Every day, large volumes of associated gas are flared around the world, mostly because there’s not enough infrastructure in place to transport the gas to market. This isn’t just a colossal waste of energy — flaring generates a lot of carbon dioxide (CO2) and, according to a recent study, it’s only 91% efficient (on average) at zapping methane, a particularly potent greenhouse gas (GHG). But what if there was a cost-effective way to beneficially consume the gas that’s stranded in remote parts of the Permian, the Bakken and other major production areas? It turns out there is — by using the gas onsite to produce electricity to power portable, modular data centers used to support cryptocurrency mining, artificial intelligence (AI) programs like ChatGPT, and other high-tech endeavors requiring massive amounts of computation power and energy. In today’s RBN blog, we discuss the growing use of stranded natural gas as a power source for middle-of-nowhere data centers.
Crude-oil-focused producers have been flaring gas in the U.S. since the first oil was produced in western Pennsylvania more than 160 years ago. Back in the day, flaring seemed to make perfect sense. (At the time, no one really thought about the environmental fallout.) After all, there was no infrastructure in place to transport and process the volatile associated gas that emerged from wells with oil — the controlled combustion of the gas onsite made oil production much safer. Over time, if wells in a production area not too far from civilization were producing large volumes of associated gas, it made economic sense to develop gas-gathering systems and larger-diameter pipelines to deliver the gas to market. Still, gas flaring continued though to a somewhat lesser degree, both for safety and economic reasons — sometimes the gas volumes produced were too small to justify the cost of developing processing and takeaway infrastructure, and sometimes gathering and takeaway projects faced delays in securing rights of way or permits. During the Shale Era, vast amounts of gas were flared in some areas (especially the Bakken, but elsewhere too) as producers and midstreamers struggled to keep up with infrastructure needs. In 2011 and again in 2014, more than one-third of North Dakota’s produced gas was flared, spurring the state to implement rules that led to a steady ratcheting down in flared volumes to where it stands today at less than 5%.
[Flaring is an even more serious issue globally. The World Bank said in a March report that an astounding 139 billion cubic meters (4.9 trillion cubic feet, or 13.4 Bcf/d) of natural gas was flared by the global oil and gas industry in 2022 — enough to power all of sub-Saharan Africa. This flaring released an estimated 357 million metric tons of CO2 equivalent (MMtCO2e), 315 MMtCO2e of it in the form of CO2 and 42 MMtCO2e in the form of methane.]
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