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(Daily Mail)   Oil prices rise to $96 per barrel following news that the oilfields in North Dakota burn off as waste enough to power Chicago and Washington   (dailymail.co.uk) divider line 61
    More: Stupid, North Dakota, Chicago, doves, short skirts, oil prices, British thermal units, Bakken, greenhouse gas emissions  
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2510 clicks; posted to Geek » on 28 Jan 2013 at 10:03 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-01-28 10:01:13 AM
Oil prices rise to $96 per barrel following news that the oilfields in North Dakota burn off as waste enough to power Chicago and Washington f*ck you, that's why

FTFY
 
2013-01-28 10:08:30 AM
This planet is hosed. If we find enough extrasolar planets, I'm taking one all for myself.

/I know, good luck with that
 
2013-01-28 10:08:42 AM
burn off as waste enough to power Chicago

I'm more concerned with your confused sentence structure subby.
 
2013-01-28 10:10:47 AM
Yep, oil companies just burning off excess fuel because and wasting millions of dollars in potential fuel energy is a-okay because, fark you, it's cheaper. But a solar company trying to create clean, alternate energy sources going under is a huge scandal. Makes perfect sense.
 
2013-01-28 10:11:21 AM
What's that in Rhode Islands?
 
2013-01-28 10:13:43 AM
blog.mdna.com
 
2013-01-28 10:17:32 AM
They're flaring off natural gas because there isn't any infrastructure for trapping, storing, and transporting it.
They could just let it escape unburnt, but it would create a health and safety hazard for everyone around the oil fields and it is a more powerful greenhouse gas than carbon-dioxide.
 
2013-01-28 10:19:16 AM
They aren't flaring it because it's cheaper. That is a blatant lie. They are flaring it because they literally cannot build the gas pipeline infrastructure fast enough to gather it all. But these are oil wells and they are contractually obligated (to the lease holder) to flow them to collect oil.

The drilling schedule has gotten ahead of the gas infrastructure schedule.

You can't store gas like you can oil, so if you can't get the pipe connected up, you have to flare it. And, BTW, this means paying fines, etc, associated with that to the state and EPA. Also, the gas is valuable, and the companies are losing money by doing it. But it won't last long. Eventually the infrastructure will catch up.
 
2013-01-28 10:19:21 AM

StrangeQ: Yep, oil companies just burning off excess fuel because and wasting millions of dollars in potential fuel energy is a-okay because, fark you, it's cheaper. But a solar company trying to create clean, alternate energy sources going under is a huge scandal. Makes perfect sense.


How is it legal? If the EPA can ding you for depositing gardening soil in a nearby creek, how can they not ding you for Batmobiling the ground?
 
2013-01-28 10:19:24 AM

StrangeQ: Yep, oil companies just burning off excess fuel and wasting millions of dollars in potential fuel energy is a-okay because, fark you, it's cheaper. But a solar company trying to create clean, alternate energy sources going under is a huge scandal. Makes perfect sense.




Because transcontinental gas pipelines are so easy to build in the USA Today
 
2013-01-28 10:20:00 AM

cranked: What's that in Rhode Islands?


Wales = 6.6 Rhode Islands.
 
2013-01-28 10:20:06 AM

plcow: You can't store gas like you can oil, so if you can't get the pipe connected up, you have to flare it. And, BTW, this means paying fines, etc, associated with that to the state and EPA. Also, the gas is valuable, and the companies are losing money by doing it. But it won't last long. Eventually the infrastructure will catch up.


Answered, then asked.

// thanks!
 
2013-01-28 10:20:43 AM
There's a lot of that burnoff around here, too. Seems like such a waste.
 
2013-01-28 10:21:25 AM
This isn't new news. Collection fields have been doing this for over 100 years. If you are crying over this, imagine how many years we could have fueled the entire planet on the gas they have been burning off since the dawn of oil drilling.

Offshore Rigs burn off even more than the land rigs because they have no easy way to store or transport it away. If a collection field gets large enough on land then it will get a pipeline to pull the gas away so they don't waste quite as much.
 
2013-01-28 10:26:39 AM
Why are collection fields burning "gas"? Shouldn't they have crude? If the refineries are receiving more crude than they can process and ship why not just store the crude?

shiat even if they have to pressurize it in order for it to maintain stability....non renewable resource, just saying "fark it" shouldn't be an actual option.
 
