Economic Considerations in Natural Gas Flaring
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(updated September 5, 2012)
Advances in oil and gas drilling and production technology have made the U.S. the world’s largest producer of natural gas. These same technological breakthroughs that have brought about a surge in domestic natural gas output are now yielding large and sustainable increases in domestic oil production. The rise in oil production also has been accompanied by substantial increases in the flaring of associated natural gas, gas that comes up the wellbore along with the production of crude oil. Policy makers, regulators, environmental groups, and a large number of commentators have raised concerns that the flaring of natural gas is both wasteful and harmful to the environment. In July 2012 the World Bank published new satellite data on flaring showing the U.S. provided the single largest addition to world flaring in 2011 (total U.S. flaring lags far behind Russia and Nigeria in comparison).