These 3 Companies Profit by Tackling Gas Flaring
Bakken gas flares seen from space-
Courtesy NASA Earth Observatory
This isn't a picture of a starry sky. It's a satellite photo of the earth, specifically the northwestern corner of North Dakota. And that cluster of lights isn't a city. Those are gas flares from the Bakken shale oil wells. Such images have struck a nerve in the environmentalist community.
Environmental concerns about gas flaring at oil wells is driving regulation and threatening to cut production. The energy industry is responding with technology, and some companies are turning the problem into an opportunity.
If there's no available gas gathering infrastructure on an oil field, drillers simply burn off gas from the well in a controlled flare. According to a New York Times story , the Bakken gas flares release roughly six million tons of carbon dioxide every year, angering environmentalists.
That's why North Dakota imposed tough flaring reduction targets in March.
A race to keep up
The New York Times reported that gas production in the Bakken could see a 40% increase by the end of 2015 due to all the drilling activity. Companies such as ONEOK ( NYSE: OKE ) and its master limited partnership, ONEOK Partners ( NYSE: OKS ) , are racing to build more gas gathering infrastructure. The report quoted Brad Borror, a spokesman for Oneok, as saying, "By the end of 2015, you'll see a significant decrease in flame volumes."
The Oil & Gas Journal reported in April that Oneok had started up Stateline II, its third new natural gas processing facility in the area. Oneok, one of the largest gas gathering operators in the Bakken, expects to increase its processing capacity from 390 million cubic feet of gas per day to 590 million cubic feet per day by the end of 2015.
New technology to the rescue
While Oneok races to build more gas gathering and processing infrastructure, others are addressing the flaring issue with new technology. Hess ( NYSE: HES ) is expanding its use of a new mobile natural gas liquid, or NGL, extraction system developed by Gtuit and Corval Group. According to Gtuit materials, the system can extract NGLs right at the well site, and drillers can set up the mobile systems in less than one day.Thinking inside the box
Statoil ( NYSE: STO ) is taking another approach. The company is working with General Electric and others to reduce flaring on the Bakken fields. Referring to the gas flaring issue, the New York Times quoted Lance Langford, Statoil Vice President for Bakken Development and Production, as saying, "You take a problem and you turn it into an opportunity. We're trying to think outside the box."
Courtesy General Electric
That's an appropriate expression. GE's solution to the flaring problem involves capturing the gas at the wellhead and turning it into compressed natural gas, or CNG, using mobile units. GE calls the technology "CNG in a box."
Full disclosure: I own shares of OKS.
Disclaimer: Nothing in this article or attached comments is meant to be a recommendation to buy or sell any stock.
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When they get flaring under control, that will be great news for the environment, for the economy, and for smart investors! 8-)
Very innovative ... I could also see a possible usage of "Bloom boxes" to use up the gas instead of having to liquify it . Both approaches do this :
All the gas that is burnt off via flaring is wasted-- it should be used.
Why liquify? I believe I've read it shrinks the volume quite a bit-- the process is used used to ship it overseas. We have a lot of it, but prices in many countries are considerable higher-- I think Japan, Europe? So much so that's even with shipping costs its still very profitable to ship it overseas and sell it there, although the government has strict policies re: gas export. (If I'm not mistaken, Exporting crude oil from the U.S. is still illegal).
P.S: I believe I've read that to to gains in technology (fracking) the U.S is now the largest natural gas producer in the world.
When I said "use up" the gas I mean consuming it to produce electric power at great efficiency . The Bloom technology is an innovative method for using solid state fuel cells . Let me know if you want a link .
BTW you have 2 copies of this article on the forum ...
The details were not about all petroleum but just "stabilized condensates" . Here is a link :
...
And an important detail :
What actually helps the wider market is that fewer tankers loaded with foreign crude oil are heading to US shores in actual fact. That creates what Id describe as incremental barrels in the global pool.