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Roger Arnold's picture
Director Silverthorn Institute

Roger Arnold is a former software engineer and systems architect. He studied physics, math, and chemistry at Michigan State University's Honors College. After graduation, he worked in...

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  • Aug 30, 2021 12:00 am GMT
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Concerned about the global warming effects of fugitive methane emissions? Robert Howarth and Mark Z. Jacobson certainly are. In a recent article that has garnered international attention, the high profile professors from Cornell and Stanford assert that high levels of fugitive methane emissions render any use of natural gas no better than coal. Wow! Talk about turning against the common wisdom!

Turns out, though, that there's a simple fix for the problem of methane leakage from the oil and gas system: increase the use of natural gas!

If that sounds facetious, well, it is. Sort of.

But only "sort of". Because what it comes down to is that the problem of methane leakage into the atmosphere has very little to do with the consumption of natural gas per se. It's fundamentally an economic problem. The price of natural gas is too low.  Increase the demand for natural gas, and the price will rise. When the price rises, voilà! The biggest source of methane leakage promptly shrinks!

That "biggest source of methane leakage" is gas flaring. That's the topic of the article I'm sharing here. (Click "Read More", below) It has a lot of useful detail about why gas is flared, why it's bad for the environment, and what can be done about it. And no, increasing the use of natural gas is no long term solution. But it's true that the 4% of associated gas estimated to be wasted by flaring and venting from oil wells in the Permian and other shale basins is "low hanging fruit" for increasing the supply of natural gas in response to increased demand. No drilling required!

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Matt Chester's picture
Matt Chester on Aug 30, 2021

So, make it expensive enough that no one dare flare it or cheap enough that no one wants to extract it from the ground? It seems we're plagued with the perpetual middle point which leads to the greatest total emissions from gas as an energy source-- and I don't see us getting the the expensive route without any sort of uniform carbon pricing

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Roger Arnold on Aug 30, 2021

Agreed, uniform carbon pricing would make a lot of things easier. But note that the flaring issue isn't about extraction of natural gas. If a field is known to have good gas reserves and the operator is drilling with the specific intention of extracting gas, there won't be any flaring. (Beyond small and temporary flaring related to system maintenance.) Flaring is almost entirely a matter of disposal of associated gas from oil wells. And particularly non-conventional oil wells in tight sand and shale formations. Fracked wells.

For oil wells in conventional formations with good rock permeability, flaring is rare. Even if the amount of associated gas isn't enough to justify the investment needed to get it to market, there's an easy alternative. It's re-injected into the formation to drive more oil to the production wells. Re-injection doesn't work, however, in tight formations of the sort that require fracking.

Creative solutions are beginning to emerge. They're variations on the parable of "Mohammed and the mountain". If it's impractical for the gas to come to end users, maybe there are end users who can come to the gas? Gas-fired generators can be pretty small and mobile, for example, and so are power-hungry supercomputer clusters of the sort used for bitcoin mining. Really anything that would benefit from super-cheap gas or electricity, can be built into one or more shipping containers, and driven to a field site. Starlink can provide the site with low latency, high bandwidth data communication if needed. I can think of lots of applications, and I'm sure others can think of more. I don't expect the flaring problem to remain unresolved for long.

Mark Silverstone's picture
Mark Silverstone on Sep 3, 2021

Interesting suggestion. If true, then one might be able to detect corrolating variations in the rate of flaring and venting as the price of gas reaches its highs and lows. But I doubt that is the case. For most small operators, which dominate US gas production, it is a cash flow and highly leveraged business. All resources are directed at producing as much as possible today. So very much human and fossil fuel energy is spent on the easiest and fastest production. No thought is given to the best possible use of the finite resource that is natural gas. 
Few operators have the time, cash, personnel or desire to temporarily reduce production today, make the necessary capital investments to reduce leaks, venting and flaring in order to save the 4% of which you speak. Perhaps if the price triples or quadruples? Maybe. It might be possible, as you say, if new consumers “come to the mountain” who are willing to pay for the resource.  You point out good possibilities for that to happen.   But I think if it were going to happen, it would have by now.  The problem, I suspect, may be the eternal “boom and bust”nature and character of the industry and its participants which make it impossible for the ancillary industries that you mention to survive.  But that possibility is no excuse for  state and federal regulators failing to enforce realistic laws for safety and environmental responsibility, much less sustainability. Without regulation and enforcement, higher prices may well trigger even more waste by spurring more drilling and production of the “easiest” gas.
 

And that is not mentioning the poor and, sometimes catastrophic safety practices that result from sloppy, careless drilling and production practices in the name of quick cash flow.  


Few operators even have the decency to securely cap wells the production from which is no longer profitable.

It’s hard to believe, I know. Like the air we breathe and the water we drink the “right” to foul it with our “waste” products is called, by some, “freedom”!

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Roger Arnold on Sep 3, 2021

Those are good points, Mark. Natural gas prices are always pretty volatile though, and I wouldn't expect to see any correlation between flaring activity and gas prices on a short term basis. Investment decisions are made on the basis of long term expectations. If there's a long term outlook for higher prices, that might tip an operator's decision to invest in a pipeline connection to the gas collection system. After that's been done, there's no further need for flaring -- from that site.

 

Investment decisions in non-conventional oil and gas plays are weird, however. The decline rates are murder, and require a steady stream of new well completions to maintain production. Most individual wells will never produce enough to pay off. But high initial flows provide all-important cash flow, and awareness of impending decline creates constant pressure for innovation to reduce costs.

 

I'm amazed at the advances that have allowed multiple horizontal wells to be drilled as spokes from the same main well bore, and the techniques for staged completions from the same central bore. Watching the industry is somewhat like watching someone who swam out too far from the beach, got swept away by the rip tide, and is struggling to keep their head above water. But as they're floundering, they're teaching themselves to swim more efficiently, and use up less energy treading water. There's something there one has to admire -- even if they were stupid to have ventured into those waters in the first place.

 

Transportable power generators and power-hungry applications in shipping containers may be the next act in the flounderer's desperate learning process. The applications relieve oil and gas field operators of the hard decision to expend precious cash for a gas infrastructure connection that may or may not pay off. The application comes to them, and whatever price it pays for the gas it uses will be better than wasting it. The transportable applications won't put any of the currently wasted gas into the supply chain directly, but indirectly it will. It will be removing its consumption from the primary gas infrastructure and leaving more there for other applications.

 

There's still the problem of declining production. When supply from the current site drops off too much for the application to operate efficiently, then it packs up and moves on to another site. The site it's leaving either reverts to flaring, but at a lower volume, or a new transportable application with a smaller power appetite moves in.

 

I think I just invented a new job category: schedule planning and dispatching for transportable power applications.

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