Flaring and Venting: Waste of a Nonrenewable Resource

WORC’s new fact sheet, Flaring and Venting: Waste of a Nonrenewable Resource, provides an overview of flaring and venting in Colorado, Montana, North Dakota, and Wyoming. Flaring and venting refer to the process of intentionally burning (flaring) or releasing (venting) natural gas into the atmosphere.

These common industry practices waste large amounts of nonrenewable energy resources every day. From 2013 to 2016 alone, flaring on just federal and tribal mineral leases may have destroyed over $1.4 billion in market value, and $182 million in lost royalty payments to American taxpayers.

Flaring and venting contribute to global warming by releasing methane, a potent greenhouse gas, as well as contributing to smog and adverse health outcomes in affected areas.

This blog post focuses on an analysis of flaring statistics for the WORC states that are major gas producers. A follow-up post will discuss the problems we encountered reaching these figures and the limitations of our data set and methodology.

WORC Regional Flaring and Venting Statistics

States in WORC’s region have witnessed some of the highest levels flaring in the nation in recent years, but some have also made significant progress towards addressing this problem.

Colorado

Colorado publishes data on the full extent of flaring in the state via well-by-well reports located on the Oil and Gas Conservation Commission’s website. The data show that Colorado vented or flared 27.2 billion cubic feet (Bcf) of natural gas from 2013 to 2016, worth $109 million.

This number includes state and private leases. Colorado’s flaring rate is the lowest of the states WORC analyzed from a relative standpoint; 27.2 Bcf is approximately one third of the amount Environmental Protection Agency (EPA) figures and Office of Natural Resource Revenue (ONRR) data projected just federal and tribal leases flaring or venting during the same time period (77 Bcf).

Montana

Montana’s Board of Oil and Gas only publishes information online about the number of wells that are flaring over the 100 million cubic feet (Mcf) per day limit, without releasing figures on how much the wells are flaring over that limit.

Montana lost at least $6.3 million in market value due to flared gas from 2013 to 2016 according to ONRR data. This is the lowest absolute amount of flaring among major gas states in the WORC network, likely due in part to the downward trend in gas and oil production Montana has experienced over the last few years.

North Dakota

These estimates were created using a few different sources. For production data and lost profits on federal leases, we used the Office of Natural Resource Revenue Reporting Tool. For combined federal, state, and private lease information, we used data from North Dakota Department of Mineral Resources Director’s Cut monthly reports, and annual flaring reports from the Colorado Oil and Gas Conservation Commission. We derived an estimate for the amount of gas flared on federal leases by using the EPA’s estimate that 4.2% of total gas production is flared/vented, as discussed in the Government Accountability Office’s 2010 report Federal Oil and Gas Leases.

North Dakota flared or vented over a third of all gas extracted in some months of 2014, and a total of 409 Bcf from 2013 to 2016 across federal, state, and private leases.

North Dakota is one of two states covered on WORC’s fact sheet (Colorado is the other) that publishes complete information on flaring for all federal, state, and private leases in the state.

Notably, even though North Dakota flared 129 Bcf in 2014, the state has cut this number almost in half over two years to 69 Bcf in 2016. Over the same time period natural gas production actually increased from 463 Bcf to 605 Bcf annually.

Because most of the gas in North Dakota is produced as a byproduct of oil wells, lack of capacity and infrastructure have hindered efforts to reduce flaring. The expansion of gas processing facilities at Tioga is one of the primary driving factors behind this reduction.

North Dakota’s flaring on federal/tribal lands is relatively small; ONRR data reports that 161 Bcf of natural gas was sold during the 2013-2016 period on federal/tribal leases. Extrapolating from this number, we calculate that, at minimum, 7 Bcf was flared on federal/tribal leases, representing $4.8 million in lost royalties.

Wyoming

Wyoming was estimated to have flared at least 225 Bcf on federal and tribal lands from 2013 to 2016 using ONRR data. This is equal to $816 million in market value, and $83 million in lost royalties for American taxpayers.

As Wyoming’s ONRR data does not account for state and private leases, there is uncertainty about the true extent of flaring in Wyoming today. Wyoming does not require reporting for flaring amounts under 60 Mcf per day. Additionally, the Energy Information Administration’s (EIA) current data on flaring and venting in Wyoming contain only information from processing plants; any gas lost at the well or during transmission to the plant is unaccounted for.

Even considering this gap in reporting coverage, EIA’s data for 2013 and 2014 show Wyoming flared at least 346 and 272 Bcf respectively, across all leases.

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