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International Practices in Policy and Regulation of Flaring and Venting in Upstream Operations Lessons from International Experience GGFR SCM Workshop Washington, DC December , 2011 Anastasiya Rozhkova

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Page 1: International Practices in Policy and Regulation of ...siteresources.worldbank.org/INTGGFR/Resources/578035-11642154156… · International Practices in Policy and Regulation of Flaring

International Practices in Policy and

Regulation of Flaring and Venting in

Upstream Operations

Lessons from International Experience

GGFR SCM Workshop

Washington, DC

December , 2011

Anastasiya Rozhkova

Page 2: International Practices in Policy and Regulation of ...siteresources.worldbank.org/INTGGFR/Resources/578035-11642154156… · International Practices in Policy and Regulation of Flaring

Sources

• “International Practices in Flaring and Venting Policy and Regulation and their Adaption for Indonesia”, 2011 GGFR Study requested by DG MIGAS of Indonesia (2011 Regulatory Study)

• “Regulation of Associated Gas Flaring and Venting: Global Overview and Lessons from International Experience”, GGFR Report No. 3, April 2004, www.worldbank.org\ggfr

• “GGFR Voluntary Standard for Global Gas Flaring and Venting Reduction” , www.worldbank.org\ggfr

• Regulatory workshops in Alberta, Canada and a workshop in Russia with participation of regulators from Norway and Alberta, www.worldbank.org\ggfr

• GGFR regulatory assistance in Indonesia, Kazakhstan, Mexico, Qatar

2

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2011 Regulatory Study: Objectives & Output

• PART 1 of the Report

• Workshop

Review, analyze & summarize variety of flaring & venting policies & regulations adopted by a selection of oil producing countries (7 country case studies)

Extract key lessons learned & outline key features of an effective regulatory system

• Part 2 of the Report

• Two workshops

Review existing regulatory system

Conduct extensive consultation

Recommendations on the new design

Propose the roadmap for development and implementation

3

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Analytical Framework for Country Case Studies

• Legal & institutional framework, policy:

– roles of legislative &/or executive brunches of power involved in setting flare &

vent policy;

– policy objectives & their main drivers – environmental/climate change, health,

energy efficiency &/or fiscal

– provisions in the national hydrocarbon, environmental and/or other law(s) stating

the policy and granting regulatory powers to specific government bodies etc.,

– Regulatory bodies & their effectiveness:

• Mandate, responsibilities, powers, capacity, overlaps, collaboration mechanisms of the

regulatory bodies;

• Flaring & venting regulations:

• List of key regulations on flaring and venting and their key elements;

• Flaring & venting management concept: circumstances when flaring &

venting are allowed & not allowed;

• Permitting, fines/taxes, targets or combination approach;

4

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5

Analytical Framework for Country Case Studies

• Procedures for permit application;

• Clustering requirements;

• Company measurement and reporting requirements including

measurement and reporting of CO2 emissions;

• Monitoring of compliance;

• Enforcement of compliance;

• Technical (performance) requirements (Conversion efficiency

incl. combustion efficiency, liquid separation, smoke emissions, stack

design, pilot flare, spacing requirements, noise, flare pits, etc.)

• Access to flare and vent data

• Tax incentives

• Cost recovery rules for flare reduction investments where

PSCs exist;

• Regulation on access to transportation & processing

infrastructure

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Study limitations

• Focus is on policy and regulation on flare and vent

management in upstream oil and gas operations

• Recognition of importance but no detailed analysis of wider

sectoral disbalances such as:

– Pricing distortions

– Local gas market development

– Availability of infrastructure

– Access to infrastructure/regulation of natural monopolies

6

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Key lessons learned: Policy

• Government commitment to reduce flaring is critical to success

– Policy decision with understanding of main drivers & trade-offs needs to be made

(ideally this shall define institutional and regulatory set-up)

– Commitment means much more than simply setting targets for elimination (which may

be unrealistic or unachievable)

– Government must follow through on institutional and regulatory measures to ensure

control of flaring

– National strategies and plans for the petroleum sector must include consideration of

associated gas utilisation

– Government must also work to ensure that midstream and downstream markets

support flared gas utilisation

• Without the ability to access viable markets, regulating to reduce flaring is unlikely to succeed

