The global oil and gas industry is making insufficient progress towards its 2030 commitments to reduce methane emissions and eliminate routine flaring. Data from the World Bank's Global Gas Flaring Tracker reveals that flaring volumes reached their highest level since 2007 last year, with flaring intensity per barrel of oil remaining largely unchanged for 15 years. This stagnation persists despite major initiatives like the World Bank’s Zero Routine Flaring by 2030 and the Oil and Gas Climate Initiative's target for zero routine flaring and near-zero methane emissions. Beyond the environmental imperative, addressing this issue represents a significant commercial opportunity, with the potential to capture and use wasted gas estimated to be worth $48 billion.

A Multifaceted Challenge

Addressing methane and flaring is a complex challenge that requires more than just technical solutions. The situation varies significantly between countries, producing basins, and companies. Successfully cracking the issue demands a combination of technical excellence, sound commercial arrangements, and effective regulation. The challenge is partly one of continuous operational improvement, or "tuning the engine," by making small, cumulative improvements. However, in complex regions like Iraq or Nigeria, this alone is insufficient and requires smart, long-term commercial investments to make a substantial difference.

Industry Tools and Frameworks

The International Association of Oil & Gas Producers (IOGP) is providing resources to help operators tackle emissions. Its publicly available methane quantification tool, which is being expanded to cover over 70 technologies, assists operators in selecting appropriate solutions based on asset type, climate, and operational context. Furthermore, the IOGP’s Methane and Flaring Framework and Oil and Gas Decarbonisation Charter aim to guide operators at different decarbonisation stages by assessing best practices and demonstrating what is possible. A key component of the Charter is the expectation and facilitation of knowledge transfer, elevating one member's best practice to an industry-recommended practice.

Varying Progress and Long-Term Investment

The current state of progress among producers is diverse, with some countries and companies performing well while others lag. A prime example of successful, large-scale investment is the Shell and Mitsubishi joint venture, Basrah Gas Company in Iraq. Since 2013, the venture has increased gas recovery to 950 million standard cubic feet per day by capturing associated gas from three oilfields that was previously flared. This success story highlights the significant opportunity, but also underscores the complexity and long timescales involved, as the project took over a decade to plan and develop.

The Critical Role of Regulation

Technical and commercial solutions can be undermined by an insufficient, ill-defined, or impractical regulatory framework. The European Union’s 2024 regulation on methane emissions reduction was cited as a potential example of counterproductive regulation, with concerns raised about impractical detection thresholds and complex import certification rules. There is a perception that some legislation may be making Europe a difficult place to work in oil and gas. Despite these challenges and the fast-approaching 2030 deadlines, progress is still considered achievable, provided that investments already in flight are seen through and the industry remains committed to the course.

This material is an AI-assisted summary based on publicly available sources and may contain inaccuracies. For the original and full details, please refer to the source link. Based on materials by Davide Ghilotti. All rights to the original text and images remain with their respective rights holders.