Methane Abatement in Developing Countries

6. Regulatory building block 3: Setting requirements to reduce flaring and venting

Box 6.1. EFFECT recommendations: Flaring and venting

What can governments do?

• Require that routine flaring at existing oil fields ends as soon as possible, and no later than 2030

• Limit non-routine flaring and venting and clearly define in regulation the circumstances under which operators can flare and vent associated gas without prior approval from the relevant regulatory authority, with reporting requirements and sanctions for non-compliance

• Before granting permission to operators to flare or vent associated gas for economic reasons, require that companies satisfy the regulatory authority that they have investigated all reasonable alternatives to flaring and venting, including reinjection for improved oil recovery or storage, or gas gathering, treatment and sale to downstream energy markets

• Ensure that infrastructure policy is consistent with zero routine flaring and reduced venting objectives and supports the building of pipelines necessary to evacuate gas

• Include dissuasive and proportionate enforcement mechanisms in relevant regulations to deal with non-compliance of flaring and venting of associated gas: for example, penalties and fines, and revocation of the production/operation license

• Ensure that companies implement high flare efficiency ratios to prevent venting of gas

• Identify alternatives to non-routine flaring and venting.

Source: Expanded from (OECD, 2022[1]).

Flaring and venting of natural gas from the upstream oil and gas sector is a significant contributor to global methane and other GHG emissions. Methane emissions primarily arise from venting – i.e. the intentional release of gas into the atmosphere, as well as from flaring – where incomplete combustion of natural gas also releases methane. According to the IEA, the prevention of non-emergency, routine flaring and venting is the most important mitigation measure countries can take as this would avoid almost 20% of oil and gas methane emission globally (IEA, 2023[2]). In fact, the impact of flaring on global methane emissions may be higher than originally thought, as flare efficiency (the percentage of gas that is successfully burned) is often assumed by regulators to be 98%. However, flare efficiency ratios can drop to as low as 10–90% based on impure gas compositions, variable flowrates, remote locations, harsh weather, and poor maintenance practices (Gordon et al., 2022[3]).

Data published by the World Bank’s GFMR show that global gas flaring released around 400 million tonnes of CO₂e (including un-combusted methane and black carbon) into the atmosphere in 2021 (International Bank for Reconstruction/The World Bank, 2022[4]). To give an idea of the lost opportunity of capturing these gas resources, the gas that was wastefully flared in 2021, could power all of sub-Saharan Africa (IGSD, 2023[5]).

Policies and regulations to tackle flaring and venting could have a significant effect on the reduction of methane and other GHG emissions globally. For example, the prohibition of venting of natural gas from oil wells could reduce global emissions by 95% (IGSD, 2023[5]). Furthermore, capturing gas that otherwise would be wasted is a cost-effective option: the IEA has estimated that 80% of the options to reduce emissions from oil and gas operations globally could be implemented at no net cost because the cost of the abatement measures are less than the market value of the gas that would be captured – see Regulatory building block: Incentivising methane emissions abatement.

Eliminating routine flaring and venting

Governments should put in place policies and regulations to eliminate routine1 flaring and venting of natural gas. Ideally, such regulations should require that routine flaring at existing oil fields ends as soon as possible, and no later than 2030, in line with international initiatives, including the World Bank’s “Zero Routine Flaring by 2030”, the Oil & Gas Decarbonization Charter, and the OGCI. For example, New Mexico’s Energy, Minerals and Natural Resources Department launched its Final Natural Gas Waste Reduction Rules in 2021. These regulations prohibit routine flaring and venting of natural gas in New Mexico and set specific requirements for operators to meet across two phases:

• Phase 1 – starting October 2021, operators are required to collect and report data that identify potential sources of methane emissions from wellhead to processing sites and beyond. This data will form the basis for establishing individual benchmarks for each operator

• Phase 2 – operators are required increasing progress toward gas capture targets by meeting a higher level of natural gas capture each year until they reach a 98% capture threshold capture by 2026.

