In the oil and gas industry, the natural gas that is produced as a byproduct of oil production has to go somewhere – and if you don’t have easy access to a pipeline, that somewhere is the atmosphere, either through flaring or venting. But while flaring or venting may be the most convenient solution, it is far from the best. These practices have significant implications for the environment and your company’s bottom line.
Natural Gas Flaring and Venting – A Growing Problem
In 2018, flaring doubled in the Permian Basin, with an estimated $1 million per day of natural gas being burned off rather than utilized.
In North Dakota’s Bakken Shale, which flares more gas than any other area in the nation, drillers produced 2.8 billion cubic feet of natural gas per day in March 2019. Roughly 20 percent of it was flared — enough to heat every home in the state for one month, 10 times over, and significantly above the state’s 12 percent limit. Meanwhile, drilling and well completions companies continue to invest heavily in power generation, tying up precious CapEx as they struggle to capture and utilize their flare gas.
The scrutiny of these practices is increasing globally as governments and environmental organizations express concern over the energy waste and the environmental implications. According to the New York Times, Exxon’s venting and flaring have increased drastically since 2017 to reach record highs. The company discarded 70 percent more gas in 2018 than it did in 2017.
The World Bank has commented on the problem as well, stating that these practices are “a tremendous waste of a natural resource” while estimating that over 350 million tons of carbon dioxide were released globally as a result of flaring.
The waste of natural gas is significant among most major oil companies – with Chevron being the exception, having reduced their flaring and venting to lower than three percent of their overall gas production. Unfortunately, among smaller oil producers, the problem is even worse. It appears that smaller oil producers flare or vent nearly 100 percent of the natural gas they produce from their wells.
Why Are Flaring and Venting So Prevalent?
Natural gas production has always been a byproduct of oil drilling, and even with all the advances in drilling technology, there is no getting around the fact that natural gas and oil are often a package deal. With the massive increase in fracking and shale oil production, the problem has only gotten worse. Shale production puts out a lot of methane, and you have to do something with it.
Traditionally, you have a few options:
- Flaring. Flaring has become the go-to option for many producers because it allows you to burn up the natural gas so you don’t have to worry about it anymore. The “natural gas” that you get from your various drilling operations can vary significantly in composition – but most if not all of it can be combusted using existing technologies and little cost.
- Venting. Venting is another option that many producers use, simply releasing the natural gas into the atmosphere. While you don’t have to go to the trouble of burning the gas, it’s hard not to think about the environmental impact of venting, as it releases methane instead of CO2. Methane is a more damaging greenhouse gas.
- Transport by pipeline. If the infrastructure is in place, you can transport the natural gas from the drill site to another location for sale or another use. Accessing a pipeline can be challenging, though, both because they tend to not be built quickly enough to keep up with the relatively short life span of many shale production sites and even if they are available, using them costs money – which may be difficult to justify if natural gas prices are low.
Unfortunately, as bad as the environmental impacts and the energy waste of natural gas flaring and burning are, oil production is still a business and you have to justify your decisions based on monetary concerns. You have a bottom line and unless regulations require you to do something specific with your natural gas byproducts – which is unlikely in many of the most productive areas of the globe for oil production – you are going to lean towards decisions that minimize your CapEx.
Proven Flare Capture Solution – An Economically Sound Alternative to Flaring and Venting
What if you could capture and convert the natural gas your wells produce into usable energy – energy you could use to power your operation? SoEnergy has a proven track record for helping operators convert flared gas into reliable, cost-effective power. Oil and gas production teams are using our gas flare capture solution to lower their carbon footprint, reduce their headcount and streamline their costs without incurring unnecessary risk.
The advantages of our capture and conversion system include:
- Getting ahead of environmental regulations. In the Natural Gas Flaring and Venting: State and Federal Regulatory Overview, Trends, and Impacts report released by the U.S. Department of Energy, the organization makes it clear that regulations regarding flaring and venting vary widely from state to state. Thus far, it has been possible for many producers to do whatever they see fit with their natural gas – but a forward-thinking business would be wise to plan for changes in the coming years. Scrutiny on flaring and venting continues to increase, which means there will likely come a time where you have to be more careful with your natural gas output. Incorporating a capture and conversion system now will put you ahead of the regulations that are likely inevitable.
- Making your business more environmentally friendly. Reducing your carbon footprint is good for business. You can demonstrate that you make full use of the natural gas that comes as a byproduct of your oil production – instead of being lumped in with companies that burn or vent enough energy to power cities into thin air.
- Save money. Right now, you pay for the energy that powers your production sites. With our technology, you can save that money by taking advantage of the energy you are already producing.
Contact SoEnergy today to learn more about our gas flaring solution. Let us help you get ahead of the curve.