2013-01-28 10:29:30 AM

DoBeDoBeDo: Why are collection fields burning "gas"? Shouldn't they have crude? If the refineries are receiving more crude than they can process and ship why not just store the crude?

shiat even if they have to pressurize it in order for it to maintain stability....non renewable resource, just saying "fark it" shouldn't be an actual option.


What comes out of a well is always some combination of oil and gas, ranging from 99% oil 1% gas to 1% oil 99% gas (a little simplified). They are processing the crude, and that is more easily store.

Nobody is saying "fark it". Oil companies do everything they can to get value out of the gas, even at these low prices. It takes a humugous effort to build thousands of miles of pipelines, across thousands of landowners, while dealing with thousands of regulations etc. You want to help? Go to rigzone.com and get a job.
 
2013-01-28 10:35:59 AM
Mmmmmmm Bakken....
 
2013-01-28 10:47:55 AM

plcow: They aren't flaring it because it's cheaper. That is a blatant lie. They are flaring it because they literally cannot build the gas pipeline infrastructure fast enough to gather it all. But these are oil wells and they are contractually obligated (to the lease holder) to flow them to collect oil.

The drilling schedule has gotten ahead of the gas infrastructure schedule.

You can't store gas like you can oil, so if you can't get the pipe connected up, you have to flare it. And, BTW, this means paying fines, etc, associated with that to the state and EPA. Also, the gas is valuable, and the companies are losing money by doing it. But it won't last long. Eventually the infrastructure will catch up.


Most, if not all, of the N. Dakota producers have waivers on the gas flaring fees.

And as another poster noted, oil producers have been flaring off the natural gas for over 100 years because it's not worth collecting. It's even less valuable now because gas producers have glutted the market. They've gone overboard fracking every fracking rock that they can fracking find.
 
2013-01-28 11:03:40 AM

LDM90: This planet is hosed. If we find enough extrasolar planets, I'm taking one all for myself.

/I know, good luck with that


Mormon?
 
2013-01-28 11:10:33 AM

Dr Dreidel: StrangeQ: Yep, oil companies just burning off excess fuel because and wasting millions of dollars in potential fuel energy is a-okay because, fark you, it's cheaper. But a solar company trying to create clean, alternate energy sources going under is a huge scandal. Makes perfect sense.

How is it legal? If the EPA can ding you for depositing gardening soil in a nearby creek, how can they not ding you for Batmobiling the ground?


$ome people are more equal than others, that's how.
 
2013-01-28 11:25:29 AM

StrangeQ: Yep, oil companies just burning off excess fuel because and wasting millions of dollars in potential fuel energy is a-okay because, fark you, it's cheaper.


You know how I know you know fark all about what you're talking about?

ArkPanda: And as another poster noted, oil producers have been flaring off the natural gas for over 100 years because it's not worth collecting. It's even less valuable now because gas producers have glutted the market. They've gone overboard fracking every fracking rock that they can fracking find.


It would be nice if the government would greenlight increased exports to countries that are willing to pay a premium price for the stuff.
 
2013-01-28 11:30:26 AM

plcow: They aren't flaring it because it's cheaper. That is a blatant lie. They are flaring it because they literally cannot build the gas pipeline infrastructure fast enough to gather it all. But these are oil wells and they are contractually obligated (to the lease holder) to flow them to collect oil.

The drilling schedule has gotten ahead of the gas infrastructure schedule.

You can't store gas like you can oil, so if you can't get the pipe connected up, you have to flare it. And, BTW, this means paying fines, etc, associated with that to the state and EPA. Also, the gas is valuable, and the companies are losing money by doing it. But it won't last long. Eventually the infrastructure will catch up.


So if the infrastructure is behind would you say it's cheaper to burn it off then get the proper infrastructure in place? Seems like the typical American "drill baby drill" and they're just gonna get as much gas as possible and worry about shiat going wrong whenever that happens. I wonder what the out of water version of the gulf disaster is
 
2013-01-28 12:03:43 PM
i.dailymail.co.uk
 
2013-01-28 12:04:32 PM
I meant to add "Thanks Obama!!"...
 
2013-01-28 12:15:33 PM

Malcolm_Sex: plcow: They aren't flaring it because it's cheaper. That is a blatant lie. They are flaring it because they literally cannot build the gas pipeline infrastructure fast enough to gather it all. But these are oil wells and they are contractually obligated (to the lease holder) to flow them to collect oil.

The drilling schedule has gotten ahead of the gas infrastructure schedule.

