peak oil predictions?
but, i agree completely that simply burning off excess is amazingly shortsighted and stupid. they could use the natural gas to power their own operations, right there. or just the AC for the workers. have their fleet of vehicles run on it.
it's the same with refineries, driving by you always see the large torches blazing. why not use this energy for something?
I'm talking about the flares you see at oil refineries, not drilling sites. Those are pressure relief valves and are essential safety equipment.
The flares you see on a day-to-day basis are just pilot flames which are always kept lit in the event a flare is required during an emergency such as an over-pressurization.
The pressure relief values are essential, what happens after that point is a separate issue. The advantage of Flares is there simple, cheap, can quickly deal with a lot of gas, and render the gas inert. Holding tanks on the other hand need a lot of piping, pumping equipment, and then some system to deal with whatever miscellaneous gas ends up in there. However, if C02 start being taxed expect to see far fewer flares.
> i wonder how this relates to the numbers behind the peak oil predictions?
+880K barrels/day of production is a significant up-tick in US oil production, but I bet it will end up looking like some fluctuation around the prediction line of Hubberts model[1].
Fracking shale rock 2 km below the surface is just another step towards an EROI of 1:1. The fact that it is considered economically viable now just means that the easier oil sources are gone; not exactly a good sign.
Ugh. I'm from North Dakota. That's cattle country out there, primarily, with soy, wheat and canola as the main crops. City folk don't know their head from their ass on a farm.
Anyway.
If we're flaring off 29% of our gas, a fairly good reason is that we've got nowhere to put it and nobody wants to invest in more infrastructure at the moment because 1) Natural gas (which we've also got in abundance) is meeting needs at already low prices and 2) The oil development isn't anywhere near completely built out.
The burn-offs are probably not reliably schedulable or consistently locatable. Not all the bright spots in the infrared visualization are "ablaze" with burn-off flares.
Not consistently locatable? Do you think this is just oil fields catching fire? The burn offs are a conscious decision to burn off excess, made by the well operator. All you need to do to locate a burn off is to ask the well operator to tell you when they are burning.
And as far as scheduling: gas power isn't like wind or solar power. You don't need to schedule it. All you need to store gas is a big tank.
No, I have no reason to assume the need to burn off at any particular location at any particular time is consistently reliable (it may or may not be; I was a geographer, not a geologist). The decision to make the action may be conscious, but the timing of the implementation may be reactive to conditions either with a stochastic build-up, a pocket of gas being hit, or when the equipment is down for maintenance (the latter of which probably would be schedulable)
Even if it were schedulable and constitent in quantity, the catchment area is fairly wide and would require considerable infrastructure to gather, which the oil companies were not geared to do to begin with (they were going for petroleum, not methane). From what another local poster mentioned, there are plans in the works to capture some of that methane, but they require studies, licenses, etc. etc.
Actually the natural gas burn offs are very consistent, natural gas is a coproduct of the oil but there isn't the pipeline/infrastructure to actually do anything with it.
I had the same thought six years ago, well before Bakken was developed [http://berbs.us/x/kvlks]. The state also has massive coal reserves, a large hydroelectric dam, and vast fields of wind turbines.
If it was a good idea then, it's an even better idea now.
If one could get the gas from the flare towers to a combined cycle natural gas reactor for under 0.9 cents per cubic foot, or, about $170 per well per annum, there could be room for a small profit ($900k/year less operating costs). Note that I assumed you're paying the well owner market price for the natural gas they're presently flaring off, a conservative assumption.
Gas flared per annum (MM cubic feet) = 150 [1];
100 cubic ft gas in MWh = 0.0302 [2];
»Natural gas flared (MWh) = 45,300
Plant efficiency = 61% [3];
»Available energy (MWh) per annum = 27,633
North Dakota electricity price (kWh) = $0.0681 [4];
Value of available energy ($ million) = $1.882 [5];
»Value per cubic foot gas = $0.0125
Market price of gas ($/MMBTU) = 3.48 [6];
BTU/cubic foot natural gas = 1020 [7];
»Market cost of gas ($ million) = $0.532
Excess value of gas in fields = $1.349;
»Excess value per cubic foot gas = $0.0090
Number of wells = 8,000 [8];
Mean gas per annum per well (cubic ft.) = 18,750;
»Expected excess value per well per annum = $168.67
Prostitution, food, housing, alcohol, cigarettes, construction, car maintenance, used car sales (buy them at auction and bring them in), illegal drugs (there is probably a certain predictable dollar flow per capita anywhere in the US, varying by "class.").
