Click here for search results

Site Tools

October 2003

Since the Steering Committee on June 30, 2003, the GGFR Partnership has again expanded significantly. New partners are ExxonMobil, ENI, Indonesia, Norsk Hydro, and Statoil, and discussions with additional interested parties continue. A recent GGFR workshop was funded by Canada and support of additional activities is under discussion with Canada as well as the UK and Halliburton. As a result overall funding has improved and around 90% of the work program for the global deliverables and initial GGFR Partner countries is now funded. The extended work program including additional target countries would be covered for 75%. The work program is being implemented, with global activities maturing and work in several countries starting based on previously agreed country work programs.

A. Progress on Global Initiatives
1. Regulation

After the completion of a draft report on the regulatory situation in some 40 countries, work continued with the analysis of some "best practice" examples (Alberta, UK, Norway). Dissemination of results took place through a regulatory workshop in Calgary with most client countries and some company representatives in October. At this workshop the Canadian approach that has led to significant reductions in gas flaring and venting achieved in Alberta was presented, including success factors and lessons learned. The key success factors included the consensual approach with regulatory backstop, and the economic evaluation used by the Alberta Energy Utilities Board (AEUB). The workshop will be followed up by workshop(s) in client countries focused on discussing country specific approaches to flaring regulation.

2. Standards

Considerable progress was made on a common global standard for gas flaring and venting. The standard is focusing on gas market development, optimal hydrocarbon production, and sustainable development. The direction of the standard is no continuous flaring and venting unless alternatives are demonstrated to be unfeasible. Criteria for unfeasible and instruments to assess such a situation include integrated economics rather than incremental gas economics, with safeguards to protect against unreasonable requirements. Continuous improvement toward an end goal of "no continuous or noncontinuous venting or flaring of associated gas," measuring, public reporting, and independent verification on emissions and reduction performance are among the standard's attributes.

A workshop was held in October in London to discuss the principles of the global standard. The main principles were agreed upon and the project will proceed to Phase II for the detailed development of the standard, with another consultative workshop planned for Feb 2004. Thereafter the GGFR Steering Committee is anticipated to approve the standard in its March meeting for implementation throughout the Partnership.

3. Carbon credits

A consultation workshop in July concluded that the Clean Development Mechanism (CDM) methodologies and processes are in general not well developed. As a follow-up, consultants are working with GGFR on one of the key issues identified in the workshop, that is, a baseline methodology for the preparation of gas flaring reduction projects to obtain carbon credits. A consultative workshop is planned for February 2004 so that results can be presented at the March GGFR Steering Committee. GGFR is identifying "representative" flaring reduction projects in the Partnership where it can assist with the methodology and process of obtaining carbon credits.

4. Commercialization

Commercialization discussions with Partners continued with the objective to facilitate utilization of otherwise flared gas in GGFR focus countries through identification of projects and reduction of barriers. This has resulted in several items in the country work programs, such as work on market development and/or access, regulatory/legal/fiscal/incentives frameworks, and removal of associated gas utilization barriers. First country results on commercialization (Cameroon) are encouraging.

B. Progress on Countries

1. Initial GGFR Partners
Work program activities include a countrywide associated gas utilization review and capacity building for carbon credits. The scope for these activities has been defined in detail and consultant selection is in its final phase. Implementation is set to begin in January 2004.

The detailed scope for the work program, including setting up a legal framework for associated gas utilization and clarifying the eligibility of the LNG export project for carbon credits, is being defined.

A study to establish whether associated gas can be commercialized through a combination of power generation, production of LPGs and condensate, and carbon credits is well underway. Preliminary results are encouraging, and a visit to Cameroon to discuss conclusions is planned before yearend.

Chad, Ecuador
The conclusion for the small-scale gas utilization studies in both countries was that it is possible to use associated gas on a small scale in an economically attractive manner. However, implementation depends on awareness and interest, and GGFR activities are now focused on raising these, and on discussing potential follow-up work. Follow up work is being planned in Chad to start in January 2004.

The work program activities focus on the implementation of the gas sector strategy work and the development of a legal framework for the gas sector. This activity is now underway. In addition, the work on formulating a plan to develop the gas markets in Ghana, Togo and Benin for the West Africa Gas Pipeline beyond its foundation customers has started. Other activities are under review including local market development and gas utilization projects, including power generation, small-scale projects and LPG projects.

2. Additional target countries
Indonesia has decided to join the GGFR Partnership, and the proposed work program includes a countrywide review of associated gas utilization and carbon credit capacity building. A study on the flaring situation in Russia and possible benefits to the country of gas flaring reduction in terms of revenue, balance of payment impact etc. has started with results expected before the next steering committee. Venezuela was visited and a notional work program has been discussed. Discussions with Equatorial Guinea are planned during a conference focusing on the country in Houston in November. In the Middle East, Iran is the most significant flaring country and has invited Bank Operations to discuss flaring reduction assistance. GGFR will join the Bank mission currently scheduled in December 2003. Mexico and Brazil were visited previously.

Potential work program additions for these countries will be proposed at the March Steering Committee. If the additional countries join the Partnership, in total around 75% of worldwide gas flaring will be covered and the Partnership's actions will have a major impact on global gas flaring.

C. Measures of Success

The GGFR team is developing success measures for the entire Partnership as well as some underlying measures for the team itself. The measures for the entire GGFR Partnership would be the primary measures, and they are:

1. A significant representation of world gas flaring in the Partnership:
Measure: number of target countries and companies that have become GGFR Partners as a result of lobbying by the GGFR team as well as by the existing Partner companies and countries.
Rationale: some 70-80% of global flaring is occurring in 10-15 countries, and participation of all those governments and their national oil companies in GGFR, in combination with participation of the major international oil companies active in those countries, would significantly facilitate global flaring reduction.

2. Setting a standard for flaring and venting:
Measure: the Global Flaring and Venting Standard, accepted for implementation by the GGFR Partnership.
Rationale: the intent of the standard is to significantly reduce flaring and venting before 2010. The GGFR team is developing this standard, supported by regular consultation with the GGFR Partners. However, internal consultation within companies and countries and feedback to the GGFR team are equally important. The resulting acceptance and active implementation of such standard in the GGFR countries and companies is the main success measure. Target acceptance date is the next Steering Committee meeting.

3. Implementation of country deliverables: Action Plan
Measure: number of GGFR client countries that have agreed to an individual "implementation plan" by 1.1.2006.
Rationale: this implementation plan would result from the country deliverables in the work program. Depending on country needs, such a plan could contain a step-wise implementation approach for activities such as development of markets, regulatory improvements, incentives frameworks for gas versus competing fuels, and implementation of the global flaring standard.

4. Demonstration projects:
Measure: number of GGFR client countries in which a demonstration project has been developed and implementation has been agreed with stakeholders.
Rationale: the purpose of these projects is to demonstrate the viability of reducing flaring and venting through a partnership approach in client countries. Demonstration projects could vary widely, dependent on country needs and priorities, from gas utilization projects to supporting an existing flare reduction project with carbon credits, to small-scale gas use, etc.

The outcome, reflected in the graph below, is expected to be a significant reduction in global gas flaring, in particular in the period 2005-2010, comparable to the major reduction in the early eighties.

GGFR Status Report

Permanent URL for this page: