The oil and gas industry has been under increased scrutiny in recent years for its flaring of associated gases produced during crude oil extraction. While global flaring volumes have steadily declined, the top five gas-flaring countries (Russia, Iran, Iraq, Algeria, and Venezuela) have seen little change in their flaring levels. The industry is collaborating with technology and equipment providers to explore alternative solutions for managing stranded gases, says GlobalData, a leading data and analytics company.

GlobalData’s thematic report, “Gas Flaring,” reveals that efforts to monetize stranded gases are ramping up, especially in countries, such as the US, the UK, and Norway. Despite the overall decline in global flaring volumes, the top gas-flaring nations continue to emit large quantities. Most of these countries have struggled to join the global trend of reduced flaring due to their economic reliance on oil exports and limited access to mitigation technologies. The report also reviews the involvement of industry leaders, such as, BP, Chevron, ExxonMobil, Saudi Aramco, Shell, and TotalEnergies, in curtailing gas flaring.

Ravindra Puranik, Oil and Gas Analyst at GlobalData, comments: “Gas flaring activity has been long associated with crude oil production. As crude oil became the backbone of the world economy, gas flaring became more common. Eventually, people started recognizing the environmental ill effects and associated monetary losses caused by gas flaring. This resulted in global efforts to monitor and mitigate the gas flaring activity.”

The World Bank leads the global effort to reduce gas flaring through regular emission monitoring and supports industry participants to curb this activity. Oil companies as well as several national governments are signatories to its Zero Routine Flaring by 2030 initiative. The collaborations among investors, governments, and oil companies have resulted in a downward trend of global gas flaring by volume.

Although gas flaring prevents the direct release of methane into the atmosphere (venting), it still leads to the generation of carbon dioxide in significant volumes. Environmentally conscious investors are putting pressure on oil and gas companies to mitigate flaring and venting activities. One such investor is the World Bank, which is actively supporting emission reduction through its ongoing initiative.

Puranik concludes: “The Paris Agreement of 2015 has bolstered efforts to reduce global flaring. New regulations have been introduced in countries such as the US and some countries in the Middle East, which have helped reduce flaring volumes. Even when the oil demand bounced back in 2022 and the world economy began to gather pace, flaring volumes were relatively low compared to the pre-pandemic levels. This trend is expected to hold for the foreseeable future, through global cooperation.”

Source: Globaldata