As natural gas demand drops this summer, ONEOK offered some good news to energy companies. They plan to invest an extra $160 million into their efforts in Bakken. Earlier, they announced a $1.8 billion dollar commitment to developing a 270-mile gathering system that would move gas production in North Dakota.
Fewer Flares and More Energy
The success of hydraulic fracturing and horizontal drilling in the Bakken has produced big results for natural gas companies. ONEOK’s decision to build a pipeline and two processing facilities should increase access to a cleaner fuel resource for both consumers and electric companies.
Without proper processing facilities, energy companies are often forced to burn off natural gas at the well head. Progressive attempts at processing and selling this abundant resource gives an energy crunched U.S. a low-cost option for generating electrical power. It also signals car companies to develop more natural gas burning vehicles.
The constant discord in oil rich regions, such as Iran, keep oil prices at $100 barrel. This translates to gas pump prices near $4 a gallon throughout the U.S. ONEOK’s announcement sheds a hopeful light towards the country’s energy future.
The Bakken is Just the Beginning
The Bakken has been a known and abundant oil reserve since the 1950’s, but modern technology has given it a new life via natural gas deposits that are found in the shale formations. Through hydraulic fracturing, energy companies are able to extract large amounts of natural gas, along with the oil. ONEOK’s investment means that the flares will be less needed, and the gas becomes available for consumer use.
If The Bakken investment proves it is profitable, ONEOK will lead the way for similar activity in the Utica formation and the Marcellus formation. Both are rich with natural gas deposits. However, the warm winter, lack of gas storage facilities, and unstable natural gas prices have energy companies on edge.
ONEOK’s commitment to actually transporting and processing the natural gas is proof that an investment a new American fuel source has potential.
The Right Time to Invest in Natural Gas
Savvy investors should see ONEOK’s development in the Bakken as good news. With natural gas prices falling, it makes sense to invest in it now. America is slow to wean itself from its oil dependency, but American companies and investors that follow ONEOK’s lead can benefit themselves as well as energy hungry Americans.
The Department of Energy encourages citizens to accept vehicles that run on natural gas because demand leads to improved infrastructure. Currently natural gas fueling stations are rare. As the resource becomes more available, it makes sense to convert. It’s not only abundant, it is also cleaner burning that liquid petroleum. That makes natural gas a fast solution to the nation’s energy needs.