Operators will now be required to pay royalties and taxes on vented and flared volumes, and this includes minor wells as the new regulations apply to all wells in New Mexico, even wells that produce 10 bpd or less. The regulations grant the regulator (the Oil Conservation Commission) with significant powers to enforce compliance, including the ability to deny drilling permits if gas capture targets are not achieved (EMNRD, 2021[6]).

Governments should ensure that regulatory interventions address both flaring and venting as policies that focus only on limiting flaring can result in a corresponding increase in venting – which is more difficult to detect, and which has a greater impact on global warming. For example, such a change in the behaviour of operators has been observed in Turkmenistan following the introduction of a ban on continuous flaring, without tougher parallel policies to limit venting (Olczak, Piebalgs and Balcombe, 2023[7]). In addition, in order to enhance compliance, regulations that impose blanket prohibitions on routine flaring and venting should also provide incentives for that gas to be captured and sold, used on-site, or reinjected for enhanced oil recovery or storage – see Regulatory building block: Incentivising methane emissions abatement.

Limiting non-routine flaring and venting

Non-routine flaring and venting refers to exceptional circumstances where flaring and venting may occur in limited volumes – for example, for safety or emergency reasons, well testing or maintenance. In situations where gas cannot be captured, regulations ordinarily favour flaring over venting as combustion (flaring) reduces the methane content of the gas – for example, see Box 6.2 for the approach taken in Nigeria.

Regulations should clearly define the exceptional circumstances under which operators are allowed to flare natural gas. For example, the Canadian province of British Columbia’s Drilling and Production Regulation stipulate that a permit holder must not flare gas unless such flaring falls under the below exceptions:

• Flaring is required for emergency purposes or for drilling operations

• Flaring is required for a workover or maintenance and the cumulative quantity of gas flared does not exceed 50,000 m³ in one year (for well sites)

• Flaring is required for maintenance purposes (at a facility); or

• Permission to flare is included in a permit (either a well or a facility permit).

Flaring permits can also be used by governments to determine under which circumstances operators can flare and vent associated gas. Flaring permits are required in the Canadian provinces of British Columbia, Saskatchewan (flaring provisions are set out in a facility licence) and Colombia. For example, in Colombia, operators who wish to flare natural gas during initial testing of exploratory and appraisal wells, and for extensive testing, may do so but only in accordance with the terms of a flaring permit. During the production phase, natural gas flaring can only be authorised under the terms of a flaring permit. Flaring permits must be applied for on an annual basis and operators must include an estimation of the volume of gas to be flared, a justification for why such routine flaring is planned, and information on alternatives to flaring (i.e. gas utilisation), where applicable.

Regulations can also set out limits on flaring and venting volumes, prescribe the equipment or process for flaring or venting, and can require operators to apply for flaring permits – which set out specific flaring requirements for each asset in detail.

Box 6.2. Venting requirements in Nigeria

Section 3.3.1 of Nigeria’s methane guidelines provides that venting is prohibited in the Nigerian oil and gas industry. However, an operator may be granted waiver to vent natural gas due to operational exigencies. In this case, the following requirements must be met:

• Address the root cause of venting – the operator shall address the root cause of gas being sent to a cold vent stack, including taking steps to minimise equipment venting from operations and minimising fugitive emissions.

• Prioritise flaring where possible – any remaining venting shall be routed to a flare, unless the gas mixture is not flammable, or the gas volume/pressure is too small/low for the flare design and thus the flame is not stable.

Source: (NUPRC, 2022[8]).

Non-routine flaring and venting requirements may also differ depending on whether the facility is producing oil or gas. It is more likely for gas production facilities to have infrastructure in place that can more easily accommodate unexpected gas, whereas oil facilities may not be connected to gas pipelines and transportation networks. In situations where gas cannot be captured, regulations ordinarily favour flaring over venting as combustion (flaring) reduces the methane content of the gas. In the Canadian province of Saskatchewan, for example, Directive PNG036 sets out different requirements for flaring and venting from oil facilities (associated gas) and from natural gas facilities. Oil wells and oil facilities may flare in excess of 900 m³ per day, whereas flaring at a gas well or gas facility, is not permitted unless it is an emergency and a reasonable level of precaution has been taken to protect human health, public safety, property and the environment and to prevent fire or explosion.

