Permian Shale Gas Flaring Plummets: Rystad

The share of gross gas output that is flared at the wellhead in the US’ prolific Permian Basin has plummeted to a modern shale-era record low, according to estimates published by Norwegian consultancy Rystad January 14. Preliminary data analysis shows only 1.6% of the basin’s gas production was flared in the fourth quarter of 2020. In the previous quarter it had been 1.7%.

The absolute amount of the flared gas probably averaged 390mn ft³/day in the last three months of the year, Rystad calculates. New Mexico’s Delaware North is the only major sub-basin which saw a sequential increase in flaring in the fourth quarter, but it is also the region with the lowest flaring intensity among the play’s major sub-basins. It is also currently the one with the most significant activity levels.

Delaware East is the only region where flaring intensity remains above 2.5%, with Delaware West largely tracking the overall basin’s trend in the second half of last year. Midland North and Midland East both posted a wellhead flaring intensity of 1.4% in the fourth quarter.

“One needs to go back to early 2012 to see flaring levels that low. But back then, shale activity was just starting to pick up. As reporting standards nine years ago were not as reliable, flaring could have been a bit higher than what we see in the data, so it is safe to assert that wellhead flaring has never been this low in the Permian in the shale era,” the report says.

Rystad assumes perfect combustion, or 100% CO₂ and no methane, in calculating wellhead flaring CO₂ intensity/barrel of oil produced for the Permian Basin. While a modest increase, from 4.4 to 4.6 kg CO₂/barrel of oil, was recorded between September and October, wellhead flaring CO2 intensity in the basin remains below 5 kg CO₂/barrel – a level which has not been seen since 2011, it said.

Rystad expects a modest increase in flaring this quarter from "smaller producers that operate under the legacy model and tend to flare gas on new completions if gathering infrastructure capacity lags drilling and completion (D&C) work."

But it says most of the "large Permian producers remain committed to their flaring intensity goals and have not demonstrated any sudden uptick, based on the latest data. As of the second half of last year, of the 45 largest gas producers in the Permian Basin, 20 exhibit a flaring intensity of 1.2% and below and 13 are in the 1.3-2.2% range. The remaining 12, with a higher flaring intensity, represent a mix of private producers and companies which initiated large completions during the same time period, and which were put on production recently."