Permian Pipelines Are a Winning Solution for Methane and Flaring

Thu, June 11, 2020

Oil and gas production across Texas may have suffered a significant slowdown due to the dampened demand amid the COVID-19 pandemic, but essential infrastructure projects – especially pipelines – are still moving ahead.

That’s promising news, especially in the face of alarming headlines highlighting recent studies that claim methane emissions from oil and gas production in the Permian Basin were higher than previously thought. These studies, affiliated with the Environmental Defense Fund (EDF), garnered plenty of media attention. Something, however, did not get enough attention: pipelines, one of our clearest tools for combatting emissions. 

Researchers from one of the studies acknowledged the need for more oil and gas infrastructure. Researchers wrote: "Overall, the high leakage rate in the Permian Basin appears to be associated with insufficient infrastructure for natural gas gathering, processing, and transportation, leading to extensive venting and flaring, which contributes to high methane emissions." [emphasis added]

Given enough pipeline capacity, operators could ship the excess natural gas to consumers via pipeline instead of flaring.

This year, several large pipeline projects are scheduled to come in service. In fact, the capacity of the natural gas pipelines that are scheduled to come online this year will exceed 2 billion cubic feet per day (Bcf/d) in takeaway capacity.

As oil and gas production across Texas rose dramatically over the past decade, pipeline capacity was not able to keep pace. Still, Permian Basin operators have risen to the challenge, focusing on lowering methane emissions from production through other innovations. In the past few years, their efforts have been successful. An analysis from Texans for Natural Gas found that over the past several years, methane emissions intensity had declined by almost 64%.

Moreover, flaring in the Permian was already on the decline in the first quarter of 2020 before the weight of low oil prices and the global COVID-19 pandemic hit oil and gas production, according to recently released data from Rystad Energy, an independent energy research company.

The Rystad report revealed that flaring intensity has declined substantially across the Permian Basin, on both the Texan and New Mexican sides.

“Such a low level of flaring has not been seen in the Permian since 2012,” Said Artem Abramov, Head of Shale Research at Rystad Energy. “While the downturn introduces severe challenges for the overall economics of Permian producers, achieving outstanding emissions targets is at least one bright spot.”

If the Permian Basin were a country, it would not even rank among the top 40 in flaring intensity, according to the Texans for Natural Gas analysis.

The opportunity for pipeline construction and completion to meet energy production is yet another bright spot.  Long acknowledged not only as the safest means of transporting oil and natural gas, but the simplest solution to combatting flaring, pipelines promise large environmental returns for Texas. 

According to the Texas Railroad Commission (RRC), in 2017, the volume of gas flared reached just over 250,000 million cubic feet per day (Mcf/d). That means the pipeline capacity projected to come in service in 2020 alone would be 8 times the current flaring levels reported to the RRC. Even allowing for increases in flaring since 2017, the new pipeline capacity will exceed current rates.

While today oil and gas producers face a challenging environment, the truth is long-term demand for oil and gas has not evaporated. The U.S. Energy Information Administration (EIA) still projects that oil and natural gas will play vital roles in our energy mix in 2050.

When the demand for oil and gas returns – and it will – Texas producers will be well-positioned to meet both the demand and their emissions goals, thanks in part to the completed pipelines.


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