However, there may be exceptional circumstances where regulations allow for the limited venting of associated gas. For example, Colombia’s 2022 methane regulations prohibit the venting of associated gas during both the exploration and production phase. In circumstances where associated gas cannot be captured for technical or economic reasons, the gas must be flared. Notwithstanding this prohibition, venting is permitted in the following exceptional circumstances:

• Emergency – in case of emergency that requires venting of gases into the atmosphere. In this case, the regulator must be informed within 24 hours;

• Maintenance – due to specific conditions that arise during compliance with the preventive maintenance programme of the facility. In this case, the regulator must be informed within 24 hours.

• Pilot light – when the volume of vented gas is below that required for a pilot burner to operate.

The British Columbia 2018 flaring guideline sets out requirements for venting that apply to oil facilities processing associated gas. In terms of venting requirements, venting is not an acceptable alternative to flaring, and if gas volumes are sufficient to sustain stable combustion, the gas must be burned or conserved. If venting is the only feasible alternative, it must meet additional requirements – see Box 6.3.

Box 6.3. British Columbia: Regulatory requirements for venting

Chapter 7: Venting and Fugitive Emissions Management Requirements

Venting is not an acceptable alternative to conservation or flaring. Venting is the least preferred option and gas should be flared under all except the most exceptional circumstances.

Venting requirements:

• All continuous and temporary venting and their sources must be evaluated using a vent evaluation decision tree

• Permit holders must burn all non-conserved volumes of gas if volumes and flow rates are sufficient to support stable combustion

• Vented gas must not constitute a safety hazard

• The quantity and duration of vented gas must be minimised

• A permit holder must have an adequate programme for managing fugitive emissions.

Source: (BC Oil & Gas Commission, 2018[9]).

Ensuring high flare efficiency ratios

Flaring refers to a process where natural gas is combusted and the methane component of the gas is destroyed, resulting in emissions of CO₂ into the atmosphere. Flare efficiency ratios represent an underappreciated methane source and mitigation opportunity. Industry and governments generally assume that the flare efficiency (the percentage of gas that is successfully burned) is around 98% and therefore that the methane released from flaring remains a marginal amount. However, recent studies have indicated that global flare efficiency ratios may be much lower than originally assumed and this may have a substantial impact on global methane emissions. Estimates2 from the IEA and academic research indicate a global average combustion efficiency of around 92% and that the incomplete combustion of gas from flares causes around 10% of total methane emissions from oil and gas operations (IEA, 2024[10]); (Plant et al., 2022[11]).

Although flares should always be lit and well maintained, this is not always the case as flares can become temporarily unlit, for example, due to strong winds, a pilot flame malfunction, or low-quality gas “snuffing” the flare (World Bank, 2024[12]). The scale of the issue of unlit flares may also be underappreciated. For example, a recent study by the Environmental Defense Fund in the Permian Basin found that 11% of flares were either unlit or malfunctioning and therefore were venting methane to the atmosphere. Furthermore, unlit flaring may continue for a longer period of time at unmanned facilities if not detected or until sufficient resources are deployed to reignite the flare (EDF, 2021[13]).

Consequently, governments should ensure that regulations set sufficiently high flare efficiency ratios and provide for the on-going monitoring of flaring to ensure compliance. For example, Nigeria’s methane guidelines specify that all flared gas shall be combusted with an auto-igniter or continuous pilot light and a design destruction removal efficiency of at least 98% for hydrocarbons (NUPRC, 2022[8]). The EU’s methane regulation stipulates that where new flare stacks are built, combustion devices with an auto-igniter or continuous pilot must have a destruction and removal design efficiency of at least 99% (European Commission, 2023[14]). Governments may also consider the use of automated monitoring systems of flare stacks, in order to avoid any operational disruptions caused by direct physical inspections.

