Top shale-drilling states are flaring near-record amounts of natural gas, even as the industry vows to cut down on the amount of climate-changing pollution it emits, according to industry research and public data.
Flaring — the burning of surplus gas that eliminates methane but releases carbon emissions and other pollutants — is one of the most visible effects of the shale-drilling boom. Wells in the Bakken and Permian basin formations produce huge amounts of gas along with oil, overwhelming the available pipeline networks.
The solution has been to burn the gas in flares at individual well sites, although some gas has been vented directly to the atmosphere. State regulators have largely avoided cracking down on companies that flare excessive amounts of gas, despite pressure from environmental groups.
"The public policy issue to my mind is, ‘Is it OK that there’s an oil rush going on and [we] let gas be treated like a waste product? Are people OK with that?’" said Thomas Singer, an attorney with the Western Environmental Law Center who has analyzed flaring data.
The glut of natural gas has pushed down prices, reducing the incentive for companies to build pipelines and sell their gas. Oil prices have remained relatively steady, though, and production is booming.
In the Permian Basin, oil companies flared 533 million cubic feet a day during the fourth quarter of 2018, according to the private data company Rystad Energy, which analyzed public data in Texas and New Mexico. That’s the highest level since 2011 — and more than some small states use in a year.
In North Dakota, the industry flared 526 million cubic feet a day in October, the highest since the state began keeping records in 1990. The most recent six months for which state data is available — September through February — are the highest six months on record.
Part of the problem is the sheer amount of production growth. The volume of gas flared in Texas, for instance, more than doubled between 2007 and 2017, the last year for which statewide figures are available. But production has grown so much that it still only accounts for about 1.3% of the state’s total gas output.
It’s the same story in North Dakota. State regulators passed rules five years ago aimed at reducing flaring to 9% of the state’s production, from a peak of more than 30%. The state’s producers were flaring a little less than 20% of their gas in February, but production has grown so much that they’re flaring a greater volume than when the state first cracked down.
Texas and New Mexico both have laws on the books that prohibit oil companies from wasting natural resources, including gas. Texas regulators actually shut down some oil and gas fields in the late 1940s after winning a string of court cases about their authority to prevent waste.
But the states haven’t cracked down on the recent rash of flaring. The Railroad Commission of Texas, which oversees the oil industry, imposed several fines on companies for flaring without permits between 2013 and 2015. Since then, no flaring cases have been sent to the commission’s headquarters for enforcement, an agency spokeswoman said in an email, although the commission’s field inspectors may have found cases and fixed them without enforcement action.
In North Dakota, the state Department of Mineral Resources has ordered companies to slow down production at individual wells on two occasions in the last six months but hasn’t imposed any monetary fines, said Katie Haarsager, an agency spokeswoman.
In New Mexico, the Oil Conservation Division was barred for several years from imposing administrative fines on companies that break state law because of a court decision.
That could change soon, division Director Adrienne Sandoval said in an interview. The state Legislature restored the agency’s penalty authority, and Gov. Michelle Lujan Grisham (D) ordered Sandoval’s department and the state Environment Department to write regulations on methane emissions.
"I think with the executive order, we’re taking a look at everything within our jurisdiction," she said.
‘Black eye’ for the Permian
Flaring and venting are just part of the oil industry’s larger issue of methane emissions. Methane, the main ingredient in natural gas, traps more heat in the atmosphere than carbon dioxide, and scientists have warned that the U.S. and other countries can’t meet their goals for reducing climate-changing emissions without curbing methane.
Environmentalists object to flaring because it’s a pure waste of the gas. In some states, oil companies don’t have to pay taxes or royalties on gas that’s burned in flares.
From a climate change perspective, flaring is somewhat better than venting methane to the atmosphere, but it still produces carbon dioxide, which is also a greenhouse gas. Singer, with the Western Environmental Law Center, estimated that New Mexico’s flaring alone produces as much carbon dioxide as two coal-fired power plants.
Also, the raw gas that comes out of oil wells typically has a lot of impurities in it, so the flares can produce other contaminants. Flares in the oil field can also release methane if they fail to light, or if the combustion is imperfect.
Several of the world’s biggest oil producers, including Exxon Mobil Corp., Royal Dutch Shell PLC and BP PLC, have said EPA needs to impose its own regulations on methane emissions (Energywire, March 13).
Additionally, smaller companies have pledged to reduce their emissions. Occidental Petroleum Corp. has set a goal of eliminating all "routine" flaring by 2030. Scott Sheffield, the CEO of Pioneer Natural Resources Co., said flaring is a "black eye" for the Permian Basin.
Rystad’s data shows that Exxon’s flaring in the Permian Basin grew fivefold between the fourth quarter of 2017 and the fourth quarter of 2018, from 7 million cubic feet a day to 35 million. Occidental’s flaring more than tripled, from 11 million cubic feet a day to 37 million cubic feet, during the same time period.
An Occidental spokeswoman declined to comment.
Exxon is in compliance with all state and federal regulations on flaring, Julie King, a spokeswoman, said in an email.
"We have made great progress in reducing flaring by working with third-party gas gathering systems, accelerating installation of gas facilities, improving facility reliability and curtailing production when appropriate," King said. "We have a long track record of understanding and managing methane emissions from unconventional resources development, including hydraulic fracturing."