Oil boom in North Dakota: putting on a happy face.

Author:Nemec, Richard

As part of a record-setting industry meeting in May at the Williston Basin Petroleum Conference in North Dakota, Republican Gov. Jack Dalrymple offered a keynote speech with one superlative after another about his sparsely populated, but energy-and agriculture-rich state. It seems his state is leading the nation in a number of categories these days, including having the happiest residents.

Perhaps the happiness, as defined by an anonymous national polling organization, is a reflection of the fact that this year North Dakota has the lowest unemployment rate in the country and the fastest growing economy. That, in turn, reflects an area of the United States where the growth in infrastructure generally, and in energy specifically, has been struggling to keep up with demand for ever-more oil and natural gas. For the pipeline and related businesses this represents both a blessing and a whole series of challenges.

Dalrymple told the eclectic audience of more than 4,000 locals and energy professionals from more than 40 states and seven countries that just like oil, natural gas is a "big story" in North Dakota. Evidence of that can be found in the all-out state/industry efforts to reduce flared associated gas. Those efforts have assumed the level of a governor-led crusade with a relentless stream of engineers and roustabouts trying to put the right infrastructure fixes on the nagging problem.

Nothing is simple in the Bakken. The glaring successes and stunning growth that have exceeded the expectations of even the most bullish of the industry and state officials have resulted from continuing solid technological advances and dogged focus on efficiency in all parts of the field operations from spudding to completions at multi-well drill sites. Fracking techniques, drilling efficiencies and the myriad of well completion techniques have all continuously improved in recent years.

"The volume curves [for output] just continue to strengthen as the producers get more experience with the play and continue to drive efficiencies," said Kevin Burdick, Oklahoma-based ONEOK Partners LP's vice president for gas gathering and processing. For a midstream company servicing all of this robust production, Burdick acknowledges that dealing with landowners and obtaining crucial rights-of-way can be a challenge.

ONEOK is on the front lines of the battle to curb flaring of associated gas at the wellhead by putting in place crucial takeaway infrastructure or well site options for burning the gas productively. The mix of challenges varies greatly from one part of the Williston Basin to another, Burdick said. The different mitigating measures pursued--and there are many, according to many industry players--all have to account for the distinctive production profile found in the Bakken, including a very large amount of natural gas liquids (NGL), richer in liquids than other crudes, and the technology improvements that are driving fracking and production...

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