BP Joins Growing Industry Effort to End Permian Flaring

Copyright © 2023 Energy Intelligence Group All rights reserved. Unauthorized access or electronic forwarding, even for internal use, is prohibited.

BP has announced plans to eliminate the routine flaring of gas in the Permian Basin by 2025, becoming the latest major to take strategic aim at cleaning up its US operations. BP said its flaring target is enabled by its newly invigorated Grand Slam facility, in which it has replaced much of the gas-driven equipment, compressors and generators with an electrified central oil, gas and water handling facility. “Electrification of the field has been a game-changer,” said Kim Krieger, vice president of operations for BP’s shale oil business BPX Energy. “We are cutting emissions while significantly increasing the reliability of our field operations enabling a 20% uplift in production.” BP has worked to align its production with legacy infrastructure, and the net effect has been reduced flaring, the company said. At the end of 2019, BP had a flaring intensity of 15%, which has dropped down to 2% more recently, BP America CEO David Lawler said in a LinkedIn posting. Flaring from the Permian is a longstanding issue, with as much as 1 billion cubic feet per day being lost to the atmosphere at its 2019 peak as associated gas from oil drilling soared -- with little takeaway capacity to move it to market. That volume has fallen dramatically but is still a flash point for environment-minded shareholders. Producers also forgo revenue for every cubic foot of gas they lose to flaring. Whether through voluntary operational shifts or supporting the restoration of federal methane emissions regulations, the industry’s largest companies are taking public positions on their engagement with the energy transition. Pioneer Natural Resources, a leading anti-flaring force, is about to become the Permian's largest E&P (NGW Apr.12'21). Urging Congress to Act Just a few days before BP's announcement, Royal Dutch Shell said it would give its shareholders a nonbinding vote on its energy transition plan for the first time during its May annual meeting. Shell's strategy is “aligned with the more ambitious goal of the Paris Agreement, to limit the increase in the average global temperature to 1.5°C above pre-industrial levels," said Shell Chairman Chad Holliday, adding that it will “help investors and wider society gain a better understanding of how Shell is addressing the risks and opportunities of the energy transition.” Similarly, when Total’s shareholders meet next month, they will make a first-time advisory vote on the firm’s strategy for sustainable development and the energy transition. US producers ConocoPhillips, Chevron and Exxon Mobil, along with their European counterparts, have backed some form of a carbon price for several years, but their calls are growing more proactive. Shell and top US gas producer EQT have also called on Congress to restore direct federal regulation of methane emissions. In a post on Twitter this month, Shell said sound natural gas policy is critical to its role in the energy transition. “We urge Congress to approve the methane resolution under the Congressional Review Act,” the firm said. Exxon in March proposed a framework for industry-wide methane regulations. Its blueprint is based on a voluntary reduction effort focused on the replacement of high-leak potential components and technological enhancements, the supermajor said. Last year, Shell and BP joined forces to appeal to the Texas Railroad Commission, which regulates oil and gas production in the state, to address routine flaring and “set the bar for others to follow.” Deon Daugherty, Houston

Shale, Corporate Strategy
Wanda Ad #2 (article footer)
Legislation that cleared the House and Senate this week include some of the top permitting reforms urged by the E&P, LNG and pipeline sectors — but it's only a start.
Fri, Jun 2, 2023
The bill would jumpstart a comprehensive study on lifecycle emissions of key goods, laying the groundwork for a future tax mechanism that would favor lower-emissions products.
Wed, Jun 7, 2023
Drilling costs in the US oil patch may be leveling out as more equipment becomes available, but one key component — labor — remains in short supply.
Wed, Jun 7, 2023