Identifying alternatives to non-routine flaring and venting

Improvements to combustion efficiency or capturing gas that would otherwise be flared can deliver significant decarbonisation results. If the captured gas is used to displace the usage of more carbon-intensive energy (for example, coal or heavy fuel oil), the greenhouse gas impact can be even greater (CATF, 2023[15]). Consequently, regulations should specify that companies must satisfy the regulatory authority that they have investigated all reasonable alternatives to non-routine flaring and venting, before being granted permission to flare or vent associated gas for economic reasons. For example, in British Columbia, the flaring guideline sets out clear requirements for gas conservation at oil facilities processing associated gas – see Box 6.4.

Box 6.4. British Columbia: Requirements to conserve natural gas

Oil facilities processing associated gas

Gas conservation is expected at all new oil facilities. However, new oil facilities where conservation is not economic or practical may be approved by the regulator on a site-by-site basis. If the net present value (NPV) of the gas conservation project is greater than CAD 50 000, the wells should be shut in until conservation is implemented. For existing oil sites, operators should conserve associated gas where:

• Combined flaring and venting volumes are greater than 900 m³/day per site and the decision tree process and economic evaluation result in a NPV of greater than CAD 50 000

• The gas to oil ratio (GOR) is greater than 3 000 m³/m³. All wells producing with a GOR greater than 3 000 m³/m³ at any time during the life of the well should be shut-in until the gas is conserved

• Flared volumes are greater than 900 m³/day per site and the flare is within 500 m of an existing residence, regardless of economics.

Flaring and venting at natural gas facilities

Operators must conserve all gas that is economic to conserve, although there are also exceptions for safety and environmental reasons. Section 3.2 provides that operators must conserve gas at natural gas facilities where:

• Conservation economics produce a NPV greater than CAD 0

• Flared volumes are greater than 4 000 m³/day per site and the flare is within 1 000 m of an existing residence.

Source: (BC Oil & Gas Commission, 2018[9]).

Conservative measures that provide alternatives to flaring and venting may include reinjection for improved oil recovery or storage, or gas gathering, treatment and sale to downstream energy markets. However, the reinjection of associated gas for improved oil recovery may lead to increased GHG emissions due to the additional production and subsequent consumption of that oil. Regulations should also encourage greater co-ordination and collaboration between industry participants, especially where capturing gas from flares of one operator requires access to critical processing facilities and/or pipelines of another operator (CATF, 2023[15]). Indeed, the location and availability of infrastructure can be crucial to the commerciality of flare capture projects as demonstrated by the recent reduction in gas flaring in Egypt.

Egypt’s flaring intensity is two times higher than the world average. However, in recent years, Egypt has significantly reduced flaring, by an average of 6% per year over the last six and flaring volumes are now 26% below 2016 levels. Flare capture projects have contributed to lowering Egypt’s flaring intensity and are driven by the fact that 75% of flared volumes take place within 20 km of an existing gas pipeline. In other cases, operators have made use of captured gas for on-site power generation. For example:

• Construction of a new pipeline – following the discovery at the Ash oil field, the operator, United Oil and Gas, installed a 20 km pipeline to link the field with the (existing) El Salmiya gas processing facility. The field produces 5 million scf/day of associated gas, demonstrating that a moderate-length pipeline can be a commercially viable option, even for relatively small flares.

• Gas recovery for power generation – Operators Pharos Energy and Apache developed flare-to-power projects to capture and use 1 million scf/day and 3 million scf/day of associated gas respectively from their operations. In both cases, the power generated by the captured gas displaces diesel – which not only is more polluting but is in short supply in Egypt. The CATF has estimated that these projects saved up to 3 million litres of diesel per month – reducing emission and also lowering operating costs by several tens of million dollars per year (CATF, 2023[15]).

Another alternative to non-routine flaring and venting is where the government (rather than the operator) has the power to access and utilise associated gas. For example, in Nigeria, the federal government has the right to take any associated gas that would have been flared either free of cost at the flare or at a cost agreed with the operator. In addition, through the Nigerian Gas Flare Commercialisation Programme (NGFCP), the government can allocate rights to third parties to monetise associated gas at specific flaring sites through a competitive bidding process. The NGFCP was developed to tackle small flaring sites that proved more difficult to monetise – for further analysis of the NGFCP see Regulatory building block: Incentivising methane emissions abatement.

