March 2, 2013 / 1:31 AM / in 5 years

UPDATE 1-Bakken oil producer Continental pledges less natgas flaring

By Jeanine Prezioso

NEW YORK, March 1 (Reuters) - Continental Resources, one of the largest oil producers in North Dakota’s prolific Bakken shale, said it had reduced the amount of natural gas it flared last year.

Flaring involves burning off natural gas found while producing oil and is done mostly when there is no infrastructure such as gathering lines from a well in place to deliver gas to a pipeline which would then bring the gas to an existing market.

The process can add more carbon dioxide into the atmosphere, which has been linked to climate change.

“During December 2012, the percentage of our natural gas production flared in North Dakota Bakken was approximately 10 percent compared to approximately 20 percent in December 2011,” Continental said in a U.S. Securities and Exchange form filed on Thursday.

The company said its “ultimate goal” is to reduce flaring to as close to zero percent as possible.

Ceres, a non-profit group representing environmental and socially conscious investor groups said on Friday one of its clients, Mercy Investment Services, had filed a shareholder resolution with Continental requesting that they adopt measures to reduce flaring.

The resolution was withdrawn earlier this year after investors and the company had a discussion.

“It’s great to see that they have this goal out there now and we hope that their peers in the industry will follow suit,” said Ryan Salmon, manager of the oil and gas program with Ceres in Boston, Massachusetts.

One of the reasons why gas is flared in North Dakota is because energy production has grown so quickly in such a short amount of time that infrastructure has been unable to keep pace.

The gas being produced is “liquids-rich” and gas processing facilities are needed to “strip” the gas of the liquids and send the “dry” portion to market via pipeline.

“Production is increasing.” said Alison Ritter, a spokeswoman for the North Dakota Industrial Commission. “It’s a matter of trying to keep up with wells we’re adding as well as have operators keep up with infrastructure.”

Oil output in North Dakota, the number 2 crude producing U.S. state, rose to a record high in December of 768,853 barrels per day, state data showed.

Natural gas flaring has since decreased. In September 2011, some 36 percent of natural gas volumes were flared, compared to 29 percent in December 2012, Ritter said.

A higher percentage of Continental’s production came from natural gas last year, “due in part to the connecting of new and existing wells in North Dakota to gas processing plants,” the company said in the SEC filing.

“Over the past couple of years, Continental Resources has invested significant time and effort to ensure first-mile infrastructure and build-out to both reduce flaring and capture value,” a spokeswoman said via email. “We are marketing that gas to midstream marketers for use in that region.”

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