Gas Flaring: Transforming Emissions into Power

What is Gas Flaring?  

Gas flaring has been a customary practice since the inception of oil production over 160 years ago. When oil is produced, it comes to the surface with methane and other gases. Flaring is the process of burning excess natural gas at the well using a flare to ignite the methane and other components in the gas, which can result in methane and other greenhouse gas emissions. Gas is also flared when a small amount of gas comes to the surface and needs to be quickly released during drilling or well unloading operations. Because it is a relatively safe method, flaring remains a prevalent means to dispose of the excess gas created by oil production. 

Producers implement flaring practices for several purposes, including operational logistics (e.g., a lack of necessary pipeline infrastructure); safety concerns (e.g., a sudden or dramatic increase in pressure); economic viability (e.g., an unprofitably small volume of natural gas); and regulatory barriers (e.g., a legal ambiguity within a jurisdiction). However, this practice considerably increases greenhouse gas emissions and wastes valuable natural resources. Rather, producers can capitalize on these natural resources through capture and storage operations or – as discussed here – by converting these gases into usable or marketable energy.

Environmental Impact of Gas Flaring 

Last year, approximately 139 billion cubic meters of production-related gas was flared worldwide, a decrease from 144 billion cubic meters in 2021. Still, enough gas was flared worldwide to generate approximately 1,800 Terawatt hours of energy, almost two-thirds of the European Union’s net domestic electricity generation and enough to power sub-Saharan Africa. Each cubic meter of flared gas results in about 2.8 kilograms of CO2-equivalent emissions, and at current levels, global flaring is estimated to result in over 350 million tons of CO2-equivalent emissions annually.

According to the Intergovernmental Panel on Climate Change, methane is over 80 times more powerful than carbon dioxide as a warming gas over a 20-year timeframe. However, while methane is stronger than carbon dioxide in its ability to trap heat, its lifetime in the atmosphere is shorter because it breaks down quicker. Due to its stronger greenhouse effect yet shorter atmospheric lifetime, the mitigation of methane emissions is a unique opportunity to slow the pace of climate change. As methane emissions decrease, its concentrations in the atmosphere should quickly follow, slowing the rate of climate change. 

In 2015, the World Bank and the UN Secretary-General launched the “Zero Routine Flaring by 2030” Initiative (“ZRF”), which strives to end routine gas flaring in new oil field development and to cease existing routine flaring as soon as possible and no later than 2030. ZRF involves voluntary commitments from oil companies and governments to annually report their flaring and progress towards the ZRF end-goal. Accordingly, many operators are making the investments necessary to reduce flaring, and producers currently endorsing the Initiative constitute approximately 60 percent of total global gas flaring. 

Creating Value from Waste 

Oil producers can improve efficiency and reduce flare gas by harnessing energy to generate power instead of releasing it as waste, ultimately reducing carbon emissions. This type of power is considered carbon neutral because energy is harnessed while carbon emissions stay the same. By implementing new or alternative methods to reduce gas flaring and its associated greenhouse gas emissions, producers can simultaneously derive financial benefits from the conserved flare gas. Producers can create new, or increase existing, external profit streams by converting these excess gases into a marketable energy product. In the alternative, producers can improve internal cost efficiency by harnessing this energy via on-site power generation. 

Producers have several options to best commercialize or harness flare gas. Though these methods may not be inexpensively implemented or widely available now, the potential cost savings and unrealized revenues currently being wasted by gas flaring are not insignificant either – not to mention the cost and impact of associated emissions. Below you will find a paraphrased list of Flaring Reduction Technologies provided by the Department of Energy: 

1. Compressing natural gas and trucking it short distances for use as a fuel; 
2. Extracting natural gas liquids from the pre-flare gas stream; 
3. Small-scale, gas-to-methanol or gas-to-liquids conversion plants; 
4. Converting natural gas to electric power using small-scale generators; 
5. Utilizing gas that would otherwise be flared for beneficial use within the field; and 
6. Converting captured gas to liquefied natural gas and trucking it short distances for use as a fuel. 

In conjunction with these available technologies, industry practitioners and government scientists are actively researching and developing supporting technologies. This R&D has focused on two areas to make gas flare reduction technology widely available and commercially feasible: (1) multi-functional catalysts and (2) modular equipment design concepts. The implementation of these available and developing technologies at economies of scale will be paramount to gas flare reduction. 

Evolving Technologies as a Path Forward 

Recent developments with cryptocurrency mining provides an apt example of efficiently utilizing the energy of gas flaring. Crypto mining requires a massive amount of energy to power arrays of computers which complete extremely complex calculations as part of the daily cryptocurrency trade. To fuel these energy-intensive processes, some crypto miners have partnered with oil producers to seize upon the opportunity presented by flared gas. Flare gas recovery systems capture the gas, convert it into electricity, and redirect it to the mining facilities.  

Not only does this process provide a carbon-neutral power source for crypto miners, but it also commercializes an otherwise wasted natural resource for producers and lowers their greenhouse gas emissions. Moreover, in Texas, these miners can dynamically adjust their load participation to help balance power grids, allowing for an adequate supply during natural disasters. While perhaps a somewhat niche and limited example, cryptocurrency may provide a blueprint for other evolving, or currently nonexistent, technologies with large power demands. Furthermore, this application illustrates how producers can turn the gas flaring problem into a value-creating solution. 

As the demands for emissions reductions amplify ever louder, the days of gas flaring are waning. Fortunately, with emerging power generation and commercialization technologies continuing to develop, producers have an opportunity to benefit from utilizing this historically wasted resource as an energy source, while simultaneously reducing their greenhouse gas emissions. Kuiper Law Firm, PLLC specializes in oil and gas law; if you have any questions about the information in this article, do not hesitate to contact us.