-1-Global Gas Flaring ReductionPartnershipBOEMRE workshopNew Orleans30 March 2011-2-GGFR Initiative – General Context•Created in 2002 at the World Summit on Sustainable Developmentin Johannesburg•Objective:–Reduce gas flaring and GHG emissions–Avoid waste of valuable resources–Contribute to energy efficiency and climate change mitigation–Monetization of associatedgas through domestic use orexport alternatives•Means:–World Bank-led Public – Private PartnershipMission StatementGGFR is a catalyst for reducing wasteful and undesirable practices of gasflaring and venting through policy change, stakeholder facilitation andproject implementationMission StatementGGFR is a catalyst for reducing wasteful and undesirable practices of gasflaring and venting through policy change, stakeholder facilitation andproject implementation-3-GGFR PartnersCountries/(NOCs)Algeria (Sonatrach)Angola (Sonangol)Azerbaijan (SOCAR)Cameroon (SNH)EcuadorEquatorial GuineaGabonIndonesiaIraqKazakhstanKhanty Mansiysk (Russia)Mexico (Pemex)NigeriaQatar (QP)UzbekistanDonorsCanadaEUNorwayFranceUSAOil companiesBPChevronConocoPhillipsEniExxonMobilMarathon OilMaersk Oil & GasPemexShellStatoilTOTALOrganizationsThe World Bank-4-•An estimated 150 bcm ofgas is being flared & ventedglobally each year–Approx 25% of US gas consumption–$30 – 35 Billion per year loss value•Approx. 400 million tons ofcarbon dioxide into theatmosphere each year–Annual emission from 77 millioncars (1/3 of US fleet)–Output from 125 medium sized coalpower generation plants [63 GW]i.e. 2/3 of India’s coal plants•Technological and policyreform requirements aregenerally well understoodGas Flaring –Magnitude of the Issue-5-•Global Activities–Support adaptation and implementation of “VoluntaryStandard” that was developed and endorsedby GGFRPartners–Promote investment in Gas Flare Reduction projectsthrough guidance on legal,regulatory, fiscal andtechnical best practices•Country-Specific Activities–Assist Governments to gather data for development ofGas Flaring Reduction strategies–Review potential gas utilization options for EOR, smallscale power generation, LPG recovery projects etc.•Knowledge Transfer and Best PracticeDissemination Activities–Organization of country/regional workshops, Publicationof reports, High level international conference etc.•Government – operator facilitationGGFR Focus Activities-6-Global: Satellite flaring volume estimation40455055606570758085100110120130140150160170180190200 Oil production, mln b/d

Gas flared, bcmGas flaringOil production-7-•GGFR Partners have endorsed the Global VoluntaryStandard for gas flaring reduction•Global Standard provides a framework forgovernments, companies, and other key stakeholdersto consult, collaborate, expand boundaries andreduce barriers to associated gas utilizationEliminate continuous ventingNo Flaring in New projectsEliminate continuous flaring from existing production(Unless there are no feasible alternatives)Global Standard-8-International regulation of venting versus flaring•Norway (Regulated by NPD)–Law: No flaring (or venting) of assoc. gas for otherreasons than safety–In practice – No venting–CO2tax $120/1000m3($ 3.3 /Mcf) whether flared orvented–On a typical platform the regulator measures•Well streams by (intermittently) measuring gas oil and waterflow rates by well•Fuel gas consumption•Gas to flare•Diesel consumption-9-International regulation of venting versus flaring•Alberta, Canada (Regulated by ERCB)–Onshore, smaller fields–Venting not considered acceptable, if volumes are sufficient tosustain stable combustion (> 537 Btu/scf)•Regulator investigates ventedvolumes of 500 M3/day (14 mcf/d)•Venting requires justification–Routine flare and venting require metering when volumesexceed 500 m3/day (14 mcf/d)–Economic evaluation of flare reduction economics•if > 900 m3/day (25 mcf/d) is flared-10-International regulation of venting versus flaring•UK (Regulated by DECC)–Flare/vent require permit (negotiated case-by case)–Target 5% year-on-year reduction (mass of gas flared)–EU Emission Trading Scheme is main legislation controllingflaring—CO2 Emissions = Activity Data x Emission Factor x OxidationFactor (excludes venting!)–Monitoring and reporting guidelines (MRG 2007)–Tier system based on tons ofCO2/year, stricter measurementfor larger emitters–Options for monitoring flares: calculation &measurement-based technologies,–Reporting needs independent verificationActivity Data-11-International regulation of venting versus flaring•Mexico (Regulated by CNH)–Aim is gas conservation and utilization–Establishes an annual decreasing limit forflaring/venting•Based on flare/vent rate of last3 years (-20% until flare/vent < 2%)•Flaring/venting achieved in one site could be accounted in otherasset (currently 11)–Venting is not allowed nor an alternative to flaring–New fields need to present an economic analysis forgas conservation/utilization–Regulatory permitting process for existing fields andnew developments-12-GGFR Guidelines on Flare and Vent MeasurementRecommendations for measuringflare and vent volumesAudience: oil companies, regulatorsand carbon offsetting projectdevelopersAim: Improve reliability,completeness and accuracy of dataBasis: accurate measuring of flarevent volumes is critical for effective,consistent and fair enforcement offlaring/venting regulations-13-Guidelines on Flare and Vent MeasurementOverall conclusions•Each options for measurement of flare/vent gas volumes,metering or estimation has positive and negative aspects•Selection of the most appropriate method will usually depend on:the accuracy requiredthe volume of flared gas to be measured and the degree of variabilitythe liquid content of the gasavailability of a specific meter type and the required support(calibration facilities, maintenance,...)-14-Sample table: Characteristics of flow meters for flare/ gas volume measurementGuidelines on Flare and Vent MeasurementEconomic-15-Emissions from venting and flaringVolume (scf/yr)35,300,000,000Constituent Mole (Volume) %Nitrogen 0.50%Carbon Dioxide 2.00%Methane 79.00%Ethane 11.00%Propane 4.00%i-Butane 0.75%n-Butane 0.75%i-Pentane 0.50%n-Pentane 0.50%Hexanes + 1.00%Heptanes + 0.00%Octanes + 0.00%H2S 0.00%Water 0.00%Oxygen 0.00%Total100.00%Global WarmingPotential *FlaretCO2Vent(tCO2)GWPFactorGWP timehorizon(years)25 2,627,161 13,380,075 5 10072 2,627,161 38,961,319 15 20Emission of CO2e of flare vs vent(for 1 bcm of natural gas)GWP is based on a number of factors, including the radiative efficiencyinfrared-absorbing ability) ofeach gas relative to that of carbon dioxide, aswell as the decay rate of each gas (the amountremoved from the atmosphere over a given numberof years) relative to that of carbon dioxideSource: IPCC guidelines-16-GGFR’s Vision is...Thank you for your attention!www.worldbank.org/ggfr-17-Back Up-18-Mexico – Regulatory process for existing operations-19-Mexico – Regulatory process for new projects