There’s been a lot of talk in the energy world recently about a BLM rule finalized in the waning days of the Obama administration that would limit methane emissions on public lands. Among other things, the rule requires the flaring of methane on federal and Indian lands to be cut in half over time. The intention behind the rule is to capture more of the natural gas produced at oil and gas wells so that it can be used on- or off-site. Natural gas’s primary component is methane, which in the short-term is a much more potent greenhouse gas than carbon dioxide. When flared (a.k.a. burned) methane emissions become carbon dioxide, which is better (but still not good) for the climate*.
With the new administration and Congress signaling their desire to repeal this rule, we felt a little background is warranted. First, there are a lot of numbers being thrown around as to the exact amounts and value of methane that would no longer be vented or flared. Using data from the U.S. Energy Information Administration, about 40 billion cubic feet seems like a reasonable estimate of methane vented or flared on federal and Indian land. Cutting this in half would prevent over 1 million metric tons of CO2 from entering the atmosphere, the equivalent of emissions from a 225,000 passenger cars. On the financial side, this amount of methane would be valued at over $80 million by natural gas distribution utilities and produce about $10 million of government royalties.
The numbers for Colorado are a bit harder to tease out, but a relatively high amount of the state’s natural gas sales comes from federal and Indian lands (29% in 2015). EIA’s venting and flaring figures for Colorado are incomplete, however, and these figures can vary wildly. Across the U.S., for instance, about 1% of total gas withdrawals are vented or flared, versus about 18% in North Dakota. Colorado is unique in that we have a rule that limits emissions to 5%, so the effect of the BLM rule is doubly hard to quantify.
In any case, capturing natural gas requires additional investments in technology on behalf of industry. For a state like North Dakota, whose oil boom occurred in the absence of sufficient pipeline infrastructure to move gas from place to place, that infrastructure would also need to be built out. It’s not cheap, it takes time, and more expensive oil and gas development could affect industry growth and prices. How’s that for giving you the facts and letting you choose a side?
*Note that gas might be flared because a storage/distribution mechanism is unavailable, to test a recently drilled and fracked well, to release pressure as a safety measure, and to manage gas vapors at compressor stations (Ohio EPA).