State regulators raise doubts about natural gas flaring permits but rarely reject them. Advocates for reform say the permit process is a “rubber stamp” and that companies shouldn’t get a free pass to keep flaring indefinitely.
By Martha Pskowski
October 18th, 2023
At a Railroad Commission meeting last month, Commissioner Jim Wright chastised Callon Petroleum for flaring natural gas at a drilling site, saying it should “find a better solution.”
But his comment came after he voted to grant the Houston-based company a flaring permit that allows Callon to continue flaring gas at the Crockett 15 well in the Permian Basin into the seventh consecutive year.
In Texas, State Rule 32 prohibits flaring, or burning off, natural gas at the wellhead except under a few specific conditions. Oil and gas companies are sometimes forced to flare gas during emergencies, to release high pressure in pipes, but more often they flare unwanted gas that comes to the surface in the oil drilling process. Flaring contributes to local air pollution and greenhouse gas emissions.
Since 2019, when the Texas Methane and Flaring Coalition, an industry group, was formed and the Railroad Commission appointed a “Blue Ribbon Task Force” on flaring in 2020, the practice has received more scrutiny in Texas.
But whatever the reason for flaring, the Railroad Commission has granted companies wide leeway to apply for exceptions to this rule and has long approved almost all of their flaring requests.
The RRC has granted thousands of Rule 32 exceptions so far this year, requiring companies to provide little evidence that they tried to prevent flaring.
One acceptable justification for flaring, according to the RRC, is that following the anti-flaring rule would limit gas production. Advocates say the permit process is a “rubber stamp” that makes the anti-flaring rule useless.
“If, at the end of the day, [regulators] don’t have the wherewithal to say, ‘No, I’m not approving this flaring exception,’ then there might as well not even be a rule,” said Virginia Palacios, executive director of Commission Shift, an advocacy organization focused on reforming the Railroad Commission, the state agency responsible for regulating the oil and gas industry.
A spokesperson for the Railroad Commission said the agency “strictly enforces the statewide flaring rule.”
In addition to releasing methane and other hazardous air pollutants, including volatile organic compounds, flaring contributes to ground-level ozone, which causes respiratory illness and heart disease. Flaring has also been linked to pre-term births.
Methane’s contribution to climate change in the short term is more potent than carbon dioxide. The oil and gas industry is the second-largest source of industrial methane emissions in the United States, after agriculture.The Environmental Protection Agency is finalizing methane regulations this year for the oil and gas industry, but in the meantime a patchwork of state regulations govern flaring.
In Texas, State Rule 32 prohibits flaring natural gas because of its economic value, while the Texas Commission on Environmental Quality regulates air pollution from oil and gas facilities. The rule allows natural gas flaring for the first 10 days after a well is completed and when necessary to ensure safety.
Requests for flaring exceptions are usually placed on the “consent agenda” of RRC meetings and voted through without discussion. At the Sept. 19 meeting, Commissioner Wright called out Callon Petroleum for two permit applications. Callon Petroleum applied for an 18-month flaring permit for the Crockett 15 and Durham-East drilling sites northeast of Pecos in Ward County.
The wells are connected to a low-pressure gathering line owned by Kinetic Energy Services, which will route gas to flare if the pressure becomes too great. Callon’s requests stated that flaring is necessary during maintenance or when there is insufficient gas to keep the compressor station running.
Wright pointed out the natural gas Callon flares is “fully marketable.” He also noted the company was requesting a “sizable increase” in the amount of permitted flaring. The new permits more than double the volume of gas Callon can flare at the drilling sites, compared to previous permits.
“I find this particular situation troubling,” Wright said. “I would suggest that this operator and its vendors attempt to find a better solution to eliminate the need to keep coming back to the commission to administratively forgive the waste of our natural resources.”
Crockett 15, a horizontal gas well, has received 16 different flaring exceptions dating back to 2018. Between July 1, 2022 and June 30, 2023, Callon reported that over nine percent of the gas produced at the well was flared.
The Railroad Commission ruled that the permits are “necessary for Callon to produce recoverable hydrocarbon liquids.” In other words, the RRC determined that maintaining natural gas production at the site overrode compliance with State Rule 32.
A spokesperson for Wright said the commissioner’s comments “reflect his strong desire that both Callon and the gas gatherer work together to improve efficiencies where possible.”