You can't store gas like you can oil, so if you can't get the pipe connected up, you have to flare it. And, BTW, this means paying fines, etc, associated with that to the state and EPA. Also, the gas is valuable, and the companies are losing money by doing it. But it won't last long. Eventually the infrastructure will catch up.

So if the infrastructure is behind would you say it's cheaper to burn it off then get the proper infrastructure in place? Seems like the typical American "drill baby drill" and they're just gonna get as much gas as possible and worry about shiat going wrong whenever that happens. I wonder what the out of water version of the gulf disaster is


Definitely not. Getting the infrastructure in place is the goal. Don't believe me? Look up the growth of Midstream Companies over the last couple of years. Huge capital investments. Things just take time. There are regulatory filings that take months to approve, farmers that have right of ways to negotiate, steel that needs to be milled, and pipes that need to be built and transported, systems that need to be engineered, accounting for every step of the process, capital that needs to be raised, and all done safely.

And, again, they aren't going after gas, they are going after oil. Why would they be "going after as much gas as possible" if they are having to flare it?

And just to reiterated, the gas is still VALUABLE, and nobody wants to flare it. The gas being flared represents and inefficiency, and one that is being aggresively targeted to reduce, it DOES NOT represent a top level decision to waste resources.
 
2013-01-28 12:24:55 PM
This is straight up just phcking stupid. Capturing and storing the gas should be part of the cost of doing business, no other choice possible. You cannot shiat into your neighbor's water supply because it is cheaper for you and what these drillers do is exactly analogous. It is unconscionable for the same reasons there are federally mandated mileage targets for automobiles, and cleanliness standards for food prep.

/phcking senile mammals
 
2013-01-28 12:29:26 PM

ArkPanda: And as another poster noted, oil producers have been flaring off the natural gas for over 100 years because it's not worth collecting. It's even less valuable now because gas producers have glutted the market. They've gone overboard fracking every fracking rock that they can fracking find.


Except that we could get rid of both coal and oil for heating and energy if we used more natural gas... So yeah, it's worth collecting. Can you imagine if we needed oil ONLY for vehicles and didn't have a coal industry to add pollution to the air? Even if we don't generate electricity from the gas, I'd bet that switching all of the heating oil and coal fired places in the country would make a huge impact...
 
2013-01-28 01:01:40 PM
Seems like building a gas fired power plant onsite or nearby would be a good idea. I imagine that infrastructure for transporting electrons would be cheaper and faster to build than a gas pipeline. Of course, if we're waiving fees/penalties for burning it, that doesn't give them as much incentive to invest in any solution.
 
2013-01-28 01:22:56 PM
What's interesting is that the Dakota's NG flaring is now a bright as night as a major metropolitan city. In an area that was pitch black just a few years ago.
3blmedia.com
 
2013-01-28 01:31:11 PM

ArkPanda: And as another poster noted, oil producers have been flaring off the natural gas for over 100 years because it's not worth collecting. It's even less valuable now because gas producers have glutted the market. They've gone overboard fracking every fracking rock that they can fracking find.


The day will come when we wish we had saved it. Of course, well all be dead so fark em.
 
2013-01-28 01:37:33 PM

edmo: The day will come when we wish we had saved it. Of course, well all be dead so fark em.


LOL. It's not funny, but what can you do but laugh, watching us drive as fast as we can into our Mad Max world?

"Hey, kids, sorry about the environment and the dead air and the dead animals and all, but look at what I saved for you--a big house and a big bank account!"
 
2013-01-28 01:51:23 PM
Am I the only one who is bothered by their use of the satellite image as the primary evidence backing their quantitative claim that the energy released via flaring in the Bakken region is greater than or equal to the energy consumption of Chicago and Washington DC combined? Its a cool picture and all, but is that really all the required proof to support such a claim?

There's hardly any mention of numbers in the article that would help to back up their information. In my opinion the estimated flaring rate and equivalent energy expendature as well as estimates for energy consumption in Chi and DC should at the very least be mentioned. there's not even any data presented for the relative intensities of the light in the images and how that could even be used to draw their conclusion. I'm led to believe that they just looked at the picture and said "By jove look how bright North Dakota is, and look at Chicago and DC, as well, yes they must be using nearly the same abount of power!"

the only numerical info for their qualitative claim I can find is:

flaring increased 50% last year (no mention of absolute rate)
flaring tripled in last 5 years (again no absolute numbers)
30% of gas is flared in the region (but no mention of the total amount of gas produced, only liquid at 660 kbd which does not help)

Just to be clear - it very well could be true that the energy wasted via flaring could power those two cities. I find this to be a particularly bold claim, and found the article astonishingly lacking in evidence to support such a claim. But looking at the source of the article, should I really be surprised?
 
