LONDON (Reuters) - The U.S. shale energy boom is fuelling a rise in the burning of waste gas after years of decline, a World Bank source told Reuters ahead of the release of new data, giving environmentalists more ammunition against the industry.
Global gas flaring crept up by 4.5 percent in 2011, the first rise since 2008 and equivalent to the annual gas use of Denmark, preliminary data from the World Bank shows.
The increase is mostly due to the rise in shale oil exploration in North Dakota, propelling the United States into the top 10 gas flaring countries along with Russia, Nigeria and Iraq.
The preliminary data - which will be released in detail later in May - shows that global gas flaring crept up to around 140 billion cubic meters (bcm) in 2011, up from 134 bcm the previous year.
Flaring is used to eliminate gas at mineral exploration sites, and is released via pressure relief valves to ease the strain on equipment.
“The challenge in North Dakota is that there is a lot of initial exploration and production going on, and often some flaring is necessary at that stage,” the source at the World Bank’s Global Gas Flaring Reduction Partnership (GGFR) said.
“We are hopeful that when the full data is released, both policymakers and companies in North Dakota will pay more attention to this issue and take the necessary steps to minimize flaring.”
The data will draw further criticism to the industry, which some activists already condemn on environmental grounds.
“Environmental regulations to stop flaring are taking a real kick in the teeth because the financial crisis has put the emphasis on increasing competitiveness, while anything that is seen as diminishing competitiveness is not getting any political traction,” Charlie Kronick, senior climate campaigner at Greenpeace, said.
Britain’s annual gas consumption is just under 100 bcm, and Norway’s yearly production just above that - which makes the 140 bcm flared globally over a third more than Europe’s top consumer and producer, respectively.
In current market terms, 140 bcm of gas would be worth over $100 billion in barrels of oil equivalent.
Gas flaring has fallen more than 20 bcm since 2006 - despite a slight increase between 2008/2009 - but the rise in 2011 indicates that companies and countries must continue to scale up their efforts to reduce global flaring, the GGFR said.
Despite massive oil and gas reserves, many top flaring countries suffer from chronic power shortages and stagnating gas export volumes which experts say could be addressed if they used the gas instead of burning it.
“It is key to show producers and governments that there is a win-win solution - in many cases you’re saving the gas and putting it to a positive use and sometimes you’re building energy infrastructure that can be a catalyst for future economic benefit,” Michael Farina of U.S. energy engineering group GE Energy said.
In Iraq, the World Bank says that the gas flared is enough to fuel all of the country’s electric power needs, most of which is unmet or generated by heavy fuel and crude oils, while Nigeria also faces substantial losses from flaring.
“Nigeria loses billions of naira to wasted gas while the nation’s power projects are crippled as a result of lack of gas supply,” Nigerian pressure group Social Action said.
The wasted gas also causes immense environmental damage, both locally and on a global scale.
The World Bank estimates that the flaring of gas adds some 360 million tonnes o f carbon dioxide (CO2) in annual emissions, almost the same as France puts into the atmosphere each year or the equivalent to the yearly emissions from around 70 million cars.
If this waste were to take place within the European Union’s carbon emissions trading scheme, the flaring would cost some 2.5 billion euros at current market value of 7 euros per tonne of CO2.
Estimating that flaring amounts to around 4.5 percent of global industrial emissions, environmental group Greenpeace says current legislation fails to tackle the issue.
“The problem is that international oil companies are not penalized for flaring gas,” Greenpeace’s Kronick said.
The damage flaring does to local communities is also immense.
Social groups in Nigeria say that flaring in the Niger Delta, where some 30 million people live, has gone on for 40 years and led to acid rains, causing many illnesses.
“Flaring of gas endangers human health and reduces agricultural productivity,” Nigeria’s Social Action group said.
Additional reporting by Oleg Vukmanovic, editing by William Hardy