Upgrade and Expand the Pipelines So Texas Can Reap the Energy Rewards

Friday, May 31, 2019

Bill Godsey | Caller Times | May 31, 2019

From wind and solar to oil and natural gas, the American energy sector is booming. The Permian Basin — with record crude-setting production and massive recoverable resources — is at the forefront of this domestic energy golden age.

The Permian Basin, sprawling more than 75,000 square miles across West Texas and New Mexico, has more than doubled its production in recent years. Recently called “America’s Hottest Oil Field,” the Permian accounts for around a third of American crude output today. And there’s no sign of it slowing any time soon, with major oil companies like Chevron and Occidental pouring billions in new investment into the region in hopes of expanding their operations.

The momentum across the Permian is a boon for the region’s economy, creating jobs and opportunity at a breakneck pace. It’s also good news for the rest of the nation’s energy outlook, helping us meet more of our own energy demands while exporting energy to our allies and trading partners.

Good news abounds in the Permian. But the region can’t go on autopilot if it hopes to maximize its potential while also managing its environmental footprint. To realize the Permian’s best possible future, public and private entities must commit to thoughtful expansion of energy transportation infrastructure.

The pace of production in the Permian Basin has led to a surplus of natural gas. Current pipelines are in place to transport crude oil, but the infrastructure grid for carrying natural gas is not as robust. The glut of natural gas supply has overwhelmed the region’s available pipeline infrastructure, causing producers to turn to “flaring” — a process by which excess gas is burned off at individual well sites — at an alarming rate. This process occurs because producers simply don’t currently have the means to capture and transport these resources to end markets. In the Permian Basin, companies flared roughly 530 million cubic feet of gas every day during the fourth quarter of 2018 — the highest level since 2011, and more than some states use all year.

Flaring eliminates methane from excess gas, but it also releases carbon emissions and other gases. In all, flaring represents one of the most visible and environmentally significant challenges associated with the nation’s shale boom — a “black eye” for the energy industry at a time when it is working hard to pursue environmentally conscious practices.

Addressing the emissions that arise from flaring (along with venting, where excess gas is simply released into the atmosphere) is only part of the environmental task at hand for the nation’s oil and gas producers. Some progress can be made by investing in technology, and the industry is doing that at scale in the form of gas gathering systems, natural gas-powered extraction equipment, and other adaptive processes intended to help understand and manage the emissions that arise from resource development. Another example is micro LNG plants and use in E-Fracs (electric-powered hydraulic fracturing equipment).

That’s important work, and it’s worth pursuing. But nothing can do more to address these challenges than expanding the region’s energy infrastructure to include more reliable and readily available transportation for excess natural gas.

Expanding access to reliable pipeline infrastructure would do more than manage the environmental impact of the nation’s production boom. It would also transform excess gas from a liability into a significant asset – both for the oil companies producing the resources and for consumer markets across the nation that are desperately in need of natural gas to power their homes, businesses, and economies.

Take New England, where markets have turned to less environmentally friendly power sources like fuel oil in recent years thanks to a painful lack of pipeline infrastructure. Natural gas, once safely and efficiently transported to consumer markets in need, provides a more affordable and sustainable option.

Better pipeline infrastructure would also help put an end to one of the most tragically ironic dynamics at play in today’s American energy heyday: reliance on fuel imported from unfriendly regimes.

California, lacking pipeline capacity to access Canadian resources, instead draws heavily from Saudi Arabia. And at Everett LNG terminal in Boston, gas imports from sanctioned Russia have flowed in during the last two winters since the region’s pipelines don’t have the capacity to bring in natural gas from the Marcellus Shale – one of the largest oil and gas fields on the planet just across the Appalachians.

The dynamics that have led to this pipeline backlog – political and otherwise – must be addressed if we’re to meet our full energy potential.

Rapid growth in the Permian Basin shows that, now more than ever, the sky is the limit when it comes to American energy production. Energy independence was nothing but a fantasy not long ago. Today it’s a real aspiration. Smart infrastructure policy can help bring that aspiration even closer to reality.

Bill Godsey is owner and president of Geo Logic Environmental Services and a former geologist for the Texas Railroad Commission.