• Reforms to downstream pricing, third party access to infrastructure and interventions to

improve viability of offtakers might be required

• Identification and implementation of government-led or G-leveraged infrastructure projects

7

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Key lessons learned: Institutional

• Creation of effective regulatory body with clear mandate (responsibilities, authority),

adequate staff & financial resources (ideally independent)

• The majority of case study countries have separate agencies, reporting to the

relevant Minister, who are responsible for flaring regulation (and other upstream

petroleum regulation)

– not always necessary – Qatar has managed relatively well without such agency. Lack of

such an agency appears to be a problem in Malaysia

– not always effective – Algeria has a separate agency, but the political power of the state

petroleum company appears to override it

• Industry consultation mechanisms are important in ensuring flaring targets are

feasible and regulations are realistic

– Alberta has perhaps the most developed consultation process

– previous failures to consult on the realism of targets are one of the causes cited for the

failures of past flaring bans in Nigeria

8

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Key lessons learned: Regulations

• Translation of the policy decision into set of transparent and enforceable

regulations and operational guidelines

• Regulations should establish the framework for reducing flaring wherever it is

economic to do so

– blanket prohibitions are unlikely to be effective, unless backed up by other

measures such as creation of downstream markets

• Emphasis should be on making operators look for opportunities to utilise gas

economically

– Alberta has annual obligations for tests of economic viability – although this is a

potentially complex process

– Nigeria is planning an obligation to „use it or lose it‟ for flared gas

– Kazakhstan is introducing three-yearly economic assessments, backed up by

powers for Government to take unutilised gas for free

• Such tests need to be backed up by an effective enforcement deterrent for

unauthorised flaring

9

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Key lessons learned: Enforcement

• Accurate measurement and reporting of flared volumes is necessary if enforcement

is to be effective

– There are a number of jurisdictions where gov-ts lack data or reliable data

• Scarce resources for enforcement should be allocated in a targeted manner, to

ensure they are used efficiently

– Alberta‟s linking of inspections to past track records is a good model here

• Penalties may be useful when they lead to flare reduction

– Nigeria show the ineffectiveness of low penalties in changing behaviour

– threats to suspend or withdraw licences for flaring may not be credible

10

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Key lessons learned: The importance of data

• Regulation of flaring is critically dependent on access to reliable and consistent

data

– identify need for intervention

– monitor achievements and trends

– rapidly identify and respond to large increases in flaring

• Publication of data on company performance and field-by-field flaring volumes can

support flaring reduction

– creates public pressure to improve, even where monetary penalties may be

limited

– helps interested parties identify flared gas volumes which may be utilised

11

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The case studies

Case Studies Justification

Alberta (Canada) Examples of international best practice, achieving and

maintaining very low flaring rates Norway

Kazakhstan Engaged in process of ‘learning by doing’ with ongoing

improvements to regulatory framework for gas flaring

Nigeria Limited success in reducing gas flaring due to conflicts of

interest, lack of downstream markets and poor enforcement

Algeria Successful in reducing gas flaring over time, despite

institutional limitations

Summary Case Studies

Malaysia Reliance on voluntary actions to reduce flaring appears to

have largely been ineffective

Qatar

A contrasting example, where the absence of a formal

regulatory framework has not prevented dramatic reductions

in flaring intensity

12

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Alberta (Canada)

13

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Alberta: Flaring performance

90% 90% 90% 90%91% 91%

92%93%

93%94%

93%

94%95%

95%96% 96% 96% 96%

95%96%

75%

80%

85%

90%

95%

100%

0.0

0.5

1.0

1.5

2.0

2.5

BCM pa

Solution (associated)

gas flared and vented

Share of solution

(associated) gas conserved

Source: ERCB

14

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Alberta: Institutional

– Regulation of gas flaring and venting was originally driven by concerns over wasted

resources, but more recently environmental considerations have become

paramount

– The Energy Resources Conservation Board (ERCB) is the independent upstream

energy regulator. ERCB is the latest in a line of energy regulatory agencies

functioning since 1938 and was created in 2008 when upstream and downstream

regulation were separated

– Consultation with key stakeholders on environmental matters is formalised through

the Clean Air Strategic Alliance (CASA), a government-funded platform for dialogue

including industry, environment and health organisations and consumer groups.

