Fueling BNSF locomotives with liquid natural gas would be a win-win for North Dakota. It would create a new market for the state’s excess natural gas, and that demand would help finance capturing natural gas now flared at well sites.
State officials are pushing multiple strategies for capturing and using natural gas: fertilizer plants, generating electricity at well sites and power stations, pipelines for moving gas to home heating markets. They’re also encouraging BNSF’s exploration of natural gas as locomotive fuel.
Natural gas is flared because doing so is less harmful to the environment than releasing the raw gas into the atmosphere.
It’s also wasteful. Not only is the natural gas from the Bakken formation lost, it contains numerous byproducts that have valuable commercial uses.
State officials are pushing for these uses because North Dakota flares about 30 percent of the natural gas produced in its oil fields. It does so because the wells have begun producing faster than a network of pipelines can be developed to capture the natural gas.
The market pressure for oil is much more intense than the market pressure for natural gas in North Dakota.
If BNSF would begin fueling its locomotives with natural gas, it also would catch the attention of the larger transportation industry. There’s potential to fuel all kinds of vehicles with natural gas. But that can’t happen until there’s a network of refueling stations available for cars and trucks traveling long distances. No big truck fleets can make a conversion to natural gas — no matter the price – if it is not readily available. If the railroad’s exploration of natural gas as a fuel works out, others will give natural gas a harder look.
A bill in the North Dakota Senate, requiring oil companies to pay royalties on flared natural gas after one year, was defeated.
There’s an existing one-year flaring requirement; however, it can be waived and often is. Lawmakers see themselves as walking a line between regulating the oil and natural gas industry and supporting its continuation as an economic benefit to the state.
Oil and gas companies have spent millions of dollars — and will spend millions more — developing the infrastructure to capture natural gas in North Dakota, and still the releases from the state’s expanding oil fields are three times that of the national average.
As the oil fields in North Dakota mature and pipelines to capture and gather natural gas catch up with exploration, the percentage of natural gas lost to flaring will decline.
Developing fertilizer plants, constructing natural gas-fired power plants and fueling railroad locomotives are all actions that improve the state’s conversion of natural gas to beneficial uses and accelerate the reduction in flaring.