Last week’s announcement of a major investment in a state-of-the-art natural gas processing plant is good news, not only for those who want to reduce the wasteful practice of flaring gas but also for an industry that has pledged to reduce flaring to 10 percent in six years. The project by Oklahoma-based Oneok Partners is an initial investment of more than $600 million, and another $100 million in expansion of the company’s existing plant in North Dakota’s Bakken oil and gas play.
State officials also have pledged to reduce flaring, and have backed up the pledge with new regulations that punish oil well operators who don’t develop gas capture plans for new wells. The combination of incentives to capture gas and new capacity to process the gas for the market is necessary to achieve meaningful flaring reductions.
Moreover, the Oneok plant seems to fit well with an industry-sponsored effort to bring together all the players in natural gas stream in order to speed up reductions in flaring.
Let’s be clear: One or two processing plants, even with the huge capacity of the Oneok operation, won’t end flaring. Percentage reductions can be meaningless as more and more oil wells come on line, and natural gas from those wells adds to the actual volume of gas either flared or captured. Estimates of growth in the Oil Patch suggest thousands more wells will be operational in the next decade or two. If gas-capture systems don’t keep up with the proliferation of new wells – processing plants and collector pipelines – flaring reductions will be difficult to attain.
That being said, the investments announced last week indeed are good news. Oneok’s project suggests a long-term commitment to processing natural gas in North Dakota, and that commitment sends a signal to other companies to do the same.
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