A group comprising over 30 governments and 50 oil companies got together almost a decade ago to lay out a plan of action to eradicate non-safety flaring of gas by 2030, but recent data shows that progress has been patchy.

The World Bank’s Zero Routine Flaring by 2030 initiative was launched in 2015 and today includes 89 members accounting for 60% of global flaring.

Tackling the routine flaring of gas associated with oil production has long been seen as a necessary step to reduce the environmental impact of burning fossil fuels. In recent decades this battle has moved to the frontline when it comes to combating climate change.

Flaring in 2015 stood at 147 billion cubic metres globally. Some reduction was registered by 2017, but the figure rose again hitting 148 Bcm in 2019.

Zubin Bamji, programme manager at the World Bank’s Global Gas Flaring Reduction Partnership (GGFR), does not mince his words: “Globally, there has been a decade of stalled progress,” he tells Upstream.

Apart from releasing carbon dioxide into the atmosphere there is growing evidence that the amount of methane burned off during flaring is significantly lower than previous estimates of about 98%, and even more so when venting from unlit flares is taken into account.

Methane, the main component of natural gas, is a potent greenhouse gas, with a warming potential up to 84 times that of CO2 on a 20-year basis.

A 2022 paper published in Science based on a study in the Permian basin and the Bakken and Eagle Ford formations in the US found that operations were achieving an “effective” destruction efficiency of 91.1%, of the methane, meaning the contribution of gas flaring to emissions could be “grossly underestimated”.

Improvement at last

In its latest Global Gas Flaring Tracker Report, the GGFR found that global flaring finally fell in 2022, showing a 3% retreat on the previous year to total 139 Bcm.

With global oil output rising 5% to 80 million barrels per day in the same period, flaring intensity fell slightly also, to 4.7 cubic metres of gas per barrel of oil produced.

Data outlined in the report paints an uneven picture, with little sign of systematic improvement.

Nigeria, Mexico and the US stood out as having reduced flaring volumes in 2022, by 20%, 13% and 9%, respectively.

The three are among the nine producing countries accounting for three quarters of global flaring from just under half of oil output.

The decrease in Nigeria was attributed mainly to a 14% drop in oil production, and associated flaring fell as a consequence.

Mexico’s flaring intensity fell from 10.3 cubic metres per barrel to 9 cubic metres per barrel, but the report said much of the improvement was due to the shutting of wells with high gas-to-oil ratios on the shallow water and depleting Ku-Maloop-Zaap and Akal fields.

“To drive more reductions, we need governments to make it a priority and incentivise it through effective regulation and policies. Regulation has a critical role to play in flaring reduction,” the World Bank’s Bamji told Upstream.

Dzenana Tiganj, emissions analysts at Rystad Energy, said there is an element of poor enforcement at play, which makes existing regulation ineffective.

“Regulation has been in place in Nigeria, but penalties have been too low to disincentivise flaring and enforcement of the law has not been stringent,” she told Upstream. “So, it’s [really about] the regulatory framework and how strictly that translates into reality.”

Midstream infrastructure

In the US, flaring rates are at their lowest in a decade, steadily declining since 2019.

New data showed a drop of almost 10% in 2022, against a 6% increase in oil production on the previous year.

Behind this progress, sources say, is a combination of tougher stance by relevant authorities and an increase in midstream infrastructure investments, which has both forced and enabled producers to act.

US President Joe Biden’s administration has played its part by enacting more stringent rules on emissions monitoring and disclosure.

The Inflation Reduction Act of 2022 includes provisions that introduce charges on methane emitted by oil and gas companies who report emissions under the Clean Air Act, but the relevant section is now under attack from a Republican-led bill recently passed in the House of Representatives.

Increased investment in midstream infrastructure to capture and commercialise gas also made a difference, according to Rystad.

Maturing development in areas such as the prolific Permian and Bakken shales has created opportunities to monetise a higher proportion of the gas resources, says Tiganj.

By the same token, new avenues are also opening up for the marketing of the gas that may otherwise have been flared, substantiating the investment case.

As a result of the decline of Russian gas flows to Europe, US producers have stepped up their shipments of liquefied natural gas to the bloc, covering over 40% of European total imports in 2022.

“Flaring would decrease [in the US] even without stringent regulation, as long as there is a way to monetise the gas from the site,” Tiganji states.

‘Waste of money’

In the UK, March data from the North Sea Transition Authority (NSTA) shows flaring in the North Sea fell 13% in 2022 against the previous year, and has dropped 50% since 2018.

But Andrew Reid, oil and gas analyst at NorthStone Advisers and research contributor at Institute for Energy Economics & Financial Analysis (IEEFA), said lower oil output was the main driver of this improvement.

“The UK joining the World Bank [initiative] hasn’t made an impact on flaring and venting in the UK as proportion of oil production. Recent declines are arguably related to lower oil production in the basin,” he told Upstream.

In comments to Upstream, the NSTA said: “The impact of shutdowns is acknowledged in our analysis”, adding that "investments in equipment and adoption of best practice for procedures” have contributed to the reductions, as well as the regulator's “tougher guidance”.

A recent IEEFA report calculated that the 143 Bcm of gas flared and vented globally in 2021 was worth an estimated $55 billion.

“Flaring and venting of associated gas from oil production is not only a major environmental problem, but also a colossal waste of money,” wrote IEEFA.

Norway, where oil output was double that of the UK but flaring was 81% lower, was held up by IEEFA as an example to follow.

Domestic taxes on emissions in place in the country since the early 1990s have been critical to drive flaring down.

Industry association Offshore Energies UK (OEUK) said the UK government is consulting on the possibility of including methane emissions into the existing UK Emissions Trading Scheme (ETS).

“Industry remains supportive of measures which will incentivise emissions reduction,” OEUK environment manager Caroline Brown told Upstream, adding: “Focus and effort now must be placed on enabling capital projects, like flare gas recovery systems.”

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