Episode 64 | Fewer Flares | Bakken Midstream
Listeners will know I love natural gas and fracking, but can't stand flaring.
According to my guest, Bakken Midstream CEO Mike Hopkins, North Dakota's Bakken Shale play flares 500 million cubic feet (Mcf) of natural gas per day, or about 20% of the total natural gas produced in the region.
You may be wondering why any gas is flared. The Bakken producers are primarily interested in oil. Gas is more expensive and difficult to transport, and far less valuable.
Mike, who I first interviewed in Episode 30 when he was CEO of Ice Energy, left that company in 2018.
"I decided I was not the best person for that next stage," he says. "There are people that are great at operations. They might not be what I do, in terms of deal-making and team building. But they're great at what I thought the company needed."
On LinkedIn I remember Mike teasing that he was starting a new company, codenamed "Stealth." It turns out that shortly before leaving Ice Energy, Mike met with renowned investor Steve Lebow, of Costco and Starbucks fame, who initially pitched the idea of developing a solution for flaring in North Dakota.
Steve says their approach is multi-phased. First, they want to address flaring at the source. He believes capturing natural gas on site and using it for electric production during drilling/fracking operations is a viable solution. He also supports compression/liquefaction.
In a few years' time, Mike and his team want to build gas processing and fractionator facilities to refine natural gas for local use. Rather than pipe the gas to another state, Bakken Midstream would use this affordable gas to lure industry to North Dakota.
"You don’t attract these companies to a place by just saying, 'We’ve got lots of this stuff in the ground. Figure out how to get it.,' he says. "It's got to be a 'Plug-and-play' environment."
I asked him why this hasn't been tried before. Mike believes producers have long been solely focused on natural gas. It wasn't until recently, when flaring reached the point where it could now limit the amount of oil produced, that the issue has been taken seriously.
He believes his startup, has the capital and speed to address this unique challenge in ways older midstream companies cannot.
When he is finished, he believes this natural gas economy will be a second economic miracle for the region.
"If we do our job right, North Dakota will have a uniquely low cost natural gas for [people that want to use it]," he says.
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