11 Mar 2014 More

Lawsuits Filed Against Oil Companies in Bakken for Gas Flares

posted by Unknown @ 11:57 0 Comments

Bakken gas flares in action
North Dakota is booming with wells in the Bakken, but the increase in gas flaring is bringing discussions of stricter regulations. The debate has been so severe in fact that 10 class action lawsuits have been filed against oil companies for lost royalties.

In an interview with NBC News, Ryan Salmon, manager of Ceres oil and gas program, said “Investors want companies to have a more aggressive reaction to flaring and disclose clear steps to fix the problem.

Companies tend to burn the lesser grade of oil instead of using more sufficient pipelines. It is estimated that $100 million per month of flare gas is wasted in North Dakota alone.  Because of this many land owners who have leased their land believe they are losing money.

In a statement by one of the law firms representing the land owners, “The Lawsuits seek to force operators to comply with state law and pay royalties to mineral owners on the value of flared gas, and by so doing create a compelling economic incentive for producers to reduce and eliminate the wasteful practice of flaring.”

Not only is there the fear of not getting paid what is due, there are health concerns regarding the release of chemicals into the air. While it is not as harmful as the release of natural gas, it still releases carbon dioxide that affects the climate.

In an interview with the Bismark Tribune, Mark Wald, owner of Blaise Energy, said, “Everybody sees the flare and it’s an obvious source of frustration. You ask yourself, ‘how can we capture that energy?’ There’s got to be another way.”

The Solution

There have been discussions on ways to reduce the amount of gas being flared. Energy companies like Hess Corp. and Alliance Pipeline have started building pipelines to connect with wells. There are also plans to create at management team to control flaring.

North Dakota Petroleum Council Chairman, Terry Kovacevich, said, “We recognize that natural gas is an efficient, clean and valuable resource, and that’s why the industry has invested more than $6 billion in new pipelines, processing plants and other infrastructure to move it from the wellhead to the marketplace.”

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