Montana Oil and Gas production

Montana Production of Oil & Natural Gas

Natural Gas and Oil
Production of natural gas and oil is up sharply in Montana over recent years. According to the Montana Department of Natural Resources, the state produced 108 billion cubic feet of natural gas in 2005. The production came from approximately 5, 400 producing gas wells.

Montana produces more natural gas than its consumers use. But because of the structure of the distribution system and markets, most of the domestic production is exported and most of what we consume is imported – primarily from gas fields in southern Alberta. Production in Montana is mostly from gas fields in the north-central section of the state. Some is produced as a byproduct in oil fields. Production is fairly evenly divided among Fallon, Phillips, Hill, Blaine, and Richland Counties. Product refinement occurs at three processing plants.

In recent years the state has averaged about 100 billion cubic feet of natural gas production with in-state consumption at just under 70 billion cubic feet. Recent drilling permits indicate a strong interest in coal bed methane, although Montana does not yet produce a significant quantity. Two oil refineries in Billings and one in Laurel are among the biggest consumers of natural gas in the state. The recently-closed Smurfit-Stone Container packaging plant in Missoula was also a major consumer. View other major users of natural gas in the state.

Natural gas delivery to all customers in western Montana is almost exclusively through the Northwestern Energy (NWE) supply network. Montana-Dakota Utilities Co. (MDU) is the second largest natural gas utility in Montana. It distributes natural gas to the geographic eastern third of the state, including the city of Billings. Energy West is the third largest gas provider in Montana, providing service to the Great Falls area. These three networks deliver 99 percent of the natural gas purchased within the state.

Peak load on the natural gas delivery system is during extremely cold winter evenings when residential space heating requirements tax the system. During summer months, the demand for product is, of course, quite low. Nonetheless, very little unused firm capacity is available on Northwestern’s network. Significant upgrades would be required to bring online major natural gas-fired electrical generating plants.

Natural gas production is closely linked to oil production in Montana, as it is for many regions. In 2005, the state produced 32.8 million barrels of oil from approximately 3, 900 producing oil wells. Montana oil production has increased sharply over recent years. Most of the production is out of the Williston Basin, which extends into eastern Montana from North and South Dakota. The Elm Coulee field in Richland County accounted for almost half of the state’s production of oil in 2005 – about 15 million barrels. Most of the oil produced outside of the Williston Basin formation is from the Powder River Basin.

Montana has four oil refineries, but most of the raw product is imported from Alberta. Only about 4 percent of the refinery feed stock is Montana crude; about 21 percent comes from Wyoming.

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