Claims that nearly $20 billion in wasted natural gas could be used to generate reliable, affordable electricity

According to a study released by GE, titled ‘Flare gas reduction: recent global trends and policy considerations’, five per cent 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 per day.

The study says that gas flaring emits 400 million metric tonnes of carbon dioxide (CO2) annually, the same as 77 million automobiles and two per cent of global CO2 emissions from energy sources, without producing useful heat or electricity. Worldwide, billions of cubic metres of natural gas are wasted annually, typically as a by-product of oil extraction, it adds.

The study reports that 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, reportedly decreased from 98 million metric tonnes per year in 2004 to 87 million metric tonnes per year in 2008, and the flaring share of energy sector CO2 emissions also decreasing from 7 to 5.1 per cent 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. It claims that approximately half of the gas supply for the system comes from associated gas that was previously flared.

Elaborating on the subject, Joe Anis, GE Energy’s President and 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 says that the technologies required for a solution exist today. Depending on the region, these may include power generation, gas re-injection (for enhanced oil recovery, gathering and processing), pipeline development and distributed energy solutions. It believes that nearly $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 utilise flare gas. Various forms of credit enhancement, including partial risk guarantees, are one option to support investment while policy reforms are under way. 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.