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François Régis MOUTON

World Bank GGFR Adviser

Yuriy MYROSHNYCHENKO

World Bank Operations Officer

Policy and Regulatory Framework: Flaring and Venting in Canada

Arden BERG

P. Eng. EUB Board Member

Alberta EUB (IA)

EndorsersIndependent Agency (IA) and Gov’t Department

British Columbia (IA)

Saskatchewan (Dept)

Manitoba (Dept)

NEB (IA - federal)

C-NLOPB (IA: joint federal & provincial Board)

Topics for Discussion

• Regulatory framework

• Themes for regulatory model success

• Roles of independent regulator

• CASA process – consultative approach

• Canadian Offshore

• Other Canadian initiatives

Global Review Regulation in 44 Countries

• Word Bank studied 44 oil producing countries

• Objective: determine how regulations and other factors affected flare and venting volumes

• Findings: countries reducing flaring and venting used

– Efficient regulation

– Incentives (fiscal policies and reform of energy markets)

Regulatory Framework Diagram

Governmentsets policy

GovernmentDepartments (environmental standards, leasing, ..)

PublicRegulatorsadminister

policy

Industrydevelops projects

LEGISLATION

REGULATIONS

Was it always easy?

• No – not easy! Wasteful flaring in Turner Valley– "Hell’s Half Acre"; 200 MMCFD for a decade

–Challenges through the years

• Had far sighted political will and leadership

• Created EUB - independent and technical –To be independent of political process / timetables

–To conserve / prevent waste of reserves

–To reduce impact on environment / society

–To enforce regulations, including shut-in oil if necessary

Who is the Alberta Independent Agency? (EUB)

• 9 Board Members – Government appointed–4 engineers, 2 lawyers, 1 accountant, 2 public

• 800 Staff –engineers, geologists, technicians, accountants, lawyers,

135 field staff

–143,000 producing wells, 373,000 km pipelines

• Key to effective independence– "Nobody controls the Regulatory Authority but the

Regulatory Authority remains under control"

Energy Resources Conservation Act (ERCA)

• Section 2 — Purposes of Act

• Appraisal of the reserves and productive capacity

• Appraisal of the requirements for energy resources

• Conservation of, and to prevent the waste… energy

• Control pollution and ensure environment conservation

• Secure the observance of safe and efficient practices

• Recording…timely…useful dissemination of information

• Receive information, advice and recommendations

Atlantic Accord Implementation Act

• Accord Act Section 154 addresses "Waste" and Paragraph (f) deals with gas flaring specifically: the escape or flaring of gas that could be economically recovered and processed or economically injected into an underground reservoir

• If, after the hearing , the Oil and Gas Committee is of the opinion that waste as defined in paragraph 154(2)(f) is occurring in the recovery of petroleum from a pool, the Committee may, by order, direct the introduction of a scheme for the collection, processing, disposition or re-injection of any gas produced from such pool

• Production and Conservation Regulations: The Chiefs may approve the flaring or venting of gas during a production operation at a rate and volume and for the period set out in the approval where the flaring or venting does not constitute waste or an undue safety hazard

• Development Plan Approvals

1996 vs. 2005 (flaring -72%, venting -59%)

86

88

90

92

94

96

98

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Per

cent

age

utilt

ized

0,6

0,8

1

1,2

1,4

1,6

1,8

2

2,2

Flar

ed a

nd v

ente

d (b

cm*)

Percentage utilizedVolume flared

and vented

Issue: 1996 @ 1.8 bcm and not declining

96.3%

.67 bcm

*bcm = billion cubic metresYear 1996 - baseline for flaringYear 2000 – baseline for venting

Best Management Practices

• KEY — Build consensus on flaring solutions–Clean Air Strategic Alliance (CASA)1

• industry, environmental NGOs, and Government multistakeholder process

–Eventual elimination routine AG gas flaring

–Orderly transition .. balances .. stakeholders ..

