Oil companies in the Permian Basin could produce revenues of more than $400 million by capturing natural gas. According to a new report, producers could see these revenues by 2025.
If Texas required companies to capture 98 percent of the natural gas they produce, the need for flaring would almost disappear. This is a finding from researchers from energy consultancy firm Rystad.
Flaring occurs when excess gas is burned off at the wellhead during the production of crude oil. Greenhouse gases, including methane, are released into the air as a result. According to the Environmental Defense Fund, methane accelerates climate change. This is because it is 84 times more capable of capturing heat than carbon dioxide over the short term.
Opponents of flaring guidelines say that oil companies would suffer from unnecessary regulations. But the EDF argues that restricting flaring could actually benefit the oil majors and the environment. “We’re talking about stopping the release of something with value,” explains Colin Leyden, the EDF’s director of regulatory and legislative affairs. “There’s significant value creation to be had with a 98 percent gas capture metric.”
The Rystad report pegged that value at $440 million by 2025 if a law to capture 98 percent of the produced gas is introduced. The study projected oil companies would only need to spend $50 million more to bring their operations into compliance with this measure.