North Dakota will sink $10 million into a road map for the future, and that road primarily leads the state west.
The legislature approved $9.5 million for studying the feasibility of salt cavern storage in North Dakota during the most recent biennium, and another $500,000 to map out the development process for hydrogen.
As it happens, the best locations for underground salt cavern storage generally lie between Williston and Minot. So when Gov. Doug Burgum talks about North Dakota hitting the “geologic jackpot,” he’s also talking about yet another key element that the West will bring to the state’s energy future.
Funding for those two legislatively directed studies, which will outline the shape of things to come for the energy industry, was approved this week by the North Dakota Industrial Commission, with UND’s Energy and Environmental Research Center to conduct the research. The next stop in the approval process for these two ground-breaking studies will be the Oil and Gas Research Council, sometime between the fourth week of June and July 27.
To get a handle on the shape of things to come, the Williston Herald visited with Lynn Helms, Director of the Department of Mineral Resources. In part one of this three-part series, we look at the key role salt caverns are going to play in the state’s energy future. In part two, we’ll look at what net carbon neutrality means for the state and for the industry. Lastly, we’ll look at the efforts to plug and reclaim abandoned wells — an ongoing reality in the roller coaster markets for oil and gas.
“(Salt Caverns) are a piece of infrastructure that opens up lots of opportunities for different uses,” North Dakota Department of Mineral Resources Director Lynn Helms told the Williston Herald. “You know we initially thought of them simply as storing the feedstocks and intermediate chemicals for petrochemical processing, and they are absolutely critical for that. But as we talk to more and more people, we find that they have the potential for other things.”
As just one example, Helms will be talking to propane wholesalers and retailers from North Dakota this week or next about the possibility of using salt caverns to store propane closer to their market. That could ease perennial propane shortages in the state that are occurring during harvest season or other times when demand spikes.
“Decades ago (for) the propane market in North Dakota, we had what was called the Cochin pipeline, but it no longer brings propane to North Dakota,” Helms said. “It got converted into a wet gas pipeline going out of the state. So you know, propane coming to North Dakota has to find its way back up to a pipeline into Sioux City, Iowa and get here by truck.”
Salt cavern storage is also a key element in the value-added ethane power project which is being discussed for Williams County near Tioga. It will also be a key element in production of blue hydrogen.
One reason they haven’t been developed to now, Helms suggested, is that the state has been seen mainly as a commodity producer. But now the state is shifting attitudes, and it’s becoming that place where value can be added to the commodity as well.
“This is a really neat point I time where we’re starting to see the state look beyond being a commodity producer that sends our crude oil and natural gas away somewhere,” Helms said.
Preliminary data on salt cavern storage has all suggested that salt cavern storage, which has long been safely used inn various locations including the nation’s Strategic Petroleum Reserve, is feasible with North Dakota geology. But attracting high-value opportunities is going to take more than a surface look. The state needs a deep dive.
“The main thing with this study is that no one has ever collected samples of the salt formations and subjected them to mechanical testing that you have to do to design a solid cavern,” Helms said. “So they are going to actually core the overlying and underlying formations, as well as the salts themselves, and they’ll subject them to mechanical testing to make sure that if you build a cavern, it will stay open and be able to be used for decades.”
The study will have similar elements to one previously approved by the North Dakota legislature, but that study is not going to get done now. This new, more expensive study, is replacing it.
“It’s also in the end going to do a major engineering design of what it will cost, and what the salt caverns would actually look like as being constructed,” Helms said, adding, “And in this case, the industry match or the principal investigators match is going to actually acquire the site and the salt formation rights, so that not only can the salt be extracted and tested, but if it turns out positive, the facility could be built there.”
Those caverns would be for holding liquified natural gas for the blue hydrogen project the state announced a few weeks ago with Mitsubishi Power Americas and Bakken Midstream.
Each salt cavern will cost in the neighborhood of $50 million in ballpark figures, Helms said. And multiple caverns with associated facilities is likely to be in the range of $200 million, based on information from the Alberta petrochemicals industry.
“The salt caverns that I toured up in Alberta were remotely operated,” Helms said. “It was kind of like a robotic operation they were operating from a control room a few miles away. Everything was handled remotely in terms of when material went into the caverns and when it came out and all of that.”
That minimizes the number of people on the surface where all the pipes are for moving material, and helps reduce the chances of accidents causing a release. That’s a top concern, Helms said.
“How do you manage that working fluid, the high salt content brine that’s typically used to move the stored material in and out of the caverns,” Helms said.
Salt caverns have many uses for underground storage, but they are not likely to be used for underground storage of carbon dioxide. That will be an entirely different formation. We’ll look at carbon sequestration and its role in the Governor’s net carbon neutral goal in part two of this series.