Dwindling energy supplies and rising gas prices could soon make gas flaring unprofitable, say researchers, saving billions of dollars' worth of natural gas from going up in smoke. Historically, producers have simply burned gas found alongside oil if it was too difficult and costly to recover and sell it. In recent years, concerns about global warming have added to pressure to end the practice. But analysts say harsh economic reality is the factor that really concentrates minds. The US National Oceanic and Atmospheric Administration (NOAA) estimates that 168 billion cubic metres (bcm) of gas were flared in 2006 – equivalent to 27% of the US natural gas consumption (read NOAA's gas flaring report). NOAA says the flared gas could have fetched $69 billion if sold.

"Until you start to put real value into gas prices, you might as well flare. But now gas prices are getting to the point where it's worth collecting," says Jonathan Stern of the Oxford Institute for Energy Studies in the UK. The effect of higher prices, however, has yet to be felt. According to NOAA, gas flaring remained constant – between 150 bcm and 170 bcm – from 1995 to 2006. Satellite observations Nigeria was long thought to flare the most gas. But NOAA has analysed observations from satellites – rather than relying on figures reported by governments – and found that Russia has been flaring by far the greatest amount. In 2004, NOAA estimates Russia flared 51 bcm compared to Nigeria's 23 bcm.

Russian president Vladimir Putin asked his government earlier in 2007 to toughen rules on gas flaring, and to withdraw producers' licences if necessary. The aim is to protect the environment and save more gas for Russian industries. Nigeria also has a strategy to end gas flaring by 2008 and has been keen to promote alternatives, such as liquefied natural gas plants that can cool gas to liquid form so it can be shipped anywhere in the world.

But many doubt Nigeria will meet its targets. The country's biggest oil operator Royal Dutch Shell has said it would miss the 2008 deadline because the government had not provided funding for a joint project to install gas-gathering facilities. In any case, analysts say a certain amount of gas will always be flared because of the impracticality of getting it to customers or for safety reasons. But diminishing oil and gas supplies, and rising prices could cut that to a minimum. Export premium Daniel Simmons, gas specialist at the International Energy Agency in Paris, agrees that rising prices are significant, notably in Russia.

Gas sold within Russia fetches no more than $60 per thousand cubic metres (tcm), providing little incentive for creating the infrastructure needed to bring often isolated gas to the consumer. But export prices are more than five times that at $320 per tcm. "[Market leader] Gazprom might now look to reduce flaring as a short-term solution to increase gas supply," says Simmons. But the effect may not trickle down to smaller producers. Gazprom's monopoly over transportation, gas processing, and access to the export market, has made other firms reluctant to consider building new infrastructure. "There is not much confidence in making large investments that would have a long-term payback period," says Simmons.
(News Scientist, 17/07/2007)