Oilfield Flares Provide a Glaring Reminder of the Drive To Produce More Oil

摘要

Natural gas flared in just two major US shale plays exceeded the amount of gas consumed last year in Colombia and Israel.The prolific waste from the Permian and the Bakken(Figs, l and 2)is a side effect of rising oil production in plays where gas growth is so strong pipeline construction cannot keep up.Flaring is a glaring reminder of the realities of the never-ending rush to drill that is driving down the cost of oil and gas around the globe.These oil-producing wells also produce more gas than processing plants and pipelines can move to market.Pipelines and refineries have recognized that ultralight oil in the Permian is fundamentally different from West Texas Intermediate(WTI), with a makeup that puts it somewhere between oil and gas liquids.As those wells age, oil production falls as the output shifts to gas.And the cost of sustaining production for the vast majority of producers has consistently exceeded the cash generated by these wells(Fig.3).The gap between capital expenditures and revenues was”a staggering $4-7 billion”during the first quarter of 2019, according to a study by Alisa Lukash, a senior analyst on Rystad Energy's North American shale team, who described it as a”tremendous overspend.”