The flaring and venting of natural gas adds to climate change. It emits some 390 million tonnes of carbon dioxide every year. The amount of gas burnt is about one third of the European Union’s annual gas consumption. Billions of dollars are simply going up in smoke...  Siberia has the largest field of gas flares
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For decades national and private oil companies have been burning the gas associated with oil production. Natural gas is released when oil is produced but is less profitable, especially in countries that lack sufficient regulation, infrastructure and markets.
Rashad Kaldany, Former Head, Global Gas Flaring Reduction Partnership: Gas flaring is a very serious problem today. We estimate that one hundred and fifty billion cubic metres of gas are flared…
Rashad Kaldany has recently been leading efforts by the public-private Global Gas Flaring Reduction partnership launched by the World Bank in 2002. It helps countries and companies overcome barriers to cut flaring.
Rashad Kaldany: Flare spewing from pipe onto sand... It’s equivalent to three hundred and ninety million tonnes of CO2 emissions…this is more than the amount of CO2 that is being covered under the Kyoto mechanisms right now.
 Rashad Kaldany
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Eliminating gas flaring worldwide would reduce more CO2 emissions than all the projects currently registered under the Kyoto Protocol’s Clean Development Mechanism - the landmark agreement between nations to reduce emissions by 2012. Total elimination’s impossible - some flaring is required for safety. But some countries flare more gas than necessary. These flares are so big they can be studied from space.
Dr Chris Elvidge, National Oceanic & Atmospheric Administration: Over this fifteen year time period from 1992 to 2006 there’s been very little reduction so far in gas flaring. Despite the fact that global oil production on an annual basis has gone up, so that’s an indication that efforts to reduce gas flaring are producing some results.
Flaring happens all over the world, mostly in fewer than 20 countries. Nigeria is one of the biggest polluters.
Dr Chris Elvidge: This is the gas flaring in Nigeria. This is the Niger delta here and there is a combination of onshore and offshore gas flares…This is one of the largest collections of gas flares anywhere in the world.
Oil is big business in Nigeria. Exports bring in forty six billion dollars a year.
Prof Anthony Adegbulugbe, Nigeria Govt.: Economy depends largely on revenue from the oil sector and it accounts for over eighty per cent, eight zero, eighty per cent of the total foreign exchange earning.
According to the Nigerian government, the oil industry burns some twenty four billion cubic metres of gas annually. This is enough to power half of Africa for a year. Ironically, most Nigerians are desperately short of energy.
 Some communities in Nigeria are dominated by gas flares
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Prof Anthony Adegbulugbe, Nigeria Govt.: Fifty five or sixty per cent don’t have access to electricity. And that is very poor… so there’s a tremendous market for gas domestically for our power sector.
Successive governments claim they have tried to eliminate gas flaring since it was regulated in 1984.
Prof Anthony Adegbulugbe: Before the President Obasanjo’s administration in 1999 what we decided to do is penalise international oil companies, some amount of money for the volume of gas that they flare. But we since found out that that didn’t work because when you look at the economics it was better for them to flare the gas than invest money in gas gathering, in gas utilisation projects.
The Nigerian government could have insisted but as a majority shareholder would have had to fund over half the cost. The oil companies highlight their problems.
Michiel Kool, Shell: Flaring is a complex issue because oil is often found in remote locations that do not have a market for the associated gas. So the first challenge is often to find or create a market for this gas, then to put in the large investments that are needed to collect the gas and take it to customers. And also to work with governments to put in place the right regulations and fiscal framework to allow these investments to occur.
Oronto Douglas, Environment Lawyer: It’s a monumental waste of our natural resources, resources that ought to translate in to…other goods…to health to education and so on. The resources are simply wasted.
This gas is often burned next to communities that have no electricity. As a fuel it offers a cleaner alternative to coal or oil.
 Associated gas can be used to generate electricity for nearby communities
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Prof Anthony Adegbulugbe, Nigeria Govt.: Some of these communities I would say below fifty thousand inhabitants because they produce small gas, and the distance to pipe them to a major hub is so large that it would make the economics not so good, but if you can put some gas utilisation project in that community and then it could actually help the economy.
It’s finally happening in Nigeria. Bonny Kingdom is a community of seventy thousand people in the delta. Oil and gas companies have invested in a local, small-scale power distribution system. It provides near constant power for most islanders - unheard of in many areas of the delta. The benefits are varied.