2013-01-28 02:27:13 PM

plcow: Oil companies do everything they can to get value out of the gas, even at these low prices.


These low prices?
 
2013-01-28 02:44:02 PM
i.imgur.com
 
2013-01-28 03:25:09 PM

MacWizard: plcow: Oil companies do everything they can to get value out of the gas, even at these low prices.

These low prices?


Um, yeah. Prices are pretty low compared to the last decade or so. They bottomed out last year, but will remain low for the foreseeable future.

http://www.eia.gov/dnav/ng/hist/n9190us3m.htm
 
2013-01-28 04:07:10 PM

StrangeQ: Yep, oil companies just burning off excess fuel because and wasting millions of dollars in potential fuel energy is a-okay because, fark you, it's cheaper. But a solar company trying to create clean, alternate energy sources going under is a huge scandal. Makes perfect sense.


In the first case private companies are investing their own money to make a profit and supply needed goods at market prices. In the 2nd politicians are throwing away tax dollars to enrich their supporters while very little in the way of usable energy is produced at ridiculously high prices.

Dont see the difference?
 
2013-01-28 04:45:33 PM
O you could, ya know, CONVERT IT TO ELECTRICITY RIGHT farkING THERE and back off the coal plants for a while.

Nah, that would make too much farking sense.
 
2013-01-28 04:47:18 PM

pdee: StrangeQ: Yep, oil companies just burning off excess fuel because and wasting millions of dollars in potential fuel energy is a-okay because, fark you, it's cheaper. But a solar company trying to create clean, alternate energy sources going under is a huge scandal. Makes perfect sense.

In the first case private companies are investing their own money to make a profit and supply needed goods at market prices. In the 2nd politicians are throwing away tax dollars to enrich their supporters while very little in the way of usable energy is produced at ridiculously high prices.

Dont see the difference?


Oil subsidies and tax breaks. How do they work? fark you you disingenuous and/or ignorant fark.
 
2013-01-28 05:06:31 PM

chocolate covered poop: Am I the only one who is bothered by their use of the satellite image as the primary evidence backing their quantitative claim that the energy released via flaring in the Bakken region is greater than or equal to the energy consumption of Chicago and Washington DC combined? Its a cool picture and all, but is that really all the required proof to support such a claim?


Yes, it's bullshiat.

They're flaring about $750,000 worth of natural gas a day in all of North Dakota right now. Maybe a cool mill a day if you price it differently.

Posted earlier by yours truly:
http://www.fark.com/comments/7545095/82007498#c82007498

In June 2012 (the last month I can get numbers for), the entire state of North Dakota produced about 660,000 b/d of oil and about 713 MMcfd of gas. As mentioned, about 36% of that gas was flared.
That is a lot of gas. Before taxes and royalties, it's about $750,000 on the spot market. Up in smoke. Daily.

(I'm using a rough estimate of 1,000MMcfd as equal to $3,000,000US)

Sadly, the gas is not worth that where it's produced. The wells are being drilled faster than the gas pipeline network can reach the wells.
It's really gotten bad over the last 18-24 months. The flared gas percentage went as high as 40% in September of 2011.
In that same time period, the amount of gas sold doubled from around 210MMcfd to well over 420MMcfd
About 150 wells each month are put online for the first time for gas sales in North Dakota (again, figures only go back to June 2012)
So that puts 5,000 wells in North Dakota selling gas to pipeline sales or putting it to work locally.
But, that means nearly 1,100 wells not with gas sales.

Taking the average oil well not on gas sales, assuming that every one is flaring gas (probably not, but I can't show otherwise)
If I get my numbers right
Each well that is flaring gas is burning up about $680US worth of gas a day if that gas were to be sold at market prices.

That's enough to make doing something economic. If you had a solution on the back of a truck, you could probably make yourself a nice pile of money.

In the meantime, 4 Billion Dollars are being spent to improve gas gathering in North Dakota.
That includes ONEOK's 60,000 barrel/day NGL pipeline that runs 525 miles to Colorado (and the new gas separation and compression plants to support that)
Hess's Vantage pipeline that runs 425 miles to Alberta that's for ethane alone (and the gas plants that will separate the gas just for that)
Alliance pipeline that runs 76 miles and will take 106MMcfd to a trunkline
and Statoil's conversion of many drilling rigs from diesel fuel over to natural gas as a primary power source.
 
