New data on worldwide gas flaring from upstream operations has been released, and the numbers are not pretty.

Flaring is again on the rise, contrary to industry and government commitments to clamp down on the practice. Even the UK appears to be moving in the wrong direction, although data inconsistencies cast doubt on this assertion.

Total global gas flare volumes rose to an estimated 148 billion cubic meters in 2023, a year-on-year increase of 9 Bcm (+7%), taking the world back to levels last seen in 2019, the World Bank said.

Gas flaring is a global problem, but it is geographically concentrated: just nine countries account for 75% of all gas flaring. These countries â€“ Russia, Iran, Iraq, the United States, Venezuela, Algeria, Libya, Nigeria and Mexico â€“ account for 46% of total global oil production.

Three of the four worst culprits flared more gas in 2023 than 2022: Russia (+2.9 Bcm), Iran (+3.2 Bcm) and the United States (+1.7 Bcm). These increases alone more than erased improvements observed in all other countries combined.

*Chart by the World Bank. Source: Global Gas Flaring Tracker Report*

â€œThe increase in flaring in 2023 more than reverses the reduction in gas flaring observed between 2021 and 2022, resulting in the highest volume recorded in the past five years and an increase in global average flaring intensity,â€ the World Bank said in its Global Gas Flaring Tracker Report.

On a global basis, the 7% increase in gas flaring occurred even as underlying oil production rose by only 1%, implying a 5% increase in the amount of gas flared per barrel of oil produced.

â€œThis indicates that the efforts made to date have not been sufficient or sustainable enough to address gas flaring,â€ the report added.

Immensely wasteful

Gas is flared for a variety of reasons: worker safety, well pressure management, or due to a lack of alternative uses for the gas. The latter â€“ routine flaring â€“ should be the easiest to tackle.

Routine flaring occurs primarily due to a lack of gas export infrastructure in the vicinity of oil wells. In such situations, gas brought to the surface with oil â€“ known as associated gas â€“ is of zero value at the wellhead and is deemed a liability, so is flared off out of convenience.

In the absence of regulatory penalties, routine flaring is invariably the cheapest solution for disposing of this waste gas. Conventional wisdom holds that fines must be higher than the cost of mitigation solutions, otherwise the economic incentive to operators is to flare the gas rather than capture it.

*Chart by flare capture specialist Capterio*

However, this calculus fails to take into consideration the economic value of the gas itself. It might be a liability when stranded at the wellhead, but if gathered and shipped to a demand centre (or used onsite by a remote gas-powered data centre) then it has market value.

At current global prices, the potential value of the overall amount of gas flared in 2023 could have been between $9 billion and $48 billion, depending on where it is sold, the World Bank said. The wide range is due to the large difference in US and European wholesale prices: Henry Hub trades at roughly $2 per million Btu, while Dutch TTF is currently around $11 per million Btu.

Oil over climate

Eliminating gas flaring would avert at least 381 million tonnes of carbon dioxide equivalent emissions being released into the atmosphere each year, the World Bank said. But it seems that the worst culprits for gas flaring have scant interest in this concern.

Russia, which flared more gas in 2023 than any other country by some margin, is maximising oil exports to fund its military activities in Ukraine after losing its primary export market for gas: Europe.

With westward pipeline flows along the Nord Stream and Yamal pipelines at zero, Gazprom already has a domestic glut of gas and is now haemorrhaging cash. These two factors combined diminish the motivation to invest in infrastructure to capture associated gas at Russian oil wells.

Russian gas flaring soared by 2.9 Bcm (+11%) in 2023 despite a 2% decrease in oil production, resulting in a 13% surge in flaring intensity to 7.7 cubic metres per barrel in 2023. This was â€œthe highest number recorded since the World Bank began systematically tracking satellite based estimates of flaring in 2012â€.

Flaring rose across each of the main oil-producing regions in Russia, suggesting systemwide rather than isolated issues. The World Bank said it is â€œlikelyâ€ that there has been â€œa deterioration in the condition of oil and gas facilities caused by the limited availability of equipment, which is in part a consequence of supply chain disruptions due to the ongoing invasion of Ukraineâ€.

It stopped short of suggesting that US and European sanctions against Russia, which prevent transfer of Western technology to Russian energy companies, might have exacerbated the deterioration.

*A gas flare at an offshore production platform. Credit: Shutterstock*

Measuring UK flaring

The UK accounts for only a tiny fraction of global gas flaring, and flared volumes have fallen precipitously since 2017. However, it is still one of the top 30 gas flaring countries by total flared volume. Satellite data indicate UK flaring rose strongly last year, but this is at odds with data from operators.

World Bank data suggest that total UK flared volumes rose from 579 million cubic metres (MMcm) in 2022 to 668.1 MMcm in 2023 â€“ a sharp increase of 15%. If true, this would be the first increase in UK flaring volumes since 2017.

North Sea flaring rose against a backdrop of an 11.6% decrease in oil production. This implies a one-third increase in the UKâ€™s flaring intensity to 2.8 cubic metres per barrel in 2023, compared to 2.1 cm/barrel in 2022 (although still well below the 4.1 cm/barrel flared in 2017).

Separately, the Energy Instituteâ€™s latest Statistical Review of World Energy shows that UK emissions from flaring also rose by 12% last year â€“ above both the European and global averages (+7.6% and +7%, respectively). This would be the first increase in UK flaring emissions since 2016.

UK data anomaly

However, there is some doubt around the robustness of the EI and World Bank flaring data because it differs from that disclosed by UK North Sea operators.

Preliminary data available on the North Sea Transition Authorityâ€™s petroleum production reporting system (PPRS) indicate that UK gas flaring continued to decrease in 2023.

Data extracted from the PPRS portal by E-FWD show that North Sea operators flared 597 MMcm of gas in 2023, down 5% compared to the previous year, when 631 MMcm of gas was flared.

The World Bank reported a 32% decrease in volume in 2022, and EI reported a 33% decrease. The NSTA reported only an 11% decrease that year, so it is possible that the 2023 data is over-compensating for prior year anomalies.

Room for improvement

In any case, two major trends stand out: the first is that UK gas flaring has fallen precipitously in recent years, with the NSTA reporting a 48% drop between 2018 and 2022.

The second is that UK oil and gas is still much more carbon intensive than neighbouring Norway, which reduced its total flare volume to 126 MMcm in 2023 even as oil production rose. Thatâ€™s a reduction of 6% in gas flaring, achieved against a 6.1% increase in oil production. The gas flare intensity of Norwegian oil is just 0.2 cubic metres per barrel, making it 14 times cleaner than UK oil on this metric.

The UK regulator is tightening the screw on operators to push them towards the North Sea Transition Deal target of zero routine flaring and venting by 2030.

In support of that, the NSTA published an updated emissions reduction plan in March requiring operators to categorise disclosed flare volumes into three categories: routine (category A), non-routine (B), and emergency (C). Assets with Category A flaring will be named and shamed on an annual basis, and operators must have fully fund plans to deliver continuous improvements in flaring and venting.

The NSTA has issued a handful of fines to operators for breaching limits set in flaring and venting permits. The most recent was a fine of Â£225,000 charged to Perenco UK for venting 59 tonnes of gas for over a month from an onshore processing plant without consent.

This was the largest fine ever issued by the NSTA. The previous record, a Â£160,000 fine levied against Repsol, was largely seen as too small to incentivise a change in operator behaviour.

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