I don’t work in the oil and gas industry. This lede from Bloomberg Environment (subscription required) may not be news to anyone in the industry, but it absolutely blew me away:
America’s hottest oil patch is producing so much natural gas that by the end of last year producers were burning off more than enough of the fuel to meet residential demand across the whole of Texas.
In short, oil companies are flaring more than 500 million cubic feet/day. That can’t even compete with some other countries. Russia apparently flares almost 20 billion cubic meters/year.
After stunned amazement, my next reaction was to wonder why any good engineer wouldn’t be horrified as such waste, even aside from the climate impacts. Then I realized that engineers are practical people. If there’s no economic cost to flaring, then it’s not waste to them.
That’s why this is reason number 42,659 for putting a price on carbon. Methane combustion yields about 2.74 tons of CO2 per ton of methane, so it has an effective global warming potential of 2.74. That means a carbon price of $40/ton of CO2 would be about $110/ton of methane.
At that price, would smart oil and gas engineers figure out ways to eliminate flaring?
Put a price on methane too – seriously. Released uncombusted it is 20 times worse than CO2 as a greenhouse gas . Recall that last September the EPA proposed roll back of Obama era rule for oil and gas industry fugitive emissions of methane, with similar proposals expected from other Federal agencies.