First Comes the Sub-Zero Gas Prices, Then the Flaring in Texas

(Bloomberg) -- The glut of natural gas in the Texas shale patch that has grown so large prices have fallen below zero is raising fears among environmentalists that drillers are burning off more of the fuel at wells. 

Last year alone, energy producers flared 68 billion cubic feet of gas across Texas’s share of the energy-rich Permian Basin, according to Colin Leyden at the Environmental Defense Fund. It’s a practice that has emerged as a major source of climate-warming emissions in recent years. Environmentalists plan to compile regulatory filings and satellite images to estimate exactly how much gas is being burned as a result of the plunge in prices since regulators don’t track flaring in real-time. They’re calling for more oversight from the Environmental Protection Agency. 

Flaring is meant to get rid of fuel that companies can’t or aren’t willing to put into pipelines by burning off methane, a greenhouse gas at least 30 times more potent than carbon dioxide at heating up the planet. But it still creates carbon-dioxide emissions. And when it fails, methane is spewed directly into the air. The practice skyrocketed when oil drilling in the Permian, which stretches across West Texas and southeastern New Mexico, surged and has come under increasing scrutiny from both Texas and federal policy makers.

“That’s an egregious and largely avoidable waste of energy resources and source of pollution that the market is not addressing on its own,” Leyden said. 

Read More: Methane Hunters Race to Change the Course of Global Warming

Wholesale gas prices at a major market hub in Texas fell below zero on Tuesday and were at one point trading around negative $2 per million British thermal units, according to traders. Prices have been plunging because of a dearth of pipelines in the region that can bring the fuel to markets. Maintenance on two major pipeline networks have exacerbated the glut of supply there.

“It seems the drillers could’ve planned for this and reduced production ahead of time, thereby avoiding this problem,” said Luke Metzger, Executive Director, Environment Texas. “It’s grossly wasteful and harmful to the environment that they didn’t.” 

For its part, the energy industry in Texas has said the price plunge underscores the need for more pipelines, not more regulations. 

“If America – and Texas – are to meet surging domestic demand for natural gas and achieve our environmental goals, we simply need more take away capacity, and that starts with more pipelines,” said Ed Longanecker, president of the Texas Independent Producers & Royalty Owners Association. 

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