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US was top contributor to global natural gas flaring growth in 2019

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US was top contributor to global natural gas flaring growth in 2019

Global gas flaring — the controversial practice of burning off natural gas associated with oil extraction — climbed in 2019 to a level last seen a decade earlier, with the U.S. contributing the most to global growth, according to a July 21 report from the World Bank.

According to the organization's "Global Gas Flaring Tracker Report," which estimates the oil and gas industry's flaring activity using satellites, the volume of gas flared globally in 2019 climbed by 4.98 billion cubic meters from the 2018 level to 149.99 billion cubic meters, with the U.S. contributing 3.22 billion cubic meters to that growth.

"Our data suggests that gas flaring continues to be a persistent problem, with solutions remaining difficult or uneconomic in certain countries," Christopher Sheldon, practice manager in the World Bank's energy and extractives global practice, said. "The current COVID-19 pandemic and crisis brings additional challenges, with sustainability and climate concerns potentially sidelined."

The total volume of natural gas flared in 2019 far exceeds the natural gas industry's global production growth in the same year. According to the BP Statistical Review of World Energy, global natural gas production grew by 132 billion cubic meters in 2019 versus global consumption growth of 78 billion cubic meters.

"The top four gas flaring countries … continue to account for almost half … of all global gas flaring for three years running … suggesting there may be systematic and structural barriers to reducing gas flaring practices in these countries," the report said. "When looking at all countries, excluding the top four, gas flaring declined by 9 [billion cubic meters], or 10%, from 2012 to 2019."

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However, the report noted that U.S. gas flaring declined by 1.2 billion cubic meters in the first quarter of 2020 despite an increase in oil production because of "improved utilization" of associated natural gas production. "If these trends continue, we are likely to see a significant drop in gas flaring in the United States in 2020," the report said.

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In the U.S., where volumes have doubled since 2016, flaring is most acute in the Permian Basin, which accounts for the bulk of the oil industry's production growth. Some industry leaders, including Pioneer Natural Resources Co. President and CEO Scott Sheffield and Chevron Corp. subsidiary Chevron North America Exploration and Production Co. President Stephen Green, have advocated for an end to the practice.

In New Mexico, where volumes of gas vented and flared have exceeded state demand and 15 operators accounted for 78% of the statewide volume, state officials have put forward a proposal to curb the practice.

Meanwhile, Texas regulators have said they support "workable requirements" at the regulatory level but much of the work will need to be done by the oil and gas industry itself. They have instructed Texas Railroad Commission staff to prepare plans to reduce flaring for presentation in the fall.