East Daley Analytics and Validere, a measurement, reporting, and verification (MRV) SaaS company, released a new report: ‘Emissions Critical: Flaring, Methane, and the Cost of Looming Permian Gas Takeaway Constraints’. The report addresses the outlook for infrastructure constraints in the Permian and the potential for increases in flaring rates, and highlights how operators can limit the impact of rising flaring rates on the environment and their social license to operate.
Permian Basin flaring caught the attention of governments, investors, and consumers in 2019 as natural gas transmission capacity lagged the associated gas production coming along with explosive oil production growth. Another round of infrastructure projects is now under construction, but Permian production growth again looks set to exceed this pipeline build-out.
“In an ideal world, infrastructure would stay ahead of supply growth, but for both commercial and regulatory reasons, production-limiting constraints can occur in gathering, processing, and transmission,” said Justin Carlson, Co-Founder, and Chief Commercial Officer at East Daley Analytics. “In mid-2024, when we estimate the excess gas problem to be at its worst, shutting in enough gas production would take 200 000 bbl/d of oil production offline, reducing US exports and pushing up both domestic and global prices. Delays in scheduled pipeline capacity could push that figure even higher.”
Relative to the last time Permian production outgrew takeaway capacity, environmental concerns have become more prominent for Permian operators. They have sharply ramped up spending on environmental monitoring, and several large operators have either already ended routine flaring or have pledged to do so soon. Some larger operators likely will manage infrastructure constraints by delaying completions or shutting in production rather than flaring, prioritising environmental performance over near-term cash flows.
Each 100 000 ft3/d of flaring adds 2.2 million tpy of CO2 emissions, and methane emissions contribute an additional 1 million tpy of CO2 equivalent (CO2e) emissions, based on the 20 year greenhouse gas (GHG) impact and 98% combustion efficiency. However, several external studies suggest that true combustion efficiency is much lower. Even 97% combustion efficiency adds 0.5 million tpy of CO2e emissions, the equivalent of the CO2e emissions from 100 000 passenger vehicles. By effectively monitoring operational data like thermocouples and quickly addressing any unlit flares, operators can limit the environmental impact of rising flaring rates.
“With Permian flaring levels likely to rise, operators in the basin will face increased environmental scrutiny,” said Jen Snyder, Senior Advisor at Validere. “It will be more important than ever to monitor both new and old flares, to ensure that this increase in flaring doesn’t also cause a sharp uptick in methane emissions, which has a much bigger near-term climate impact.”
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Read the article online at: https://www.worldpipelines.com/special-reports/25052023/how-operators-can-manage-ghg-emissions-from-flares/
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