You may have heard something about the impact burning fossil fuels is having on our planet's climate. You may have also heard lip service by politicians about the need to address the problem, both here and abroad. Well, keep that mind as you read this.
What is wrong with this picture (besides names and borders on a satellite image)?
Hint: It is the same thing that is wrong in this picture.
A large component of those lights in western North Dakota is flaring of natural gas from shale oil wells. In fact, the U.S. Energy Information Agency (EIA) estimates that more than a third of the natural gas produced by hydraulic fracturing in the Bakken Formation is burned off rather than captured.
You might think that makes no sense since we are fracturing shale formations all over the US for natural gas. If it is so valuable, why burn it off and put megatons of greenhouse gases into the atmosphere? The technical explanation is that North Dakota lacks the infrastructure to collect, store, and transport the gas.
However, due to insufficient natural gas pipeline capacity and processing facilities in the Bakken shale region, over 35% of North Dakota's natural gas production so far in 2011 has been flared or otherwise not marketed. (It is generally better to flare natural gas than to vent it into the atmosphere because natural gas—methane—is a much more powerful greenhouse gas than carbon dioxide.) The percentage of flared gas in North Dakota is considerably higher than the national average; in 2009, less than 1% of natural gas produced in the United States was vented or flared.That explanation is filled with truthiness. What we have here is insufficient regulation related to collection of natural gas co-produced from oil wells. The EIA knows that.
According to current North Dakota state regulations, producers can flare natural gas for one year without paying taxes or royalties on it, and can ask for an extension on that period due to economic hardship of connecting the well to a natural gas pipeline. After one year, or when the extension runs out, producers can continue flaring but are responsible for the same taxes and royalties they would have paid if the natural gas went to market.
It turns out it is not as valuable as the oil we are getting out of the Bakken so regulators in North Dakota are letting drilling operations burn it off. It is about expediency. State regulators allow the drilling operations to flare off the gas for a year without any penalties. After a year, they have to pay the 5% severance tax rate for gas not collected. Apparently my idea of an economic hardship is very different than the one used by the folks in North Dakota.
How much gas is being burned off the Bakken?
The rapid increase in shale oil production means it is now often more economical to ‘flare off’ unwanted gas than to sell it. As a result, one field in North Dakota, the state leading the energy revolution, is now burning off enough gas to power all the homes in Chicago and Washington D.C. combined.That is a lot of waste. It is also a lot of carbon pollution.
Regulators in Texas, also contending with a shale oil and gas boom in the Eagle Ford and Permian formations, are considering relaxing requirements on gas flaring.
Thirty oil producing nations, including the US, and 17 major oil companies are part of the Global Gas Flaring Reduction partnership, sponsored by the World Bank. Everyone understands the reasons for tight regulation of gas flaring.
“By reducing gas flaring, oil-producing countries and companies are improving energy efficiency and mitigating climate change,” said S. Vijay Iyer, Director of the World Bank’s Sustainable Energy Department. “Instead of wasting this valuable resource, we now need to develop gas markets and infrastructure so the associated gas can be utilized to generate electricity and cleaner cooking fuels.”When the US is responsible for much of the recent increase in gas flaring, undermining progress in the last decade, it sets a very negative precedent. By contrast, Norway requires collection of natural gas produced from oil wells. The infrastructure to collect, store, and transport has to be in place before a well is brought on line. That is how sane people manage natural resources and limit collateral damage to the atmosphere.
However, the real moral of the story is that states control regulations over oil and gas production. If North Dakota wants to allow gas flaring, there is nothing to stop them. States do not fear the US Department of Energy. It is the EPA that scares them with all this talk of regulating greenhouse gas emissions. That is why states are working feverishly to stop the EPA from raining on the fossil fuels parade.
One recent example is a bill is rapidly moving the Wyoming legislature to tie the EPA's hands.
The EPA decided in 2011 to oversee permitting of large sources of greenhouse gasses in states that had shown themselves unwilling or unable to do so. Wyoming sued, protesting that the EPA hadn't given the state enough time to submit its plan to regulate such facilities. The lawsuit is ongoing.That sounds a bit like foxes designing henhouse fences. At least the big carbon polluters have a sense of humor.
In the meantime, legislators on the Joint Minerals Interim Committee, along with the industry, proceeded to design a process by which the state — and not the federal government — would regulate the emissions.
Marion Loomis of the Wyoming Mining Association, Wyoming's mining trade group, testified that his members are on board as long as language remains saying the greenhouse gas standards “are no more stringent than federal greenhouse gas” standards.There are no federal greenhouse gas standards for oil and gas production. The only targets for the EPA in regulating greenhouse gas emissions have been power plants, refineries, cement plants, and motor vehicles. Standards for oil and gas production are limited to toxins and smog-producing volatile organic compounds.
Here is a fun fact. Global gas flaring currently produces approximately 360 megatons of greenhouse gas emissions per year, roughly equivalent to the amount produced by 70 million cars.