2013-01-28 06:01:37 PM

plcow: They aren't flaring it because it's cheaper. That is a blatant lie. They are flaring it because they literally cannot build the gas pipeline infrastructure fast enough to gather it all. But these are oil wells and they are contractually obligated (to the lease holder) to flow them to collect oil.

The drilling schedule has gotten ahead of the gas infrastructure schedule.

You can't store gas like you can oil, so if you can't get the pipe connected up, you have to flare it. And, BTW, this means paying fines, etc, associated with that to the state and EPA. Also, the gas is valuable, and the companies are losing money by doing it. But it won't last long. Eventually the infrastructure will catch up.


But you can cap the damn thing until run run a power line and put a waste gas generator on site.

Farking bottlecaps, how do they work?
 
2013-01-28 06:02:30 PM
you run
a doo wahh wahh
 
2013-01-28 06:11:03 PM

Feral_and_Preposterous: But you can cap the damn thing until run run a power line and put a waste gas generator on site.


Say you had 1100 of those units ready to go tomorrow. What are you planning to do with the power generated from them? You can't export that power via electricity. That network simply doesn't exist.
 
2013-01-28 06:44:03 PM

EnviroDude: Because transcontinental gas pipelines are so easy to build in the USA Today


I built three in my backyard this weekend. Big Oil just wants to see the pretty fires light up the night sky.
 
2013-01-28 06:57:56 PM

SVenus: Feral_and_Preposterous: But you can cap the damn thing until run run a power line and put a waste gas generator on site.

Say you had 1100 of those units ready to go tomorrow. What are you planning to do with the power generated from them? You can't export that power via electricity. That network simply doesn't exist.


Yeah. We haven't figured out how to move electricity around, I forgot. Maybe you ought to get to work on that, you could make a dollar or three.
 
2013-01-28 07:03:29 PM
Many of you here are under the assumption that this is nice clean sweet gas that is being burned. Most of the time the gas is sour or the BTU's are too low for it to be burned efficiently. Even if it is sweet gas you can't just hook it up to a pipeline. It needs to be processed and compressed to the utility company's standard and that is costly as well as needing the infrastructure as already pointed out.
 
2013-01-28 07:27:37 PM
Commas are a thing.
 
2013-01-28 07:48:02 PM

give me doughnuts: They're flaring off natural gas because there isn't any infrastructure for trapping, storing, and transporting it.
They could just let it escape unburnt, but it would create a health and safety hazard for everyone around the oil fields and it is a more powerful greenhouse gas than carbon-dioxide.


Natural gas pipelines, hopefully we will develop such amazing technology in the next 40 to 50 years....
 
2013-01-28 08:52:57 PM

Feral_and_Preposterous: Yeah. We haven't figured out how to move electricity around, I forgot. Maybe you ought to get to work on that, you could make a dollar or three.


As the pipeline hooks up to the well you've been working that generator on, you move the generator on to the next well that came on stream. Where's the electricity infrastructure for that one? Now, multiply that times all those wells, because all 1,100 of those aren't the same ones. Now, feel free to sell that electricity to a grid with existing electricity contracts. It would be difficult, if not impossible to QUICKLY sell a consistent amount of electricity of that volume without significant substations and the rest.

Note the infrastructure being installed currently for the area. It's $4billionUS, and that's primarily for the gas. So ALL the infrastructure you're putting in place for electricity will be made obsolete in just a couple of years. You would have trouble justifying the expense of the electricity infrastructure you've just installed as the gas is sold and moved off more efficiently than your electric grid. People who know this would never want to buy electricity from you at the expense of terminating their existing long term contracts.
 
2013-01-28 09:23:35 PM

give me doughnuts: They're flaring off natural gas because there isn't any infrastructure for trapping, storing, and transporting it.
They could just let it escape unburnt, but it would create a health and safety hazard for everyone around the oil fields and it is a more powerful greenhouse gas than carbon-dioxide.


No infrastructure available for trapping, storing, and transporting it?

I bet a nice, big pipeline from there to Texas would be handy right about now.

/the line is set...
 
2013-01-28 10:27:16 PM

SVenus: Feral_and_Preposterous: Yeah. We haven't figured out how to move electricity around, I forgot. Maybe you ought to get to work on that, you could make a dollar or three.

