CNH Could Fine PEMEX For Excessive Natural Gas Flaring
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CNH Could Fine PEMEX For Excessive Natural Gas Flaring

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By Kristelle Gutiérrez | Junior Journalist & Industry Analyst - Fri, 05/27/2022 - 17:12

Energy regulator CNH is preparing to fine state-owned oil company PEMEX for allegedly burning off excessive amount of natural gas at a major oil deposit, further proof of an environmental hazard that appears to have grown in scope during the past years.

In the past, PEMEX has expressed its commitment to tap both the natural gas and higher-value condensate from the Ixachi field in the state of Veracruz. However, satellite data shows that this area has become one of the world’s largest sites for gas flaring, Reuters reported. Scientists had been collecting the satellite data to determine the radiant heat output of a flare and then estimate its gas volume, sharing their findings with the news outlet.

Gas flaring is problematic because it contributes greatly to the production of harmful greenhouse gas emissions. In Mexico, locations that saw an increase in gas flaring are primarily the ones that already burn vast amounts of natural gas and are concentrated in the southern states of Chiapas, Tabasco and eastern Veracruz, as well in the Gulf of Mexico.

Reuters’ report came out after it visited the Ixachi field in Tierra Blanca, Veracruz, earlier this month, citing that it lacks the “crucial infrastructure to commercialize the abundant gas and heavy machinery had only just started clearing the dense vegetation for construction.” PEMEX did not disclose how much gas is flared at Ixachi and CNH declined to disclose its own estimate. However, data from the World Bank suggests Mexico flared 229.54Bcf in 2021.

In Feb. 2022, Reuters published an extended report on the alarming gas flaring seen at the Cactus gas processing center in the southern state of Chiapas. The registered volume of gas flared rose prominently around the time that President López Obrador took office in Dec. 2018, growing by 50 percent from 137.72Bcf to 204.8Bcf in December 2020.

The Payne Institute for Public Policy at the Colorado School of Mines accounts that even as oil production has fallen, flared gas volumes continue to increase. The institute’s data revealed that the flare intensity collected, which is calculated by the volume of gas flared per barrel of oil produced, increased from around 173cf/b in 2018 to 303.7cf/b in 2020. Furthermore, the Payne Institute already predicts that Mexico may very well break 2020’s record of flaring activity in 2021, based on the data collected during the first 10 months of the year that reported a total of 229.5cf/d.

According to Reuters, Mexico’s oil fields are unable to process the massive amounts of gas emitted as the byproduct of oil production and often opt to dispose of this excess by flaring it, even though scientists repeatedly advise against the practice, citing the detrimental effects that it produces. “The high – and rising – flaring activity has both local and global impacts,” said Tamara Sparks, Researcher, the Colorado School of Mines.

As new flare sites have continued to appear in other regions over the past two years, Sparks noted that these “may not operate as efficiently as a well-established, steadily operating flare,” which could lead to proportionately more emissions of methane.”

In the past year, PEMEX authorities acknowledged the challenges the NOC faces in keeping flaring gas levels down, citing outdated and inadequate infrastructure due to lack of investment and maintenance. The company nonetheless said it was actively reducing flaring as one of its ten most important areas of focus. Rosanety Barrios, a veteran independent energy analyst, highlighted that the state-owned company is focusing its efforts on exploration and production activities, which could push gas flaring control further back in the line of priorities.

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