The Financials Behind Flaring
/A new report from the World Bank’s Global Gas Flaring Reduction Partnership (GGFR) studied the financial decisions surrounding routine gas flaring, a leading cause of global emissions.
Flaring is one of the most financially attractive options for producers to get rid of excess gas, and regulations only do so much to curb the practice. The report focuses on medium-sized flares and deploying technologies that can recover and monetize the excess gas, rather than flaring it into the atmosphere, to make the ever-important connection between environmental and monetary benefits.
The report focused on six alternatives to flaring. The excess gas can be:
FROM WORLD BANK
Converted to power to be used on-site by the oil operator
Converted to power and sold to external off-takers
Delivered to an existing pipeline network
Delivered to a gas processing plant
Compressed and sold as compressed natural gas
Liquefied for sale as liquefied natural gas
One option discussed includes partnering with bitcoin and other cryptocurrency miners to use excess natural gas to power energy-intensive computing instead of burning it off.
The report studied the financial cost/benefit of each option, citing several barriers that keep mid-sized flares off companies’ radar as a viable financial benefit. It also discussed scaling solutions to make use more financially attractive than flaring and equity options for smart investment.
Regulations haven’t been enough incentive for companies to batten down the hatch on flaring, so this report considers what would make use attractive enough for producers. No surprise the focus came down to finances.
Download the full report here.