As the pipeline hooks up to the well you've been working that generator on, you move the generator on to the next well that came on stream. Where's the electricity infrastructure for that one? Now, multiply that times all those wells, because all 1,100 of those aren't the same ones. Now, feel free to sell that electricity to a grid with existing electricity contracts. It would be difficult, if not impossible to QUICKLY sell a consistent amount of electricity of that volume without significant substations and the rest.

Note the infrastructure being installed currently for the area. It's $4billionUS, and that's primarily for the gas. So ALL the infrastructure you're putting in place for electricity will be made obsolete in just a couple of years. You would have trouble justifying the expense of the electricity infrastructure you've just installed as the gas is sold and moved off more efficiently than your electric grid. People who know this would never want to buy electricity from you at the expense of terminating their existing long term contracts.


Good thing power isn't needed for drilling wells, pumping water, lighting, satellite communications or anything else on a drilling site. It would be really hard to run a cable from one site a half mile or mile to the next drill site to provide that site with power. Why would anyone want to cut down on the aamount of diesel they're using to power light plants, pumps, trailers and communications equipment at a drilling / fracking site? That would be farking idiotic.
 
2013-01-28 11:43:41 PM

SVenus: Feral_and_Preposterous: Yeah. We haven't figured out how to move electricity around, I forgot. Maybe you ought to get to work on that, you could make a dollar or three.

As the pipeline hooks up to the well you've been working that generator on, you move the generator on to the next well that came on stream. Where's the electricity infrastructure for that one? Now, multiply that times all those wells, because all 1,100 of those aren't the same ones. Now, feel free to sell that electricity to a grid with existing electricity contracts. It would be difficult, if not impossible to QUICKLY sell a consistent amount of electricity of that volume without significant substations and the rest.

Note the infrastructure being installed currently for the area. It's $4billionUS, and that's primarily for the gas. So ALL the infrastructure you're putting in place for electricity will be made obsolete in just a couple of years. You would have trouble justifying the expense of the electricity infrastructure you've just installed as the gas is sold and moved off more efficiently than your electric grid. People who know this would never want to buy electricity from you at the expense of terminating their existing long term contracts.


Ok, if they can't store it, pipe it somewhere or convert it to electricity on site then why should they be allowed to drill it? Why should the infrastructure be so far behind the drilling? How can that much waste and pollution be acceptable?
 
2013-01-28 11:47:32 PM

Feral_and_Preposterous: That would be farking idiotic


Then you didn't read my post upthread that has Statoil converting their field rigs to run off the natural gas. Conversions take time and cost an investment, but it is what's happening now. But nice to know you thought of it, too. Pat yourself on the back.
 
2013-01-28 11:58:24 PM
Using http://www.cntenergy.org/media/Chicago-Regional-Energy-Snapshot.pdf and http://www.eia.gov/beta/state/?sid=dc I get about 20MMMBTU/day to power D.C. the Chicago metroplexes. So the Daily Fail is right that ND is flaring enough natural gas to power the cities using SVenus' number of 713MMcfd (713MMMBTU/day). Of course, I suck at unit conversions in my head. For comparison, Svenus' number accounts for about 1.1% of the USA's total natural gas production in 2010 (less in 2011).

There are lots of chemical companies in the Gulf region planning major capital projects/expansions/grass roots projects in anticipation of the completion of the infrastructure to receive this natural gas. The oil industry doesn't want to waste the natural gas. The oil industry doesn't exist to be evil, it exists to make money. It's losing money by flaring the gas, simple as that.
 
2013-01-29 09:40:45 AM

Baryogenesis: Ok, if they can't store it, pipe it somewhere or convert it to electricity on site then why should they be allowed to drill it? Why should the infrastructure be so far behind the drilling? How can that much waste and pollution be acceptable?


I'm in the business, but I refuse to go into defense mode.

If it was converted into electricity, it would still be burned on site. Flares can be monitored for pollution, and I would imagine flaring gas isn't all that different from burning it in a generator. In truth, there could be some additional carbon soot that falls locally. For the most part, this area is pretty desolate. This isn't coal you're burning off.

Note I did mention the $4Billion dollars worth of gas infrastructure. This includes a 525 mile pipeline to Denver. Do I need to go into the issue with getting pipeline permits? Putting a pipeline down to collect gas locally is the same thing, only on a local basis. The local collection network buildout has to be a biatch. Imagine putting up a road system to handle traffic from a new city. Each road will be a toll road, and every person in every car paying their fair share, even down to how much they weigh. Only you're not zoning the city, and someone puts up an apartment building where you didn't expect. So a new toll road has to be put down on top of the other one, only the previous toll road owner isn't investing in this new toll road, but he now controls the right of way. So the people who control the right of way get a sweet deal. Rights of way in pipeline situations are sweet when you know the pipeline owner has no other choice. The state can't pull an eminent domain thing on the little collection network. Now, I don't build pipelines, but you see the types of problems that put delays that would prevent the timely development of an area.

