Pipeline Operator Sues Railroad Commission In Flaring Dispute by Sergio Chapa, Dec. 3, 2019, Houston Chronicle
The controversial oil and natural gas industry practice of burning off natural gas produced as a byproduct of crude oil production is under fire in a lawsuit filed by a pipeline company alleging that Texas regulators allowed one of its potential customers to flare natural gas instead of moving it to market and selling it.
In a Nov. 20 lawsuit filed before Judge Jan Soifer with the 345th State District Court in Austin, Oklahoma pipeline operator Williams and its subsidiary Mockingbird Midstream Gas Services sued the Railroad Commission of Texas over the agency’s 2-1 decision on Aug. 6 allowing Dallas oil and natural gas company Exco Resources to burn natural gas produced by 138 wells in the Eagle Ford shale of South Texas.
Williams argues that its natural gas gathering pipelines were already connected to Exco’s wells and would have allowed the company to move the gas to market and sell it instead of burning it off in an industry practice known as flaring.
“Natural gas flaring has long been recognized as wasteful and environmentally harmful,” Williams said in the lawsuit. “The Railroad Commission of Texas is vested with the duty to prevent the waste of oil and gas.”
Natural gas is byproduct of crude oil production, but with gas prices so low, many companies are simply burning it off, rather than paying the costs to transport it. Exco has been using temporary permission from the Railroad Commission to burn off billions of cubic feet of natural gas from it Eagle Ford wells since Dec. 2017.
In a filing with the Railroad Commission, Exco contended that it does not have a natural gas gathering agreement with Williams and even if it did, the using the system would be too costly and that the network does not have enough capacity to move all of the natural gas produced by the wells.
“Connecting to Williams’ pipeline would be uneconomic,” Exco said in the filing, “and without a flaring exception Exco will have to shut in the 138 wells which could cause damage to the wells and the reservoir resulting in a waste of hydrocarbons.”
Flaring remains a thorny issue for the oil and natural gas industry in Texas where the Norwegian research firm Rystad Energy estimates that operators burned 752 million cubic feet of natural gas per day during the third quarter, a double digit increase from the 650 million cubic feet burned daily during the second quarter.
Selling that gas, instead of burning it, would have prevented the release of millions of pounds of carbon dioxide and other pollutants into the atmosphere. It also could generate billions of dollars in revenue and hundreds of millions of dollars of royalties for landowners, the state, county governments and school districts.
In it’s lawsuit, Williams argued that the Railroad Commission has not denied any of the more than 27,000 requests for flaring permits received over the past seven years, a practice that had already sparked the ire of environmentalists who say the agency is weak on enforcement and is doing nothing to limit greenhouse gas emissions blamed for climate change.
Environment Texas, an Austin-based environmental group, delivered an open letter to the Railroad Commission on Tuesday asking the agency’s three elected commissioners to stop issuing flaring permits. Signed by 26 people ranging from environmentalists, scientists and Native American leaders to Texas State Sen. Jose Rodriguez, D-El Paso, and retired Shell Oil Company John Hofmeister, the letter asked the agency to end flaring.
“At current prices, flaring in the Permian Basin burns an excess of $1.8 million dollars a day worth of natural gas,” the letter stated. “Annual waste of gas is sufficient to power 400,000 Texan homes 7 for two and a half years.”
No court date has been set for the Williams lawsuit. The Railroad Commission said it would not comment on pending litigation . But the Aug. 6 hearing for Exco’s flaring permit sparked fierce debate in the all-Republican commission. …