Within CASA a dedicated flaring and venting team has been put in place

15

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Alberta: ERCB organogram

Chairman/CEOBoard Members

Senior Advisor to the

Chair

Public InvolvementSenior Executive to

the Chair

Regulatory

Development

Executive Manager

Central Council and

Law Branch

Executive Manager

Board Project

Executive Manager

Chief Operating

Officer

Finance Branch Chief

Financial Officer &

Executive Manager

Board Secretariat

Public Security

Officer

Oil Sand Branch

Executive Manager

Applications Branch

Executive Manager

Field Surveillance &

Operations Branch

Executive Manager

Geology,

Environmental,

Science & Economics

Executive Manager

Information & System

Service Executive

Manager

Corporate Services

Branch Executive

Manager

Oil Sands and Coal

Mining Manager

Chief Operations

Engineer

Insitu Oil Sands

Manager

Chief and Senior

Advisor

Facilities Applications

Manager

Business Op. &

Dev.Manager

Resources

Applications Mngr.

Senior Applications

Officer

Senior Advisors

Sr. Technical

Engineer

Emergency Mgmt

Mngr

Field Operations

Manager

Technical Operations

Manager

Liability Management

Manager

Bus. Analysis

System & Supp Mngr

Advisory& Regulatory

Change Mngr

AGS Mngr & Prov.

Geologist

Economics

Manager

Env. Monitoring &

Reg.Mngr

Reserve & Porespace

Mngmt Mngr

Energy-Resource

Appraisal Mngr

Chief and Senior

Advisors

Bus. Info Solutions

Manager

Info Collection &

Dissemination Mngr

Techn. Support and

Infrastr. CTO & Mngr

External Relations

Manager

Human Resources

Manager

Administrative

Services Mngr

Communications

Manager ERCB has 900

staff and 9 field

centres

16

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Alberta: Regulations

– Key regulation is Directive 60, originally issued in 1999 in consultation with CASA

– Associated gas flaring volumes are subject to an annual industry-wide target,

proposed by ERCB in consultation with CASA. If necessary, ERCB has powers to

impose targets

• Annually, operators assess if associated gas can be utilised economically

– the economic test uses guidelines and parameter values set by ERCB

– if the NPV of a project is greater than C$-50,000, it must be implemented

– operators in proximity are required to consider the option of clustering

– where utilisation is not economic, flaring must conform to strict standards

17

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Associated Gas Decision Tree

Alberta: Flaring management framework

18

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Alberta: Enforcement

– Penalties apply to individual facilities in case of non compliance

– Operators flaring or venting above 100 m3/month have to report their flaring and

venting quantities, which are published to increase transparency and pressure to

reduce flaring

– Penalties for non-compliance are applied in relation to the severity of the

consequences and whether the operator has a previous record of non-compliance

– ERCB enforces compliance through inspections. The frequency of inspections also

increases with the significance of flaring volumes and impacts and with previous

records of non-compliance

19

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Alberta: Publication of flaring data

ERCB annually reports flaring by company and their ranking

Maps show the levels of flaring and venting affecting townships

20

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Alberta: Lessons learned

– Continued strong political commitment to reducing gas flaring, although motivations

have changed, has been critical

– Alberta‟s approach combines effective enforcement with a degree of flexibility for

operators in implementation

– Consultation with industry produces targets and regulations that are effective but

realistic

– Annual requirements to assess whether gas utilisation projects are economically

viable maintains pressures on operators to explore opportunities to reduce flaring

– Monitoring and enforcement costs are reduced by focus on those operators and

fields with poor past records

21

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Nigeria

22

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0

500

1,000

1,500

2,000

2,500

3,000

3,500

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

000 bpdBCM pa

Oil production

Flared gas'Shut-in' of oil

production and development of

downstream utilisation

Nigeria: Flaring performance

Source: NNPC

23

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Nigeria: Institutional

• The Department of Petroleum Resources (DPR) is responsible for supervising

petroleum industry operations, including gas flaring. DPR is responsible to the

Minister for Petroleum Resources

• Approval of field development plans, including gas utilisation plans, is undertaken

by National Petroleum Investment Management Services, a subsidiary of the

Nigerian National Petroleum Corporation (NNPC)

