July 23, 2020 Read More →

IEA: Methane emissions are ‘Achilles heel’ of gas industry

Oil Price:

The Texas Railroad Commission last month surprised many: it said it would tighten the rules for gas flaring at oil fields later this year. Texas is certainly not the state with the best environmental policies record for obvious reasons. After all, it is the largest single producer of oil in the United States. But gas flaring literally wastes billions of dollars. 

Every year, the oil and gas industry flares some 140 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 need to be flared to avoid explosions. 

And there is more. Many oil producers have no idea how much gas they are wasting through flaring because they have no monitoring systems, Mark Davis, CEO of Capterio – a company that provides flaring elimination services–said. They also don’t see the gas they flare as a potential revenue stream, mostly because in order to start capturing it, they need to make an additional investment, which is often deemed uneconomical. And finally, Davis says, there are capex constraints. A lot of oil producers, especially in the United States, simply cannot afford to stop flaring, at least on their own. 

“The oil and gas industry has been undergoing fundamental change over the past several years, transforming from a cash-inundated juggernaut to an unstable, declining player that the State of Texas depends upon for its financial health,” said the authors of the report that calculated how much Texas had lost from flaring.

“In this context, the RRC’s duty to address waste in oil and gas production is not only a legal requirement but also a practical imperative that is becoming more and more critical for the financial future of Texas,” the Institute for Energy Economics and Financial Analysis said.

[Irina Slav]

More: The Beginning Of The End For Gas Flaring

Posted in: IEEFA In the News

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