FEATURE STORY

Time to End Routine Gas Flaring

July 7, 2014

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Center of a leading Russian oil production region making progress in gas flaring reduction. Khanty-Mansiysk, Western Siberia.

Bjorn Hamso/World Bank

STORY HIGHLIGHTS
  • Oil companies and governments are increasingly seeking solutions to reduce flaring of natural gas at oil production sites.
  • The World Bank Group appeals for zero routine flaring by 2030.
  • Gas flaring reduction: responsible environmental stewardship, utilization of valuable natural resources, and energy access.

The practice of flaring gas at oil production sites across the globe garnered significant attention at the 21st World Petroleum Congress in Moscow. Two sessions – one on the industry’s position on climate change, the other on sustainable financing – placed the issue in front of hundreds of delegates to the triennial event.



" We simply cannot afford to waste it anymore. Reducing gas flaring is one very tangible way the oil and gas industry can show leadership on mitigating the effects of climate change and ensuring proper use of natural resources. But it is also about access to energy. "
Anita Marangoly George

Anita Marangoly George

Senior Director, Energy and Extractives Global Practice, The World Bank Group

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Bjorn Hamso/World Bank

Anita Marangoly George, Senior Director of the World Bank Group’s Energy and Extractives Global Practice, called for an end to routine gas flaring by 2030.

“It is time to end this industry practice,” she urged delegates, mostly from governments of oil producing countries, leading international and national oil companies, service companies, equipment manufacturers, and financial institutions.

During oil production, the associated natural gas is flared when barriers to the development of gas markets and gas infrastructure prevent it from being utilized. About 140 billion cubic meters (bcm) of gas is flared every year worldwide, resulting in about 350 million tons of carbon dioxide in annual emissions. Eliminating the flaring would, in terms of emissions, be the same as taking some 70 million cars off the road.

The World Bank Group has a leadership role in gas flaring reduction through the Global Gas Flaring Reduction Partnership (GGFR), a public-private initiative with governments and oil companies working together to increase utilization of natural gas associated with oil production. Satellite data on global gas flaring shows that overall efforts to reduce gas flaring are paying off. From 2005 to 2012, flaring dropped 20 percent worldwide.

According to available satellite data, the Russian Federation is by far the world’s largest flarer. In 2012, it is estimated Russia flared nearly 35 bcm of gas. The choice of Moscow for this year’s World Petroleum Congress was thus an opportune moment to raise the issue.

While flaring in Russia has significantly declined over the last several years and in 2012 over 76 percent of associated gas was utilized, much work remains. However, progress in one of Russia’s regions offers grounds for confidence that further reductions can be made. In the Khanty-Mansiysk Autonomous Okrug – Yugra (KMAO), about 1,200 miles northeast of Moscow, the regional government has developed a focused effort to address gas flaring. Oil companies operating in this region spent $3.4 billion to build the infrastructure to utilize otherwise flared gas. The volume of flared gas being utilized is now well over 90 percent in KMAO.

In her remarks to the World Petroleum Congress, Ms. George used the success story of KMAO as an example, and challenged all delegates to do more to pursue a world free from routine flaring of natural gas.

“We simply cannot afford to waste it anymore,” she said. “Reducing gas flaring is one very tangible way the oil and gas industry can show leadership on mitigating the effects of climate change and ensuring proper use of natural resources. But it is also about access to energy.”

One example is Nigeria, the second largest flarer in the world. Nigeria flares approximately 13 bcm annually while millions of its own citizens lack electricity.

Bjorn Hamso, manager of the GGFR program, visited Nigeria soon after his appointment to the post. He notes that the Nigerian government, a GGFR partner, is trying to tackle the issue but faces numerous challenges.

“Nigeria has had a policy of no flaring since 1984, but its enforcement of this policy has been weak. In some ways it’s another case of the resource curse where countries rich in natural resources struggle with managing them efficiently,” he said.


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