Natural Gas Flaring in Texas: A Regulatory Capture Study

Flaring, the practice of oil and gas equipment deliberately burning natural gas without using it, is a controversial practice. While some flaring is mechanically necessary, many stakeholders fear that the practice is too frequent in Texas. Using publicly available permit data, I analyze the flaring permit application process to evaluate the variables that drive permit outcomes. I find that Texas regulators have rejected less than 1% of permits, frequently granting permits for applications that are incomplete, incoherent or directly contravene stated policy. I also find that every permit rejected was rejected after the flaring had already occurred, so no permit rejections have actually curtailed flaring. The findings also indicate that regulators are subsidizing otherwise uneconomical new wells by exempting them from flaring regulations. Finally, I argue that these findings indicate strong regulatory capture and that reforms to curtail agency discretion are necessary to improve flaring regulation.