A secret recording of US oil executives at a gathering last year in Colorado revealed that they were worried that some producers were intentionally flaring or burning off far too much natural gas, threatening the industry’s image, the New York Times (NYT) yesterday reported.
“We’re just flaring a tremendous amount of gas,” the NYT quotes Ron Ness, president of the North Dakota Petroleum Council, telling the June 2019 gathering, held in Colorado Springs, Colorado during the 1hr 22 minutes recording it said it listened to. “This pesky natural gas,” he said. “The value of it is very minimal,” particularly to companies drilling mainly for oil.
The meeting was convened last year by the Independent Petroleum Association of America (IPAA), a group that represents energy companies and of which ExxonMobil is a member.
The audio, the NYT said, was provided by an organization dedicated to tracking climate policy that said the recording had been made by an industry official who attended the meeting.
The article made reference to the fact that flaring is an inexpensive way of getting rid of the gas, which produces methane, a greenhouse gas that, when released directly into the air, traps heat in the atmosphere and contributes directly to global warming.
The over 10.2 billion cubic feet (cf) of gas flared at ExxonMobil’s Liza-1 well alone here in Guyana and the continuing flaring of 12-15M cf per day, saw concerns raised by a number of environmentalists and organizations about eliminating the hazard. The issue has also seen a delay in the granting of the permit for ExxonMobil’s Payara well development as this country wants the legal language for flaring tightened so as to avoid prolonged flaring under the “startup flaring” legal clause.
The recording of big oil saying in public that it has the issue under control but company executives contradicting that by expressing concern in private, will raise again the question of whether ExxonMobil is doing enough here to bring the situation under control.
Already, ExxonMobil will significantly impact this country’s 2020 greenhouse gas emissions (GHG) and impact its carbon sink status, for which it was once paid millions under a climate change pact with Norway.
With an 8 billion-plus barrels of oil reserve from 18 finds to date and most of its Stabroek Block area still to be explored, government has said that it wants a commitment from the company in black and white, that it will put the safety of this country’s citizenry and the environment above profits.
Utilizing the calculations from the forest protection pact between Guyana and Norway, flaring of 9B cf as at May, is equivalent to US$24 million worth of carbon dioxide (CO2) emissions. Under that agreement, which was signed in 2010, Guyana pledged to accelerate its efforts to limit forest-based GHG emissions and protect its rainforest as an asset for the world. As such, Norway provided financial support at a level based on this country’s success in limiting emissions with a price set at US$5 per tonne of CO2 equivalent.
Using the calculation, nine billion standard cubic feet of methane gas flared would amount to 4.8 million tonnes CO2 equivalent. Multiplying that by the US$5 carbon price reflected in the Guyana-Norway agreement indicates that this country theoretically would have lost US$24 million under that pact had it been from deforestation.
To further illustrate, according to Guyana’s 2018 Measurement, Reporting and Verification (MRV) report under the forest protection pact, this country lost 9,227 hectares of forest that year.
The CO2 equivalent emissions from ExxonMobil’s nine billion cubic feet of gas flaring would be equivalent to 4,642 hectares of deforestation or more than half of this country’s annual total.
The nine billion cubic feet of gas flared as at mid-May, with an estimated 15 million cubic feet per day flared since then, is also likely to impact the oil major’s own sustainability commitments as the company had in 2018 committed to a target of reducing flaring in 2020 by 25% of its 2016 totals.
ExxonMobil’s 2020 Energy Carbon Summary shows that the company had set a global performance standard in 2018, where it committed to 25% reduction in flaring from the 2016 benchmark by 2020. This is equal to a commitment of a maximum flaring of 397.5 million standard cubic feet (MMscf)/day in 2020.
In Guyana, the emissions at Exxon’s Liza-1 project alone of 80 MMscf/day would represent 20.1% of the promised global threshold performance limit of the company.
Portrayed
In the New York Times article, it states that company executives expressed concerns at how they are portrayed to the young demographic which sees the environment and climate change as key issues. The practice of burning off natural gas, producing dramatic flares and attracting criticism, represented a “huge, huge threat” to the industry’s efforts to portray natural gas as a cleaner and more climate-friendly energy source, Ness said.
“What’s our message going forward?” Ness asked. “What’s going to stick with those young people and make them support oil and gas?”
At the Colorado meeting, executives also worried about a potential backlash against the industry, particularly among younger voters, according to the NYT which said that recent surveys in the US had shown a sharp rise in the number of Americans who feel passionately about climate change, and the issue appears likely to play a more prominent role in this year’s presidential election than in previous ones.
“Young voters, female voters, Hispanic voters, really every sector except for older conservative male voters,” Ryan Flynn of the New Mexico Oil and Gas Association said in the recording of the meeting, “their No. 1 issue when it comes to our industry is always going to be environmental stewardship, and concerns about what we’re doing with the environment.”
Dan Haley, president of the Colorado Oil and Gas Association, laid out the stakes.
“Hippies were going to change the world, until they wanted to get a job and buy a BMW,” Haley said in the meeting. “In Colorado, we’ve been kind of playing a game of whack-a-mole. We went from where fracking was the dirty word, and contaminated your water. And we inundated them with information about that and blitzed the TV airwaves,” he said. “Then slowly that changed into a health and safety messaging. And so we’re ramping up our health and safety messaging.”
Climate change was “the prism through which everything is being viewed,” Haley added. “We have to be comfortable talking about it, talking about how we are part of the solution through natural gas. And again, hitting people with emotions hitting them where their heart is.”
The NYT said that it spoke to Scott Prestidge, a spokesman for Haley, who said that it was difficult to confirm the accuracy of a transcript from 2019, but said it was pretty clear that the remarks about the hippies were “said tongue-in-cheek.”
Flynn told the NYT that in those statements he was expressing public concerns about the oil and gas industry’s effect on the environment and the need to better address those issues.
‘We absolutely need to address young people, all people’s, concerns about climate change. We’ve taken criticism at times from our peers that we are engaging on these issues. But it’s critical for the future of our industry,’ he said.
