Exploring the issue of flare gas and the opportunities to put it to better use
The oil and gas industry is under pressure to address the issue of gas flaring, facing calls for the practice to be minimised in order to reduce the environmental impact and, wherever possible, put flared gas to better use.
An estimated 150 billion cubic metres of gas is wasted through flaring each year worldwide. This is the equivalent of $20 billion USD worth of gas. Gas flaring is not just a waste of a valuable natural resource, but also has a significant impact on the environment, adding as much CO2 to the atmosphere every year as 200 million cars. While gas flaring is unavoidable in certain circumstances, there are several solutions that allow operators to monetise this gas, resulting in an outcome which is mutually beneficial for their bottom line and the environment.
The World Bank’s initiative to eliminate gas flaring by 2030 has had buy-in from many industry leaders and prominent oil-producing countries. However, there is still work to be done to achieve this ambitious milestone. World Bank data revealed that 2017 saw a five per cent decrease in flaring worldwide, with a particularly significant fall in Russia. However, while an encouraging step, some leading oil producer nations increased volumes of gas that they flared in 2017, including the USA. This serves as a strong indication that there is still a way to go in solving this burning issue.
There is a huge opportunity to unlock the potential of flared gas.
There is a huge opportunity to unlock the potential of flared gas at both a Governmental and inter-Governmental level. Last year alone, 150bcf of gas was flared globally. If this had been converted into power, it would exceed Africa’s annual demand. Considering that 60 per cent of Africa’s population does not currently have access to electricity, the industry should be looking for ways to convert this wasted gas into energy. Flaring often occurs in countries with poor electrification rates and chronic power problems, such as Nigeria, Ivory Coast and Gabon. These nations could harness this waste gas for power generation to support their own grids or sell the excess to neighbouring nations suffering from power shortages.
At a more local level, operators can convert their gas to power for onsite operations. If excess power is produced, it can be sold through the local grid which could provide a supplementary source of clean and cheap energy to previously off grid or poor grid areas.
Often, flaring is a consequence of economic limitations, such as inaccessibility or perceived impact on CAPEX. However, flaring should be seen as an opportunity for economic gain, with a number of options operators can consider to monetise the gas. One of those, which Aggreko has deployed recently in Egypt, uses rich gas in small volumes. The operator extracts the natural gas liquids (NGL), liquefies them at site and sells them to the local market. The remaining lean gas generates power for the operators own requirements and any excess is sold to the grid. The small and fluctuating volumes lend themselves to a no CAPEX, flexible solution and the NGL sales make the project viable.
As we move towards a decarbonised future, there is a need for the oil and gas industry to further consider how it can utilise these resources in a greener way and, where possible, benefit local communities. Using the gas wasted through flaring each year to provide power to areas which currently have no electricity will enable communities to develop as well as reducing an operator’s carbon footprint. The importance of a company’s green and community support credentials are only set to increase.
Operators have the opportunity to cut emissions and support ambitions for universal access to electricity as well as turning a wasted by-product of oil extraction into a revenue stream. There needs to be a concerted effort across the industry to seek out and adopt solutions to avoid flaring, where possible, and monetise this gas - putting it to better use with waste to energy solutions . The challenge of ending gas flaring is great, but the potential reward is even greater.
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