Russia, Kazakhstan Lead Way to Reduce Gas Flaring and Lower Emissions

Kazakhstan, one of Central Asia’s major oil-producing countries, has cut gas flaring associated with oil production by a third in just five years, according to satellite estimates, thereby reducing CO2 emissions by almost six million tons. That’s about the volume of greenhouse gases emitted by one million cars.

The country’s remarkable achievement is closely matched by its neighbor, Russia, which has also seen significant reductions in gas flaring. Together, the two countries lead the list of countries which in 2010 worked to reduce greenhouse gas emissions by cutting gas flaring.

This Kazakhstan result has been achieved by projects like the one undertaken by Tengizchevroil (TCO). In 2010 the company completed a four-year $258 million Gas Utilization Project which has eliminated routine gas flaring in the giant Tengiz oil field.

TCO, a joint venture that includes Chevron, ExxonMobil, Kazmunaigaz, and LukArco, has reduced flaring emissions by over 94 percent since 2000, while simultaneously increasing crude oil production by 147 percent.

The fact that Kazakhstan, Chevron, and ExxonMobil have achieved this flaring reduction is no accident. All three are members of the Global Gas Flaring Reduction public-private partnership (GGFR). This partnership, launched by the World Bank in 2002, has just marked another milestone with satellite data estimating a nine-percent drop in gas flaring worldwide in 2010.

Why gas flaring matters

Although total emissions from gas flaring represent about 1.2% of global CO2 emissions, these are emissions that can be effectively reduced through targeted interventions, including the right mix of policies and incentives. To put this in perspective:

• Global emissions from gas flaring alone are more than half the annual Certified Emissions Reductions (624 million tons) currently issued under the Kyoto’s Clean Development Mechanisms.(data as of June 2011)
  
• Gas flaring emissions in some oil-producing countries (i.e. Nigeria) represent about one third of their total CO2 emissions, according to Nigeria’s National Communication to the UNFCCC.

Downward trend

For the fifth consecutive year flaring of gas associated with oil production has registered a drop worldwide: between 2005 and 2010, gas flaring decreased by 22% from 172 billion cubic meters (bcm) to 134 bcm, according to satellite estimates commissioned by the World Bank-led GGFR partnership.

Last year’s reductions, from 147 bcm in 2009 to 134 bcm in 2010, occurred despite a two-million barrel-a-day increase in crude oil production over the same period. This also confirms a 15-percent drop in gas flaring intensity (ratio of gas flared to oil production volumes) since 2002. (See graph below.)

The 13-bcm decline in 2010 is roughly equivalent to 30 million tons of CO2 emissions, or to taking almost six million cars off the road.
Most of last year’s estimated reductions were achieved in Russia and Kazakhstan, where public and private stakeholders have increased investments in associated gas utilization projects.

Overall, Russia and Nigeria have seen the largest reductions but still top the list of flaring countries in 2010, which also includes Iran, Iraq, Algeria, Angola, Kazakhstan, Libya, Saudi Arabia, and Venezuela.

The 134 bcm of gas flared worldwide in 2010 is equivalent to almost 30 per cent of the European Union’s yearly natural gas consumption. Overall, the flaring of gas adds about 360 million tons of carbon dioxide in annual emissions, roughly equivalent to the annual emissions from 70 million cars. Some flaring also emits black carbon, or soot.

Public-Private collaboration

The GGFR partners have established a collaborative Global Standard for gas flaring reduction. This Standard provides a framework for governments, companies, and other stakeholders to consult each other, take collaborative action, work on projects across two or more countries, and reduce barriers to associated gas utilization. GGFR partners commit to avoid flaring from new projects, and to eliminate continuous production flaring, except where no feasible alternatives exist.

In sum, GGFR facilitates viable solutions to gas flaring reduction and helps partners unlock the value of currently wasted natural gas to improve energy efficiency, expand access to energy, and contribute to climate change mitigation and sustainable development.

Specifically, the partnership helps developing countries overcome barriers to reducing flaring, including:

• High costs of capturing and utilizing the associated gas currently flared
• Undeveloped domestic gas markets and limited access to international markets
• Lack of financing to put the necessary gas infrastructure in place
• Undeveloped regulatory frameworks
• Inefficient gas pricing systems (mostly due to subsidies)

To help governments and companies overcome these barriers, GGFR’s work focuses on:

• Commercialization of associated gas by identifying potential uses
• Regulations for flaring and venting, and the use of associated gas
• Implementation of the Global Standard for flaring and venting reduction
• Capacity building to obtain carbon credits for flaring and venting reduction projects.

“By reducing flaring some oil-producing countries and companies are making an important contribution to energy efficiency and climate change mitigation,” says Paulo de Sa, manager of the World Bank’s Oil, Gas and Mining unit. “Other emerging oil producers also need to join these global efforts.”