Oil companies wasting natural gas, emitting large amounts of greenhouse gases

The New York Times recently looked at data on the way energy companies deal with natural gas in the three largest U.S. shale oil fields — the Eagle Ford and Permian Basin fields in Texas, and the Bakken field in North Dakota that straddles the border with Canada. Oil drilling companies, from the largest like BP to the smallest like Exco, flare and vent the natural gas that comes up the well as a byproduct of the fracking process. (Flaring means burning the gas at the production facility, venting means releases the gas into the atmosphere.) The NYT writes that energy companies are venting and flaring larger quantities of gas, thereby releasing more carbon dioxide and methane, two of the greenhouse gases that contribute to climate change.

The headline assertion about flaring in general: “The World Bank estimates that flaring last year emitted more than 350 million tons of carbon dioxide globally, equivalent to the greenhouse gas emissions of almost 75 million cars.”

The increased use of flaring and venting comes after firms such as Exxon Mobil and BP pledged over the summer to reduce the two practices. Exxon Mobil’s flaring and venting rose 70 percent in 2018 compared to 2017. Last year, in the Permian Basin alone, energy companies burned and released more natural gas than some states will use in a year. Across the three fields, all companies burned and released 320 million cubic feet of gas, a 40% increase from 2013 levels. And the numbers might not be exact, since oil companies provide the figures on state-level disclosure forms. Some environmental groups would like a third-party analysis of flaring and venting to ensure accuracy.

Chevron appears to be the sole bright spot, the company wasting no more than 3% of the natural gas it unlocks. A spokesperson told the NYT, “We built a strategy early in our Permian development that, whenever possible, we would not flare to produce.”

There are several reasons companies waste the natural gas. There might be no pipelines to carry it away from the well, or pipeline transport and packaging fees might cost more than a company can make selling the gas. Or there might be so much gas that the pipeline network can’t carry it away quickly enough, and companies don’t want to shut down wells.

The energy companies continue to maintain their commitment to reducing the two practices. Exxon Mobil said that in 2020 its flaring and venting would be 25 percent below the 2016 figure, and BP said it’s investing in infrastructure in the Permian Basin to greatly reduce flaring.

Head to the NYT to check out the story. As with the story from 2009 about how a handful of the largest container ships pollute just as much as all the cars on the planet — an assertion that’s had a few clarifications in the meantime — the natural gas story presents an industrial-level issue that could provide a lot more financial and environmental return than lowering a crossover’s cD by 0.01.