Permian Natural Gas Pipeline Expansion -- What Will The Faux Environmentalists Complain About Next? -- May 26, 2019

Remember this back on May 15, 2019? A Permian pipeline bubble?

Hold that thought.

North Dakota flares about 15% of the natural gas it produces. Bakken flaring was a huge story years ago; that story has pretty much gone away. Environmentalists are now going after the Permian and flaring. Google it.

So, I was curious. How much natural gas is being flared in the Permian? I think we discussed this before. There are two numbers. An "older" number is 4.4%; a newer number is 5.8%. Whatever. I find both numbers incredibly small considering what is going on in the Permian. Remember, unlike the Bakken, the Permian has a lot of natural gas along with its crude oil. From my perspective the operators and the state have done a great job keeping flaring to about 5% of total natural gas production.

But, now look at this. From mrt.com, March 4, 2019:

The proposed pipeline capacity expected to come online in the Permian Basin over the next three years is vastly greater than the estimated volumes of flared gas, according to a Texans for Natural Gas analysis. Recent media reports have called attention to flaring levels in the Permian as production has increased, with one environmental group even suggesting that the market can’t solve the issue. But the new pipeline capacity being added over the next few years appears to contradict that claim.

A TNG review found an estimated 14 billion cubic feet per day (Bcf/d) in additional natural gas pipeline capacity set to come online in the Permian by the end of 2022. This equates to more than five trillion cubic feet of natural gas annually.

I don't know what that means. Is "14 billion cf/d in additional natural gas pipeline capacity" anything to get excited about?

Answer:  That proposed capacity is about 93 times larger than the current flaring levels, according to data from the Texas Railroad Commission.

Comment: private enterprise tends not to like to "over-build." If proposed capacity is 93 times larger than the current flaring levels, that speaks volumes. No pun intended.

If they are over-building, they will cut back.

If they are not over-building, there will be a huge surge in natural gas production over the new few years.

14 billion cubic feet = 2.3 million bbls boe. Per day. That's in addition to whatever is already being produced.