While the headlines emphasize North Dakota's second-only-to-Texas crude oil production, new statistics about natural gas potential are truly amazing. Production could easily quadruple from current levels, making the state a major player in the U.S. natural gas market.
The escalating gas production will come as the state's oil production pushes toward the 2-million-barrels-per-day mark, reaching it as soon as 2025. But it's the natural gas news that is making for significant changes in the state's expanding and diverse energy outlook. By that same date, Williston Basin gas output could reach 3.1 billion cubic feet per day, up from today's 736 million cubic feet per day.
It appears there is more gas in the Bakken and Three Forks formations than previously detected. Not only is there a lot of gas; it is rich in natural gas liquids such as propane and ethane, which make it more valuable on the market. So even if natural gas prices remain at current low levels, the liquids extracted from the gas make each unit of gas worth more.
As the gas market develops, a network of pipelines and processing plants will be necessary. Several plants and pipelines already are on line or being constructed, but state oil/gas officials estimate that an investment of as much as $4 billion will be required to build the necessary facilities.
Lignite or gas?
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The abundance of relatively low-cost natural gas opens up intriguing possibilities for North Dakota. In many parts of the nation, natural gas is becoming the fuel of choice for electrical generation plants because it's cleaner than coal. Plant conversions are accelerating as power companies find ways to avoid expensive pollution control retrofits to meet emissions standards. The coal-fired generation industry is quick to point out that air quality standards are among the major causes of rising utility bills.
What might that mean for North Dakota's lignite-fired electrical generation plants in the central part of the state? One of the advantages of burning North Dakota lignite is that power plants were built adjacent to lignite strip mines. If that factor makes sense for low-cost lignite, would plants near natural gas wellheads make similar sense? Could a close-by, cheap and reliable source of natural gas solve the emissions problems caused by burning lignite?
We suspect the industry is taking a look.
Meanwhile, a natural gas boom rivals the oil boom in the Oil Patch. It's yet another affirmation of North Dakota's rank as one of the most important energy states in the nation.
Forum editorials represent the opinion of Forum management and the newspaper's Editorial Board.
