Wayne Lax remembers the exact date and time.
It was Monday, March 11 at 12:21 p.m. just off Interstate 80 near the intersection of Laramie County Road 137 and U.S. Highway 30.
A large compressor station was spouting a voluminous, orange ball of fire. So Lax pulled out his phone and took a video and photograph of the scene.
The operator was burning off excess natural gas in a process known as flaring. According to accounts from Lax and other nearby landowners, the flaring had been happening almost “nonstop” throughout the weekend.
A natural gas processing plant had unexpectedly gone offline and the facility had turned to flaring. But Lax did not have that information at the time.
“We were just confused about what was going on,” Lax said. “So we documented it. I know people that live right near it, and they could just look out their window and see it. I live a few miles away, but I drove out there a few times and documented it.”
As a landowner in Laramie County, Lax decided to bring the issue to the attention of the Wyoming Department of Environmental Quality and the Laramie County Commission’s quarterly oil and gas meeting a week later.
In an email reviewed by the Star-Tribune, a state regulator informed Lax that EOG Resources Inc. reported flaring on March 7 for eight hours and the next day for eight hours and 30 minutes.
“But we had people out there that were seeing a lot more than that,” Lax said. The landowner also serves as the vice president of Cheyenne Area Landowners Coalition and a board member of Powder River Basin Resource Council.
In a statement to the Star-Tribune, the company acknowledged it had been flaring the day that Lax snapped his photograph.
“EOG recognizes the importance of minimizing flaring in our operations, and we do so whenever feasible,” a spokesman for the company said. “When flaring does occur, we follow proper protocols and maintain regular contact with the (Department of Environmental Quality) to keep them informed. This particular occurrence was the result of an unplanned outage at a third-party natural gas processing plant.”
Lax said he understands why operators turn to flaring, and that the state has rules in place to regulate the practice. But he wants the oversight to be tighter.
“I think the gray area is that most of flaring is self-reported (by the companies),” he said. “And that is where we have a lot of questions and a whole lot of concerns.”
To energy producers and public officials, flaring is an often unavoidable step in oil exploration and production. Natural gas can be a byproduct, and rather than allow it to simply vent it into the air, operators flare, or burn it.
Operators usually plan to build a pipeline for the gas if a site proves productive. But there’s often a period of time between when production starts and when a midstream company arrives to build a pipeline. What’s more, to persuade midstream pipeline companies to take a risk and invest in an unexplored area, operators want to test out wells and collect data. Companies will likely not make the investment in a pipeline if there are too many unknowns.
Some companies have developed novel approaches to addressing flaring, including two firms who want to convert the gas into computing power for things like bitcoin mining. But flaring continues to worry landowners like those in Laramie County, who say the flames obstruct the landscape, contaminate the air and burn up state revenue.
“What we’re really, really concerned about is that it seems that safety and health are being put on the back burner in terms of money,” Lax said.
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An oil and gas operator in Wyoming is permitted to flare up to 60,000 cubic feet of natural gas per day from an oil well. The total amount of flaring recorded last year in Wyoming hit 5.9 billion cubic feet, according to Wyoming’s Oil and Gas Conservation Commission. Flaring limits are tracked by volumes of natural gas flared, not necessarily the amount of time an operator spends flaring.
Of that, Wyoming operators self-reported flaring 428 million cubic feet above the daily limit last year, according to Wyoming Oil and Gas Conservation Commission monthly reports. And in the first half of this year, Wyoming operators reported flaring about 297 million cubic feet of approved gas above the daily limit.
Wyoming ranks third nationally in the amount of natural gas flared and vented. The practice is strictly regulated, and the state’s flaring rates are a far cry from those in states like Texas and North Dakota.
Wyoming’s environmental quality agency and oil commission both keep a close eye on flaring, according to several interviews with industry experts.
Flaring emits climate-warming pollution including volatile organic compounds, carbon dioxide, soot and other contaminants that can compromise local air quality.
“The Oil and Gas (Conservation) Commission talks about the cost problems for these oil companies to put infrastructure in to capture the gas and not have to flare it,” Lax acknowledged. “But why don’t we get it to where the infrastructure needs to be in place before the drilling (starts)? ... Flaring to the most minimum amount, that’s what we want.”
To Lax’s dismay, the Laramie County Commissioners decided in October to suspend the county’s quarterly oil and gas meetings.
Valerie Miller, executive assistant for the Laramie County Commissioners, told the Star-Tribune the suspension is temporary. Commissioners will likely resume in the spring, she said.
“We weren’t getting new information or anything like that (at the quarterly meetings). It was the same questions and the same answers every time,” she said. “(Development) ebbs and flows. This time we’ve decided, ‘Let’s let it go for awhile and pick it up in the spring when the oil fields are ramping up.’”
In the meantime, several landowners expressed anxiety over what they saw as an unexpected decision. In their eyes, it meant one less avenue for public participation in oil and gas development.
Natural gas to cash
As oil and natural gas prices tumble, companies have been left with little choice but to trim operating costs and find ways to save. But power providers in the Rocky Mountain region have been exploring a solution: turning excess natural gas into an additional source of revenue.
On Nov. 13, two companies announced plans to put wasted natural gas to beneficial use. Mesa Natural Gas Solutions, LLC and Crusoe Energy Systems plan to partner over the next two years and transform stranded natural gas at well sites into computing power. To do so, Mesa will contribute its state-of-the-art natural gas generators and Crusoe will provide modular data centers at well sites throughout Wyoming and beyond.
“We are extremely proud and excited to work with Crusoe and partner with them to convert stranded or flare gas to electricity for use in Crusoe’s onsite data centers,” said Scott Gromer, president and CEO of Mesa Solutions. “The Crusoe team has developed an innovative, cost-effective solution to the growing issue of excess associated gas in the U.S. oil fields. Oil and gas companies have asked for a solution to excess associate gas production and with Crusoe and Mesa’s technology, we can economically consume the excess gas while reducing emissions.”
After the natural gas is used to generate electricity, Crusoe funnels it to computer servers inside customized beta centers in the oil field. The computing power is then used for activities like blockchain processing, artificial intelligence or machine learning programs — computations that consume enormous amounts of energy.
“We’re bringing some of that high, energy-demanding computing into the oil field,” said Chase Lochmiller, Crusoe’s CEO and founder. “Let’s let our oil and gas industry have a piece of this computing economy and let’s bring it into Wyoming.”
Crusoe has already deployed its flaring mitigation system in the Powder River Basin. In fact, Crusoe’s first client was Thunder Basin Resources, LLC in Wyoming. Though the practice has yet to reach every operator, the alternative seems to be catching on.
Because the gas is converted to electricity and then data onsite, costly infrastructure like pipelines or processing plants for transporting the excess natural gas are no longer needed.
“We like to say it’s easier to move a bit(coin) than it is to move a molecule (of gas),” said Cully Cavness, Crusoe’s president and founder. “We can basically move this massive power demand upstream directly to where the gas is being produced.”