Commission weighs next step in gas flaring

CASPER — When state regulators noticed flaring in the gas fields of southern Wyoming recently, it was a matter of concern because Wyoming doesn’t allow burn-off from gas wells.

But the story of flaring in the gas fields is complicated, posing a potential challenge to the Wyoming Oil and Gas Conservation Commission. It’s a question of how to deal with spontaneous gas mucking up the traditional way of producing gas and transporting it via pipeline.

BP operates about 1,800 wells across more than a half million net acres in the Wamsutter area, and the company has been producing from the southern Wyoming gas fields for four decades. But as they incorporated horizontal drilling in new rock layers to their operations they found themselves dealing with flash gas, or retrograde concentrate. Fort Worth-based Southland Royalty reported the same.

The minerals condense into a liquid state as production lowers the pressure in the reservoir, but can rapidly vaporize into a gas during separation and transportation at the well site. Some of that gas, in large volumes, was being flared, catching the attention of state officials.

Wyoming doesn’t have rules that deal with this phenomenon, said Mark Watson, agency supervisor of the Wyoming Oil and Gas Conservation Commission. These wells fall into a category somewhere in between the rules for oil production and the rules for gas, he said.

The state hasn’t allowed flaring from gas wells since the 1950s, reasoning dry gas is a saleable product and shouldn’t be wasted. Flaring is allowed in limited amounts from oil wells, often because there isn’t nearby pipeline infrastructure to catch byproduct gas from oil production, or because a company is testing the amount of gas they can produce in order to prove it’s worth the investment from pipeline companies.

The companies noted Tuesday that they were capturing most of the gas they were producing, and since state regulators flagged their flaring activities, have developed new systems to catch more gas.

“This isn’t your normal flaring application, these wells are 99 percent dedicated to (a pipeline company),” BP’s lawyer Michael Wozniak explained at the Tuesday hearing. “The gas is being captured at the well head, but there is hydrocarbon flashing that occurs at the well head.”

Watson said state officials noticed the large amounts of gas being flared in the gas fields and called companies before the Wyoming Oil and Gas Conservation Commission to explain.

The companies came a long way in the few months that passed between that request and the presentations before the Commission on Tuesday, he said.

However, commissioners were hesitant to discuss a regulatory framework for flash gas, given the work that operators are still doing to address it through technology.

“Technology sometimes outpaces our rules and regulations,” said Gov. Matt Mead. “We need to make sure we do look at some other states and see what they are doing.”

The governor also noted that he didn’t want Wyoming to hold back technology or establish itself as behind industry’s best practices because it had rushed to put rules in place.

“Commissioners … never want to do something unintended to prevent you all from using the best available technology,” he said.

BP requested that the commission allow it to continue testing its current pilot programs to capture gas while developing other approaches to reduce the amount of flash gas. Wozniak reported 99 percent capture of gas and 97 percent capture of liquids. But as the company continues drilling wells, they asked for relief to continue with their current practices, perhaps applying the flaring limits in place for oil wells to their new development.

“Frankly, that was all I could come up with even though it doesn’t really apply,” Wozniak said. “But we need some guidance that says here’s what we can do.”

The commission held off on deciding its long-term approach, requesting instead that the companies report progress in two months to provide the commission with more data that will guide the way forward.