Colorado takes aim at oil, gas well flaring

Colorado energy regulators have voted for a curtailment of gas flaring at oil and gas production sites, limiting approved flaring to just a few circumstances, the Colorado Sun reports, noting that flaring is relatively rare in the state, compared with other states where it is routine.

The rule will help mitigate climate change, ensure the safety of groundwater, and make sure soil resources are available to grow healthy crops and vegetation, the director of the Colorado Oil and Gas Conservation Commission, Julie Murphy, said in a statement as quoted by Bloomberg Law.

Every year, the oil and gas industry flares some 150 billion cubic meters of natural gas. The reasons vary: at oil fields, gas is flared when there are no pipelines to transport it to a collection or storage hub; at refineries, some gases must be flared to avoid explosions.

The biggest flarers globally are major oil-producing countries such as Iraq and Russia. In the United States, flares are much smaller than Russia’s and Iraq’s, but they are still quite substantial, especially in the Permian. Oil and gas companies could be motivated to reduce or even eliminate flaring, not just for environmental protection purposes. Flaring burns gas that can be utilized or sold, which means it destroys a potential revenue stream.

Yet the environmental protection perspective is also very important: there has been growing pressure from investors, environmental organizations, and regulators mounts on the industry to take steps to reduce the amount of methane burned at oil wells.

“With this rule, Colorado becomes the model for other jurisdictions looking to end routine flaring as communities, investors and leading companies demand action,” said Environmental Defense Fund director of state advocacy Dan Grossman, as quoted by the Colorado Sun.

Earlier this year, the Texas Railroad Commission also said it would tighten the rules for flaring at oil wells, surprising many. After the elections, however, this may change: Republican Jim Wright won a seat on the TRC over Democratic candidate Chrysta Castaneda, vowing to increase oil production in the Lone Star state.

By Irina Slav

Gh Extractives

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