IEA (2019), "Tracking Fuel Supply", IEA, Paris https://www.iea.org/reports/tracking-fuel-supply-2019
Natural gas is often produced as a by-product of oil extraction (‘associated gas’). Without a strong commercial case or enough regulatory incentives to bring the gas to market, an operator must choose whether to use it on-site, reinject it into the ground, vent it as methane into the atmosphere, or flare it.
Methane is a very potent GHG if released directly into the atmosphere, so flaring is often a preferred option, referred to as ‘routine flaring’. Gas is also flared as a safety measure if there has been a build-up in gas pressure.
In both cases, the gas is not put to any productive use. In addition, flares are rarely 100% efficient, meaning that some of the gas is not burned and is instead released into the atmosphere as methane.
Few countries systematically measure, record and release flaring data publicly. The lack of monitoring equipment and limited oversight make it difficult to precisely quantify the amount of gas-flaring around the world. However, based on satellite measurements, the Global Gas Flaring Reduction (GGFR) Partnership publishes flaring estimates for around 85 countries.
Based on satellite data, over 140 bcm of gas were flared globally in 2017, equal to Africa’s total natural gas consumption that year. As a result, 270 MtCO2 and 3 Mt of methane were released into the atmosphere.
Only five countries (Russia, Iraq, Iran, the United States and Algeria) are responsible for more than 50% of flaring globally.
Russia recorded the largest flaring volumes but also showed the largest decrease in 2016-17 in absolute terms (a drop of 2.5 bcm). There has been particular concern recently about the level of flaring in some tight-oil areas of the United States. It is estimated that 3 bcm to 4 bcm were flared in the Permian region alone in 2017 (EDF, 2019; Rystad, 2018). But there are also large volumes flared in the Middle East, e.g. Iraq flared around 18 bcm in 2018.
In the Sustainable Development Scenario (SDS), the volume of gas flared drops dramatically over the next decade. Flaring is soon eliminated in all but the most extreme cases, with less than 13 bcm flared from 2025 onwards, less than 10% of the 2017 level.
In 2018, the Nigerian National Petroleum Corporation, the regulator of oil and gas operations in Nigeria, announced a new strategy to end routine flaring by 2020. For new projects, field development plans must include a gas utilisation scheme and the routine flaring of natural gas is prohibited. For existing projects, the recent Flare Gas (Prevention of Waste and Pollution) Regulations 2018 aim to ensure that flaring will decrease steadily while the penalties set out in the 2016 Nigeria Gas Flare Commercialization Programme are enforced more stringently.
In the United States, The North Dakota Industrial Commission (NDIC) requires that exploration and production companies file a gas capture plan with their drilling permits and put flaring limits in place. The NDIC allows flaring for one year following first production from a well, then sets targets for reducing the share of gas flared (e.g. no more than 12% was to be flared by November 2018, but these targets were subsequently relaxed).
The Iraqi government has been a longstanding member of the GGFR Partnership and has pledged to reduce flaring on several occasions. Past commitments have rarely been met, however, and the deadline for ending flaring in southern Iraq has been pushed back from 2016 to 2022. Nevertheless, a number of Iraqi companies have recently announced targets to reduce flaring and substantially increase the volumes of associated gas brought to market.
Various energy companies, governments and institutions have endorsed the Zero Routine Flaring by 2030 initiative launched by the World Bank and the United Nations in 2015.
For new fields, operators should aim to develop plans to use or conserve all the field’s associated gas without routine flaring. At existing oil fields, operators are asked to eliminate routine flaring when it is economically viable as soon as possible, and no later than 2030.
So far, 36 oil companies, 32 governments and 15 development institutions have endorsed the initiative.
- Revise oil and gas legislation so that policies are clear and unambiguous on the treatment of associated gas, and so that fiscal terms encourage or require associated gas utilisation. Policies should also clarify ownership of associated gas volumes and ensure that new oil developments are approved only if they include the utilisation of associated gas.
- Develop national frameworks to provide a legal, regulatory, investment and operating environment that can help develop infrastructure to deliver captured gas to markets.
- Set an overall goal: this could include a flaring cap, wherein if flaring rises above a minimal level, field production should be stopped until the gas can be handled.
- Establish enough enforcement: in many cases, policies restricting flaring exist but are not sufficiently enforced.
- Maximise transparency by making flaring figures (and the method for calculating them) public. The need to ensure the social acceptability of oil and gas operations would provide an incentive for operators to decrease flaring volumes more rapidly.
- Improve flaring efficiency: mandate, monitor and enforce state-of-the-art flaring efficiency requirements (e.g. with a combustion efficiency above 98%).
Selected examples of successfully implemented policies
Norway was one of the first countries to introduce regulations (in 1993) requiring operators to meter flared gas and taxing flaring-related CO2 emissions. A reduction of more than 60% has been achieved from pre-1990 levels.
In Canada, Alberta’s Energy and Utilities Board regulates flaring and venting with Directive 060: Upstream Petroleum Industry Flaring, Incinerating and Venting.
This guide challenges operators to eliminate routine associated gas flaring whenever possible: operators set voluntary targets, and if they are not achieved the regulator steps in with a more prescriptive approach.
Flared volumes fell by more than 70% between 1996 and 2004 as a result. British Columbia and Saskatchewan also have regulatory measures in place to address flaring in upstream oil and gas operations.
- Increase direct measurement of flared gas volumes: flared volumes are not directly measured, but rather estimated using a gas balance exercise. Meters could instead be installed at the flare.
- Apply technologies that keep gas in the reservoir: several technologies can be used to keep associated gas underground and avoid the need for flaring. Examples include inflow control devices within oil wells and gas breakthrough control technologies at the surface.
- Ensure timely development of gas infrastructure: gas infrastructure is not well established in many oil-producing regions. Industry, governments and the investment community should prioritise the development of gas processing or pipeline capacity for existing oilfields to ensure that associated gas can be brought to the market.
- Include gas utilisation technologies in the design of new oil developments: flaring can be more easily avoided (and at a lower cost) if it is addressed during development planning. Close collaboration between subsurface and surface project development teams is necessary.
- Improve flaring efficiency: investing in and deploying technologies that improve the combustion efficiency of flares is essential, as is robust monitoring to ensure that flares operate at the required level.
- EDF (Environmental Defense Fund) (2019), Satellite data confirms Permian gas flaring is double what companies report, http://blogs.edf.org/energyexchange/2019/01/24/satellite-data-confirms-permian-gas-flaring-is-double-what-companies-report/.
- Rystad (2018), Rystad Energy research and analysis, https://www.rystadenergy.com/newsevents/news/press-releases/Permian-flaring-record/.