Natural Gas to Power Equipment in North Dakota

By DALE WETZEL
BISMARCK, N.D.

Money from a North Dakota research fund will be used to explore whether wasted natural gas may be used to provide electricity for oil producers and rural electric cooperatives.

Rapid expansion of North Dakota's oil production has also boosted the state's output of natural gas, which is a byproduct of oil production.

State Department of Mineral Resources statistics show a 63 percent increase in natural gas production in the last five years. Oil output has more than doubled during the same period, to more than 245,000 barrels a day.

Construction of a network of pipelines to gather and ship the natural gas have not kept up with that growth. As a result, natural gas is often flared, or burned off, at the well site.

In 2008, more than 30 percent of North Dakota's natural gas production was flared. North Dakota energy industry officials say the percentage has dropped to just over 10 percent. The U.S. Energy Department says the national average is less than 1 percent.

"There's still a lot of gas out there that the gathering systems haven't gotten to yet, or wells where it could be years before it's (profitable) to bring a gathering system in," said Lynn Helms, director of the Department of Mineral Resources.

North Dakota's Industrial Commission, which regulates the state's oil and gas industry, has approved a $375,000 grant to study whether raw gas produced at an oil well site can be used to fuel an electrical generator to provide power for the well operator.

Any surplus power could be sold to the rural electric cooperative that serves the area, the proposal says.

The grant, which is split into increments of $250,000 and $125,000, is intended to finance tests at two well sites, application documents say.

The money will not be distributed until agreements are struck with oil operators, grant documents say.

Helms said the tests would be conducted at sites where a reduction in gas flaring was necessary to increase oil production or prevent production restrictions.

"This process will design a portable generator unit that can be set on the (oil well) location," Helms said. "It will burn the flare gas, generate electricity and put it directly into the rural electric grid."

Should it work, the project will help rural electric cooperatives satisfy the power demands of oil companies in rural western North Dakota, and allow increased production of both oil and natural gas, Helms said.

The research fund is financed by a share of North Dakota's tax collections on the oil industry. The fund's income is capped at $4 million every two years.
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