Money to Burn? GE is Putting Wasted Flare Gas to Work

Imagine checking your tires regularly to maintain proper inflation, getting your car tuned up as needed to keep it running efficiently, when all the while you had a great big hole in your gas tank that let 5% of every tank go leaking out along the road. I expect that if you were that person, you would want to get that hole plugged (or the tank replaced) as soon as possible. But you might be surprised to learn that a number of oil companies don’t think like you do, especially when it comes to natural gas.

A 2007 study undertaken by the NOAA in conjunction with the World Bank, found that $40 billion worth of natural gas, roughly 5.5% of the world’s production, was being flared off, which is to say burned up as it exits hundred of huge pipes sticking out of the ground like giant torches. The study was funded by an effort to reduce flaring, which apparently is like a bad habit that is difficult to shake, particularly in countries like Russia and Nigeria, Iran and Iraq.

Why do oil companies do this? Natural gas is often an unintended by-product of oil drilling, which companies do not feel it is worthwhile to capture. In some cases, gas is released when pressure builds up in the system to a degree that could damage the equipment, so gas is released through a pressure relief valve where it is ignited as it exits. This results in lost gas, wasted heat and significant CO2 emissions. Oil production operations that flare off gas have a much higher carbon footprint than those that capture it. The greenhouse gas effect would be even worse, however, if the gas was released without being burned since methane is twenty times more potent as carbon dioxide.

There are gas capture systems that could be used, but they are expensive and oil companies have been slow to implement them. You would think they had money to burn!

But all this could be about to change, not because of new legislation. General Electric just announced a campaign to cut gas flaring which worldwide now represents 23% of the US annual consumption of natural gas. This amount of flaring produces some 400 million metric tons of CO2 annually, the equivalent of 77 million cars, or roughly one-third of all the cars in America.

“Alternatives to flaring,” says Bent Svensson, manager of the World Bank's program to reduce gas flaring,  “include re-injecting natural gas to increase oil production, liquefying it for international shipment, piping it to markets, using it on-site for electricity generation, or distributing it for use in nearby communities.” The video below describes efforts in Canada and elsewhere to collect gas.

According to GE, roughly half of the $40 billion worth of wasted gas could be used to generate electricity. The company  recently announced a project at the world’s largest liquefied natural gas facility in Qatar in which gas that was previously boiled off  during the loading of carrier ships will now be captured, compressed and stored using GE equipment.

Better technology is now becoming available and oil producers are well-advised to take heed.  According to Michael Farina, a program manager at GE Energy, if Russia could capture half its flared gas and sell it at domestic market prices, it would be worth an extra $2bn a year.

A country like Nigeria, which has made recent progress in cutting gas flaring, still has a tremendous opportunity to offset the $13 billion that they  currently spend on diesel fuel for electric generation by burning the flare gas that is now being wasted instead.

RP Siegel is the co-author of the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water.  Like airplanes, we all leave behind a vapor trail. And though we can easily see others’, we rarely see our own.

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