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Published May 16, 2010, 11:09 AM

Company wants to convert flared gas to electricity

BISMARCK, N.D. (AP) — Much like the proverbial moth to a flame, Mark Wald was drawn back to his native North Dakota by the burning sky over the state's oil patch.

By: JAMES MacPHERSON, Associated Press

BISMARCK, N.D. (AP) — Much like the proverbial moth to a flame, Mark Wald was drawn back to his native North Dakota by the burning sky over the state's oil patch.

Wald saw waste — but also promise — in of the hundreds of flares that burn natural gas as an unwanted byproduct of oil production in western North Dakota.

"I think everybody sees the tremendous waste and don't understand why it's happening," Wald said. "I see tremendous potential."

Why not, he thought, capture at least some of the gas, run it though a generator to create electricity and pump the power into a nearby transmission line.

It's an idea that's now being endorsed by an environmental group, regulators and industry officials.

Wald, 45, moved from Seattle where he worked in technology sales to his hometown of Dickinson last year to form Blaise Energy Inc., a company focused solely on utilizing wasted natural gas.

His company received a $375,000 state grant in January to study the project that he's dubbed "recycled energy from a wasted resource."

Wald believes his company can capture 600 million cubic feet of natural gas from well sites and convert it to 5 megawatts of electricity, or enough to power about 5,000 homes.

"It's really a win for the local co-ops because they are starved for power in some parts, and for oil producers, it shows some proactive stewardship on their part," he said.

The project, pegged at $4.4 million, also will curb a significant amount of carbon dioxide emissions blamed for global warming, he said.

Blaise Energy is seeking $2 million in federal money that is being filtered through the state to help fund the project.

The North Dakota Oil and Gas Research Council endorsed the plan and funding last week. It will be considered on Thursday by Gov. John Hoeven, Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring, who make up the North Dakota Industrial Commission, which supervises oil and gas regulation in the state.

Lynn Helms, director of the state Department of Mineral Resources, said he knew of no other attempts to transform natural gas to electricity in North Dakota.

"I'm very impressed with the project," Helms said. "That's going to be another big first for North Dakota, capturing flared gas and making it electricity."

In 2008, nearly one-third of natural gas produced in North Dakota was flared because of the lack of collecting systems and pipelines needed to move it to market. Helms said about 17 percent natural gas in the state's oil patch is being flared at present.

Less than 1 percent of natural gas is flared from oil fields nationwide, and less than 3 percent worldwide, according to the Energy Information Administration in Washington, D.C.

Wayde Schafer, a North Dakota spokesman for the Sierra Club, said he likes Blaise Energy's idea of using otherwise wasted natural gas. Oil companies in a rush to develop the state's oil patch have treated natural gas more as a nuisance than a commodity, he said.

"The percentage of what we're flaring is higher than any other state and it's unacceptable and wasteful," he said.

Nearly $1 billion in infrastructure improvements are either planned or have been built in North Dakota to capture natural gas and move it to market, said Justin Kringstad, director of the state Pipeline Authority.

Not all well sites will have access to pipelines and Kringstad believes Blaise Energy's could help fill the void.

"I think there is some huge potential for them," he said.

Wald said his company has several investors and some agreements with electric utilities to purchase power though he declined to name them for proprietary reasons. Agreements also have been reached with some oil producers, he said.

"We're focusing on the greatest problematic areas of flaring, away from where the pipeline infrastructure is or will be," he said. "We're targeting sites that are already electrified, most times the grid is there."

"They are on the right path with their targeting," said Ron Ness, president of the North Dakota Petroleum Council. "The economics got to work for everybody for it to be successful and we're very hopeful it will be."

Wald said his company would get the natural gas at no charge but would pay oil well owners a monthly stipend of "a couple of thousand to several thousand dollars" to install equipment at the site.

"They're flaring it so they are getting zero for it today," Wald said. "We've tried to remove all reasons they wouldn't want to go with this system."

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