Some 30% of Europe’s annual consumption of natural gas and a quarter of US consumption is wasted through flaring, according to research commissioned by GE Energy.
This equates to 5% of gas production simply going to waste, with significant resource and environmental consequences.
Nearly $20billion in wasted natural gas could be used to generate reliable, affordable electricity and yield billions of dollars per year in increased global economic output.
Gas flaring emits 400million tonnes of CO annually – a figure equivalent to the emissions of 77million cars, without producing useful heat or electricity. The gas is wasted worldwide, typically as a by-product of oil extraction.
Worryingly, many of the flare reduction projects sanctioned over the last decade leverage existing nearby gas infrastructure. For this reason, less progress has been made at remote locations. Furthermore, in places such as Venezuela, Uzbekistan, Ecuador, Iraq, and Libya, gas flaring appears to be increasing.
The GE study warns that governments in new frontier oil regions of Africa, such as Uganda or Liberia, need in particular to consider associated gas options early in the oil development process, before flaring becomes a major issue.
“A critical challenge, however, is that the short-cycle investment process of the oil industry is at odds with the long-cycle nature of the gas business”, said Michael Farina, programme manager at GE Energy and author of the white paper. “This puts a spotlight on the role of state to invest in gas infrastructure, but often there are insufficient resources and expertise to launch capital and technology intensive gas projects.
“This dynamic highlights the need for external support and financing, especially in the developing world.”
Farina goes on to say that governments with weak environmental regulations are particularly likely to flare large amounts of gas. The problem is exacerbated through policy distortions and ineffective oversight and inadequate enforcement measures.
The GE study finds that the technologies required for a solution exist today. Depending on the region, these may include power generation, gas re-injection (for enhanced oil recovery, gathering and processing), pipeline development and distributed energy solutions.
“Power generation, gas-reinjection and distributed energy solutions are available today and can eliminate the wasteful practice of burning unused gas. This fuel can be used to generate affordable electricity for the world’s homes and factories,” said Farina.
“With greater global attention and concerted effort – including partnerships, sound policy and innovative technologies – large-scale gas flaring could be largely eliminated in as little as five years. It’s a win-win outcome.”
The report provides a region-by-region analysis of gas flaring trends, including:
o Within the Russian Federation, by some measures the world’s largest source of flare gas emissions, as much as 50billion cu m of natural gas produced is wasted annually.
o Although Nigeria has reduced flare gas emissions by 28% from 2000 levels, the country’s oil industry still wastes 15billion cu m of gas every year.
o Elsewhere in west Africa: Angola, Equatorial Guinea, Gabon, Congo and Cameroon collectively waste about 10 billion cu m every year.
o Low commodity prices and higher costs related to capturing flare gas in the Middle East inadvertently encourage the wasteful burning of unused gas.
According to David Victor, director of the Laboratory on International Law and Regulation at the University of California San Diego, making better use of vented and flared gas is a tremendous opportunity.
Moreover, tackling the problem will, he says, help slow global warming while also saving scarce natural resources.
But Farina points out that the next phase of flare gas eradication will require a co-ordinated effort at multiple levels.
These efforts must include proper punitive actions and incentives to encourage investment.
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