Flaring of natural gas has surged in North Dakota’s Bakken shale formation, and land owners aren’t happy about losing the royalties.
Ten class actions have been filed seeking damages from Continental Resources, XTO Energy, SM Energy and Marathon Oil, among others.
About 30 percent of the natural gas output in North Dakota is flared. Flaring is used when there’s no way to process the gas or transport it to market. The practice is typically seen when oil wells proliferate fast than the infrastructure can be developed to handle the gas, or before a commercial market for the gas is established.
There are now about 1,500 natural gas flares in western North Dakota. Low gas prices are discouraging the development of expensive processing facilities and pipelines to handle the byproduct from surging crude oil production.
The land owners who leased mineral rights to oil and gas companies think value of the flared Bakken shale gas is about $100 million a month.
Oil output in Bakken is up by 100,000 barrels a day since May this year and now totals 850,000 barrels a day.