The ongoing UN Climate Conference in Paris (COP21) is focused mainly on the long term shift from fossil fuels to clean energy. In the short term, however, there are some relatively easy ways for the world to reduce our greenhouse gases. One of them is to reduce the amount of gas that is flared or burned wastefully at oil production sites around the world. This is an oil and gas industry practice that is garnering increasing global attention thanks to a new initiative launched by the World Bank. The "Zero Routine Flaring by 2030" Initiative has already been endorsed by a number of large oil companies and oil-producing countries. To better understand this initiative and its impact on climate change, I interviewed Anita George, Senior Director of the World Bank's Energy and Extractive Industries Global Practice.
Question 1: Anita, What is gas flaring, and how much does it contribute to climate change?
Answer: During oil production, the natural gas that is dissolved in the oil is often wastefully burned, or flared, at the oil field. Many people have seen gas flares and often wonder what they are and why it happens. In many cases this happens because delivering this associated natural gas to a market requires a level of infrastructure investment that sometimes makes use of the gas uneconomic. In other cases market conditions may be unfavorable, such as low gas prices or non-paying consumers. Associated gas may in some cases be flared simply because using the gas is not given priority, even when economically viable utilization options exist. Current estimates are that 140 billion cubic meters of gas is flared annually around the world. That is a tremendous amount of energy being wasted.
Then there's the CO2 emissions from gas flaring, estimated to be 350 million tons each year. In addition, un-combusted methane, a highly potent greenhouse gas, is released to the air from the flare. Flaring also produces black carbon (soot) that is of particular concern when released near snow and ice caps, where it darkens the surface and accelerates melting.
The basic issue is flaring gas is so unproductive, and can be avoided far more easily than much of the other CO2 emissions. The gas could be put to good use and displace other fuels that generate higher emissions per energy unit. For example if all the gas that is being flared today were converted to power, we would be able to meet the electricity needs of all of Africa.
Photo: Gas flaring in the Niger Delta (Nigeria). Credit: Ed Kashi / World Bank Group.
Question 2: So, getting companies to capture and sell this gas could be one of those "low hanging fruit" we hear about - a "doable" way to reduce our emissions. What could flared gas be used for?
Answer: Yes absolutely. This would be a great way for the oil and gas industry to show serious commitment to mitigating climate change.
Flared gas is similar to the natural gas that is used all over the world for power generation; as feedstock for the manufacture of chemicals; distributed to homes for cooking, heating, etc. However, it requires processing to remove the heavier components (like butane and propane) and remove contaminants before it can be used in these ways. Associated gas is often re-injected into the oil reservoir to increase oil production.
Question 3: The name "Zero Routine Flaring by 2030" initiative is self-explanatory. But who has signed on to the initiative and how will you get global compliance with those countries and companies that have not?
Answer: As of today, there are 45 governments, companies, and development institutions that have endorsed the Initiative and committed to ending routine flaring. While the World Bank has introduced the Initiative, this is a voluntary commitment made by all endorsers and each entity is responsible for complying. Its visibility and high global profile ensure that failure to demonstrate commitment to the Initiative will be a reputational issue. Endorsing governments and oil companies will annually report their flaring and comment on their progress towards the Initiative. The World Bank will report the same for all endorsers on the Initiative website. This is not to say it is an easy task, in part because the volume of most gas flaring is still estimated rather than metered. In addition, satellite monitoring will continue to allow estimates of flaring volumes for every country.
Question 4: What would it cost to eliminate routine flaring by 2030?
Answer: There is minimal publicly available data on the cost of flare reduction activities, but it is clear there is a very wide range in the unit cost of flare mitigation. Recent studies from Iraq, Russia, and Nigeria indicate an average cost of around $6-9 US$ per cubic foot per day, which translates to $85 -125 US per ton of carbon dioxide emissions for onshore projects (This is just the cost to install each cubit foot of utilization capacity.) The cost of eliminating flaring offshore is generally substantially higher. This implies a potential cost of well over US$ 100 billion to eliminate the gas currently flared worldwide. Understand that this estimate does not include revenues from utilization of the gas.
Question 5: What are the common reasons why governments would NOT endorse the Initiative?
Answer: We expect a majority of oil producing countries to endorse the Initiative. But often it takes time and dialog to explain what the commitment means. Many countries need to follow a rigorous due diligence process before committing to the Initiative. We respect this and understand their willingness to ensure that it is consistent with the aspirations of their nation. We will support them in this process and work to secure their endorsement in the coming months and years. The World Bank, meanwhile, will continue this advocacy campaign until all the major oil producers endorse the Initiative, thereby creating a de facto global industry standard that helps mitigate climate change and also ensures resources are not wasted.
Anita Marangoly George is Senior Director of Energy and Extractives at the World Bank.
www.worldbank.org
Tim Ward is the author of The Master Communicator's Handbook, a guidebook for thought leaders and change maker. See: "Communication: It's not about output, it's about impact!"