Shale oil production also comes with large amounts of associated natural gas. Associated gas often does not have a commercial market. Some of it is flared but environmental regulations dictate that only a small portion can be burned off at the wellhead. The issue of associated gas is already emerging as a problem for shale players, particularly in North Dakota’s Bakken. Shale operators in the Bakken have started to shut down rigs and scale back well completions to avoid violating the state’s 85% gas-capture target. In the Permian, an estimated $1 million of gas is burned off every day because there aren’t enough pipelines to get it to market.
