Regulator: Flaring of gas is off the charts

Practice now at level unseen in state since 1950s, report reveals

The oil and natural gas industry practice of flaring, or burning surplus natural gas from oil wells, has reached volumes not seen in Texas since the 1950s, a new report released Tuesday by Railroad Commissioner Ryan Sitton revealed.

During the 1950s, an oil boom outpaced pipeline construction prompting companies to burn off a record 815 million cubic feet of natural gas per day in 1953.

A similar situation is taking place now. Without enough pipelines to move natural gas to market and thousands of oil wells producing it as a byproduct in the Permian Basin of West Texas and elsewhere around the state, oil companies burned an estimated 650 million cubic feet of natural gas per day in 2018 — more than double the 268 million reported a year earlier.

The amount of natural gas burned daily in 2018 would have been enough to supply nearly 4 million U.S. homes for a single day. And at current market prices, it would have also generated $1.3 million of revenue per day or roughly $475 million over one year’s time.

Sitton, one of three elected commissioners overseeing the state agency regulating the oil and natural gas industry, told the Houston Chronicle that he released the report to provide concrete data about the issue and to help environmentalists, companies, regulators and landowners develop solutions. Those solutions range from building more pipelines and gas processing plants to shutting in the wells with the worst flaring rates to asking OPEC to step up production or setting flaring goals that companies would need to hit.

“Everybody talks about flaring levels being higher for the past couple of years, but just using total flaring volume is a pretty poor data

point,” Sitton said. “The insight into what these numbers actually mean and what they tell us takes a unique skill set.”

Taking publicly available data on the agency’s website, Sitton compared the amount of natural gas a company flared to the amount of crude oil the company produced from November 2018 to October 2019 to create a flaring intensity score. That index, he said, can be used to measure how well companies and the state are performing with regards to flaring.

With an average of nearly 23.4 million cubic feet of natural gas burned per day during that one-year period, Exxon Mobil led all others in the amount of gas burned off. But Exxon produced more than 181,000 barrels of crude oil per day in the same time, giving the company a relatively low flaring intensity score of 0.13 in Sitton’s report.

Exxon Mobil’s score was much lower than the 2.93 received by Oklahoma Citybased Continental Trend Resources, which produced 62 barrels of crude per day from its wells in the Texas Panhandle and burned off 181,000 cubic feet of natural gas per day — making the company the most flaring intense company operating in Texas.

In a statement, Exxon Mobil said the company is working to reduce its numbers even further. “We are making significant investments in gathering, processing and natural gas pipelines to enable resource development and reduce flaring intensity,” the company said.

Irving-based Pioneer Natural Resources is considered to be the top oil producer in Texas, producing more than 360,000 barrels of crude per day. With the company’s wells flaring 7.7 million cubic feet of natural gas per day, Pioneer received a 0.02 flaring index score. As a general practice, Pioneer does not put an oil well into production until natural gas gathering pipelines are in place.

As a whole, Texas flared 410 million cubic feet of natural per day during the oneyear period of Sitton’s report and produced an average of 4.4 million barrels of crude oil per day, meaning that the entire state had an index score of 0.09, lower than other oil-producing states such as North Dakota and oil-producing nations such as Iran, Iraq and Russia.

“I’m not putting the spotlight on anybody, this is all publicly available data,” Sitton said. “All I’m doing is the analysis and saying these are results.”

Sitton is releasing the report independently of the agency and his two fellow commissioners on the Railroad Commission of Texas, the state agency that regulates the oil and natural gas industry. That move, he said, was done to sidestep the politics of his fellow commissioners, release the data to the public and begin a fact-based public debate on how to handle the issue.

Elected to office in 2014, Sitton is up for re-election this year to a six-year term. The Friendswood Republican faces one challenger in the Republican primary. Four Democrats, two Libertarian Party candidates and a Green Party candidate also are making a run at Sitton’s seat. Some of those candidates say the release of the report was timed to boost Sitton’s election effort.

“I started this analysis five or six months ago, before any of those candidates filed for office, so that’s a pretty weak political claim,” Sitton said. “But I’m not surprised; that’s what weak political candidates do.”

Chrysta Castañeda, a Dallas energy attorney among the four candidates seeking the Democratic Party nomination, called the Railroad Commission race the most important environmental race in the United States this year. Over the past seven years, the Railroad Commission has not denied any of the more than 27,000 requests for flaring permits that came to the agency for review.

“The report unsuccessfully attempts to reframe the issue to take scrutiny away from Sitton’s poor decisions on flaring,” Castañeda said.

Environmentalists are open to the dialogue. Colin Leyden, with the Austin office of the Environmental Defense Fund, said the report echoes previous figures and reports about flaring issued by the Washington-based environmental group. The Railroad Commission, he said, has the authority to handle the issue through its own rules, regulations and permits without the Texas Legislature needing to pass new laws.

At the opposite end of the spectrum, Sitton’s report received endorsements from pro-industry groups such as the Texas Oil & Gas Assocation and the Texas Independent Producers & Royalty Owners Association.

“Oil and gas is an industry defined by innovation and results,” TIPRO President Ed Longanecker said in a statement. “TIPRO looks forward to continuing its work with partners and stakeholders on realistic solutions, collaboration and innovation to reduce emissions. Cleaner operations, facilities and products all are part of this sector’s commitment to responsibly develop our nation’s energy resources.”