N.D. Oil Industry Flares Off $1B Worth of Natural Gas…But Balks at Investments in Renewable Fuels -

[Bill USA]

http://www.ethanolrfa.org/exchange/entry/n.d.-oil-industry-flares-off-1b-worth-of-natural-gasbut-balks-at-investment/

As it turns out, the oil and gas industry really does have “money to burn.” According to a recent study, government data show that nearly 30% of the natural gas extracted as a byproduct of fracking for oil in North Dakota is being burned off, or “flared.” That’s right, three out of every 10 cubic feet of natural gas extracted in North Dakota ends up being burned at the wellhead and released into the atmosphere.

The study, released by Ceres in July, concludes that the practice of flaring in North Dakota “…is environmentally damaging, economically wasteful and a potential threat to the industry’s long-term license to operate.” No kidding?

The report estimated natural gas flaring in North Dakota emitted 4.5 million metric tons of carbon dioxide (CO2) in 2012, which is equivalent to the annual emissions of approximately 1 million cars. In the lexicon of lifecycle greenhouse gas analysis, this means 3-5 grams of CO2-equivalent emissions per megajoule should be added to the carbon intensity score of gasoline/diesel produced from Bakken crude oil to account for flaring alone.

Notably, there are several other aspects of fracking that make it considerably more carbon intensive than conventional oil production (e.g., most crude from the Bakken is shipped by rail instead of pipeline; significant emissions are related to transportation and disposal of fracking materials/process aids; increased refining intensity due to presence of high levels of naphthenic acid; etc.). Incredibly, current regulations like the RFS and LCFS assume the carbon intensity of crude oil from the Bakken is no different than light, sweet conventional crude oil. Enlarge this image.



While the negative environmental impacts of flaring are obvious, there are tremendous economic consequences as well. As the report points out, “[t]he environmental impact of flaring is not its sole cost. The combustion of natural gas during production represents a significant economic cost for oil and gas producers…” Indeed, natural gas flaring in North Dakota represented roughly $3.6 million in lost revenue per day in May 2013—or more than $1.3 billion per year on an annualized basis. But oil and gas companies are making so much money on the crude oil they are producing via fracking that they don’t even miss the extra income that could be captured through efforts to curb flaring.
(more)

- See more at: http://www.ethanolrfa.org/exchange/entry/n.d.-oil-industry-flares-off-1b-worth-of-natural-gasbut-balks-at-investment/#sthash.eebVxyEI.dpuf

[NickB79]

1. I think the limiting factor is lack of gas pipelines

To transport it to profitable markets. You can't easily transport that much gas by train or truck, either. But, since the price of natural gas is so low right now, they don't see any profit in building such pipelines in the near future.

It's all just one big clusterfuck.

[Champion Jack]

2. Then why the fuck are they in such a rush to drill if they don't have any way of getting to market

[Nihil]

3. From the OP extract:

> But oil and gas companies are making so much money on the crude oil they
> are producing via fracking that they don’t even miss the extra income that
> could be captured through efforts to curb flaring.

It always boils down to greed.

[Champion Jack]

4. Yup, here (WV) the motivating factor is to get in and drill before the lease expires

The leases around here were for 3, 5 and some times 10 years. The Gasholes only have to show production for one day to claim the lease for, well, forever. There is a lot of drilling and capping going on.