In oil rich west Texas, shale producers and pipeline owner Williams Co. are fighting over whether new “burning off of natural gas” permits should be approved. It is a battle between companies that are usually aligned.
Flaring happens primarily when there is insufficient pipeline capacity to carry natural gas from wellheads to natural gas markets. Allowing the gas to build up at the derrick is a serious safety risk. Even though Williams already has an extensive pipeline network in western Texas, it is insufficient to match the soaring natural gas production resulting from fracking.
New pipelines are expensive and take time to clear permitting and construct. A key question is, will it “pencil out” financially?
The Texas Railroad Commission, governed by three elected officials, regulates the oil and gas industry, gas utilities and surface coal and uranium mining. It has been overwhelmed by more than 27,000 flaring applications in recent years.
West Texas sits atop the massive Permian Basin, which is about the size of Wyoming. It is one of the world’s richest oil patches. Today, Permian oil producers either have to burn off or release natural gas into the atmosphere.
The Wall Street Journal reports that Rystad Energy, an energy analytics firm, estimates an average of 740 million cubic feet of natural gas is released each day. “That gas would be worth about $1.8 million a day at current prices and produced greenhouse gas emissions equivalent to that of nearly five million cars a day.”
The additional natural gas could be processed into even cleaner LNG along the Gulf Coast. Those facilities could not only liquefy the gas, but filter out corrosive minerals and other potential air and water contaminants. Much cleaner fuel emerges.
With the advent of new fracking technology, there has been a glut of natural gas, which has oil producers concerned. However, there are growing global markets for natural gas, particularly liquefied natural gas (LNG). Global LNG supply is expected to rise by 35 million tons this year, Shell estimates, and Asian and European customers are poised to absorb the additional supply.
China became the largest LNG importer in 2017. “The continued surge in Chinese LNG imports has helped improve air quality in some of its biggest cities,” according to the 2019 Shell LNG Outlook. Chinese officials say the switch from coal to natural gas has reduced CO2 by 176 million tons in the Beijing metropolitan area — the equivalent of taking 37 million cars off the road.
In the Pacific Northwest, there have been heated battles over siting pipelines and LNG processing plants. For example, some port authorities, such as Vancouver, took preemptive action to ban new carbon-fuel energy facilities. Others have not. The Port of Tacoma has leased a 33-acre site to Puget Sound Energy, which plans to build an LNG plant to supply ships and residential customers.
While some opponents question the safety of LNG facilities, Tacoma port officials point to the Yankee Gas facility in Waterbury, Connecticut, which is very similar to the PGE Tacoma facility. It has been operating safely since 2008.
“LNG is the only practical industry-wide marine fuel today that provides a solution to power ocean shipping and advance the environmental standards — reducing pollutant particulates, noxious nitrogen, sulfur oxides and GHG emissions,” Peter Keller wrote in Maritime Executive Magazine last February.
Even with the transition to more renewables such as wind and solar, there is strong future demand for gas. Our country needs a broad-based energy system that encourages efficiency, affordability and accessible energy while also addressing health and safety concerns. We also must find ways to expedite projects that are environmentally sound, create jobs and fulfill the needs of our expanding population.
Don C. Brunell is a business analyst, writer and columnist. He recently retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.