Oil extraction is neither a clean nor simple process. Alongside the desired crude, vast quantities of water and natural gas are produced from oil wells.

In 2019, 75% of the 935 billion cubic metres (bcm) of gas emitted – so-called ‘associated gas’ – was captured on-site, estimates the International Energy Agency (IEA). It was then either used to power the extraction site, reinjected into the well or stored and later sold to consumers.

Gas flares burn from pipes at an oil extraction site in Nigeria. (Photo by George Osodi/Bloomberg via Getty Images)

Of the remaining 25%, the IEA estimates around a quarter, or 55bcm, was released as natural gas, which is primarily composed of methane, directly to the atmosphere, in a process known as ‘venting’. Gas venting during oil production is equivalent to around 3% of global natural gas production. It is under increasing scrutiny because methane is 84 times more potent a greenhouse gas as CO2 over a 20-year period.

The remaining 150bcm of associated gas is burnt, says the IEA, in a process known as ‘flaring’. This volume of natural gas is equivalent to the combined total of natural gas imported by Japan and Korea in 2019, while the 300 million tonnes of CO2 (MtCO2) emitted when the gas is burnt equals the annual emissions of Italy.

Some 3.9% of global greenhouse gas emissions every year come from oil and gas production, says the World Resources Institute. And “a significant share of that” – around 35% – comes from flaring, says Magnus Kjemphol Lohne from the Norwegian consultancy Rystad Energy.

Flares can also not be completely effective, with methane often leaking out alongside that which is being burnt. The IEA estimates that around 5bcm of the 55bcm of methane vented during oil production in 2019 was because of leaky flares.

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As long as oil and gas extraction continues, some emergency flaring is probably necessary for safety reasons. “Gas stored in vessels can go through huge pressure swings, which can create a flash gas that needs to escape the tank,” explains Sarah Smith from NGO the Clean Air Task Force (CATF). “Having a flare there is the best option we currently have. Flaring is cleaner than just venting.”

Most flaring is ‘routine flaring’, however, or flaring that is avoidable. In 2019, this was responsible for 77% of flaring emissions, estimates Rystad Energy. “The huge range in flaring intensity across different countries speaks to how solvable the problem is,” says John-Henry Charles, lead of FlareIntel, a satellite-aided flare tracking group.

Data from FlareIntel shows Venezuela and Cameroon produced oil with a flaring intensity of 44.6bcm and 36.9bcm per barrel, respectively – but that countries like Canada, Saudi Arabia and Norway, which has banned non-emergency flaring since 1972, recorded only negligible flaring per barrel.

Four years to turn flaring around

Some argue that, given flaring represents only a fraction of the scope 1, 2 and 3 emissions produced by a barrel of oil, it should not be the number one priority for getting on track to net zero.

“The burning of oil remains the main problem,” says Asbjørn Torvanger at the Norway-based Center for International Climate Research, a think tank. The IEA estimates oil production accounts for 10–30% of the full “well-to-wheel” emissions of crude oil.

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However, given that global emissions continue to rise, and the technology to avoid flaring and venting already exists, most analysts suggest it should be an immediate policy priority.

The IEA estimates the oil and gas sector could cut methane emissions by 75% using current technologies, with up to two-thirds of that at no net cost. Jules Kortenhorst, chief executive of the think tank RMI, describes associated gas cuts as ‘low-hanging fruit’.

The IEA’s Sustainable Development Scenario (SDS), which the agency believes would lead to a 50% chance of limiting global warming to 1.65°C, assumes flaring falls to less than 10% of current levels by 2025.

In stark contrast to this trajectory, flaring has consistently hovered around 150bcm since 2015, with only a slight dip recorded in 2020. Making matters worse, the average global flaring intensity per barrel is the highest it has been in five years, crossing the 5m3/bbl (cubic metres per barrel) threshold in 2020.

“The contrast is very stark: flaring [reductions] basically flatlined between 2015 and 2020,” says FlareIntel’s Charles, “but the Sustainable Development Scenario requires a 90% reduction by 2025. The scale of this reduction would be gargantuan.”

Improving national performance

Data from the World Bank shows that Russia, Iraq, Iran, the US, Algeria, Venezuela and Nigeria have been the largest flaring culprits for nine years running, since the first flare-monitoring satellite was launched in 2012. Together, they produce 40% of the world’s oil each year, but account for 65% of global flaring.

