Joe Anis, GE Energy’s President & CEO for the Middle East
GE today released a study, Flare Gas Reduction: Recent Global Trends and Policy Considerations, which estimates that 5 percent of the world’s natural gas production is wasted by burning or “flaring” unused gas each year—an amount equivalent to 2.4 million barrels of oil equivalent per day.
Gas flaring emits 400 million metric tons of carbon dioxide (CO2) annually, the same as 77 million automobiles and 2 percent of global CO2 emissions from energy sources, without producing useful heat or electricity. Worldwide, billions of cubic meters of natural gas are wasted annually, typically as a by-product of oil extraction.
The study reports flaring levels in the Middle East are relatively high with the amount of gas flared increasing from 17.1 billion cubic metres (Bcm) per year in 2000 to 34.6 Bcm per year in 2008. The CO2 emissions from gas flaring, however, decreased from 98 million metric tons per year in 2004 to 87 million metric tons per year in 2008, and the flaring share of energy sector CO2 emissions also decreasing from 7 to 5.1 percent during the same period.
The report records a notable achievement by Saudi Arabia in managing gas flaring. The Kingdom’s master gas system mega-project, which was online in 1982, today gathers almost 100 Bcm per year and is the world’s largest single hydrocarbon network. Approximately half of the gas supply for the system comes from associated gas that was previously flared.
Joe Anis, GE Energy’s President & CEO for the Middle East said: “The success achieved by Saudi Arabia is one example in the long journey for the Middle East region towards managing gas flaring more effectively, which has long-term environmental and energy sector impact. Eliminating wasteful gas flaring has the potential to be the next big energy and environmental success story, and through better management, the region can benefit not only from direct costs in terms of resource use but also in social and environmental costs.”
The GE study finds that the technologies required for a solution exist today. 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 US$20 billion in wasted natural gas could be used to generate reliable, affordable electricity and yield billions of dollars per year in increased global economic output.
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.