Permian Flaring at All-Time High: Rystad
Energy researcher Rystad Energy says flaring of associated gas in the Permian Basin of Texas and New Mexico averaged more than 750mn ft3/day in 3Q 2019, reflecting increased overall activity, especially in areas with less-developed gathering infrastructure, and basin-wide takeaway constraints.
“This represents a new all-time high,” Rystad’s Artem Abramov, head of shale research, said in a November 5 statement. “Oil production in the Permian Basin is growing at an accelerated pace again, and we observe high, sustained levels of flaring and venting of associated gas in the basin.”
Rystad began tracking flaring in the prolific Permian in 2017, and its previous quarterly estimates suggested that basin-wide flaring averaged between 600mn and 650mn ft3/day from 4Q 2018 through 2Q 2019.
“The most recent increase in flaring is predominantly driven by the Delaware Texas portion of the basin, which accounted for more than 40% of basin-wide flaring and venting as of the third quarter of 2019,” Abramov said. “Northern Midland also saw a significant boost in new activity, which resulted in increased flaring of associated gas. The sub-basin has basically returned to the record level of flaring seen in the fourth quarter of 2018.”
Although Texas monitors and attempts to regulate flaring, the Texas Railroad Commission has never denied a request for a flaring permit, and routinely extends them in order to ensure drilling activity in the state continues.
Several Permian operators have reduced their flaring intensity over the last 12 months, Abramov said, but others – especially in the Eastern Midland sub-basin – have recently ramped up flaring intensity. The late-September commissioning of Kinder Morgan’s 2bn ft3/day Gulf Coast Express pipeline in West Texas is expected to help reduce flaring. Liquefaction terminals are also planned to take some of that unwanted gas, such as Tellurian's Driftwood and NextDecade's Rio Grande LNG.