A legislative committee killed a bill Tuesday that would have taxed natural gas flaring from oil wells.
When there isn’t pipeline or processing infrastructure available to move the natural gas, companies simply burn it. The draft bill would have required severance tax payments on gas flared more than 180 days after the well starts producing. Representative Michael Madden, one of two supporters of the bill, said the proposal wasn’t a tax increase, but rather the repeal of an exemption.
There are fewer companies flaring off natural gas today than there were six months ago. In March, the Oil and Gas Conservation Commission had 65 flaring authorizations. Members of the Legislatures Minerals Committee were told by Commission Supervisor Grant Black that now there is about half that number. He also said that companies generally request flaring permits when a compressor is down or there is no pipeline to get the gas to market and they’re seeing much less of the latter.
Natural gas’ reputation as a climate-friendly alternative to coal has been tarnished recently by concerns that methane—a potent greenhouse gas—is leaking in copious quantities as the fuel makes its way from the ground to the consumer. A study released Monday provides the first on-the-ground measurements of methane leaks at hydraulically fractured natural gas well sites, and they're not as bad as some had feared.
Wyoming Public Radio’s Bob Beck spoke with the new supervisor of the Wyoming Oil and Gas Conservation Commission, Grant Black. Since he started the job a few weeks ago, Black has been dealing with issues ranging from the flaring of natural gas to water contamination. He says the flaring issue is interesting.
A coalition of Wyoming groups has filed a rulemaking petition to the Wyoming Oil and Gas Conservation Commission to address oil and gas development in the state.
The petition focuses on three main issues: increasing the setback of drilling rigs from homes, schools and businesses, adequate enforcement in the case of accidents and spills…and reducing the practice of flaring. Powder River Basin Resource Council’s Jill Morrison says flaring has been a recognized problem for some time.
Oil development in the state is bringing up natural gas along with the oil, but some of the gas is getting burned off in flares and the state is missing out on taxes and royalty payments. The reason the gas is getting flared is that there are not enough pipelines in place to connect new wells to markets.
The President of the Wyoming Petroleum Association, Bruce Hinchey, says it doesn’t always make sense to build new pipelines for the relatively small quantities of gas coming up.