CNBC’s Brian Sullivan discusses rising gas prices with Patrick De Haan, head of petroleum analysis for Gas Buddy. For access to live and exclusive video from CNBC subscribe to CNBC PRO:
When a raging snowstorm and frigid temperatures hit Texas last month, oil and gas behemoths responsible for producing and processing the lion share of the nation’s reserves, including Exxon, Occidental and Marathon Petroleum, shut down production at oil wells and refineries across the state.
For many oil producers in the Permian Basin of West Texas and New Mexico, the shutdown put upstream and downstream operations in a squeeze. Downstream, multiple refining operations flared during shutdowns, releasing air pollutants from processing units. Upstream, as oil drilling came back online, there was risk of needing to flare or halt oil production in the field until the broader energy market, including refining and utility generation, stabilized. Indeed, satellite imagery showed increased flaring at oil and gas production sites in the Permian Basin did take place, according to the Environmental Defense Fund.
But at Occidental, a choice was made to shut down some operations.
“There were a couple of plants that had difficulty coming back online,” Occidental’s CEO Vicki Hollub said during a recent CNBC Evolve event focused on energy innovation. “We could have put our production back online and just flared the gas. We chose not to do that. We left the production shut down because we didn’t want to flare.”
The decisions made during the Texas power crisis are part of a broader debate with the oil and gas industry over flaring, the process of releasing greenhouse gas emissions through burning, which has long been a controversial topic for environmental advocates and climate policy experts. The practice, which is commonly used by oil and gas companies to relieve the pressure that builds up during oil production, is responsible for releasing CO2 and methane into the atmosphere.
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