Mario Caenen, Bonny Utility Company: You get new businesses arising, we’ve got an internet café…the micro-economy is developing in such a way that there is less dependency on the industry…
The operation covers its costs by supplying affordable electricity to the community. The oil industry pays for the set up and then becomes a shareholder in the business.
Mario Caenen: The industries benefit from it by getting a much better relation with the community but also from simple things like sickness levels go down, your workers go home and their food is not spoilt because your fridge is still working.
The initial investment in Bonny Utility Company came from firms such as Shell, Total and ENI, based on Bonny Island. Nigeria LNG manages the investment. They liquefy natural gas for export to North America and Europe.
Chris Haynes, Nigeria LNG: Nigeria LNG was initially conceived to be an enabler to putting flares out in Nigeria. However Nigeria has a lot of gas reserves and NLNG can also help monetise those gas reserves as part of its business of making liquefied natural gas.
Michiel Kool, Shell: So the joint venture including all of its shareholders and the govt has invested two point five billion dollars over the last five years to put in place the infrastructure to collect the gas from across the Niger delta and take it to customers.
According to experts, Natural gas is expected to become the second most important global fuel in the next decade, turning the export of gas in to a growing industry. Diversifying in this way reduces Nigeria’s dependence on oil exports, bringing more security to the country.
Jean-Michel Gires, Total: The energy scene has been changing a lot. We were back in the nineties beginning of the year 2000, in low price energy…nobody was caring about energy scarcity, energy availability, peak oils and so on. And now we have a very different scene. Everybody is a little bit nervous about what is the future of energy.
Capturing and using otherwise wasted gas in Nigeria has allowed Shell to reduce flaring by a reported forty per cent over the last ten years. But what about the future?
Michiel Kool, Shell: Our aim is to eliminate routine flaring from our worldwide operations including Nigeria by 2009.
Prof Anthony Adegbulugbe, Nigeria Govt.: Well the 2008 gas flaring deadline is a target of government and government’s extremely serious about it. But what’s important now is that the rate at which the gas flaring is going down shows that the policy is working. But when we get to 2008 if there are any problems and I think govt will sit down with the international oil companies, and see how we can remove more barriers so that we get to the minimum level of gas flaring.
Oronto Douglas, Environment Lawyer: Governments will change hands by May 2007, we’ve had these rhetorics before… it needs the political and economic will of the drivers of the process to take the matter very seriously.
There are some places in the world where oil is produced and virtually no associated gas is flared or vented. What’s more, this has been possible for half a century. Government regulation in consultation with the oil industry has played a significant role.
 'Hell's Half Acre' in Alberta, Canada in the 1930s
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Arden Berg, Alberta Energy & Utilities Board: In the case of Alberta, which is the largest producing province in Canada, our agency was created in 1938 to reduce flaring. There was a lot of flaring going on at the time, in fact it was referred to as ‘Hell’s Half Acre’… the provincial government…was very concerned about a waste of a valuable resource and so they created our agency to deal with this issue… Since 1996 we’ve had a consultative approach to further reduce the flaring and get it as close as possible to having no flaring… In Alberta over ninety-six per cent of the associated gas is conserved.
Bent Svensson, Manager, Global Gas Flaring Reduction Partnership: Normally in a country when you flare, you need a permission to do it and some countries apply penalties to the flaring. In Norway for instance the penalty is very, very high. …then the companies find ways to utilise the gas to avoid flaring.
Anne Margrethe Mellbye, Statoil: In Norway, we started to… explore and produce oil and gas in the early 70s, meaning that in the late 60s the Norwegian authorities developed regulation for how this should be done…we had to build new pipelines to make sure we could export the gas… it was very expensive… but we have been able to get the money back throughout the years.
Even working in the remotest locations, Statoil of Norway has found it possible to recoup its investment in capturing associated gas. That’s not been the case next door in Russia. According to figures released by the Russian government, it’s the second largest gas flarer after Nigeria. Russia acknowledges that flaring is underreported. Satellite images reveal the scale of the problem.
Dr Chris Elvidge, National Oceanic & Atmospheric Administration: This is the largest collection of gas flares in the world. This is in Siberia and you can see there is not only a very large number of individual flares but some of them are very large in size... because it’s a basically it’s a waste disposal process… because it’s in remote locations often times it’s offshore… there’s not a lot of incentive for reporting.
