Gas-to-liquids technologies can help the US meet Paris Agreement commitments

The climate change agreement reached at the 2015 United Nations Climate Change Conference (COP21) in Paris in December was historic, moving the world toward a low-carbon future by setting the objective of keeping global temperature increases well below 2 degrees Celsius. While the United States is making historic investments in growing industries like wind and solar, there’s one area in which much still needs to be accomplished if we are to significantly reduce our contribution to global carbon pollution, and that is the wasteful burning of natural gas. The World Bank-led Global Gas Flaring Reduction partnership (GGRP), whose goal is to reduce routine flaring around the world, reports that the United States is the fifth-ranked gas flaring country in the world.

{mosads}The use of hydraulic fracking and horizontal drilling in oil-rich regions such as North Dakota’s Bakken shale formation has made the United States one of the world’s top oil producers. In its World Energy Outlook 2012, the International Energy Agency projected that the United States would become the world’s top oil producer by 2020, a position it last held in the 1970s. In the Bakken, oil production increased 40 fold between 2007 and mid-2013, from 18,500 to 760,000 barrels per day (bpd), according to Ceres, a nonprofit advocate for sustainability leadership. But the downside of the tremendous growth in oil production has been a rapid rise in the production of associated gas, or gas produced in association with the production of oil. In North Dakota, about 20 percent of associated gas is flared at the wellhead because of the lack of pipeline infrastructure to get it to market. In 2012, flaring in North Dakota resulted in the loss of approximately $1 billion worth of fuel and the addition of greenhouse gas emissions equivalent to adding nearly one million cars to the road, Ceres said. Indeed, NASA satellite images show North Dakota’s flares burning nearly as brightly as Chicago’s city lights. 

The obvious solution is to build pipelines to transport the natural gas to market. But this is easier said than done. The huge increase in oil production — North Dakota is now producing more than a million barrels of oil a day, outranked only by Texas — has created a demand for pipelines that is impossible to meet in the short term. In addition to the expense and the volume of pipe required, the process is complicated by the need to assemble a complex network of property easements and regulatory approvals. The North Dakota Industrial Commission, which oversees the state’s oil and natural gas production, recently voted to give the industry an extra 10 months to meet an 85 percent gas capture goal that was scheduled to take effect January 1 because of delays in the construction of natural gas gathering system and processing infrastructure.

But what if there was a way to eliminate flaring, comply with anti-flaring regulations and produce new revenues? One way of achieving this is to transform wasted flare gas into more valuable end products, using gas-to-liquids technologies such as Primus Green Energy’s STG+TM GTL systems. Using natural gas as a feedstock, STG+TM can produce valuable end products including high-octane gasoline, methanol and diluent, with future plans calling for the production of diesel as well. The zero-sulfur, zero-benzene gasoline produced through the STG+TM process can be sold directly into the wholesale market or mixed with crude oil at the wellsite for simplified logistics. While other solutions exist to convert flare gas into fuel – specifically, transforming flare gas into Compressed Natural Gas (CNG) or Liquefied Natural Gas (LNG) — these solutions require specialized engines and fuel delivery infrastructures. 

The low-cost, prefabricated STG+TM units are easily deployed at the wellhead.  Trucked in and assembled onsite, they can easily be reassembled at another site if they are needed elsewhere. They are scalable, flexible and modular enough that they can be integrated with existing gas processing operations or completely self-sufficient, depending on need. They also require minimal labor (a single operator during normal plant operations, with remote operation available) and only yearly maintenance — factors that translate to ultra-low operations and maintenance costs.

Bjorn Hamso, the program manager for the World Bank’s “Zero Routine Flaring by 2030” initiative, which was strongly supported in Paris, has called flaring “the low-hanging fruit” on the world’s climate agenda. By comparison with other contributors to climate change, flaring is relatively easy to identify and reduce – with pipeline and processing infrastructure, as well as with gas-to-liquids technologies such as STG+TM. If the United States is to meet the targets established under the Paris agreement, it will need to reduce the wasteful flaring of natural gas. The STG+TM technology offers a means of protecting the environment from emissions that contribute to climate change while also monetizing valuable fossil fuel resources that are now going up in smoke.

Golan is CEO of Primus Green Energy.