Just look at everything you see around you every day and don't really see; there are probably huge pockets of under-served markets for "everything."
The operator of a coffee kiosk on the right crossroads would probably be exhausted.
Most business opportunities there are currently severely constrained by an insufficient supply of labor and housing. Fast food jobs pay $15/hr. I've heard Menard's (a Home Depot-like chain in the midwest) flys people in from Texas for a week at a time to work at their retail stores because they can't find any local help.
I live in Minot, ND, and previously worked at the Menards here in town.
Right now, they're flying people in from parts of Michigan, and I believe there are others that are being flown in from a store in Minnesota that's currently being rebuilt.
A Taco Johns here in town is starting people at $13/hr. McDonalds is at $10/hr and a $500+ hiring bonus. One of our nicer Italian restaurants in town just closed down as they couldn't find enough people to work. Kohls just built in town (the building has been done since November), but they won't open up until mid-March, as they still haven't found enough workers.
There's a lot of potential for businesses here, but the lack of workers and reasonably priced housing really hurts. The housing isn't hurting only because of the influx of oil workers. It's hurting worse since the largest city close to the oil had 1/3 of it flooded in June of 2011. Not everyone has rebuilt.
In the east, there's a ton of tech. Microsoft's second largest campus is in Fargo, and with that comes a lot of satellite companies (vendors, consultancies, etc). There's also nano tech and a ton of biotech here. UND in Grand Forks is well-regarded in the region for its aerospace program, and there are plenty of opportunities in that field. In the last 20 years or so ND has gone from largely agriculture-based to fairly well-diversified between ag, tech and natural resources.
If you're thinking of moving here, though, let me tell you that anything anyone tells you about the winter is truly unimaginable. You need to actually experience -30 degrees to understand it.
If the gas is simply being flared, wouldn't it be more profitable to bring in some large gas turbines (converted 747 engines would work) and generate power to sell to the grid and neighboring states until pipelines are ready?
If transport is likely to be a recurring problem, it seems obvious that an entrepreneur could step in and arbitrage the price gap between energy and the glut of natural gas in the region by generating power and upgrading power lines.
Even when more natural gas production goes to pipelines, those power lines could later be used to transport North Dakota's wind power.
Shouldn't it be forced to store gas for future use instead if burning it? Underground storage wouldn't be that expensive and we will probably need that gas at profitable prices in the next 20 years.
Between releasing CO2 (a by-product of the burn) and releasing methane, CO2 is consindered the lesser of the two waste gases. Underground storage would be expensive, volatile gas stored anywhere is a potential liability waiting to happen, especially in areas where there is fuel being moved about. Since the companies have extraction rights, they may also lack the legal capacity to build storage facilities.
Too costly to transport/store it, plus doing so would slow them down getting to all that Oil (and we all know Oil is king). Really governments should mandate that we convert to NG or dual systems such that we can make use of both (I.e. increase the value of natural gas and decrease the value of oil). And then governments could mandate the use of natural gas instead of wasting it.
I guess it simply takes up too much space to practically store. Liquefied gas would take up much less space, but the equipment to condense it and keep it chilled presumably costs a lot more.
Mining companies operate 24hrs a day with huge lighting rigs illuminating the pits. One of the motivating reasons for the automation work I did for Rio Tinto was that autonomous trucks can drive perfectly happily in the dark, saving a fortune in energy bills.
One of our company offices is in Detroit Lakes, MN, very close to the ND border. The fact of the matter is that this oil boom has made many, many ND farmers instant millionaires. If oils is found on their land they are receiving huge royalty checks ($500k+ per month).
It is true that mineral rights are often not included in the sale of real estate in this part of the country...but the royalty checks they receive for allowing the oil companies to drill create generational wealth.
Generally, there are set-back limits to how close to existing building they're allowed to drill, in your mineral rights lease.
