Private companies in America’s most productive oil region are burning unwanted natural gas at almost six times the level of intensity than publicly listed companies. The majority of flaring by the top operators in the Permian Basin — an area that accounts for more than half of US oil output — still occurs routinely, despite industry pledges of cleaner supply chains within the next decade, according to figures from energy consultancy Rystad.
Among the 29 largest operators in the region, close to 80 percent of flaring — the process of burning off gas to relieve pressure during oil extraction — by private companies occurs regularly, compared with 45 percent for listed companies, Rystad data show.
Private oil and gas companies burnt off an average of 423 cubic feet of gas for every barrel of oil produced compared with just 74 cubic feet a barrel for their listed rivals.
The environmental impact of gas flaring, which results in more than 400m tonnes of C02 being emitted into the atmosphere each year, has caused investors to push companies in the industry to make commitments to end the practice.
Most of the big oil groups such as Chevron, Royal Dutch Shell and ConocoPhillips, have committed to end “routine flaring” by 2030, many as part of a global gas flaring partnership initiative lead by the World Bank. However, private operators are yet to announce similar targets.
“Many companies will need to do a lot to eliminate routine flaring,” said Artem Abramov, head of shale research at Rystad. Yet this is now almost a requirement for public companies to be able to reach their net zero emissions targets, he explained.