Global Gas Flaring Could Cost $82B Per Year
Oil producing countries could lose more than $80 billion dollars a year due to global gas flaring.
That’s according to GlobalData, whose recent report outlines that countries could make up to $82 billion per annum if they utilized this gas instead of flaring it. The company noted that many countries persist with the activity, even though technological solutions exist to avoid gas flaring. This includes developed countries such as the United States and Russia, GlobalData highlighted.
Besides lost revenue, it’s also an environmental issue as gas flaring is one of the major contributors to CO2 emissions, GlobalData outlined.
“It would do many countries, especially in Europe and Asia where natural gas prices are setting all-time records, a lot of good if oil and gas operators found the strategy to sell this gas rather than lose it - not only for the money but for meeting their CO2 targets too,” Anna Belova, a senior oil and gas analyst at GlobalData, said in a company statement, which was sent to Rigzone.
“The top 12 gas flaring countries flared almost 13 billion cubic feet of gas per day. To put that into context, that amount of gas could easily keep the whole of Japan well supplied for a year. All of that power has simply gone to waste,” Belova added in the statement.
Reducing global gas flaring will require a multi-prong approach due to unique regional drivers that prioritize flaring over monetization of gas, Belova noted.
“Small-scale modular technologies, aimed at converting gas into liquids or chemicals, represent a logical choice for remote and distributed flaring sites,” Belova said.
“Alternatively, multiple sites by different operators can be combined with large-scale midstream and downstream components - provided enough flaring density. This approach was pioneered by Saudi Aramco and has now been applied in Texas, with LNG-based monetization of gas, and Russia, with natural gas used as feedstock for petrochemicals,” the GlobalData analyst continued.
“Given that technological solutions exist at multiple scales, regulatory and investor pressures are needed to drive investments, supported by voluntary environmental, social and governance (ESG) commitments by operators to end routine flaring of gas globally,” Belova went on to say.
In its report, GlobalData revealed that the top 10 flaring countries, by volume from 2010 to 2020, comprise Iran, Venezuela, Russia, the United States, Iraq, Nigeria, Indonesia, Malaysia, Mexico and Angola.
Gas flaring involves excess natural gas being burnt or flared off during an oil and gas operation, the report highlights, adding that the process takes place across the oil and gas value chain but is predominant in the upstream sector. The report notes that it has often been an easier recourse than harnessing the excess gas but adds that, lately, there has been a conscious effort from industry leaders to minimize this activity by setting up a gas recovery system, or even channeling the gas to produce alternate revenue streams.
GlobalData describes itself as a leading data and analytics company. The business, which is headquartered in London, focuses on several sectors, including oil and gas, power, mining, pharma and financial services, its website shows.
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