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Oil’s Big Crash Has Permian Explorers Flaring Less Gas


By Rachel Adams-Heard

(Bloomberg) Collapsing oil prices are having at least one positive side effect: less flaring in North America’s biggest shale field.

In the Permian Basin, flaring — the process of burning off unwanted natural gas flowing from oil wells — dropped in the first quarter to the lowest since the third quarter of 2018, according to Rystad Energy AS. As a slowdown in crude drilling begins to erode output in coming months, flaring will decline even faster because new wells tend to be the source of most flared gas, the Oslo-based research firm said in a report Monday.

“While the downturn introduces severe challenges for the overall economics of Permian producers, achieving outstanding emissions targets is at least one bright spot,” Artem Abramov, Rystad’s head of shale research, said in the report.

Although flaring is safer and cleaner than letting methane vent unchecked into the atmosphere, the process produces carbon dioxide and wastes a useful resource. Earthworks said Monday that Rystad’s analysis doesn’t take into account unlit flares, which the environmental group said have been on the rise since 2017.

“Rystad’s ‘silver lining’ of decreased Permian flaring might be illusory,” Sharon Wilson, an organizer at Earthworks, said in a statement. “Unlit flares are worse than flaring because they release enormous amounts of methane, which is 86 times worse for climate than the carbon dioxide that lit flares are intended to release.”

The Texas Railroad Commission, the state’s main energy regulator, has been repeatedly criticized for its lax policy toward flaring.

The agency is now considering curbing oil production in the state in a bid to bolster crude prices, and the Environmental Defense Fund is urging it to consider flaring as a metric when deciding who must limit output.

The commission has a duty to regulate the industry “in a way that prevents waste, protects mineral rights, and considers the environmental implications of its actions,” Colin Leyden, senior manager of regulatory and legislative affairs for the EDF, said in a statement. “One way to do this is to look at which companies have demonstrated they can produce oil without wasting gas.”



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