• eliminate, reduce, and improve the efficiency of flares

• Regulatory backstop if voluntary failed

CASA Flaring Project Team (FPT)

• Series of Consensus CASA FPT Recommendations–Decision tree with predetermined input controls

– Industry wide flaring reduction targets

• Latest Updated Recommendations (EUB updated Directive 60)

–Flaring Absolute Cap = 50% 1996 Base Line (0.670 BCM)

–Must tie-in if Present Value is > $ -50k

–Decision tree extended: gas plant and non-assoc gas flares

–Conventional wells—shut in until tied in (72 hour tests)

–Fugitive emissions programs and implementing required

Newfoundland and Labrador Offshore Petroleum Board

Terra Nova FieldGas Flared

Yearly Cumulative Totals And Daily Average Oil Produced

0

60,000

120,000

180,000

240,000

300,000

360,000

420,000

480,000

540,000

600,000

2002 2003 2004 2005 2006

Year

Cu

mu

lati

ve G

as T

ota

ls (

103

m3 )

0

5,000

10,000

15,000

20,000

25,000

Dai

ly A

vera

ge

Oil

Pro

du

ctio

n

(m³/

d)

Gas Flared Daily Average Oil Produced

White Rose FieldMonthly Cumulative Gas Flared And Daily Average Oil Produced

0

6,000

12,000

18,000

24,000

30,000

36,000

42,000

48,000

54,000

60,000

Nov

-05

Dec

-05

Jan-

06

Feb

-06

Mar

-06

Apr

-06

May

-06

Jun-

06

Jul-0

6

Aug

-06

Sep

-06

Oct

-06

Nov

-06

Dec

-06

Year

Cu

mu

lati

ve G

as T

ota

ls (

103

m3 )

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000D

aily

Ave

rag

e O

il P

rod

uct

ion

(m

³/d

)Gas Flared Daily Average Oil Produced

Hibernia FieldGas Flared

Yearly Cumulative Totals And Daily Average Oil Produced

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Year

Cu

mu

lati

ve G

as T

ota

ls (

103

m3 )

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Dai

ly A

vera

ge

Oil

Pro

du

ctio

n

(m³/

d)

Gas Flared Daily Average Oil Produced

Other Strategies - Canadian Jurisdictions

• Facilitate discussions with stakeholders and industry• Resolve regulatory barriers and economic barriers• Adopt air quality guidelines, measurement, and

modeling• Improve flare design and operations standards• Require utilization unless flaring justified to regulator• Expand public notification and consultation• Use flare hierarchy—eliminate, reduce, improve• Re-licence facilities - deadline or permit cancelled• Amend acts and regulations

Conclusions - What Worked

• Stakeholder consensus processes

• Industry-wide targets but assess each site

• Independent regulator—backstop provisions

• Clear and consolidated requirements

• Good measurement, reporting, monitoring

• Regular review of flaring and venting targets

• Improved public confidence in process

Policy and Regulatory Framework: Flaring and Venting in Canada

Arden BERG

P. Eng. EUB Board Member

The Norwegian Experience

Marta Sophie LINDE MELHUS

Norwegian Petroleum Directorate

Overview

• The Norwegian resource management to flare

• The international work

Norwegian CS

Norwegian energy policy:

- Combine the role of being a large energy producer with a pioneering position on environmental issues

The petroleum resources on theNorwegian Continental Shelf (status 1.1.2006)

• 50 fields in production

• Produced reserves:

– 27 billion boe

• Remaining reserves and resources:

– 55 billion boe

• Daily production:

– 3.0 million boe liquid per day

– 8.2 billion SCF gas per day

• Share of GDP: 24.7 %

• Share of total export: 51.6 %

The resource management

• Flaring and venting are strictly regulated from a resource management point of view since the early days on the Norwegian Continental Shelf, NCS (1971 → )

Historical view of the flaring on the NCS

0

5

10

15

20

25

30

35

40

1975 1979 1983 1987 1991 1995 1999 2003Gas fl

ari

ng

(m

3)

per

m3

sold

o.e

.

Gas export started

CO2 tax introduced

Gas flaring policy

• The Petroleum Act; Flaring and venting in excess of the quantities needed for normal operational safety shall not be allowed unless approved by the Ministry”

– The Plan for Developement and Operation (PDO) needs an approval from the Norwegian government/Storting

– A gas management system for each new field is implied

– Annual flare permits and annual production permits are needed

• The CO2 Act; CO2 tax has to be payed for all gas to fuel, flare and vented gas (about USD 0.1 per Sm3 gas)

The consequences of the policy

• Developement of integrated gas transport systems

• Driving force to improved oil recovery by gas reinjection

• Environmental friendly flaring technologies has been developed

• Realization of smaller oilfields on stream

Institutional co-operation

• Currently 12 projects ongoing with focus on:–Legal, regulatory and contractual framework–Resource assessment, promotion and licensing–Government tools: PDO, Production Plans, Flaring Permits,

