Last month the storms and cold temperatures in Texas made oil and gas companies shut down production at oil wells and refineries across the state. As a result, massive oil and gas flaring was recorded as the resources had nowhere to be sent due to power plants going offline. On the worst day, the amount of oil and gas burned could have powered tens of thousands of homes for at least a year.
“The extreme weather conditions that Texas experienced in February forced many facilities to flare gas, as there was no other exit,” wrote Artem Abramov, head of shale research at Rystad. “Just immediately closing the gas tap is not possible,” he added.
Some of the oil and gas flaring happened in the production sites in the Permian Basin. In fact, the Permian Basin saw the biggest hike of flaring ever observed there. That is according to Mark Omara, a senior researcher at the Environmental Defense Fund.
Scientists now warn turning to natural gas, once hailed a “bridge” toward renewable energy, might have its pitfalls. Flaring is one major reason that raises concerns.
What is it?
Flaring explains the process of burning oil and natural gas when they have no place to be sent and they still stream out of the ground. Typically, they are burned on top of a large tower or stack. A routine flaring is practised when oil companies lack facilities or markets available for the leftover gas or oil.
When they are simply burned instead of used in electricity production, vast amounts of GHGs are released into the atmosphere. It is estimated that global gas flares emit more than 400 million tons of CO2 equivalent emissions every year.
Alternatives To Oil And Gas Flaring
However, there are some alternatives to flaring that could save those emissions. There are processes that could rewire the gas for electricity or internal uses. That involves building pipelines to pump gas back into businesses for heat and electricity.
Another alternative would be the implementation of vapor recovery units. They are needed to collect vapors and thus reduce emissions. The companies just need to bear the costs associated with each alternative.
According to Colin Leyden, the director of regulatory and legislative affairs at the Environmental Defense Fund: “As long as flaring is an option because of a loose regulatory framework, it’s going to be difficult for these options to catch on.”
Regulations
Flaring is currently legal. It lacks regulations that could halt it or encourage the use of gas and oil for other purposes. Some progress has been made in New Mexico. Regulation has been finalized to nearly eliminate routine natural gas flaring.
In Texas two bills are talked about at the moment. One of them puts a 25% tax on gas vented or flared while extracting oil. Giants like Exxon, BP and Royal Dutch Shell also have expressed net zero pledges. That means they would need to end routine flaring as part of those commitments.
Mr Gunnar Schade’s opinion on the matter is also supportive of Mr Layden’s. Mr Schade is an atmospheric scientist and associate professor at Texas A&M University. According to him, investments are not encouraged “because flaring is free, you don’t have to pay anything for it”.
The recent energy crisis in Texas though might be a turning point regarding oil and gas flaring. Oil companies struggle to obtain fossil fuels, yet they are the same ones that burn them off and waste them.
When President Biden rejoined the Paris Climate Agreement, he called on agencies to review and reinstate regulations dismissed under the Trump administration. The Railroad Commission of Texas has recently moved to take a closer look at oil and gas flaring.
“If you have a policy that says we won’t tolerate routine flaring, that you can’t bring oil wells online, can’t start pumping until you have a destination for the gas, that will change the economics around midstream as well and increase the need to invest in the infrastructure,” Mr Leyden suggests.
Companies Response
A study published in 2019 at Rice University claims that if all flared or vented gas in the Permian Basin is captured and liquefied, it fills a Q-Max LNG carrier every 10 days. Hypothetically, those carriers could be sent to power plants and be burned for electricity generation.
An increasing number of companies are becoming more sensitive to environmental issues though. The world’s largest money manager, BlackRock, will require companies it invests in to disclose direct emissions.
“I would much rather have us, business, do it ourselves and that’s one of my big cries out in this letter: we need to do it ourselves before the government does it for us,” said BlackRock CEO Larry Fink.
Oil producer Occidental made a choice to shut down production at the Permian Basin to avoid flaring.
“There were a couple of plants that had difficulty coming back online,” said Occidental’s CEO Vicki Hollub regarding the Texas event. “We could have put our production back online and just flared the gas, we chose not to do that. We left the production shut down because we didn’t want to flare.”
Occidental also found an alternative to cut its flaring emissions. Its New Mexico operations use a gas gathering system linked to third-party capacity and pipeline supply arrangements. All this is said to reduce the company’s flaring emissions by more than 60%. Occidental also says in their annual climate report that this can be used in other upstream oil and gas projects to cut flaring.
Conclusion
The Texas event marks a record oil and gas flaring. That sends a big message to the industry and politicians that self-regulations are ineffective and the practice needs stricter rules and management. Limiting oil and gas flaring is also an excellent opportunity for cutting GHG emissions in a time when countries are claiming net zero pledges.
