Maureen Lorenzetti
After a 3-year effort by the World Bank and Norway, 11 countries and 8 major oil companies met May 11 in Algiers to sign a voluntary global natural gas venting and flaring reduction standard.
More than 100 bcm of gas is released into the atmosphere each year, an amount comparable to the combined annual gas consumption of Germany and France. And although international greenhouse gas reduction targets could be a long way off, limiting gas venting and flaring offers tangible benefits now, according to some stakeholders.
The gas currently flared in Africa, for example, could produce 200 Tw-hr of electricity, about 50% of the current power consumption of the continent and more than twice the level of power consumption in Sub-Saharan Africa (excluding South Africa).
Ongoing progress
Companies working in Canada, Norway, and the US already make large investments in gas-flaring reduction projects for environmental and economic reasons. But over the past 20 years, most new global oil production increases have been outside those countries, leading to a corresponding rise in associated gas production that largely offsets reduction efforts.
There's no way to know for sure since no one is required to report it, but World Bank officials believe that as much as 80% of global venting and flaring occurs in about a dozen countries. Often it is in places where oil and associated gas production is in a remote location with no infrastructure to transport and distribute the gas to market.
Long-term goals
Stakeholders hope that in 10 years the venting standard will mean most gas is captured and sold instead of released into the atmosphere. Parties that signed the agreement now account for some 40% of global flaring. But if countries like Russia, Iraq, Iran, and China agreed to limit the practice, the environmental benefits could be far-reaching, according to standard proponents.
Right now many of those countries have regulated price structures that discourage gas capture. Moreover, gathering associated gas and transporting it to a domestic or international market often requires significant capital developing nations don't have. Converting the gas to LNG for export is an obvious, albeit expensive option. Donor countries and the World Bank may offer financial incentives, including carbon credits for achieved emission reductions. The World Bank, through related initiatives, is also encouraging more gas infrastructure projects in resource-rich developing nations.
No fines or penalties are imposed if someone ignores the standard. But the World Bank is counting on public reporting by the press, financial institutions, nongovernment organizations, and other interested stakeholders to keep everyone engaged in the process.
Partnership members now include the World Bank, the governments and national oil companies of Algeria, Angola, Cameroon, Chad, Ecuador, Equatorial Guinea, Indonesia, and Nigeria; and international oil companies BP PLC, ChevronTexaco Corp., ENI SPA, ExxonMobil Corp. NorskHydro ASA, Statoil ASA, Royal Dutch/Shell Group, and Total SA. Donor countries include Canada, Norway, and the US.
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