There was a time when natural gas was a welcomed byproduct of crude oil drilling, and drillers in the prolific Permian basin enjoyed this consolation prize–at least when natural gas prices were on the rise. All good things come to an end, though, and the amount of natural gas now exceeds the capacity to get rid of it. With pipeline capacity fully exploited and natural gas prices squarely in the red, Permian drillers today are faced with three lousy choices: burn off the natural gas, pay to have the gas removed, or slow oil drilling activities to staunch the flow of natural gas. Crude oil and natural gas are like two peas in a pod: when you find oil, you often find gas. Crude oil is pumped out of the well, and a small amount of natural gas comes almost inevitably comes with it. But over time, this ratio […]