World Bank to ask oil companies to stop flaring gas by 2030

June 19, 2014 | Health, Safety & Environment, Renewable Energy

London, United Kingdom | – The World Bank will urge producers of oil to stop flaring natural gas by 2030, saying the amount of fuel wasted in the practice would generate enough power to meet all of Africa’s demand for electricity.

“It will be voluntary but we hope that both companies and countries will see the sense in what we are proposing,” Anita George in the bank’s extractive industry unit said in a Moscow interview. “We are planning to propose it in September.”

Gas flaring or venting is the process of burning off combustible gas (flare gas).

Gas flaring or venting is the process of burning off combustible gas (flare gas).

The World Bank is leading 33 companies and nations in the Global Gas Flaring Reduction partnership that seeks to shrink the industry custom by 30 percent in the five years to 2017. The gas is pumped from fields when companies drill for oil.

Halting the burning of about 140 billion cubic meters of gas globally every year would reduce carbon-dioxide emissions equivalent to taking about 70 million cars off the roads.

Mexico and Azerbaijan have reduced flaring about 66 percent and 50 percent, respectively, in the past two years, George said. In Nigeria, Royal Dutch Shell Plc is investing about $4 billion to reduce flaring from local oilfields.

BP Plc’s biggest flaring occurs at its crude production in the Rumaila oilfield in Iraq, said Bob Dudley, chief executive officer at the London-based company. It’s proposing to pump gas to Kuwait to reduce the country’s liquefied natural gas imports.

“That would be a big step forward for the world,” Dudley said in an interview. He downplayed the World Bank initiative. “Zero is like saying never or nothing,” he said. “So that’s probably not realistic, that’s an aspiration to go.”

“According to satellite data Russia is by far the largest flarer of gas,” George said at the World Petroleum Congress in Moscow. OAO Rosneft, OAO Sibur Holding, OAO Lukoil, OAO Gazprom Neft and OAO Surgutneftegas have been increasing use of the gas partly for local power generation, she said.

The World Bank’s GGFR experts have been crunching satellite data for more than year to compile a new report on flaring. The last was published in July 2012, with 2011 data.

“We’re working on calibrating the flares” to get reliable results, said Bjorn Hamso, program manager. Preliminary results show the U.S. share of flaring is growing after a surge in its oil and gas production. It’s behind Iraq and Russia “competing for the top spot,” followed by Nigeria and Iran, Hamso said.

The U.S. “is on a steep upward curve,” he said. Flaring intensity per barrel of output “is still quite low,” Hamso said. “But of course we don’t like the trend.”

Statoil ASA, Norway’s largest oil company, only flares gas in the U.S. after buying Brigham Exploration Co. in 2011, said Hege Marie Norheim, a senior vice president at the Stavanger-based company. Local producers are working with authorities to end gas flaring from the Bakken shale by 2020, she said.

The zero target “is a great challenge,” Norheim said in an interview in Moscow. “There is a reason why there is production flaring” because some fields are remote and away from pipelines to transport the gas to markets and buyers.