Flaring milestones and outlooks: Capterio’s New Year Reflections
Dear Partners, Collaborators, Investors, and Media Partners,
Beyond the untold human suffering, the horrors of Putin’s unjustified war in Ukraine have sharpened our focus on fixing the global energy system. The world urgently needs to increase energy security, address energy affordability and accelerate the energy transition.
Whilst we sorely need to transition to a net zero and carbon-free economy in the coming decades, one supply source hidden in plain sight can make a real difference today. By fixing gas flaring, venting and leaking (266 BCM of gas annually – sufficient to supply 47% of Europe’s 2021 demand), we can more than replace Russian gas, diversify supply risk, lower prices, and reduce emissions (by up to 6.6 billion CO2-equivalent tonnes per year – see source).
Today we can capture this wasted gas with proven technologies and create real commercial value. No, capturing this gas does not delay the transition. And yes, doing so does materially and immediately decarbonise within 12-18 months. We just need to act.
We are thrilled to have helped our clients to reduce flaring by 20% (in 2022, vs 2021) whilst also reducing emissions by 4.86 million CO2-equivalent tonnes. That’s the equivalent of taking 1.1 million cars off the road!
Our clients are right to be proud not only of their improving operational performance, but also of the support they give to the local economy and in enhancing sustainability and ESG credentials.
Capterio collaborates with leading producers, service companies, governments, finance groups and NGOs to fix flaring using a combination of real-time analytics, advisory and project work.
Our industry-leading product FlareIntel Pro tracks every flare by satellite for every asset in every country and for every company – every day. Producing companies use FlareIntel Pro’s dashboards to cut through organisational complexity and get real-time and independent visibility into flaring. Since FlareIntel Pro also detects operational upsets (e.g. equipment failures), it also drives performance improvement. Many of our clients use FlareIntel Pro – which meshes infrastructure data and imagery to identify the most attractive investment opportunities.
But beyond the industry, public awareness of gas flaring is also rising. With luck, we can create an unstoppable “industrial and social tsunami” of intervention.
And to sharpen the focus of industry and government alike, we published –immediately after the start of Putin’s war – a paper on how North African flare reduction can increase European energy security. Our paper (co-authored with Columbia University) led to citations in The Economist and an IEA paper on avoiding gas shortages. In May, Financial Times expanded the theme in two Capterio Opinion Editorials. That month, our work with EDF – on the problem of “transferred emissions” (resulting from M&A activity) made the front page of the New York Times. In August we were live on TV and Radio discussing the BBC‘s expose of Russia’s egregious flaring close to the Nord Stream pipeline. A commentary followed in Nature, following September’s pipeline explosion/sabotage.
Our work on flaring at companies’ “non-operated” assets (most of which goes unreported) was featured, in August, on Germany’s flagship TV programme Monitor. The topic was further aired in September in a compelling BBC film Under Poisoned Skies and in a report we co-authored with EDF in October. Strong leadership has driven material reduction in flaring in Egypt (see our September paper for COP27, co-authored with the Clean Air Task Force). A similar focus has helped state-based actors in Oman and Kazakhstan to see particularly-significant flare reductions through 2022.
Three game-changing milestones are likely to be particularly significant for global flare reduction in 2023 and beyond:
- First, the US Inflation Reduction Act provides a new focus on reducing emissions in the world’s 4th largest flarer. The world sorely needs the US to truly lead.
- Second, the EU has signed into law the first iteration of a Carbon Border Adjustment Mechanism. Whilst CBAM is not (yet) targeted on energy imports, it focuses consumers on the embedded supply-chain emissions, especially in the EU’s gas imports from the US, Qatar, Algeria and Nigeria, sharpening the need for certification and carbon taxes.
- And third, a personal highlight from Capterio’s visit to Sharm El-Sheik. We were delighted to see President Biden profile our work with the EU and the US governments, by unlocking $500 million of funding to help Egypt to accelerate its transition (including by reducing up to 3.7 BCM of gas flaring, venting and leaking – see announcement).
As budgets get finalised, it is important to note that investment is key to making the needed upgrades to facilities and infrastructure. And flare capture investments (with their negative marginal abatement costs) are some of the best possible decarbonisation investments.
To accelerate delivery, it is likely that operators, governments, and financing groups will need to collaborate across traditional organisation and contractual boundaries. But only by delivering can we also make progress on the World Bank’s “zero routine flaring” initiative and the EU/US-led Global Methane Pledge.
Against a backdrop of these ever-increasing commitments, our work at Capterio continues to surge forward with tangible actions. Our advanced analytics using FlareIntel Pro support our subscription services, and our insights power our consulting services and our work on on-the-ground capture projects. We’ve also seen record sign-ups to our public domain product FlareIntel Free.
Our programme for 2023 is even more exciting. We want to thank you and all our clients, academic partners, collaborators, investors, finance partners, co-authors, and media partners for your support.
We wish you and your families all the very best for 2023!
You might also like to see how we used flaring analytics to predict the World Cup result. You might also find the charts below interesting.