• Onshore and shallow water fields (59% of production) are developed as joint

ventures in which NNPC holds a 55% or 60% share

– NNPC is frequently unable to cover cash costs of investments by JVs

– results in delays in investing in gas-gathering infrastructure

• Deep water fields are developed under PSCs

24

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Nigeria: Regulations

• Various acts have been passed setting deadlines for eliminating

flaring and providing incentives for associated gas utilisation

– Associated Gas Reinjection Act 1979 and accompanying decree

set a deadline of 1984 for flaring to cease

– weakened by subsequent decrees allowing continued flaring on

payment of a fine

– Associated Gas Framework Agreement 1979 introduced a

package of fiscal incentives for investments to increase gas

utilisation

– investments have been made in gas utilisation infrastructure, but

seem to be as much about using non-associated as associated

gas

• Other flaring targets (2008 phase-out) have not been met

• Further legislation is now planned

25

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Nigeria: Enforcement

• DPR has the authority to suspend or remove licences and permits in

the event of non-compliance of gas flaring and venting regulations.

• Breaches of environmental legislation also carry the risk of

prosecution of the operating company and its employees

• Milder sanctions for non-compliance include the imposition of fines

• In practice, a lack of resources at DPR and the remote and insecure

location of many facilities makes it difficult to conduct regular

inspections

• Sanctions are usually limited to fines

– until 2008, fines for flaring were set at US$0.07/mscf. They were

increased to US$3.50/mscf in that year but they have not been

applied to date

– the low level of fines means operators are often willing to pay

these instead of reducing flaring

26

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Nigeria: Petroleum Industry Bill

• The Petroleum Industry Bill would reform the governance of the

petroleum sector as a whole

• The Bill was submitted to the National Assembly in 2009 but has not

progressed and has been subject to large-scale amendments

• With respect to gas flaring, the Bill provides that

– all operators must produce gas utilisation plans within six months

of the Bill being enacted

– where flaring is planned to continue past 1 January 2013, third

parties can bid to use this gas, within 120 days of the plan being

published

– any unplanned (unutilised) gas must be shut-in or reinjected

– no new licences for oil or gas production will be issued unless a

satisfactory gas utilisation programme is in place

27

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Nigeria: Downstream markets

• A major cause of flaring has been the lack of a downstream market

– gas-gathering and transportation infrastructure is limited and third party access

is difficult to achieve

– downstream gas prices for power generation have been extremely low

($0.20/mmbtu until recently) and payment uncertain

• Recent reforms aim to address these problems

– a Central Processing Facility (CPF) will be established in each region

– operators will be able to sell associated gas to the CPF or pay for it to process

gas under a tolling arrangement

– the power sector is being reformed and privatised. A new single buyer is being

established with World Bank-backed guarantees

– electricity tariffs and prices of gas into power are being increased (to

$1.0/mmbtu in June 2010 and to $2.0/mmbtu by December 2013)

28

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Nigeria: Future gas market structure

29

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Nigeria: Lessons learned

• Nigeria‟s efforts to eliminate flaring have been handicapped by

– lack of funding for flaring reduction projects due to combination of JVs and

Government budgetary constraints

– low prices and poor payment records in downstream markets meaning

utilisation projects are unlikely to be commercially viable

– inadequate penalties for flaring, making paying fines preferable to increasing

utilisation and compounded by limited institutional capacity

– conflicts of interest between increasing oil production and eliminating flaring

leading to reluctance to take measures to achieve targets

• The Petroleum Industry Bill and downstream market reforms may help. But the

delays in passing the Bill and numerous rewrites make this questionable

30

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Malaysia

31

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Malaysia: Flaring performance

0

100

200

300

400

500

600

700

800

900

1,000

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

000 bpdBCM pa

Oil production

Flared gas

Source: NOAA / BP

32

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Malaysia: Lessons learned

• Petronas, the major oil and gas producer, is implementing the Towards

Zero Flaring and Venting programme

• State ownership of Petronas and its involvement in most petroleum sector

may mean that a formal regulatory framework has been considered

unnecessary to reduce gas flaring

• However, reliance on voluntary measures appears to have been ineffective

to date

• One concern that has been raised is that any offshore pipeline must involve

Petronas who will also, generally, be the operator. As a result, the viability

of flaring reduction projects by operators other than Petronas can be

dependent on the transport charges applied by Petronas

33

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Norway

34

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0

100

200

300

400

500

600

700

800

900

1000

0

50

100

150

200

250

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Flared gas (mmcm)Pipeline capacity (bcm)

First export pipeline (Norpipe)

