The Flaring Boom

November 26, 2014

Colorado, oil and gas drilling, WORC

Flaring Boom

From the Western Organization of Resource Councils (WORC)*:

New report looks at the natural gas flaring boom
Waste sparked by oil prices, length of leases, and weak protections

Billings, MT — Surging oil production in shale hotspots, like the Bakken in North Dakota and Eagle Ford in Texas, has increased waste of natural gas through flaring, venting, and leaking according to a new report released today by the Western Organization of Resource Councils (WORC), a network of conservationists and family farmers and ranchers.

The report, The Flaring Boom, describes the causes and effects of flaring, venting, and leaking of natural gas by examining efforts to curtail these wasteful practices in Alaska, Colorado, Montana, North Dakota, Texas, and Wyoming.

“Flaring lowers quality of life in oil­producing communities through increased air pollution, deprives royalty payments to those owning the rights to the natural gas, and contributes to climate change,” said Donald Nelson, a rancher from Keene, N.D., and Chair of WORC’s Oil and Gas Campaign Team.

Nelson has 30 to 40 flares on his ranch. “It’s easy to count them at night,” he said.

The report identifies three factors spurring the waste.

One factor is the price of oil. Oil prices are not particularly high, but natural gas prices are much lower. Incentive is too low for companies to spend capital to capture and process gas.

Second, companies are anxious to recoup investments before their leases end. Most oil and gas leases run three to five years. If a company fails to drill and produce within the lease period, it must shell out additional up­front capital. For example, many leases in the Bakken that went for $100 or less five years ago are worth 20 times that, or more, today.

Third, regulation and enforcement are weak in five of the states studied and in federal agencies. Texas, for example, allows flaring gas from all wells for the first six months of operation, while in North Dakota, where over 5,000 wells are flaring, the grace period is a year, although North Dakota now requires a gas capture plan.

“These states need more handles to limit flaring,” Nelson said. “Many state laws that allow flaring are set up to foster more production by giving the oil industry a break. It’s time for these states to give us, the local residents, a break.”

The report recommends that oil­producing states adopt Alaska’s flaring regulations. The state has prohibited flaring since 1971 except for emergencies and system tests. In those instances, Alaska requires a written report and statement of compliance actions for any gas “release, burning, or escape into the air.”

For states not yet ready to follow Alaska’s example, the report suggests those states:

  • Adopt hard limits on flaring and enforceable deadlines for compliance, and make continued permitting of oil and gas wells contingent on compliance.
  • Require companies to pay full royalties to all mineral owners, public or private, on all oil and gas wasted through flaring and venting.
  • Maintain accurate records of flaring and venting and issue meaningful fines to violators.
  • Review and reconsider air quality laws and rules, including placement of monitors, to develop adequate oversight of temporary oil and gas­related temporary air pollution sources, and to fines to violators.

According to The Flaring Boom, natural gas flared in 2011 across the United States could have provided nearly 2.9 million American homes with all of the natural gas needed that year. North Dakota lost nearly 32 percent of gas produced, Montana flared or vented over 7 percent, and Alaska, New Mexico, Texas, and Wyoming lost 2 percent or less.

By 2012, gas flaring in North Dakota alone amounted to an estimated 4.5 million metric tons, the carbon dioxide equivalent of adding a million cars on the road. Together, the six states studied and New Mexico flared or vented nearly 203 billion cubic feet of natural gas in 2012, 95 percent of all natural gas vented or flared in the country that year.

The World Bank estimates that gas flaring worldwide emits about 400 million tons of carbon dioxide annually.

The report outlines the health implications of flaring. More than 250 toxins, including benzene, naphthalene, styrene, toluene, and xylene, have been identified as being produced and released during flaring.

Exposure to benzene is a well known cause of leukemia. Naphthalene can damage the membrane of red blood cells. Styrene is a skin and eye irritant. Toluene can affect the nervous system. Xylene can affect the central nervous system and stunt human development.

Other known effects of exposure to these toxins include renal failure, cardiovascular failure, emphysema, bronchitis, endocrine and immune dysfunction, reproductive disorders, and autoimmune diseases.

“Policy should not be set to benefit one industry, but to benefit the long term interests of the state and its residents,” Nelson said. “We need to make sure we can keep farmers and ranchers on the land to raise our food. That’s what we’re going to be about in the long run.”

Read the 35-page report, The Flaring Boom.

*Based in Billings, Mont., WORC is a regional network of conservationists and family farmers and ranchers in Colorado, Idaho, Montana, North Dakota, Oregon, South Dakota, and Wyoming.

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