Kirill Liats, Metaprocess: The official figures is fifteen billion cubic metres of associated gas are burning by oil and gas companies in Russia, mostly in the region of western Siberia, you see on the map a lot of oil and gas fields that are burning different amounts from field to field of associated gas…if we process this gas in to electricity it will be equal of power that today nine nuclear power station in Russia are generating.
Gas and oil production tends to be in remote and unpopulated locations, meaning there is little need to generate electricity in the local area. But the associated gas can be used in other ways.
Kirill Liats, Metaprocess: From those gas that we are burning now in Russia we can receive…about nine million tonnes of diesel.
Turned in to diesel, associated gas could fill the tanks of one hundred and seventy five million cars. They would still pollute but carbon emissions would be cut. And at current Russian prices this could generate three billion US dollars a year. As Russia’s economy opens up, it creates opportunities for young entrepreneurs to use associated gas, rather than wasting it.
Kirill Liats, Metaprocess: Metaprocess gives oil companies the opportunities to reduce burning of associated gas and process it into methanol for example and to sell methanol as a separate product for profit of course.
Kirill Liats has already started doing this.
Kirill Liats, Metaprocess: So today we are here, this is Moscow, and the plant is right here. It’s about three and a half thousand km from Moscow.
In North West Siberia on the sixty-sixth parallel, Kirill has built his first methanol plant.
 Kirill Liats on Novatek's gas field in Siberia
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Kirill Liats, Metaprocess: It’s about minus thirty six degrees centigrade. We’re… on the shore of Tazovskaya bay, it’s a field named Yurzhszovskoye belongs to Yurkhazpvonefte daughter company of Novatek, gas producer company…behind us the methanol plant that are producing methanol from gas.
Novatek uses this methanol plant as part of the exploration process on its gas field. But the technology can easily be applied in oil fields to turn the waste gas into a saleable commodity.
Rauf Yunusov, Novatek: Novatek is not an oil exploration company but because our fields are multi-layered, whenever we find oil underneath the gas, according to the terms of our licence agreement with the government, we are obliged to also extract the oil.
Kirill Liats, Metaprocess: Besides gas fields Novatek has a few oil fields and it is burning about three hundred million cubic metres of associated gas, it’s a big amount…if they decide to process their… associated gas they could receive…more than ninety million…US dollars annually…I suppose it’s good profit. Today the associated gas is garbage.
The Arctic Circle… It may seem remote and empty, but ‘in far Siberia’s deepest soil’, the machine of Russia’s huge oil industry continues to burn this gas away. Now change is on the horizon.
Rauf Yunusov, Novatek: I am a member of the expert council in the utilisation of associated gas for the Russian Gas Association. Today the Association is preparing special legislation which … the Russian state parliament will introduce as law from January 2010 to outlaw gas flaring. If utilisation of associated gas is less than 95% the companies will incur big fines, or work may even be stopped.
Kirill Liats, Metaprocess: I believe that Russian government… Russian parliament and special authorities, they’re responsible for this problem, know this problem and they try to push…oil companies…in this… gas processing question…. But they have to find the best way with minimum expenditures and maximum profit. It’s a question of all commercial companies to avoid…losing money.
Russia has yet to join the consortium of oil producing governments and international oil companies led by the Global Gas Flaring Reduction Partnership.
Rashad Kaldany, Global Gas Flaring Reduction Partnership: This is now the time to step up this effort, bring in other countries such as Russia… Brazil,… Venezuela to make sure that we capture all of worldwide flaring. We have shown that this is a viable activity, it is relevant, it has tremendous impact on global climate and that we can make a difference.
Anne Margrethe Mellbye, Statoil: It’s a so called low-hanging fruit in terms of climate change abatement because it’s relatively simple; it can be done quite easily.
Arden Berg, Alberta Energy & Utilities Board: It’s a win-win for every body, you have the potential to increase utilisation of a premium fuel and natural gas is a premium fuel. It has an opportunity to provide some poverty alleviation benefits and it reduces a greenhouse gas.
Oronto Douglas, Environment Lawyer: Can we then please stop this monstrous fire-spitting gas that is affecting the totality of the environment whether in the Niger Delta or the rest of our global commons.
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