Mark Doelger wasn’t in favor of flaring millions of cubic feet of gas in the Powder River Basin, but an appeal by ATX Energy Partners to do just that moved smoothly through the Wyoming Oil and Gas Conservation Commission Tuesday, with his vote.
Flaring is the practice of burning off gas rather than venting it into the atmosphere or collecting it for sale. Sometimes a safety precaution to release pressure, flaring is often used when oil wells are drilled in areas that don’t have existing pipelines to move produced gas to a market. It’s considered safer than venting — when the gas is simply released — but comes with its own set of challenges, from the release of volatile organic compounds into the air to waste of Wyoming’s natural resources.
The commission lowered the bar on how much gas could be vented two years ago, but left flaring amounts at 60,000 cubic feet per day before a permit is required.
ATX’s proposal would allow the release of up to 1 million cubic feet of gas per day, at each of three wells, over a period of six months — in excess of the daily limit by about 1500 percent.
The question before the commissioners Tuesday: ‘Is that request reasonable?’
For Doelger, it was.
“In thinking about this hearing before it occurred. I was against it, but I thought their request was not out of bounds,” he said. “Often an operator needs to flow the well, in order to test it and know what volumes are available in order to get the midstream pipelines companies to commit to building.”
ATX wants to drill in central Johnson County, but the wells would be located about 14 miles from an existing pipeline system. In order to justify the expense of connecting to that network, owned by a subsidiary of Meritage Midstream, the company asked if it could flare three wells, for six months, up to 1 million cubic feet of gas per day for each well. If the company can prove there is enough gas to justify the expense of a pipeline, it will start construction.
The company’s lawyer, James Parrot of Beatty and Wozniak P.C., said flaring the gas was “of the upmost importance to ATX as a company and to further development of a large area of the Powder River Basin.”
The Powder River Basin has become home to a patchwork of gas pipelines over the last decade, as noted by the commission Tuesday. It’s on the edge of what was a coal-bed methane hot spot until the price of natural gas fell. Thousands of shallow wells were drilled to access natural gas and many miles of pipelines were laid to carry that gas. When gas prices fell, the lure of the coal-bed methane business faded and a number of companies picked up cheap assets only to go defunct soon after. Much of the infrastructure is left behind.
“They went crazy, permitted some 50,000 coal-bed methane wells,” said Jill Morrison, an organizer for the landowners group Powder River Basin Resource Council. “There was gas and pipelines everywhere … Now all of a sudden gas is worth nothing and we’re all after oil. So it’s just like: Let’s just flare the gas.”
Morrison was skeptical of the commission’s decision. It’s just too much gas when there are safer and more economically beneficial — to Wyoming — options, she said.
ATX said it had done its due diligence, considering existing pipelines, but the infrastructure is degraded or otherwise unusable.
ATX’s pipeline comes with its own challenges. The company reported Tuesday that the pipeline would be largely on private land and would travel through a core habitat for sage grouse. More than half of the right of ways have been negotiated, the company said.
Commissioner Erin Campbell, state geologist, raised the concern of timing — given that the end of the flaring period and beginning of construction would come close to sage grouse breeding season in the spring.
Sage grouse is a sensitive topic in Wyoming. The state, along with federal agencies like the Bureau of Land Management, put together conservation policies to keep the bird from being listed as an endangered species. Maintaining the bird’s habitats, particularly those identified as “core” habitats, is the foundation of those plans.
After the pipeline is laid, the disturbance to the sensitive Wyoming bird would be limited. The largest challenge, or concern, is in construction, said Dan Thiel, Wyoming Game and Fish Department wildlife management coordinator for the Sheridan region.
There is very little healthy sage grouse habitat remaining in that area of the state, which makes these core areas particularly important and the restoration of any damage key to any project, Thiel said.
ATX reached out the Game and Fish in early spring, soon after it acquired the assets in Johnson County. The company has performed the required calculation to ensure that surface disturbance would fall under 5 percent of the area.
It was that, along with the presentation on timelines and collaboration with the pipeline company, that convinced the commission to allow the flaring.
The company is in a “holding pattern” until it knows how much gas can be produced, a representative said.
Morrison, of the Powder River Basin Resource Council, said flaring is still a concern, both because there are environmental harms associated with burning gas and because it’s a waste of Wyoming’s resources.
“I think the commission really was too lenient in flaring this much,” she said. “We really need legislators to look at making people pay the severance tax on gas that gets flared. It needs to be measured and it needs to be paid for.”
Draft legislation to that effect failed in the Wyoming legislature years back. That measure was sponsored by Johnson County’s longtime representative, Mike Madden, R-Buffalo. Industry opposed it, Morrison said.
Waste was a concern raised by the commission.
“I do feel that flaring is burning up state dollars,” said Campbell.
But though 1 million cubic feet per day is a lot of gas to flare, it’s not a ton of money for Wyoming, maybe about $1,500 a month, Doelger said in an interview.
And though oil has become the game today, companies appear to be moving away from flaring, Doelger said.
“I hope they’ve gotten the message from the commission that we really don’t like flaring very much,” he said of industry. “But you have to take it case by case.”