Flaring called wasteful
Speaking at big energy event in Houston, Interior secretary says incentives may be offered to stop the practice on federal lands
Interior Secretary Ryan Zinke said Tuesday that oil and gas operations on federal lands could soon be offered a financial incentive to stop flaring natural gas from oil wells.
Zinke, speaking in Houston at CERAWeek by IHS Markit, described the practice as “wasteful” and raised the possibility of reducing the royalties collected by the federal government and speeding up permitting times for pipelines and other infrastructure needed to get gas to market.
"I don't know what the future is,” he said, “just that flaring is a waste.”
The statement came as the Trump administration is working to undo a regulation created by former President Barack Obama that limited the flaring of gas on federal and tribal lands. The regulation aims to reduce the waste of a public resource and cut emissions of methane, a powerful greenhouse gas.
At the Houston energy conference, Zinke described the Trump administration as one that considered itself a partner of the oil and gas industry, thanking attendees for “Making American energy great again.”
“The Interior Department should not be in the business of being an adversary to industry,” he said. “We need to work on creating a regulatory framework that encourages innovation.”
The advent of hydraulic fracturing and horizontal drilling over the past decade has turned the United States into one of the world’s largest oil and gas producers. Last month, domestic crude production reached reached 10.3 million barrels a day, double levels from a decade ago.
President Donald Trump is hoping to further increase output, largely by rolling back Obama-era environmental regulations and expanding production
on federal lands and waters. Zinke said an offshore lease sale for 77.3 million acres in the Gulf of Mexico scheduled for later this month would be the largest in U.S. history.
But some industry analysts are questioning how much interest the sale would attract as oil companies, still contending with relatively low oil prices, focus investments on lower-cost onshore shale fields. Zinke seemed to acknowledge the possibility that offshore tracts might attract few bidders.
“This sale is going to be a bellwether in many ways,” he said. “We'll see what the future of offshore is in comparison to the Permian” oil field in West Texas.
The push by Trump to increase U.S. fossil fuel production has incited intense opposition from an environmental movement that had gained significant ground in raising awareness on climate change during the Obama administration.
After Zinke’s statement Tuesday on flaring being “wasteful,” the Environmental Defense Fund, a national advocacy group, tweeted, “@SecretaryZinke says one thing, yet does another.”
During his speech, Zinke questioned the notion that the administration was just “pro oil and gas,” saying he believed in an “all of the above” energy strategy. But he added no form of energy was without “consequence.” He cited the vast amounts of land that solar farms required and the approximately “750,000” birds killed by wind turbines each year.
“And certainly oil and gas and coal have a consequence on carbon,” he said.
Since taking office 14 months ago, Trump has spoken frequently of the concept of “American energy dominance.”
Zinke conceded onstage Tuesday that he'd received some questions about what exactly the president meant.
A former Navy SEAL, Zinke said the phrase meant producing energy in an environmentally responsible manner while also driving economic growth for the United States and its allies. There was a “moral” component too, he added.
“I don't want to see your children to have to deploy overseas to have to fight for energy,” he said.
“Affordable, readily available energy promotes peace.”