Why the war in Ukraine must increase the urgency to solve gas flaring

Russia’s war against Ukraine is a wake-up call to reduce our dependence on Russian oil, gas and coal, and more broadly, to accelerate the energy transition to a net-zero society.  We urgently need to find new sources of energy.  In the short term, this crisis should accelerate our focus on reducing the waste from flaring, venting and leaking – it’s 260 BCM globally, 1.5x that of Europe’s imported gas from Russia.  We’ve been talking for decades, and now it’s time to act.

The scale of Europe’s dependency on Russia is vast: 900 million barrels of oil, 170 BCM of gas and 31 million tonnes of coal per year.  At current prices (over $100 per barrel, $15 per mmbtu and $300 per tonne), this is over $500 million per day.

So we need to wean ourselves off Russian hydrocarbons – by working on the demand and supply sides together. Yes, of course, we need to decarbonise in the process, build more wind and solar, electrify industrial heat, accelerate H2, etc., but realistically these will all take years to get to a scale to offset our vast addiction. Of course, we cannot afford to slow down on this agenda, but we also have an even more pressing problem right now.

In the short term, oil is perhaps the least challenging supply source to switch to, after all, it is fungible, and the Middle East could probably ramp up by 2.5 million barrels per day. 

But gas is possibly the hardest nut to crack. The gas market is already super stretched due to structural investment and post-COVID recovery demand response – and (even before Russia’s war), this was expected to lead to high gas prices for several years.

In the short term, to reduce gas demand, we should turn down our thermostats and consider fuel switching to non-Russian coal (dare I say it, but prices are driving this already) and delay (or reverse?) the closure of nuclear plants.  And in the short(ish) term, we need to increase supply (accelerating the completion of the Calcasieu LNG project and restoring production from the Dutch Groningen field. In the longer term we can expect significant new gas volumes from LNG to come to market – and Europe is already planning more LNG import terminals.

But here’s the thing. A key and often-overlooked “supply source” is addressing the waste in the oil and gas supply chain.  Flaring, venting and leaking account for 260 BCM – that’s 1.5x the gas imported by Europe from Russia or 7% of all gas consumption. 

Put differently, it’s also almost 7 billion CO2-equivalent tonnes of greenhouse gas emissions, 570 million to 1500 million passenger vehicles, $140 billion of lost revenue per year, at $15 per mmbtu, 175 GW of continuous electrical power (which would replace 16% of all power generated by coal) and $130-340 billion in carbon taxes, at $50 per tonne of CO2.

And some of this flared gas is on Europe’s doorstep – in Algeria, Libya, and Egypt. And these flares, vents and leaks can all be fixed with proven technology and a significant majority also have attractive financial returns, especially-so given that gas prices are likely to remain high for several years.

The world needs to use this crisis to urgently spur action to reduce gas flaring, venting and leaking. Unlike many gas projects, there is zero “technical” risk (the gas is already discovered – and is on “production”), and 54% of all flaring is already within 20 km of an existing gas pipeline. There is a wide range of proven technologies that can be rapidly deployed (potentially within 6-12 months, if fast-tracked). 

We’ve simply not seen enough progress to reduce gas flaring over the last decade. Perhaps this crisis will be a defining moment for us to grip the flaring, venting and leaking problem, generate a credible alternative to Russian gas, and encourage producing countries to use the proceeds to accelerate their low-carbon energy transitions.

To find out more about gas flaring please see www.flareintel.com/insights