Why the Bakken Looks Like A City From Space At Night
As shown in a picture below, the Bakken Shale oil fields are lit up at night like a major city. This is due to all the natural gas being flared off oil wells. First, let’s dig in a bit to fracking. There was a quite a bit of talk during the VP debate last night about fracking — also known as hydraulic fracturing. As you are probably aware, fracking is a method of extracting oil and natural gas from shale rock by injecting liquid at high pressure into fissures in the shale. Fracking and advances in drilling technology have completely transformed America’s energy landscape. In 2019 total energy production in the U.S. exceeded energy consumption for the first time since 1957. The U.S. is now the top producer of oil in the world. Check out this table from the Energy Information Administration:
While fracking dates back to the 1860s and was used throughout the 20th century, it wasn’t a major factor in oil and gas production until the 21st century. What happened? In the late 1990s that engineers at Mitchell Energy accidentally discovered a better method of breaking open shale rock and the fracking craze was born due. Production of natural gas and oil from shale rock took off in the early 2000s.
In the below chart from the EIA you can see the huge increase in production of natural gas and oil due to fracking starting in the 2000s.
The great increase in production of both oil and natural gas has contributed to a reduction in oil prices and a collapse in the price of natural gas. Here’s a chart showing the price of natural gas over the past 15 years.
One side effect of the low price of natural gas is it transforming how electricity is produced in the U.S. We’ve seen a change from coal fired power plants to ones that use natural gas. Not only is this a good thing in terms of electricity costs, but natural gas fired power plants produce 50%-60% fewer greenhouse gas emissions than coal fired plants. You can see that gas power plants have overtaken coal in terms of electricity production:
Another side effect of the super lower price of natural gas is that flaring of natural gas has increased. Fracking often results in both natural gas and oil being produced from a well. If the driller is looking for the more valuable oil and natural gas also comes out of the well, the low price of natural gas may mean that it’s not worth it to the driller to capture and transport the natural gas in order to sell it. In some areas of the country where there isn’t sufficient infrastructure for storage or transport, natural gas produced while drilling for oil is just “flared off.” This means that the gas is just burned instead of collected, transported and sold. The EIA summarized the issue as follows: “As crude oil production has outpaced the buildout of infrastructure to handle natural gas, associated gas—or natural gas that is extracted during oil production—has been increasingly vented and flared in order to manage this undeliverable natural gas production from flowing oil wells.”
An amazing example can be seen at the so-called “Bakken Shale” in North Dakota. Here’s an image from space at night of the northern part of the U.S. Notice that the natural gas being flared off the oil drilling makes the Bakken look like a major city:
The Bakken is not the only set of oil fields that light up like a city at night. Here’s a webpage from geology.com that shows the nighttime views of other oil fields around the world: Oil Fields from Space.
With the price of natural gas so low, it isn’t economical to invest in the infrastructure necessary to store and transport natural gas. In the absence of regulation, flaring of natural gas is the most viable option. With respect to regulation, the rules about flaring natural gas are primarily regulated by the states and the rules vary state-by-state. Texas and North Dakota have the greatest amount of natural gas flaring.
According to the EIA, “both Texas and North Dakota are working with producers to limit the need for flaring without shutting down or affecting production of crude oil from new wells.”