Oil drillers are burning excess natural gas to keep the crude oil ﬂowing. Natural gas is mostly a byproduct of crude oil drilling in the Permian Basin. So the shortage of pipeline capacity to transport the gas to market has played a role in companies burning — or ﬂaring — large amounts of natural gas to keep that roadblock from slowing oil production. State data and analysts' reports show large increases in ﬂaring permits and volumes in Texas. A similar situation happened — although with much larger percentages ﬂared — several years ago in North Dakota. That prompted state regulators to rein in the practice. Texas Railroad Commissioner Ryan Sitton said this summer he expects to address the situation within the next six months.

Flaring is on the rise in Texas

The percentage of natural gas ﬂared is still small, but the volumes are signiﬁcant.

North Dakota's natural gas problem

Drillers ﬂared as much as a third of their gas before the state intervened.

"The regulatory side is going to start to be a problem as we continue to try to flare more gas in order to get the commodity we're looking for, which is crude oil. The flaring is not only value lost to the operator, but it's also value lost to the state in terms of tax dollars."

Cheap natural gas makes ﬂaring easier

senior oil and gas marketing analyst, Drillinginfo

Drillers want to sell their gas but not if it slows oil production.

Henry Hub natural gas spot prices, dollars per million BTU

"Flaring that you're seeing right now is more related to the infrastructure within the Permian. ... We are forecasting some additional constraints on that downstream takeaway. ... We're producing a little over 8 bcf [billion cubic feet] a day of residue gas leaving the area, and that's up from about 5 bcf just in 2015. If you plotted that projection, you would start to run out of capacity really by the end of this year."

Flaring permits peaked in 2015

president of consulting service Caballo Loco Midstream

Although the number of permits is decreasing, volumes are increasing.

Number of flaring permits

"Midstream companies are building new pipelines to clear the natural gas choke point in the Permian Basin. Much of that capacity is still a year or two off, though. Besides the financial impacts, there are environmental repercussions of flaring, from climate change effects to interfering with views at the McDonald Observatory in West Texas."

energy and environment writer, The Dallas Morning News

SOURCES: Drillinginfo; U.S. Energy Information Administration; Texas Railroad Commission