Abandonment Plans, etc–Gas planning, Environmental Issues, CDM–Supervision and auditing–Data management–Education and Training

• Assistance from Petroleum Safety Authority, PETRAD and other Norwegian authorities and companies

Institutional co-operation

• Exchange of experience, also on issues regarding management of natural gas:

–Assistance to develop legal and regulatory framework–Gas planning–Technology transfer–Health, safety and environment isues–Training and other institutional support

• For more information you are welcome to visit the NPDs web side:

www.npd.no

The Norwegian Experience

Marta Sophie LINDE MELHUS

Norwegian Petroleum Directorate

Minimizing Flaring and Ventingin Established Markets

J. Michael MELANCON

Regional SupervisorProduction and DevelopmentMMS, Gulf of Mexico OCS Region U.S. Dept. of Interior

Oil Production2005

• Oil Production

Source: Energy Information Administration (2004 data)

0

2

4

6

8

10

Sau

di

Ara

bia

Ru

ssia

Un

ited

Sta

tes

Iran

Mex

ico

Ch

ina

No

rway

Can

ada

Ven

ezu

ela

Ku

wai

t

Nig

eria

Un

ited

Kin

gd

om

Iraq

Alg

eria

Bra

zil

An

go

la

Ecu

ado

r

Eq

uat

ori

al

Gu

inea

Gab

on

Cam

ero

on

Mil

lio

n B

arr

els

/Da

y

Gas Production2005

• Gas Production


0

10

20

30

40

50

60

70

Un

ited

Sta

tes

Ru

ssia

Can

ada

Alg

eria

Iran

No

rway

Un

ited

Kin

gd

om

Sau

di A

rab

ia

Ven

ezu

ela

Nig

eria

Mex

ico

Ch

ina

Bra

zil

Ku

wai

t

An

go

la

Iraq

Eq

uat

ori

al G

uin

ea

Gab

on

Cam

ero

on

Ecu

ado

r

Bil

lio

n C

ub

ic F

ee

t/D

ay

US Gulf of Mexico

1947

2006

GOM Production(Bar height indicates volume)

Pipelines

• Pipeline Infrastructure

Flaring & Venting 2004

• Worldwide Flaring & Venting


Pe

rce

nt

of

Pro

du

cti

on

0

20

40

60

80

100

Bra

zil

Ku

wai

t

Iran

Ven

ezu

ela

Alg

eria

Un

ited

Kin

gd

om

Can

ada

No

rway

US

(n

on

-GO

M)

US

(G

OM

)

Sau

di A

rab

ia

MMS Regulatory Program

•Flaring & Venting Categories1.Continuous

• generally not allowed offshore U.S.• small & uneconomic allowed• lease use allowed

2.Intermittent (upsets)• equipment failure/maintenance• testing/unloading

ALL must be recorded on field records and submitted to MMS monthly

MMS Regulatory Program

• How to Minimize Continuous Flaring & Venting

– Prohibit permanent flaring/venting of associated gas

– Economic review of facilities that continuously flare/vent over threshold

– Require capture of gas if equipment is cost neutral over life of facility

(Courtesy of Christopher Richter)

US Offshore Law

OCS Lands Act43 USC 1334(i)

• (No lessee)... shall be permitted to flare natural gas from any well unless the Secretary finds that there is no practicable way to complete production of such gas, or that such flaring is necessary to alleviate a temporary emergency situation or to conduct testing or work-over operations

Intermittent Flaring

• How to Minimize Intermittent Flaring & Venting

– Properly maintain equipment– Install spare compressor capacity– Spare VRU on large platforms– Only low GOR wells during

incidents– Shut-in facilities when necessary– Monitor compliance

GOM Challenges

• Challenges– ~87% of gas is vented instead of

flared – can’t see it– Deepwater facilities can flare/vent

huge volumes in short time period– Cannot inspect as many facilities in

deepwater due to long flight times

Future

• Future U.S. Improvements– Drafting clearer regulations– Require flare/vent meters on

major oil production facilities– Separate flare vs. vent records– Sending regulatory experts

offshore with inspectors– Infrared video cameras to "see"

unauthorized venting– Monitor from satellites

Infrared Video Camera

Infrared Video Camera Flare boom

Naked Eye


Infrared Video Camera Flotation Unit (treats produced water)

Naked Eye


Satellites

(Courtesy of Goddard Space Flight Center)

(Data from European Space Agency World Fire Atlas)

Minimizing Flaring and Ventingin Established Markets

J. Michael MELANCON

Regional SupervisorProduction and DevelopmentMMS, Gulf of Mexico OCS Region U.S. Dept. of Interior

François Régis MOUTON

World Bank GGFR Adviser

Flares As Seen From The Sky

Dr. Christopher D. ELVIDGE

U.S. Department of CommerceNational Oceanic and Atmospheric AdministrationNational Environmental Satellite and Information ServiceNational Geophysical Data Center

Flares as seen from the skyPost Forum Workshop

• How much gas is flared globally?

