Oil field flaring rules now are facing a revision

After promising in summer to tackle flaring, the Texas Railroad Commission soon could take up rules that would reduce the extended time during which drillers could burn gas at a new well.

The TRC is reviewing the proposed changes, and the threemember panel could vote on the issue at an upcoming meeting.

Flaring opponents, however, say the proposed reporting changes don’t go far enough to curtail the practice. They demand the commission take steps to eliminate routine flaring within five years.

Routine gas flaring occurs when an operator brings an oil well on line without access to a market for the natural gas produced with the crude. Current state regulations allow producers to burn excess gas for 10 days after the well is brought on line.

Then Railroad Commission staff typically will issue 45-day extensions up to 180 days. Commissioners must approve requests for extensions beyond 180 days.

As production in Texas grew during the past decade, the number of flaring exceptions has skyrocketed to almost 7,000 in 2019 from 158 in 2009, according to Railroad Commission statistics.

For years, the commission has approved virtually all applications for flaring extensions. An August Environmental Defense Fund blog post noted, “since 2013, operators have obtained 35,000 flaring permits without a single denial.”

The flaring issue has been around since the earliest days of Texas oil production, but during the 20th century, the commission required producers to shut in wells until pipelines were built to carry the gas to market.

Past decades saw the commission focused on efforts to prevent waste of a natural resource, but much of the flaring debate today stems from its environmental impact.

While environmental groups, such as EDF and the Sierra Club, have fought to reduce or eliminate routine flaring for some time, they recently have been joined in the fight by some seemingly unlikely allies — including international oil and gas giants BP and Shell, and big investor groups.

In August, the Railroad Commission said the proposed changes also would provide additional data, such as the location of the flare stack and document efforts to connect the well to a gas collection system.

The period of time for which an operator could obtain an administrative exception would be reduced by 50 to 80 percent in some cases, the commission said.

The data sheet change marks “an important first step in ensuring we have the data necessary to get an accurate view of the scope of flaring in Texas,” said Wayne Christian, then the TRC chairman.

Flaring opponents, however,

say the commission needs to move more aggressively.

“We can end routine flaring. We’ve seen the companies that are able to do that, but this proposal doesn’t get us anywhere closer to doing that,” said Colin Leyden, director of regulatory and legislative affairs for the Environmental Defense Fund.

Cyrus Reed, conservation director for the Texas Chapter of the Sierra Club, said the reforms fall far short.

“We continue to call for a statewide approach, like they’ve done in other states,” he said, citing New Mexico, where regulators are crafting rules to set flareintensity targets and to limit the percentage of gas that could be flared.

“We would like to see the Railroad Commission … get to zero flaring by 2025,” he said.

The level of oil and gas production — and thus flaring volumes — has plunged across Texas in recent months as a result of the demand destruction caused by the coronavirus pandemic.

While the volume of gas produced in Texas declined by 13 percent from June 2019 to May 2020, the amount of gas that was flared dropped by 79 percent during the same time, the TRC said in August.

With an expected return to drilling later this year, flaring levels are likely to rise, as producers bring on more wells that aren’t connected to infrastructure and as the commission approves flaring exemptions at those wells.

The Environmental Defense Fund in a July press release said its scientists, evaluating data from the National Oceanic and Atmospheric Administration, found that Permian flaring is on the rebound, with June flaring volumes up 50 percent after a steep slide February through May.

The future of flaring regulation in Texas could hinge on the result of next month’s election. Chrysta Castañeda, the Democratic candidate for the seat held by Ryan Sitton, has made ending routine flaring the signature issue of her campaign. She supports eliminating routine flaring by 2025.

“I do believe it’s an achievable goal,” she said. “Flaring’s been against the law for 100 years, but it’s become commonplace in the last five to seven years, so much so that in 2019 we lit on fire enough natural gas to power the entire city of Houston.”

She said that in its efforts to reduce gas flaring, the Railroad Commission has focused too much on the construction of pipelines to carry the gas to far-off markets, and not enough on the development of alternative technologies that could allow the gas to be used closer to the drilling pad.

“It can be turned into electricity for micro-generation at the wellhead or close to it,” she said. “Another possible solution would be to re-inject the gas, which some operators are doing to promote enhanced recovery of the oil.”

Her Republican opponent, Jim Wright, said he agrees in principal with the goal of eliminating routine flaring, but disagrees with Castañeda’s strategy for achieving that goal.

“The cost of the grid system to get it gathered at a larger electric-producing facility is way more than putting the pipelines in,” said Wright, a rancher and owner of a business that recycles oilfield waste. “It’s real easy for politicians to stand up and say ‘simply turn it into electricity.’ If that was possible, we’d have done it years ago.”

Wright said he believe the solution for gas flaring will require members of the oil and gas industry to work together with regulators to design a plan for delivering to market the natural gas produced in association with increasing crude oil production.