Oil Firms, Nations Agree to End Gas Flaring

Twenty-five major oil companies, oil-producing nations and development institutions agreed Friday to end the practice of routine flaring of natural gas by 2030 at thousands of oil production sites around the world.

Royal Dutch Shell, Statoil, Kuwait Oil Co., Russia, Norway and the Asian Development Bank are among those making the commitment, which was announced by the World Bank and United Nations at an event in Washington Friday. No U.S.-based companies have signed onto the initiative.

Many producers regularly burn off natural gas as carbon dioxide into the atmosphere when producing oil for a variety of reasons, including lack of infrastructure to move the gas and low economic incentive to use the gas.

Andrei Lushin, World Bank Group Executive Director for Russia, said in remarks at the event that the country flares the most gas associated with oil production in the world. “That is a problem of course, but this is also a potential to achieve large gains in reducing gas flaring,” Mr. Lushin said. “The government sees petroleum gas flaring as a waste of valuable resource and a very harmful practice for global climate.” Russia is one of the world’s largest producers of both oil and natural gas.

The World Bank and U.N. are announcing the new initiative as a way to build support for a conference in December hosted by the U.N. aimed at forging a global agreement to cut carbon emissions.

“As we head toward the adoption of a meaningful new international climate agreement in Paris in December, these countries and companies are demonstrating real climate action,” U.N. Secretary-General Ban Ki-moon said Friday. “Reducing gas flaring can make a significant contribution toward mitigating climate change. I appeal to all oil-producing countries and companies to join this important initiative.”

The World Bank says the initial endorsements of the initiative represent 40% of global gas flaring and that those committed already will work to get more companies and countries to sign onto the effort. Emissions from flared gas represent about 1% of global carbon emissions, according to World Bank officials.

A spokesman for the American Petroleum Institute, the largest U.S. oil and natural-gas trade group, said U.S. government data show that U.S. producers keep cutting greenhouse-gas emissions without new federal regulations. “These voluntary efforts will continue as operators work to capture more gas and deliver it to consumers,” API spokesman Carlton Carroll said.

World Bank officials said they are talking with U.S. companies and the Energy Department about more involvement from U.S.-based organizations and companies.

“We have seen that when industry sets a target and aligns its efforts with government, results can be astonishing in scale and dimension,” World Bank President Jim Yong Kim said Friday.

Wall Street Journal