Flaring in 2019: A year in review

Flaring has been much discussed this past year and is an ongoing challenge within the industry. In line with the World Bank’s Zero Routine Flaring by 2030 initiative, several government and regulatory bodies, as well as companies, have committed to end routine flaring by 2030. But how far have we progressed? What is the state of flaring in 2019?

Gas flaring has been gradually decreasing over the last twenty years as infrastructure, technology and alternative fuels come into play. However, in a time of climate crisis, there is continued and increasing pressure for oil and gas regulators and companies to keep flaring to a minimum.

Flaring – the figures

Between 2017 and 2018, the volume of natural gas lost to flaring increased by 3.2% from 140.5 billion cubic metres in 2017 to 145 billion cubic metres in 2018. The World Bank’s Global Gas Flaring Reduction Partnership Programme has seen flaring figures from their partner countries flat-line, with no increase or decrease between 2017 and 2018. Although there has been no progress between these years, partnering countries still show much lower figures than countries that are not part of the programme.

According to Brainnwave, as of September 2019, the value of natural gas flared by 80 different nations around the world increased 11% – peaking at $16.4 billion. This increase is made up of two factors, the rising price of natural gas and an increase in the volume of flaring. Steve Coates, CEO of Brainnwave, said, “gas flaring is a major environmental issue but it is also a commercial one. Oil producers often lack the infrastructure to export natural gas from their wells and face few alternatives but to flare it in order to reach oil.”

Top flaring countries in 2019

According to the International Energy Agency, Russia, Iraq, Iran and the US account for almost half of flaring globally.

The Permian Basin has been in the public eye throughout the year and has been criticised for its lack of infrastructure and regulations around flaring. In the third quarter of 2019, flaring in the Permian peaked, averaging around 750 million cubic feet per day. Further infrastructure and regulations are needed to reduce US flaring and in 2020 this may be top on the agenda. There are also multiple pipeline projects underway to offer transport options for the associated gas. Having transportation infrastructure is a key step in reducing flaring.

As the leading country in flaring in 2019, Russia continues to look for ways to fulfil its commitment to the Paris Climate Agreement. However, due to remote oil fields and a lack of infrastructure, including pipelines, long-term, sustained flaring reduction is limited. Despite this, there has been a slight decline recently. This is the result of improved energy efficiency, flare gas recovery by local governments and stricter legislation. This legislation includes its 2009 Climate Doctrine, outlining key climate actions regarding CO2 emissions.

Another key step towards reducing flaring in Russia is the petrochemicals industry. This industry uses the gas that would otherwise be flared as a key element in its processing and production. According to Sibur, one of the leading petrochemical companies in Russia, in 2018, the company reduced greenhouse-gas emissions by 71 million metric tons by using more than 22.3 billion cubic meters of associated petroleum gas (APG).

Iran is also making steps to reduce flaring. In the second quarter of 2019, the National Iranian South Oil Company (NISOC) committed to zero flaring in its southern oil fields by 2022. This will be achieved by multiple deals between companies in which gas that would otherwise be flared, will be piped to nearby plants and refineries. This will then be used in production or processed into a refined product. The changes will not only reduce flaring, but also economically benefit the country as the APG can be turned into a saleable product, such as LNG.

Iraq has committed to a similar sentiment, estimating that flaring in Basra will disappear by 2022. A study in 2018 estimated that Iraq could save $5.2 billion over the next four years by reducing flaring and instead recovering and using the gas.

What’s in the pipeline for 2020?

Using the associated natural gas to create alternate fuels is one option to reduce flaring. LNG production and demand has increased, with a 28.2 metric ton increase from 2017 to 2018, equating to a 9.8% year-on-year growth. This was supported by an increase in LNG plants and transportation, with Australia, US and Russia leading the way in infrastructure, while China, India and South Korea led LNG demand growth.

Flare gas recovery is another hot topic and is key in reducing flaring in 2019. In flare gas recovery, the associated gas is recovered and then reused for processing. You can read more about the process in our blog, Flare Gas Recovery, reducing and monitoring flare gas.

Ultimately, government bodies and large oil and gas companies need to pave the way for flare gas reduction and take steps to implement stringent rules. One such rule required is an increase in the accuracy with which flare gas is measured. Nigeria have done exactly this with their 2019 Nigerian Gas Flare Commercialisation Programme.

This programme not only increases the accuracy with which flare gas must be measured from 5% to 3%, but also outlines fines that companies must pay if they flare gas. It also provides an alternative to flaring by outlining uses for the gas – giving it value.

It’s clear that reducing flaring will remain a priority for the industry in 2020 and there is still some way to go to hit the targets that many countries and companies have promised. Flaring in 2019 has been a tale of two sides, and the success of many zero flaring commitments will rely on multiple factors. Perhaps the most important of these is stricter regulations alongside improved infrastructure, increasing pipeline capacity.

December 19, 2019 | News

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