Report: Permian Basin oil producers flaring more natural gas than they told the state

An analysis of government satellite data by the Environmental Defense Fund shows that the amount of natural gas that energy companies burned off in 2017 is twice as high as what they reported to state regulators.

A flare burns atop a drill pad on land near Carlsbad, New Mexico. The oil-rich Permian Basin straddles West Texas and southeastern New Mexico.

Companies drilling for fossil fuels in West Texas' Permian Basin are flaring off significantly more gas than they say they are, according to a new analysis by the Environmental Defense Fund.

Scientists at the environmental advocacy group used satellite data from the National Oceanic and Atmospheric Administration to determine how much gas operators burned in 2017 in the oil-rich Permian and compared that with the amount of flared gas they reported to the Texas Railroad Commission, the state’s oil and gas regulatory agency.

They discovered a big gap. The satellite data showed Permian operators burned 104 billion cubic feet of natural gas in 2017 — about 4.4 percent of all gas produced in the region — while state records showed they reported burning just 55 billion cubic feet of gas.

“In 2017 alone, Permian oil and gas operators burned enough gas to serve all the heating and cooking needs of the state’s seven largest cities,” wrote Colin Leyden, the Environmental Defense Fund's senior manager for state regulatory and legislative affairs, in a blog post describing the findings. “That’s roughly $322 million of natural gas that went up in smoke.”

Natural gas is a fossil fuel hitchhiker that comes up with oil. When burned off, it releases earth-warming greenhouse gases and pollutants that can wreak havoc on the human respiratory system.

While drilling for oil and also striking natural gas might seem like a bonanza for companies — two commodities for the price of one — there often isn’t enough room in pipelines to move it all to market, and new pipelines haven’t come online in the region fast enough. Increasingly, the gas, which sells for far less than oil, has instead been burned off.

As oil and gas production has picked up in the Permian Basin in recent years, the number of permits the Railroad Commission has issued allowing companies to flare has skyrocketed. Those permits allow substantial flaring for a maximum of six months. But the commission also has repeatedly granted extensions.

It’s not always how the commission has always operated. Decades ago, faced with rampant flaring, it shut down 17 oil and gas fields to stop what it called unlawful waste. The court system backed it up in 1949.

Railroad Commission Chairman Christi Craddick told the Tribune last year that she thinks flaring is a shame — a waste — but not an urgent reason for a regulatory crackdown. This is just what happens in a boom, she said. Flaring will drop as additional pipelines come online.

In his blog post, Leyden said that argument rings hollow.

“The data show, waste and pollution from flaring in the Permian has been consistently high since at least 2012,” he wrote. “The truth is, the economics of each well are built around the oil. The market and industry, left to their own devices, is neither willing, nor able, to solve the problem in any sort of reasonable time frame.”

Asked to comment on the Environmental Defense Fund's analysis, Railroad Commission spokeswoman Ramona Nye said in an email, “Operators are required to be in compliance with all RRC rules at all times.”

“The RRC takes enforcement action against any operator found in violation of our rules,” she said, noting that the agency launched an online database this week where anyone can look up inspection and violation data for any oil and gas lease in the state.

“This is an important tool for the public and stakeholders and enhances our commitment to transparency,” she said.

Disclosure: The Environmental Defense Fund has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

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