• How much gas is flared within individual countries?

• What are the trends in gas flaring?

• Can progress in reduction in flaring be independently confirmed?


Why Not Estimate Gas Flaring Volumes From Satellite Data?

• Open combustion produces a unique signature that should be detectable by satellite sensors.

• Systematic global observations of gas flaring from satellites could provide independent data on location of flaring, flaring volumes and trends over time


• The U.S. Air Force• Defense Meteorological • Satellite Program (DMSP)• Operational Linescan System (OLS) has a

unique capability to collect low-light imagery. The primary mission of DMSP is cloud detection and weather prediction. But gas flares and other light sources are also detected.

• Polar orbiting• 3000 km swath• Fourteen orbits per day• 2.7 km ground sample distance (GSD)• Two spectral bands: visible and thermal• Nightly global coverage• Flown since 1972• Digital archive from 1992.• Will continue till ~2012

Visible

Thermal

• The OLS sensor is extremely sensitive to light emitted by gas flares.

• Nightly observations make it possible to include many observations during a year.

• Global archive extending back to 1992.

• NGDC has standardized and largely automated annual product generation.

• Lighting detected from many other sources.

• No onboard calibration of visible band.

• Gas flares not detected in OLS thermal band data.

• Coarse spatial resolution.

• Clouds, sunlight and heavy moonlight degrade the quality of the observations.


Pros and Cons of DMSP

• Composites made using data from the thousands of orbits collected in a year.

• Composites are screened to exclude:– Clouds– Sunlight– Moonlight– Solar Glare– Missing / bad scan lines

• Composite image is the average digital number of the cloud-free light detections divided by the number of cloud-free observations

• The “sum of lights index” tallies the image values within vectors drawn to cover gas flares.


Nighttime Lights Annual Products


• Processed time series of annual cloud-free composites

1992 F10

1993 F10

1994 F10 F12

1995 F12

1996 F12

1997 F12 F14

1998 F12 F14

1999 F12 F14

2000 F14 F15

2001 F14 F15

2002 F14 F15

2003 F15

2004 F15 F16

2005 F15 F16*

2006 F15 F16*

* Processing not complete


• Cloud-free Coverages From Satellite F16 In 2004


• Average Digital Number of Lights Detected From Satellite F16 In 2004


The annual composites were inter-calibrated based on sets of lights from human settlements (avoiding gas flares and fires). The primary assumption of the inter-calibration is that in most areas lights change very little over the course of two years.


• Convert To A One Km2 Equal Area Projection(Mollweide)


• Vectors are drawn around flares identified based on their fuzzy, circular appearance, dynamic change over time, and lack of urban center in DOE’s population grid

Color composite image made with 2004 as red, 1998 as green and 1992 as blue. Flares often yield vivid colors due to changes in activity from year-to-year.


• Gas flaring in the Gulf of Mexico. Color composite image made with 2004 as red, 1998 as green and 1992 as blue. Flares often yield vivid colors due to changes in activity from year-to-year


• Gas flaring in West Africa. Color composite image made with 2004 as red, 1998 as green and 1992 as blue. Flares often yield vivid colors due to changes in activity from year-to-year


• Gas flaring in the North Sea. Color composite image made with 2004 as red, 1998 as green and 1992 as blue. Flares often yield vivid colors due to changes in activity from year-to-year


• Gas flaring in the Middle East. Color composite image made with 2004 as red, 1998 as green and 1992 as blue. Flares often yield vivid colors due to changes in activity from year-to-year.


• Gas flaring in the Russia. Color composite image made with 2004 as red, 1998 as green and 1992 as blue. Flares often yield vivid colors due to changes in activity from year-to-year


2004 Gas Flaring Calibration

BCM = 2.54E-05x

R2 = 0.94

0

5

10

15

20

25

30

0 400,000 800,000

Sum of Lights Index

BC

M..