References

[9] BC Oil & Gas Commission (2018), Flaring and Venting Reduction Guideline, BC Oil & Gas Commission, https://www.bc-er.ca/node/5916/.

[15] CATF (2023), Leadership on flaring in Egypt: Recent successes and future opportunities in the lead-up to COP27, Clean Air Task Force (CATF), https://www.catf.us/resource/leadership-flaring-egypt-recent-successes-future-opportunities-lead-up-cop27/.

[13] EDF (2021), PermianMAP Final Report, Environmental Defence Fund (EDF), https://blogs.edf.org/energyexchange/wp-content/blogs.dir/38/files/2022/11/PermianMAPFinalReport.pdf.

[6] EMNRD (2021), Final Natural Gas Waste Reduction Rules, Energy, Minerals and Natural Resources Department, https://www.emnrd.nm.gov/wp-content/uploads/sites/6/OCDMethaneRuleReleaseMarch252021.pdf.

[14] European Commission (2023), Commission welcomes deal on first-ever EU law to curb methane emissions in the EU and globally, European Commission, https://ec.europa.eu/commission/presscorner/detail/en/IP_23_5776.

[3] Gordon, D. et al. (2022), Know Your Oil and Gas: Generating Climate Intelligence to Cut Petroleum Industry Emissions, Rocky Mountain Institute, https://rmi.org/insight/kyog/.

[10] IEA (2024), Global Methane Tracker 2024, International Energy Agency, Paris, https://www.iea.org/reports/global-methane-tracker-2024.

[16] IEA (2023), Gas Flaring (website), https://www.iea.org/energy-system/fossil-fuels/gas-flaring.

[2] IEA (2023), Global Methane Tracker 2023, International Energy Agency, Paris, https://www.iea.org/reports/global-methane-tracker-2023.

[5] IGSD (2023), A Primer on Cutting Methane: The Best Strategy for Slowing Warming in the Decade to 2030, Institute for Governance & Sustainable Development, https://www.igsd.org/wp-content/uploads/2022/09/IGSD-Methane-Primer_2022.pdf.

[4] International Bank for Reconstruction/The World Bank (2022), Global Flaring and Venting Regulations: A Comparative Review of Policies, World Bank Publications, https://thedocs.worldbank.org/en/doc/fd5b55e045a373821f2e67d81e2c53b1-0400072022/original/Global-Flaring-and-Venting-Regulations-A-Comparative-Review-of-Policies.pdf.

[8] NUPRC (2022), Guidelines for Management of Fugitive Methane and Greenhouse Gases Emissions in the Upstream Oil and Gas Operations in Nigeria, Nigerian Upstream Petroleum Regulatory Commission, https://www.nuprc.gov.ng/wp-content/uploads/2022/11/METHANE-GUIDELINES-FINAL-NOVEMBER-10-2022.pdf.

[1] OECD (2022), Equitable Framework and Finance for Extractive-based Countries in Transition (EFFECT), OECD Development Policy Tools, OECD Publishing, Paris, https://doi.org/10.1787/7871c0ad-en.

[7] Olczak, M., A. Piebalgs and P. Balcombe (2023), A global review of methane policies reveals that only 13% of emissions are covered with unclear effectiveness, One Earth, https://www.sciencedirect.com/science/article/pii/S2590332223001951.

[11] Plant, G. et al. (2022), Inefficient and unlit natural gas flares both emit large quantities of methane, Science, https://www.science.org/doi/10.1126/science.abq0385.

[12] World Bank (2024), Global Gas Flaring Tracker Report 2024, International Bank for Reconstruction and Development / The World Bank, https://www.worldbank.org/en/programs/gasflaringreduction/publication/2024-global-gas-flaring-tracker-report.

Notes

← 1.  Routine flaring and venting occur when oil field operators opt to burn the “associated” gas that accompanies oil production, or simply release it to the atmosphere, rather than to build the equipment and pipelines to capture it (IEA, 2023[16]).

← 2.  These estimates include both unlit flares and inefficient combustion, and are based on bottom-up assessment of production types; facility and flare design practices; operators; changes in produced volumes over field lifetime; local crosswind variability; and the strength of regulation, oversight and enforcement in flaring sites around the world.