Emissions Soar As Permian Flaring Frenzy Breaks New Records

The flaring and venting of natural gas in the U.S. continues to soar, reaching new record highs in recent months.

The volume of gas that was burned or simply released into the atmosphere by oil and gas drillers reached 1.28 billion cubic feet per day (Bcf/d) in 2018, according to the EIA, up from 0.772 Bcf/d in 2017.

The practice is a disaster on many levels. It is wasteful, it worsens air quality and it exacerbates climate change. Venting gas is much worse than burning it since it releases methane into the atmosphere, a potent greenhouse gas.

The New York Times documented several "super emitters" in the Permian, using infrared cameras to visually capture the epidemic. The NYT even recorded an oil worker walking into an invisible plume of leaking methane.  

But shale drillers continue the practice and regulators have shown little interest in regulating them. Even though venting is off limits in North Dakota and restricted in Texas, flaring has largely gone unchecked while methane leaks at virtually every stage of the extraction process.

In the third quarter of 2019, the Permian basin alone vented and flared 752 million cubic feet of natural gas per day, up sharply from 661 mcf/d in the first quarter, according to Rystad Energy. "This represents a new all-time high. Oil production in the Permian Basin is growing at an accelerated pace again, and we observe high, sustained levels of flaring and venting of associated gas in the basin," Artem Abramov, head of shale research at Rystad, said in November.

Some oil companies trumpet their reduced rate of flaring, but others have flared at higher rates. "A significant number of operators have exhibited a clear downwards shift in flaring intensity in 2019. Yet there are other examples of a recent increase in flaring intensity, which are primarily represented by some operators active in the Eastern Midland Basin," Abramov said. Related: OPEC+ Agrees To Deeper Output Cuts

"It's a black eye for the Permian basin," Pioneer Natural Resources Chief Executive Officer Scott Sheffield said earlier this year. "The state, the pipeline companies and the producers -- we all need to come together to figure out a way to stop the flaring."

One thing that could be done would be for the Texas Railroad Commission, which regulates the industry in the state, to deny permits to companies that allow them to flare. But the Railroad Commission has not denied a single request from an oil producer for a flaring permit in years, despite the spike in flaring. The number of permits granted has shot up from around 500 in 2010 to 5,500 in 2018, according to the EIA. There is essentially no cop on the beat.

Earthworks, an environmental group, has extensively documented methane leaks from oil and gas operations, and has filed over 103 complaints with the Texas Commission on Environmental Quality. "Our field research and complaints of oil and gas operations are doing the job that Texas regulators ought to be doing to protect the public," Earthworks' Senior Policy Counsel Aaron Mintzes said in a statement.

The situation reached absurd levels a few months ago when the Texas Railroad Commission approved a company's request to flare even though the company had pipeline access readily available. One of the main reasons that flaring has reached astronomical levels is because pipeline capacity has not kept up with the surge in gas production. Because the industry is really chasing oil, all of the gas is surplus. And because there is nowhere to put it, they flare it.

That's the argument anyways. But Williams Cos., a pipeline giant, is suing the Texas Railroad Commission over the agency's recent decision to grant a flaring permit to Exco Operating Co. Exco has wells in the Eagle Ford that are already connected to a pipeline, but Exco balked at paying the fees. Instead, it just wanted to burn the gas. It's worth reemphasizing this - the company doesn't actually need to flare the gas for any technical reason, it just doesn't want to pay to ship it. Related: Iran: We Won't Agree To Any Production Cuts In The Future

The Railroad Commission granted the permit. Now, Williams Cos. is suing the commission for failing to uphold the state's own regulations on flaring.

Coming under fire, the Railroad Commission has sought to defend itself. "That's a very unique case that we almost never see," Ryan Sitton, a Republican commissioner at the agency, said on Bloomberg Television Thursday, referring to the Exco case. "All we did was grant a permit for seven months to allow the producer to continue to flare while we try to work this out." Bloomberg notes that the Railroad Commission has issued around 7,000 permits this year, allowing companies to vent or flare.

"At the end of the day, you've got 27 million Texans, and what they want is affordable, reliable energy," Sitton said. "And they want our energy industry to do well."

Meanwhile, natural gas is often likened to a "bridge fuel," but it is now the main driver of higher greenhouse gas emissions globally. "Gas is a major concern," Bill Hare, chief executive officer of Climate Analytics, told Bloomberg. "Governments are acting as if this fossil fuel is somehow clean. Yet gas was responsible for half the increase in CO2 emissions from fossil fuel consumption in 2017-18."

By Nick Cunningham for Oilprice.com

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