Back in the early days of oil development, Rockefeller prevented development of oil drilling in large areas because he cut a sweet deal with the railroads. He actually got paid when others moved their oil. Could you imagine if an oil company accidentally (cough! cough!) prevented another oil company with leases expiring from drilling because the gas pipeline contracts were being held up for a contracted reason? The windfall profits from me drilling and completing because I have a gas contract and gas connections and you losing your leases is enough to buy the state legislature. With spare cash for a nice pinky ring.

Say you have a collection network of gas pipelines and nobody wants to buy the gas. THAT HAPPENS.

Plus the requirements to sell gas hits you. The gas that comes out of these wells has impurities, often carbon dioxide. That has to be removed at no small expense. Say, you get a nice rich fraction of gas (not just methane) but the gas pipeline doesn't want those fractions, or won't pay the value of that. So now, your gas treatment plant (Got one of those handy?) has to remove carbon dioxide and partially drop out the natural gas liquids, that you have to deal with. Eventually, it should pay for itself. But also eventually, the oil companies will get their final gas connections and want good prices.

The mineral owners deserve the royalty from the flared gas, and they could sue for it. I think in Texas the oil companies only get a month exemption for flaring.
 
2013-01-29 10:00:52 AM
One more thing

SVenus: Say, you get a nice rich fraction of gas (not just methane) but the gas pipeline doesn't want those fractions, or won't pay the value of that.


The gas glut in America is so bad, there's pretty active "ethane rejection" going on right now across many natural gas fields

Read this: What Is Ethane Rejecton?/
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Gas processors look at the market value of ethane burned as an MMBtu in the pipeline gas stream versus its value as a gallon of liquid. The plastics industry turns liquid ethane into ethylene, then polyethylene, and then into things like trash bags. So is ethane worth more burned in your stove top or lining your garbage can?
If ethane is worth more at a plant as a liquid (and ultimately lining your garbage can), the processor "recovers" ethane. If it's worth more as a gas (ultimately burning on your stove top), he "rejects" ethane. This economic choice what we call a real option. The processor has the operational right but not the obligation to sell ethane as a gas, depending on what nets him the higher price at his gas processing plant. Of course, he can only reject as much ethane as permitted by the pipeline specs. We wouldn't want your stove top to blow out...or blow up!
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If you heat your homes with natural gas, your water heaters are set for a certain gas heat value. It's not like you can add a free hotter gas in there and not have someone burn down their home. So, ethane is actively being rejected by gas pipelines. The folks that make stuff out of ethane in liquid form have all they can handle. They don't want your ethane in liquid form to make your garbage bags or in their gas pipeline.

So now, you have ethane that you can't sell at any price in any form. You could store it. You could build generators to burn it. But you have to build a transportation network to do that.
 
2013-01-29 07:29:59 PM

SVenus: Baryogenesis: Ok, if they can't store it, pipe it somewhere or convert it to electricity on site then why should they be allowed to drill it? Why should the infrastructure be so far behind the drilling? How can that much waste and pollution be acceptable?

I'm in the business, but I refuse to go into defense mode.

If it was converted into electricity, it would still be burned on site. Flares can be monitored for pollution, and I would imagine flaring gas isn't all that different from burning it in a generator. In truth, there could be some additional carbon soot that falls locally. For the most part, this area is pretty desolate. This isn't coal you're burning off.

Note I did mention the $4Billion dollars worth of gas infrastructure. This includes a 525 mile pipeline to Denver. Do I need to go into the issue with getting pipeline permits? Putting a pipeline down to collect gas locally is the same thing, only on a local basis. The local collection network buildout has to be a biatch. Imagine putting up a road system to handle traffic from a new city. Each road will be a toll road, and every person in every car paying their fair share, even down to how much they weigh. Only you're not zoning the city, and someone puts up an apartment building where you didn't expect. So a new toll road has to be put down on top of the other one, only the previous toll road owner isn't investing in this new toll road, but he now controls the right of way. So the people who control the right of way get a sweet deal. Rights of way in pipeline situations are sweet when you know the pipeline owner has no other choice. The state can't pull an eminent domain thing on the little collection network. Now, I don't build pipelines, but you see the types of problems that put delays that would prevent the timely development of an area.

