The Role of Payments for Emissions of Pollutants From Associated Petroleum Gas Flaring as a Tool for Regulating the Rational Use of Natural Resources in the Oil-Producing Regions of the Russian Federation
Authors:   Tomsk State University (Tomsk, Russian Federation), Makarova Irina A. 
Published: February 2021

For a long time, Russia was the leader in associated petroleum gas (APG) flaring. This led to the destruction of useful raw materials and environmental pollution. Due to the tightening of the state policy in the field of the APG rational use and the introduction of fees for APG flaring in 2012, oil producing companies had an incentive to use APG efficiently. In addition, the level of air pollution began to decline. The budgets of the constituent entities of the Russian Federation in the oil-producing regions began to receive significant revenues. Some experts expected that the APG efficiency target would be achieved in 2014 or 2016. Unfortunately, some oil producers were unable to achieve the target. Moreover, at present, there is a reduction in payments for APG flaring in many regions. This causes concern for certain market participants. The object of this research is the impact of APG flaring fees on the level of rational APG use and on incomes of the oil-producing regions. The aim of the work is to study the role of these payments as a tool for regulating the rational use of APG. The analysis shows that the introduction of fees for emissions of pollutants generated by APG flaring plays an important role in ensuring the sustainable development of the regions. Firstly, this fee helps to improve the environmental situation in the region because the volume of gas flared has decreased significantly. Secondly, the application of fees for APG flaring contributes to an increase in the level of energy efficiency, the development and implementation of innovative technologies. Thirdly, the increase in APG deep processing makes it possible to obtain products required in the domestic industry. This improves the efficiency of the oil sector and accelerates import substitution. Fourthly, payments for emissions of pollutants generated during APG flaring form additional funds that can be spent on the development of the region. Fifthly, all oil-producing regions can be divided into two groups. The first group is a group that has practically reached or is very close to reaching the established limits for APG flaring. The second group of regions is a group for which reaching this target is still a difficult task. Experts point out the following reasons that prevent some oil-producing companies from achieving targets for APG flaring: (1) commissioning of new fields, which are characterized by an insufficient level of infrastructure development required for APG utilization; (2) closure of gas processing plants for repair work, which forces some companies to temporarily flare APG; (3) establishment of new benefits and exemptions; (4) geographic fragmentation of fields and limited reserves, which does not allow making the project for the rational use of APG profitable; (5) remoteness of some gas pipelines from the main oil-producing regions, difficult access to the gas transportation system.