“If Commissioner Wright believed it was right and proper to reject the application, then he would have of course voted to do so,” the spokesperson said.
In 2021, soon after he was elected to the RRC, Wright issued a statement explaining how he would review applications for flaring.
“Flaring is a necessary last resort during an upset, and we have work to do internally at the commission to ensure that we are not approving requests that go beyond that,” he said.
Callon representatives did not respond to requests for comment. In its 2021 sustainability report, Callon set the goal to reduce all flaring to less than one percent of gas production by 2024. The company’s 2022 sustainability report modified the goal to reduce “Callon-controlled flaring” to less than one percent. The report attributes an increase in flaring at Callon facilities between 2022 and 2021 to “flaring caused by or exacerbated by force majeure conditions and third-party operational issues.”
The third-party issues referenced can include midstream companies that transport oil and gas from Callon drilling sites to processing and refining facilities.
“Our efforts to find solutions will continue, but we remain partially reliant on our midstream
partners’ performance to reduce flaring,” the 2022 report states.
The company has requested more than 500 flaring exceptions from the RRC since May 2021, according to the RRC database.
During the Sep. 19 meeting, Palacios of Commission Shift urged the commissioners to take decisive action.
“I really appreciate your comments and your suggestions for the company to not flare that gas and to find a better way to use that gas…” she said, speaking to Wright. “But you could take things a step further as the commissioner, all three of you could, and not approve those permits when it’s not appropriate for them to be approved.”
The number of flaring permits issued by the Railroad Commission peaked in 2019 at 6,972. After declining for several years, the total is creeping back up. Permits increased from 3,351 in fiscal year 2021 to 3,667 in 2022. Initial data shows fiscal year 2023 is on track to surpass 2022.
Since the Railroad Commission launched a flaring exemption database in May 2021, the records include only 44 applications that were denied and more than 8,000 that were approved.
The RRC spokesperson disputed that the high approval rate means applications are rubber stamped.
“The Commission always rejects flaring applications when it is not meeting the requirements of the application and the operator must resubmit the application after corrections are made,” the spokesperson said. “Sometimes it takes several rejections before the flaring permit is approved.”
The RRC spokesperson cited the percentage of natural gas flared out of total gas produced in Texas—0.77 percent in May 2023—as “an indication of the efforts by the RRC and the oil and gas industry to reduce flaring in the state.”
However, most flared gas comes from oil wells, known as casinghead gas, not from natural gas wells. Palacios and other advocates say the rate of casinghead gas flared is a better measure of progress, or lack thereof. In May 2023, according to RRC data, approximately 2 percent of casinghead gas was flared.
Gunnar Schade, associate professor of atmospheric sciences at Texas A&M University, said that flaring rates in Texas follow the booms and busts of oil production. Schade, who has studied unreported flaring, pointed to RRC data that showed flaring has increased as the industry recovered from the decline in production at the start of the pandemic in 2020. He said lowering the flaring rate is only part of the equation; if gas and oil production continues to increase, so will overall methane emissions.
“Higher production means higher methane emissions,” Schade said. “Net U.S. methane emissions have not dropped as the industry only decreased methane intensity, counteracting their own production growth.”
The 2021 report Flaring in Texas, by Sharon Wilson and Jack McDonald, outlined problems with the permitting process.
“Rule 32 outlines a series of flaring justification examples, but does not actually articulate any standard for determining when a flaring permit should be granted,” they wrote. “In practice this means the RRC has ceded flaring permit decision making to each individual operator, effectively preventing the RRC from denying flaring permits.”
The report also documents numerous flares in the Permian Basin for which companies had no permits. Advocates also warn flaring is underreported in Texas because the RRC relies on companies self-reporting.
“Wright knows that the industry doesn’t act on suggestions,” Wilson said, in reference to the RRC commissioner’s recent comments. “Any changes need to be mandated and rigorously enforced.”
Wilson, who now directs the organization Oilfield Witness, said public pressure has increased on companies to stop flaring. But she warned that companies may resort to venting—releasing methane directly into the atmosphere—which does not create the tell-tale flame of a flare, to avoid scrutiny. Methane, a climate super-pollutant, is over 80 times more warming than carbon dioxide over a 20-year period.
“Because the methane is invisible, no one is likely to know,” she said. “The best way to stop flaring is to stop oil and gas expansion and keep the methane gas in the ground.”