Back in the early days of oil development, Rockefeller prevented development of oil drilling in large areas because he cut a sweet deal with the railroads. He actually got paid when others moved their oil. Could you imagine if an oil company accidentally (cough! cough!) prevented another oil company with leases expiring from drilling because the gas pipeline contracts were being held up for a contracted reason? The windfall profits from me drilling and completing because I have a gas contract and gas connections and you losing your leases is enough to buy the state legislature. With spare cash for a nice pinky ring.

Say you have a collection network of gas pipelines and nobody wants to buy the gas. THAT HAPPENS.

Plus the requirements to sell gas hits you. The gas that comes out of these wells has impurities, often carbon dioxide. That has to be removed at no small expense. Say, you get a nice rich fraction of gas (not just methane) but the gas pipeline doesn't want those fractions, or won't pay the value of that. So now, your gas treatment plant (Got one of those handy?) has to remove carbon dioxide and partially drop out the natural gas liquids, that you have to deal with. Eventually, it should pay for itself. But also eventually, the oil companies will get their final gas connections and want good prices.

The mineral owners deserve the royalty from the flared gas, and they could sue for it. I think in Texas the oil companies only get a month exemption for flaring.


I'm not arguing that it's easy to build that infrastructure. I'm arguing that if their infrastructure is too far behind the drilling. They've over drilled and now have no way to utilize that resource so it's just being wasted. Why is waste to that degree acceptable?
 
2013-01-30 09:07:08 AM

SVenus: So now, you have ethane that you can't sell at any price in any form. You could store it. You could build generators to burn it. But you have to build a transportation network to do that.


The ethane goes along with the methane in ethane rejection mode. The total BTU's per mcf then get balanced by adding inerts. What you have in your gas fireplace is some combination of methane, ethane, and a tiny tiny bit of propane, and the amounts vary, but the heating value stays the same, because they balanced it upstream to make it consistent.
 
2013-01-30 10:13:17 AM

plcow: The ethane goes along with the methane in ethane rejection mode. The total BTU's per mcf then get balanced by adding inerts. What you have in your gas fireplace is some combination of methane, ethane, and a tiny tiny bit of propane, and the amounts vary, but the heating value stays the same, because they balanced it upstream to make it consistent.


I figure that's probably what actually ends happening when there's just a partial fraction of ethane available. I'm told many streams are rich and getting richer with the stuff in some areas, so balancing of the ethane regionally becomes a cost. Add to that the ethane source isn't getting but methane prices, or if the balancing is a cost, below market prices for adding a richer stock.

The economics of natural gas liquids has changed in some areas, too. In the parts of Texas where I have some prospects, you would produce the oil, and the gas you would run through a small plant and "drop" the liquids out (condense the rich gas into transportable liquids) and those would then sell for the price near or even above the oil price. There's a glut of those liquids now; the refineries are close to max production of those feedstocks. So, instead of giving you a better price for NGLs than the oil, they offer you a much lower price for the liquids.

And to top that off, in many parts of Texas, there's up to a 20% price cut for oil. (It's about 14% today for a March 13 contract - see here) A barrel of oil produced south of Austin is worth $16.79 less than a barrel of exactly the same oil in Lake Charles, Louisiana. The pipelines are full. The price break does provide for oil to be profitably moved over the roadways and rail. It's safer if it moves in pipelines rather than rail or road, but pipelines are a political football these days.
 
2013-01-30 10:14:08 AM

Baryogenesis: I'm not arguing that it's easy to build that infrastructure. I'm arguing that if their infrastructure is too far behind the drilling. They've over drilled and now have no way to utilize that resource so it's just being wasted. Why is waste to that degree acceptable?


Money changes everything
 
2013-01-30 03:12:47 PM
Tag is for the subby trying to put together a sentence for the headline.
 
2013-01-31 12:04:25 AM

SVenus: Baryogenesis: I'm not arguing that it's easy to build that infrastructure. I'm arguing that if their infrastructure is too far behind the drilling. They've over drilled and now have no way to utilize that resource so it's just being wasted. Why is waste to that degree acceptable?

Money changes everything


I'll take that cryptic remark to mean "it's cheaper (for the oil/gas company) to pollute and be wasteful". Why not just say that to begin with? Now it's clear that these companies merely want to foist the true cost of their business onto the public.
 
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