Reference BCM data from GGFR 2004 and a set of metered flares in West Africa.

Nigeria

Iran

IraqAngola


• Standard deviations for the 2004 BCM estimates generated from monthly nighttime lights for 2004.


Global estimate of 2004 flaring based on DMSP data is 175 BCM (std. dev. = 26 BCM).


2004 Gas Flaring Estimates From DMSP Data

0

5

10

15

20

25

30

35

0 10 20 30 40 50 60

BC

M..

BCM

Std. Dev.Russia (excluding KM)

Khanty Mansiysky

Nigeria

Iran

Iraq

4-5 BCM:KazakhstanAlgeriaAngolaLibya

2-4 BCM: Saudi Arabia, Qatar, China, Indonesia, Kuwait, Oman, Gabon, North Sea, UAE, Uzbekistan, Venezuela, Malaysia

1-2 BCM: USA, Egypt, Turkmenistan, Eq. Guinea, Congo, Cameroon, Ecuador, Syria

0.5-1.BCM: Brazil, Australia, Mexico, Canada, Yeman, India, Vietnam, Colombia

< 0.5 .BCM: Argentina, PNG, DRC, Thailand, Bolivia, Tunisia, Sudan, Chile, So. Africa, Azerbaijan, Peru, Brunei, Norway, Romania, Chad, Philippines, Trinidad, Myanmar, Kyrgyzstan


• Patterns in annual trends: steady

Cameroon Gas Flaring Estimated From DMSP Data

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Year

BC

M..

F10

F12

F14

F15

F16

Australia Gas Flaring Estimated From DMSP Data

0

0.2

0.4

0.6

0.8

1

1.2

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Year

BC

M..

F10

F12

F14

F15

F16


• Patterns in annual trends: sharp decline in early 1990’s

Saudi Arabia Gas Flaring Estimated From DMSP Data

0

1

2

3

4

5

6

7

8

9

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Year

BC

M..

F10

F12

F14

F15

F16

Libya Gas Flaring Estimated From DMSP Data

0

2

4

6

8

10

12

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Year

BC

M..

F10

F12

F14

F15

F16


• Patterns in annual trends: declinesSyria Gas Flaring Estimated From DMSP Data

0

0.5

1

1.5

2

2.5

3

3.5

4

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Year

BC

M..

F10

F12

F14

F15

F16

Gabon Gas Flaring Estimated From DMSP Data

0

0.5

1

1.5

2

2.5

3

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Year

BC

M..

F10

F12

F14

F15

F16


• Patterns in annual trends: increasing flaringKazakhstan Gas Flaring Estimated From DMSP Data

0

1

2

3

4

5

6

7

8

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Year

BC

M..

F10

F12

F14

F15

F16

China Gas Flaring Estimated From DMSP Data

0

0.5

1

1.5

2

2.5

3

3.5

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Year

BC

M..

F10

F12

F14

F15

F16


• Global flaring remains largely stable

Global Gas Flaring Estimated From DMSP Data

0

20

40

60

80

100

120

140

160

180

200

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Year

BC

M..

F10

F12

F14

F15

F16

• DMSP satellite data can provide estimates gas flaring volumes at an accuracy of about +/- 15%.

• Global flaring remains largely stable from 1992 to 2006.• The 2006 estimate from DMSP data is that global gas flaring

stands at 160 BCM.• Trends can be observed for individual countries – with some

increasing, others decreasing.• The satellite data complement in situ efforts to track gas flaring

volumes.• There are several satellite systems with demonstrated

capability for flare detection. Cost and level of processing and analysis effort will be factors to consider.


Conclusions:


Data and Results Will Be Posted At:

http://www.ngdc.noaa.gov/dmsp/download_gas_flares.html Shape files for gas flare vectors Spreadsheets for individual countries Sum of lights in geotiff format Cloud free coverages in geotiff format

For additional discussion contact [email protected]

Round Tables

• Russia / Caspian SeaAnastasiya ROZHKOVA

–Delibes room (level 1)

• Africa Gulf of GuineaDominique LALLEMENT

–Lulli room (level 1)

• Middle East / North AfricaSilvia PARIENTE-DAVID

–Berlioz room (level -1)

• Latin AmericaFrancisco SUCRE

–Mozart room (level 1)

10h45 – 12h15

Closing Session

• Wrap-Up of round tables

12h30 – 13h15

• Cocktail lunch in Opera Room

13h15 – 14h30

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