|Gas-flaring countries and trends. Click to enlarge.|
A newly released GE study—Flare Gas Reduction: Recent Global Trends and Policy Considerations—estimates that 5% of the world’s natural gas production is wasted by burning or “flaring” unused gas each year, despite some progress on the flaring issue. This is an amount equivalent to 30% of consumption in the European Union and 23% in the United States.
Gas flaring emits 400 million metric tons of CO2 annually, the same as 77 million automobiles, without producing useful heat or electricity. Worldwide, billions of cubic meters (bcm) of natural gas are wasted annually, typically as a by-product of oil extraction.
The study finds that the technologies required for a solution exist now. Depending on region, these may include power generation; gas re-injection (for enhanced oil recovery, gathering and processing); pipeline development and distributed energy solutions. Nearly $20 billion in wasted natural gas could be used to generate electricity and yield billions of dollars per year in increased global economic output.
A lack of technology solutions is not the problem; gas flaring can be dealt with today through a variety of existing technologies at reasonable cost...However, often regional political complexities and lack of gas infrastructure systems drive the decision to flare gas.
It is becoming increasingly clear that the next phase of flare gas eradication will require a major, coordinated effort from central and regional governments, oil and gas producers, technology providers, and the international community. The role that each party plays differs by region.—“Flare Gas Reduction”
The report provides a region-by-region analysis of gas flaring trends, including:
Within the Russian Federation, by some measures the world’s largest source of flare gas emissions, as much as 50 billion cubic meters of natural gas produced is wasted annually. If half of this flare gas (25 bcm per year) was captured and sold at prevailing domestic prices in Russia, the economic opportunity may exceed US$2 billion (65 billion rubles). A significant portion of this waste could be avoided with modest policy efforts and greater emphasis on investments in power generation and gas processing technologies.
Although Nigeria has reduced flare gas emissions by 28% from 2000 levels, the country’s oil industry still wastes 15bcm of natural gas every year. While nearly half of the population has no access to electricity, the country spends nearly $13 billion per year on diesel-powered generation and perhaps 10GW of potential electricity is flared away. Successful capture and flare gas utilization could potentially triple per capita electricity consumption for this nation of 155 million people.
Elsewhere in West Africa, Angola, Equatorial Guinea, Gabon, Congo and Cameroon collectively waste about 10 billion cubic meters of natural gas every year.
Low natural gas prices and higher costs related to capturing flare gas in the Middle East inadvertently encourage the wasteful burning of unused gas.
Making better use of vented and flared gas is a tremendous opportunity. It will help slow global warming while also saving scarce natural resources. While this issue has been on the radar screen for some time, many countries still waste massive amounts of gas through flaring and venting.—David Victor, director of the Laboratory on International Law & Regulation at the University of California San Diego
The study highlights the following recommendations to reduce gas flaring:
Strengthen international commitments. The next phase of flare gas eradication requires a coordinated effort from central and regional governments, oil and gas producers, technology providers and the international community. These efforts must include both proper punitive actions and incentives to encourage investment.
Advance local solutions. Local efforts are critical to flare gas reduction. Governments, producers and technology providers across the globe must cooperate to communicate the value of gas, including greater efficiency; highlight the financial benefits associated with gas flaring reduction; secure local government support for monitoring and enforcing flaring regulations; and build capacity that helps local investors and contractors develop, operate and service distributed power generation.
Expand access to financing. Local efforts require capital support, including investments in pipeline, processing and storage, which make it economically efficient to gather and utilize flare gas. Various forms of credit enhancement, including partial risk guarantees, are one option to support investment while policy reforms are underway. Targeted technology funds and carbon partnerships also can facilitate projects, along with carbon financing and expanded eligibility for flare gas reduction within the United Nations Clean Development Mechanism.