U.S. oil production remains far below pre-pandemic levels, but methane emissions from the Permian basin have rebounded back to pre-Covid highs.
The oil industry has made lofty promises about reducing flaring and venting even as the methane crisis continues largely unabated. But outside pressure for action is growing.
Methane back to pre-pandemic levels
The burning of natural gas in the Permian basin spiked in recent years as oil production ramped up and operators had little need for the associated gas that came out of the ground. In addition to the negative health impacts associated with living near flaring stacks, the greenhouse gas fallout is of global concern. Flaring is widespread, but leaks, unlit flares and malfunctioning flares are additional problems, which results in the release of massive volumes of methane – a potent greenhouse gas – into the atmosphere.
Methane emissions from the Permian collapsed by around 60 percent last year.
Methane emissions from the Permian collapsed by around 60 percent following the pullback in drilling last year in the wake of the pandemic. But methane emissions are now back to pre-pandemic levels, according to a new study stemming from EDF’s Permian Methane Analysis Project. EDF has used aerial surveys and remote sensors in West Texas and New Mexico to detect methane.
The 60-percent decline in methane came even as production only fell by 10 percent. The disproportionate drop in methane is likely because historically operators have produced more gas than the region’s infrastructure can handle. It only took a 10 percent decline in output to relieve a lot of that pressure, EDF says.
“The fact that Permian methane levels have returned to pre-COVID highs as drilling levels continue to increase confirms we need more state and federal oversight of oil and gas operations to manage this emissions problem,” EDF scientist and lead author David Lyon said in a statement. “Emissions from flaring and overloaded midstream sites can no longer fly under the policy radar.
New Mexico recently finalized state regulations aimed at dramatically curtailing routine flaring. The state’s portion of the Permian basin has emerged as one of the hottest places to drill in the country in recent years. The new rules require operators to capture “no less than 98 percent” of the gas produced from wells, with a phased-in timeline.
“Venting or flaring of natural gas during drilling, completion or production operations that constitutes waste is prohibited,” the final rule says. New Mexico follows Colorado in putting strict regulations on flaring, although New Mexico’s move is more significant given the enormous flaring footprint in its portion of the Permian basin.
Texas, home to rampant flaring
Texas, where a much larger volume of oil is produced, is not following suit. The Texas Railroad Commission (RRC), which regulates the oil and gas industry in the state, has done next to nothing to put a check on the rampant flaring.
Since 2013, the RRC has approved over 35,000 flaring permits without ever denying a single application.
Since 2013, the RRC has approved over 35,000 flaring permits without ever denying a single application. Earlier this year, the RRC appeared to be applying more scrutiny to flaring permits as both public and market pressure grows. RRC commissioners initially punted on a decision on a batch of permits, citing concerns about wasteful flaring. But the apparent scrutiny has amounted to nothing, with permitting continuing unchecked.
Indeed, the grid freeze in February that led to a multi-day statewide blackout resulted in an enormous amount of gas burned off in West Texas. On a single day, the industry flared an estimated 1.6 billion cubic feet of gas, roughly five times the normal rate, according to EDF. “This is clearly one of the highest spikes” of flaring ever recorded, Mark Omara, a senior researcher with EDF, told the New York Times. “And it could be an underestimate.”
Moreover, RRC commissioners went out of their way in the days following the Texas grid crisis to defend the oil and gas industry and cast blame on renewables, according to the Texas Tribune. One of the commissioners testified at the state Capitol, arguing against additional regulation on the oil and gas industry. If the RRC saw no reason for regulation after a historic blackout that left millions shivering in the dark, there is even less desire to regulate methane, an issue that the commissioners do not view as much of a problem.
Large oil producers in the Permian are not talking about ending flaring anytime soon. Companies and trade associations have said they won’t aim to end routine flaring until 2030. In the interim, they have talked up their emissions intensity targets, or the rate of emissions per barrel of oil produced. For example, ConocoPhillips says it will cut its greenhouse gas emissions intensity by 35 to 45 percent by 2030. Intensity targets do not preclude an absolute rise in emissions based on higher overall levels of production.
But while concerns about the climate may not resonate with industry players or Texas regulators, market pressures have caught their attention. France’s Engie backed out of a deal last year with a proposed Texas LNG project over concerns about methane. More recently, fifteen Japanese LNG buyers launched a group to call for more “carbon neutral LNG,” a newfangled idea that would rely heavily on carbon offsets. Carbon offsets are riddled with problems and are of questionable use, but pressure and scrutiny on the carbon (and methane) footprint of Permian gas is likely to rise in the coming years.
Pressure on Permian flaring could come from the federal government.
At the same time, pressure on Permian flaring could come from the federal government. Royal Dutch Shell said that it backs efforts by Congressional Democrats to rescind the Trump-era rollback on federal methane regulations. The American Petroleum Institute has also stated its willingness to see federal methane regulations imposed on drillers. At a minimum, federal regulators could begin forcing drillers to capture more methane, although the rulemaking process could take time.
In addition, the U.S. Federal Energy Regulatory Commission, is stepping up scrutiny of the greenhouse gas impact of export terminals and pipelines, which could impose a higher bar for new projects to clear.
For now, the Permian flaring and methane crisis is showing no signs of easing. But it’s not clear that drillers can resist outside pressure indefinitely.