Flaring for Free: New Report Exposes Yet Another Big Oil Subsidy

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Flaring for Free: New Report Exposes Yet Another Big Oil Subsidy

'For over a century Big Oil has been subsidized to the hilt with everything from tax breaks to royalty free-leasing. To that list we can now add natural gas flaring—and it has to stop.'

"When companies are unwilling to invest in the infrastructure to capture and sell gas, the cheapest option is often to simply burn it at the wellhead, sending planet-warming CO2 directly into the atmosphere and producing air pollutants like black carbon and volatile organic compounds." (Photo: WildEarth Guardians/flickr/cc)

Add it to the list of subsidies enjoyed by Big Oil: royalty-free "flaring" on public and tribal lands.

A new report from Friends of the Earth reveals that oil producers are burning, or flaring, millions of dollars of gas byproduct on publicly owned lands—exacerbating climate change without paying a dime. 

"When companies are unwilling to invest in the infrastructure to capture and sell gas, the cheapest option is often to simply burn it at the wellhead, sending planet-warming CO2 directly into the atmosphere and producing air pollutants like black carbon and volatile organic compounds," explains the report, entitled A Flaring Shame: North Dakota and the Hidden Fracking Subsidy (pdf).

The boom in domestic drilling, driven by new technologies like fracking, has also triggered a boom in flaring, the study points out.

But the federal Bureau of Land Management (BLM), which regulates the leasing of public and tribal lands for fossil fuel extraction—and therefore also flaring and venting of excess fuels—hasn't kept up. "[A] combination of both outdated rules and lax enforcement is allowing millions of dollars worth of resources to be burned away without taxpayers or tribes seeing a dime in royalties," states the report.

"Royalty-free flaring is both a dangerous addition to climate disruption and a de facto subsidy for the oil industry," said lead author Lukas Ross, climate and energy campaigner at Friends of the Earth. "For over a century Big Oil has been subsidized to the hilt with everything from tax breaks to royalty free-leasing. To that list we can now add natural gas flaring—and it has to stop."

The peer-reviewed study identifies both the top flaring states (North Dakota, Texas, and Wyoming lead the pack) and top flaring culprits, showing that Oklahoma-headquartered Continental Resources was responsible for more waste than all of the others combined, producing carbon emissions equivalent to over 360 million gallons of gasoline.

Noting that the rules governing flaring and venting haven't been updated in more than 30 years, Friends of the Earth urged the Obama administration to end the subsidy for good. "For the sake of taxpayers and the climate, this loophole must be closed," Ross said.

But beyond that, Wednesday's report offers further evidence that Obama should in fact end fossil fuel leasing on public lands altogether. "If companies cannot responsibly manage resources that have already been leased," the report declares, "then allowing them even further access to public lands should be out of the question."

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