We just signed one last year with 750' setback. Luckily, it looks like they're going to drill on some adjacent land.
And, as someone else points out, it doesn't really matter where the pad goes (roughly), as they're covering either 640 or 1280 acres (1 or 2 square miles) with 6-8 horizontal legs from a single well pad, at least in this area of Ohio.
Yes they'd pay for the barn, but given directional drilling technology it's almost impossible that they'd have to do that the "holes" can be angled in from sometimes as far away as a few miles. IF they HAD to do it some guy in houston with a spreadsheet would plug in the barns cost and say drill/no drill in a few minutes. Hell, they might have a APP for that.
The video shows Australia. Particularly curious to me was the abundance of light in Western Australia, given a lot of it is unpopulated (sure a bit is mining operations).
Fracking is a topic fraught with controversy, and the issues are indeed complicated.
If by fracking you're talking about that wonderful process that extracts that bountiful nectar of progress deep from within our mother earth, creating jobs, building commerce and bringing warmth into our family homes, I'm all in favour of it.
If by fracking you mean the systematic destruction of our ecosystem, and the wanton waste of our precious resources, while causing earthquakes and the toxification of the water table, then I oppose it.
Ladies and gentlemen, we must be strong, and hold our opinions close to our hearts, for the future is in our hands.
Not "doing a meme", making a point. There are arguments for fracking from both sides - unfortunately the pro side takes a very short term view, and the con side takes a long term view.
The length of politicians' terms fundamentally shape the direction policy takes, along with the fact that, whether it's conscious or not, there's the "well, I'll be dead by then" phenomenon.
It turned into if-by-whiskey as I wrote it. There's a difference between lolcats and discourse.
For this reader, whatever point you were trying to make was lost. There are arguments on both sides about everything, but there's no value in posting an if-by-prosecution on every Aaron Swartz story. To me, your original post reads as:
[generic topic statement]
[endorsement via obvious positive traits]
[condemnation via obvious negative traits]
[trite conclusion]
I fail to see how this format furthers discourse since there was nothing clever in its use; it's essentially a search and replace of whiskey terms with fracking terms. What you've said above about long and short term views and how this shapes policies introduced by politicians is what you should have written in the first place. That is interesting and encourages discussion.
No need to go on the space station or in suborbital flights: you can see them from regular commercial planes and the first time you experience it it's a bit frightening, because supposedly most people do not know what's going on.
You can see the same while flying over Russia for example.
If there are clouds you see lights at night illuminating the clouds from below and it is really impressive.
"When oil comes to the surface, it often brings natural gas with it, and according to North Dakota's Department of Mineral Resources, 29 percent of the natural gas now extracted in North Dakota isn't captured. Gas isn't as profitable as oil, and the energy companies don't always build the pipes or systems to carry it off. For a year (with extensions), North Dakota allows drillers to burn gas, just let it flare. There are now so many gas wells burning fires in the North Dakota night, the fracking fields can be seen from deep space."
Right now there is a boom economy in western North Dakota, with extremely high wages, low unemployment, a shortage of single women,
http://www.twincities.com/national/ci_22382285/north-dakota-...
and established businesses in the region importing workers from as far away as Illinois just to keep up normal operations as workers quit to join oil field crews. There hasn't been time to build infrastructure yet to move away the natural gas to markets that will pay for the gas--especially because the price of natural gas all over the United States has crashed because of the huge increase in production in the last few years. But given time, yes, there will be infrastructure in place to transport Bakken Shale gas to other markets, and I'm sure that we here in Minnesota will be as glad to have North Dakotan natural gas to supplement our nuclear-powered energy grid as we already are to have North Dakotan petroleum brought in by truck. Once more pipelines are built, the entire United States energy economy will become more flexible.
Still to be figured out is the economics of converting natural gas deliquefaction terminals (those cost BILLIONS of dollars and years to build or convert) along the Gulf Coast into liquefaction terminals, so that the United States can get into the business of exporting liquified natural gas. It could happen. North Africa and the Arabian Peninsula used to flare off all of their natural gas incidentally brought up during petroleum production--there was no local market for it. It took a long time to develop natural gas liquefaction; now there is international trade in natural gas that was undreamed of when I was growing up.