Introduction of CO2 tax

Norway: Flaring performance

Pipeline Capacity

Flared gas

Source: NPD

35

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Norway: NPD organogram

Discoveries and Fields

Exploration Director

General HR

Strategy, Communication

and Projects

Internal Services and

Development

Environment and Energy

Prognosis, Analysis and

Data

North Sea

North

North Sea

South

Norwegian

Sea and

Barent Sea

Storting (Parliament)

Standing Committee on Energy and Environment

Ministry of Petroleum and Energy (MPE)

Ministry of Environment (MOE)

Department for Climate, Industry and Technology

Norwegian Petroleum

Directorate (NPD)

Department for Climate Change and Pollution

Control

Statoil

Gassco

Climate and Pollution Agency (Klif)

Petoro

State of Environment, Norway

Ministry of Finance (fiscal policy)

The Government

NPD has 210 staff organised into

80 teams. Only 10 staff members

are classified as managers

36

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• Norway‟s commitment to eliminate flaring dates back to the start of oil and gas

production. The “10 Oil Commandments” issued in 1971 include:

5 - Flaring of exploitable gas on the Norwegian Continental Shelf must not

be accepted except during brief periods of testing

• Operators are required to include plans for associated gas utilisation or

reinjection in their field development plans

• Since 1991, a CO2 tax has been applied to emissions from the burning of all

hydrocarbons including flaring and venting

• Since 2008, offshore petroleum industry activities have been included in the

EU Emissions Trading Scheme with which Norway is aligned

• Following entry into EU ETS, the CO2 tax was reduced so that the overall

penalty for flaring (tax + EU ETS price) remains constant

Norway: Regulations

37

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• Field development plans and gas utilisation plans are approved by NPD and

the Ministry for Petroleum and Energy (MPE).

• Annual flare gas permits must be obtained from the MPE, with strict control on

the volumes and duration of flaring allowed

• Operations are subject to ongoing compliance reporting requirements, and

regular inspections by the NPD.

• The CO2 tax and the Norway ETS impose strict rules as to how flare volumes

and carbon content are to be monitored and reported. This is backed up by an

enforcement system consisting of six-monthly reporting and collection cycles,

and annual inspections

Norway: Enforcement

38

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Norway: Lessons learned

• As with Alberta, Norway shows the benefits of a clear political commitment to

reducing gas flaring (in this case, with the “10 commandments”)

• There has been increased emphasis on the use of market mechanisms to

encourage flaring reductions, alongside an emphasis on the climate change

impacts of flaring (CO2 tax and EU ETS)

• Government has taken various measures to encourage gas utilisation and

export including

– promoting the creation of a gas exporting union (subsequently ruled illegal

under EU law)

– forcing the merger of the pipeline interests of major producers into a single

company, operating under a common carriage model

39

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Kazakhstan

40 ©

2011 Economic

Consulting

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Kazakhstan: Flaring performance

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

000 bpdBCM pa

Oil production

Flared gas

Source: NOAA / BP

41

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Kazakhstan: Institutional

• The main responsibility for regulating gas flaring and venting activities lies with

the Ministry of Oil and Gas (MOG)

– MOG‟s implementing agency for gas flaring policy is the Committee of

State Inspection of the Oil and Gas Industry (CSIOG). While legally

separated from the MOG, CSIOG is subordinate to MOG

• The Ministry for Environmental Protection (MEP) also plays a key role in the

regulation of gas flaring activities in Kazakhstan

– under MEP, the Committee on Ecological Regulation and Control (CERC)

is responsible for monitoring environmental compliance. Among its

competencies are the issuance of emissions permits

• Industry representatives can voice concerns or suggestions on policy and

regulation within the Foreign Investor‟s Council (FIC). This is a chaired by the

president of Kazakhstan and includes an Oil and Gas group within its structure

42

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Kazakhstan: Regulations

• New legislation in 2010 greatly strengthened gas flaring regulations

– gas flaring is only permitted for reasons of safety or on a temporary basis.

