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Published September 10, 2012, 11:41 AM

Press forward on natural gas issues

North Dakota needs to have more of its natural gas captured and put to good use. It’s an environmental issue. It’s an economic issue.

By: Bismarck (N.D.) Tribune, Agweek

Bismarck (N.D.) Tribune

BISMARCK, N.D. — North Dakota needs to have more of its natural gas captured and put to good use. It’s an environmental issue. It’s an economic issue.

More than 30 percent of the natural gas produced in the state is flared — burned off at the well site. That’s too high. Nationally, only 1 to 2 percent gets burned off.

Natural gas flaring here isn’t a new issue. The oil boom only makes it a harder problem to solve. The oversupply of natural gas drives down the price, making it harder to find capital to invest in pipeline expansion. Building infrastructure to gather natural gas in new oil fields typically is a matter of playing catch-up. As it is, millions of dollars are being spent to develop an adequate natural gas pipeline network.

The irony is that the flared natural gas could be used to manufacture nitrogen fertilizers (anhydrous ammonia) that can be used in the state’s corn and wheat fields. Fertilizer costs have gone from about $100 a ton in the 1990s to $850 a ton today, according to North Dakota Agriculture Commissioner Doug Goehring. Converting natural gas in the Bakken to fertilizers would do much to bring down the fertilizer price.

A New York company wants to build a portable fertilizer plant that could be moved among oil wells in North Dakota. It wouldn’t have to wait for the pipelines to reach new wells, and it could reduce flaring, separate valuable natural gas byproducts and produce fertilizer. It seems to be a smart, innovative and practical answer to a difficult problem — except the company wants a $1 million grant from North Dakota; a quarter of the cost of developing the prototype.

The Industrial Commission — made up of state officials Gov. Jack Dalrymple, Attorney General Wayne Stenehjem and Goehring — did the right thing recently when it delayed a response to N-Flex LLC. It doesn’t mean the commission isn’t going to bite. It means, we hope, that the commission’s staff is going to do due diligence on N-Flex and its proposal. The commission said it wanted more information on the company’s financial assumptions and feasibility of the project. The state may be flush, but the Industrial Commission got it right in not pulling the trigger on that kind of money without a thorough review.

It’s always a worry when there’s only one company knocking at your door.

The Industrial Commission does have another fertilizer proposal in the works. A Fargo-based company received $100,000 from the Industrial Commission to study building a $1 billion farmer-owned fertilizer plan in the Upper Midwest.

North Dakota is helping develop smart options to flaring natural gas. It takes time and money. The Industrial Commission needs to keep the pressure on industry to develop practical and effective solutions for the state’s environmental and economic future.