Gas flaring not only harms the environment but also deprives developing countries of an energy source that is often cleaner and cheaper than others available. During the drilling for crude oil, gas usually comes to the surface as well and is often vented or flared instead of used, particularly in countries that lack effective regulations, gas markets, and the necessary infrastructure to utilize the gas.
"In Africa, where many people lack access to energy, approximately 35 bcm of gas was flared last year, which, if captured, could have generated nearly 12,000 MW of electricity. Gas flaring also reduces potential tax revenue for governments and market opportunities for companies", said Somit Varma, World Bank Group’s Director for Oil, Gas, Mining and Chemicals, in his keynote speech on Thursday.
There are several ways to utilize the flared gas, including its use for power generation on-site, or its transportation via pipelines in the form of liquefied natural gas. Countries like Canada and Norway book good results in flaring reduction. Norway, for example, imposes a huge CO2 tax while Canada has established a collaborative effort between government and industry to reduce flaring.
In Angola, several GGFR partners will gather flared gas from some 20 offshore fields to a new 5-million ton per year LNG plant, thus achieving potential reductions of 32 million tons of CO2 emissions in the next few years.
Global figures from the latest satellite estimates show a small decline in global gas flaring from 157 bcm in 2006 to 147 bcm in 2007, but further reductions are necessary in order to achieve greater impact.
"We need better data, effective regulations with clear policies and incentives for operators; we need the commitments from other relevant partners and the commercialization of new technologies. But above all, we need action," says Somit Varma, World Bank Group’s Director for Oil, Gas, Mining and Chemicals. "Governments and companies need to cooperate in removing these obstacles and realizing the value of this wasted resource while minimizing the environmental harm caused by gas flaring."
The Global Forum on Flaring Reduction and Natural Gas Utilization was held in Amsterdam on December 4-5, and was organized by the World Bank’s GGFR partnership, along with the US Environmental Protection Agency’s Natural Gas STAR Program, Methane to Markets Partnership, and the International Association of Oil & Gas Producers (OGP). The event was also supported by major oil producing countries and companies, the OPEC Secretariat and the European Union. It brought together government officials from oil producing countries, representatives from major oil and gas companies, technology and service providers, and potential financiers, in a unique platform for dialogue, best practices exchange, and potential business opportunities.
The U.S. EPA estimates that over 100 bcm of methane is vented or lost through fugitive emissions in the oil and gas sector each year. As methane is a more potent greenhouse gas than CO2, this adds the equivalent of over 1 billion tons of carbon dioxide annually. Altogether, annual emissions from flaring and venting are equivalent to more than twice the potential yearly emission reductions from projects currently submitted under the Kyoto mechanisms.
The major flaring region in the world is Russia and the Caspian (about 60 bcm); followed by the Middle East and North Africa (about 45 bcm). Sub-Saharan Africa (about 35 bcm) is the third-biggest flaring region, followed by Latin America with some 12 bcm of gas flared annually.
Iraq, Azerbaijan and Uzbekistan are some of the newest partners who have joined the GGFR partnership over the past months, and more are expected to do so in the coming months.
