Texas Regulator Sends Warning to Drillers About Gas Flaring

Texas again sending a warning shot to drillers about flaring regulations.

Feb 7, 2014 at 1:05PM

This article was written by Oilprice.com -- the leading provider of energy news in the world. Also check out this recent article.

Texas Railroad Commissioner Christi Craddick sent letters to oil and gas drillers to warn them about running afoul of the state's rules on flaring natural gas. Gas flaring is the process of burning off excess natural gas when drilling a well, which burns off methane, a better environmental outcome than simply allowing it to escape, even though it still produces air pollution. Texas allows operators to do so for up to 10 days after a well is completed.

Craddick spoke at a conference in Houston, and according to Fuel Fix she explained the motivation behind the warning: "We have flaring rules in the state and we will be implementing and enforcing those. The letter is going to remind people of that. Sometimes, we've had a few not necessarily follow those rules."

The letters sent by the Texas Railroad Commission, which regulates the oil and gas industry, was meant to remind operators of the rules, according to Craddick. She says drilling in the Eagle Ford Shale is of particular concern.

Gas flaring has received increased attention recently, but regulators are only catching up to a process that has been under way for some time in places like North Dakota and Texas. Regulators in the Bakken are trying to find ways to incentivize the industry through carrots and sticks to capture the natural gas instead of flaring it. As NPR reported in late January, an estimated $1 million is being burned off each day in the Bakken.

The problem is that the infrastructure often does not exist, and the gas is simply not lucrative enough to build out enough equipment and pipeline capacity to capture the natural gas and transport it to market. Natural gas is worth a small fraction of the value of oil. "We know the infrastructure is behind. We don't want to shut you in. But we also wanna make sure you follow the rules," Craddick said.

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Written by Joao Peixe at Oilprice.com.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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