Any operator wishing to flare gas is required to have a gas flaring permit

and an ecological permit determining allowed CO2 emissions

– operators must „process‟ (use commercially) gas unless it is shown not to

be economically viable, in which case they can „utilise‟ the gas (eg, for re-

injection). Studies must be updated every three years and approved by

MEP and MOG

• The 2010 legislation also made associated gas the property of the State

– Government can now access associated gas for free, if the operator is not

processing or utilising it

– failure to process or utilise associated gas can be penalised at the

resulting revenue losses to the Government

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Kazakhstan: Enforcement

• Targets such as the elimination of flaring by 2004 have not been met (there is now an

indicative target of 95% utilisation by 2012)

• Comparisons of officially reported flaring data and NOAA estimates suggest some

under-reporting of flaring

3.1

1.7

6.2

3.8

0

1

2

3

4

5

6

7

2006 2007 2008 2009 2010

Offical MEP Data

NOAA Data

Vo

lum

e in

bil

lio

n m

3

Where penalties are applied, these are

generally insignificant despite high fines

being applicable in theory (equal to the

foregone revenue)

actual fines paid totalled $120,000 in

2008 and $114,700 in 2009

MEP charged operators $115 million in

2009, compared to estimated damages

(lost revenues) from flaring of $3 billion

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• Previous targets (elimination of flaring by 2004) were overly-ambitious and

ineffectual

• Enforcement appears to have been weak (fines much less than potential

penalties and apparent systemic under-reporting of flaring)

• 2010 legislation should greatly strengthen powers of Government to ensure

use of associated gas, but creates its own problems

– can Government credibly commit to enforcing flare processing

requirements in absence of developed downstream markets?

– will penalties be enforced in this case?

Kazakhstan: Lessons learned

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Algeria

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Algeria: Flaring performance

0

1

2

3

4

5

6

7

8

9

10

0

10

20

30

40

50

60

70

80

90

19

64

19

66

19

68

19

70

19

72

19

74

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

Flared gas (bcm)Gas (bcm)

Total gas exports

Flare volume

Flare data available for 1994-2008 only

Pipeline capacityTransMed gas pipeline

commissioned

Bettioua LNG plant commssioned

LNG capacity

Mahgreb-Europe gas pipeline commissioned

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Algeria: Institutional, regulations and enforcement

• Prohibition on flaring reported to have been in place since 1966

• Sonatrach has set objective of recovering 93% of associated gas by 2008-09 and

100% by 2010, but seemingly not achieved

• 2005 Hydrocarbon Law and 2006 Ordinance introduced the following

– prohibition of flaring, except where prior authorisation from ALNAFT (National

Agency for the Development of Hydrocarbon Resources)

– authorisations to flare limited to durations not to exceed 90 days

– permitted flaring subject to a tax of 8,000 DZD per 1,000 Nm³ (~US$110 per

Nm³), modified each year at a fixed rate

• Taxes are estimated to costs operators in excess of US$600 million annually

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Algeria: Lessons learned

• Algeria appears to take a tough stance on gas flaring

– prohibition on flaring in law since 1966 and reconfirmed in 2005

– one of only three countries (with Nigeria and Norway) that taxes flaring

– current level of flaring tax similar to that levied in Norway.

• However, the ongoing high level of flaring (50-100 Sm² per Sm² oil; maybe more

than half of all associated gas produced) suggests that the strong legal framework

is ineffective in practice

• Lack of evidence of monitoring, reporting, and tax collection. This may in part be

attributable to the political power of Sonatrach.

• Has one of the few operational CCS projects in the world, injecting CO2 removed

during sweetening into a saline formation (Salah Gas)

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Qatar

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Qatar: Flaring performance

0

500

1,000

1,500

2,000

2,500

3,000

3,500

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

000 boe pdBCM pa

Oil production

Flared gas

Gas production

Start of Al Shaheen Block 5gathering system, delivering associated gas for domestic

market (0.6 BCM pa)Source: NOAA / BP

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Qatar: Lessons learned

• Qatar has been very successful in reducing flaring intensity, despite dramatic

expansion of oil and gas production (intensity is seen by Qatar as a better measure

than absolute volumes given this growth in output)

• The primary causes appear to be a commitment at the highest levels of

Government to manage the environmental impacts of Qatar‟s energy sector, and its

Government‟s ability to rapidly and effectively implement this committment

• Qatar is now looking to formalise its control of flaring. A Health and Safety

Executive was created in 2005 within Qatar Petroleum (although still in the process

of staffing itself). A regulation on flaring is being drafted by HSE, with assistance

from GGFR

• Qatar‟s circumstances are probably unique and difficult to replicate elsewhere

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