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Colorado energy regulators have voted for a curtailment of gas flaring at oil and gas production sites, limiting approved flaring to just a few circumstances, the Colorado Sun reports, noting that flaring is relatively rare in the state, compared with other states where it is routine.
The rule will help mitigate climate change, ensure the safety of groundwater, and make sure soil resources are available to grow healthy crops and vegetation, the director of the Colorado Oil and Gas Conservation Commission, Julie Murphy, said in a statement as quoted by Bloomberg Law.
Every year, the oil and gas industry flares some 150 billion cubic meters of natural gas. The reasons vary: at oil fields, gas is flared when there are no pipelines to transport it to a collection or storage hub; at refineries, some gases must be flared to avoid explosions.
The biggest flarers globally are major oil-producing countries such as Iraq and Russia. In the United States, flares are much smaller than Russia’s and Iraq’s, but they are still quite substantial, especially in the Permian. Oil and gas companies could be motivated to reduce or even eliminate flaring, not just for environmental protection purposes. Flaring burns gas that can be utilized or sold, which means it destroys a potential revenue stream.
Yet the environmental protection perspective is also very important: there has been growing pressure from investors, environmental organizations, and regulators mounts on the industry to take steps to reduce the amount of methane burned at oil wells.
“With this rule, Colorado becomes the model for other jurisdictions looking to end routine flaring as communities, investors and leading companies demand action,” said Environmental Defense Fund director of state advocacy Dan Grossman, as quoted by the Colorado Sun.
Earlier this year, the Texas Railroad Commission also said it would tighten the rules for flaring at oil wells, surprising many. After the elections, however, this may change: Republican Jim Wright won a seat on the TRC over Democratic candidate Chrysta Castaneda, vowing to increase oil production in the Lone Star state.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
It is also important to note that oil companies flare because of disruptions of midstream gas takeaway. Oil is more valuable than gas so to protect revenue streams the companies flare. In order to get companies to reduce production flaring there needs to be penalties severe enough to make the loss in oil produced less severe than the flaring penalty.
Just a couple questions on your article taking aim at Colorado flares:
How does a reduction in flaring ensure the safety of groundwater, and make sure soil resources are available to grow healthy crops and vegetation? What do flares have to do with groundwater and soil?
Also, you recommend using it as an additional revenue source, but you also mention that it is done in places too costly or difficult to transport or sell the gas. Don't you think the oil companies might have thought about that revenue source if it was profitable?? Seems like a weird statement. Are you thinking that they could use it as a revenue source that would result in net losses???