Gas flaring seemed to be an issue relegated to the past or to countries disinclined to respect the environment. However, the recent exploitation of shale oil enabled by the improvement of extraction techniques have brought back this issue to the center of United States’ environmental and energy policies.
Gas flaring is the practice of burning natural gas associated with crude oil during extraction in an oil field. All too often, the natural gas released from fracking is burned, wasted, and damagingly released into the atmosphere — about 400 million tons of carbon emissions per year globally. Tweet stat: Tweet
Every year, the equivalent of 30 percent of E.U. and 25 percent of the U.S. gas consumption is flared globally. This practice has become such a concern that in 2002, the World Bank initiated the Global Gas Flaring Reduction (GGFR) partnership between oil companies and countries with the objective of reducing this practice. Tweet stat: Tweet
Some countries have made good efforts to curb this practice, even in the biggest polluter states: Russia (#1) and Nigeria (#2). One country has done the opposite, however, increasing flaring by 223% between 2007 and 2012, rising from 14th to 5th globally in 5 years. This country is the United States. Tweet stat: Tweet
The reason behind this recent increase has been American access to the kingsize shale oil field in Bakken, North Dakota. This field contains the largest oil accumulation in the country, and is perhaps one of the biggest in the world. The extraction of large amounts of shale oil has been made possible by the use of horizontal drilling and high pressure “fracking.” Other places around the country also participate in this phenomenon, but to a lesser extent.
Today, 30% of North Dakota gas production is burnt, representing the destruction of enough energy to heat half a million homes per day. In a time where fossil ressources are diminishing and energy security is a major issue, such waste seems difficult to understand. Tweet stat: Tweet
The main reason behind the practice of gas flaring is that it is cheaper to grab the oil and burn the associated gas than to build the infrastructure necessary to exploit both. Indeed, with the shale gas boom in the U.S., the price of a gas unit crashed, going from $8 in 2008 to $2.5 in 2012. With the oil field in North Dakota being relatively new and very rural, covering 15,000 sq feet, pipelines and processing plants needed to extract and store the associated gas are lacking.
The costs and the administrative burden of building these infrastructures, as well as the competition between oil companies, has so far stood in the way of more investments. There are no real incentives to change the practice of flaring, given current lax regulation and short leases on shale fields. Tweet
At the federal level, new standards have been set by the EPA which would require companies to invest in equipement that will capture the “waste” gasses, but they are not set to be implemented before 2015.
Environmental groups are worried about the impact flaring might have over the next 2 years, not only on the United States’ carbon footprint but also on air and water quality in areas where such practice is common.
The concerns over gas flaring is also shared by the business community.
In March 2012, 37 investors representing over $500 billion in assets sent a letter to companies in North Dakota voicing their concern over the long term consequences of flaring. Indeed, even with the current low price of gas, North Dakota flared $110 million worth of gas in the last year alone. Tweet
Some companies have taken steps to change this trend, like Whiting, a Colorado company which used to flare 80% of its gas in 2007 but has now reduced it to 20% with a zero waste aim in the future. However, the good will of few companies will not be enough to address the problem. especially when it is estimated that the number of wells in the region will increase from 5,000 to 48,000 in the next 20 years.
With the oil industry is already receiving a lot of heat because of the high environmental costs of exploiting shale oil, gas flaring will certainly ignite the debate even more. However, as environmental groups, oil companies, state and federal governments would, in the long term, all be benefiting from a reduction or even an extinction of the practice of gas flaring, there is hope that a solution can be found.