The US is an outlier in this list of low or middle-income countries. Much of this is down to big differences in regulation across different states: California has banned both flaring and venting since 1939, while six other states, including Ohio, Arkansas, Illinois and Indiana, explicitly allow it.

States like North Dakota and Texas, which have seen a rapid development of fracking in recent years, have also seen significant increases of associated gas production, notes the latest flaring report from the US Department of Energy. An August study from environmental NGO Earthworks found that 69–84% of oil and gas flaring in Texas is currently unpermitted.

US President Joe Biden and congressional Democrats have made it a policy priority to tackle flaring and venting, with Congress voting to reinstate Obama-era methane regulations in June. However, there remain challenges to cleaning up the oil industry.

“In the US, ownership of the gas is usually separate from ownership of the infrastructure to carry the gas away – if that infrastructure even exists,” says Earthworks’ Lauren Pagel. Capturing the gas would likely involve new contracts and expenses, while “flaring is ‘free’,” she says.

Pagel adds that the current Congress and legislatures in oil and gas-producing states means it remains “not politically possible in the near term” to end flaring, despite the environmental advantages.

European countries tend to produce oil with far less associated gas. Yet the World Bank’s 2021 Global Gas Flaring Tracker suggests European importers cannot be absolved of responsibility for flaring, given the enormous amounts of oil they import from countries where flaring and venting is rampant. The analysis suggests Switzerland imports the most flaring-intensive oil.

Nevertheless, hope remains. In the US, flaring is currently on a steep downward trajectory, falling by 32% between 2019 and 2020, says the World Bank. Nigeria and the Khanty-Mansiysk Autonomous Okrug (KMAO), a major oil-producing region of central Russia, have also recorded significant progress. Over 15 years, Nigeria reduced its flaring by 70% to 7bcm in 2020, while the KMAO reduced volumes by 80% over the same period to 4bcm.

Flaring is sometimes excused with the argument that oil extraction occurs far from existing gas infrastructure. However, data from FlareIntel analysed by the IEA shows 54% of all flaring in 2019 was at sites less than 20km from natural gas pipelines. This suggests there is significant scope for adapting infrastructure to avoid flaring.

Building a business case for flare gas

FlareIntel's sister company, Capterio, works to help energy companies capture and sell gas that would otherwise have been flared. According to Charles, they currently have 15 projects in the pipeline with a collective value of $500m.

Establishing new oil and gas businesses may raise alarm bells in some quarters, given that the sector will have to rapidly decline if the world is to meet net zero.

“More economic investment in fossil fuels means a larger political constituency for their continued use,” says Earthworks’ Pagel. “We should be transitioning to a renewables-based economy, not investing in dirty fossil fuels that will hopefully soon be a thing of the past.”

However, Zubin Bamji, Program Manager of the World Bank’s Energy & Extractives Global Practice, says he “welcome[s] any effort to help facilitate and accelerate decarbonising the sector”. The IEA’s Net Zero 2050 roadmap anticipates that oil and gas production will never fall to zero. Given this reality, it is “vital that the oil and gas sector decarbonises production”, Bamji says.

Charles says Capterio is “unequivocally” aligned with net zero and the Paris Agreement. For many oil nations, finding ways of cleaning up production will be critical to sustain economic growth and transition to a low-carbon economy.

Capterio argues that flare capture projects make sound ESG investments, given their potential to lower emissions and generate additional revenue. The World Bank says routine flaring “represents a lost opportunity to provide hundreds of millions of people with an energy source”. An estimated 620 million people could still lack access to energy in 2030, a significant market that companies harnessing wasted natural gas may be able to target, it says in its most recent flaring report.

Capterio’s core targets are countries in the Middle East and North Africa like Algeria, Egypt and Libya, says Charles, but he adds that there remain systemic issues – around policy, risk, capital constraints, skills – that make investment in certain markets tricky.

However, even if certain markets remain hard to penetrate, insiders are optimistic the tide could soon turn on the unabated flaring of associated gas.

“I hope COP26 can provide a forcing mechanism to really begin to make progress on flaring,” says Charles. “It will also help countries to reduce flaring now if they want to keep trading with places like the EU, which will likely soon adopt carbon border adjustment mechanisms.”

The World Bank’s Bamji adds that associated gas is often still flared “just because it has not been prioritised or given any attention, even when economic utilisation options exist". He believes this could end “quickly” as awareness of the climate impacts from flaring increases and pressure grows to end the practice.