North Dakota reported flat growth in natural gas production in March versus February, with producers signaling no plans to curb output despite low prices in the Bakken Shale, according to the state’s Department of Mineral Resources (DMR).
DMR’s Lynn Helms, Oil and Gas Division director, hosted a press briefing last week to discuss the March production figures and current outlook for upstream activity in the state.
The price of natural gas delivered to Northern Border Pipeline at Watford City, ND, stood at $1.78/Mcf as of Friday (May 12). Bakken prices remain at their lowest level since the height of the pandemic during the third quarter of 2020, Helms highlighted.
He said that despite the low prices, the state’s producers have not indicated plans to dial back activity this year in the oily Williston Basin.
“We’ve got a lot of excess capacity now built into our gathering and processing systems,” Helms said. “So even with the low price of gas, the oil prices are robust enough that companies are actually planning to grow their oil production this year.”
Helms was joined by Justin Kringstad, director of the North Dakota Pipeline Authority. Kringstad noted that in recent weeks, Bakken gas has accounted for more than 80% of volumes on Northern Border, which originates in the Western Canadian Sedimentary Basin. Displacement of Canadian volumes with Bakken Gas on the system has contributed to discounted pricing at the NOVA/AECO C hub in Alberta.
North Dakota’s natural gas production averaged 3.05 Bcf/d in March, nearly flat from 3.04 Bcf/d in February. The gas capture rate held steady at 95%.
Regulators approved 89 drilling permits in April, compared to 89 in March and 70 in February.
The statewide rig count stood at 39 as of Friday, down from a monthly average of 43 in April. Helms attributed the dip to temporary load restrictions for trucks amid the springtime thaw, which causes roads to soften. The restrictions limit transport of heavy materials, such as water and hydraulic fracturing sand, Helms explained.
The tally of drilled but uncompleted wells stood at 483 as of March, compared to 487 in February. Well completions in April totaled 51, versus 62 in March and 96 in February, based on preliminary figures.
There were 18 hydraulic fracturing crews active in the state as of Friday, Helms said, versus 21 around the same time last month.
Oil production, for its part, fell 3% month/month to average 1.12 million b/d in March.
Helms expressed displeasure with proposed rule changes by the Environmental Protection Agency to curb greenhouse gas emissions from natural gas and coal-fired power plants.
He likened the proposal to “the Clean Power Plan on steroids,” a reference to the Obama-era policy to regulate emissions from the power sector, which was repealed and replaced by the Trump administration.
The new proposal from EPA would require certain gas-fired plants to deploy carbon capture and storage (CCS) or begin co-firing low-carbon hydrogen in order to curb emissions.
The Biden administration’s Inflation Reduction Act “put a carrot out there” in terms of incentivizing CCS, “but now we’re seeing the stick come along behind that,” Helms said. “And I’m sure that the state of North Dakota is going to be very actively resisting these new EPA regulations.”
