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Friday, October 18, 2013

Landowners Sue Companies For Royalties on Flared Gas

From the New York Times:
In the sharpest challenge yet to the surge in flaring of natural gas in the Bakken shale oil field, North Dakota mineral owners this week filed 10 class-action lawsuits seeking millions of dollars in lost royalties from some of the nation’s largest oil companies.
Roughly 1,500 fires burn above western North Dakota because of the deliberate burning of natural gas by companies rushing to drill for oil without having sufficient pipelines to transport their production. With cheap gas bubbling to the top with expensive oil, the companies do not have an economic incentive to build the necessary gas pipelines, so they flare the excess gas instead.
Flaring is environmentally less harmful than releasing raw natural gas into the atmosphere, but the flared gas still spews climate-warming carbon dioxide into the atmosphere. The quantities of gas burned are so large that the fires rising above wheat and sunflower fields look like a small city in NASA photographs taken from satellites.
Flared gas has nearly tripled in the last two years in North Dakota, with almost 30 percent of the output in the state burned at wells, producing emissions equivalent to more than two medium-size coal-fired power plants.
The value of flared gas in the state is roughly $100 million a month, leading property owners who lease their lands to the oil companies to believe they are losing money even though they are earning increasing royalties from the fast expansion of oil production in North Dakota. Oil output has risen by 100,000 barrels a day since May alone.
Read the whole article here. 

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