Industry Seeks Ways to Implement Kremlin Directive to End Flaring

The Kremlin wants to end gas flaring, a wasteful and polluting practice so prevalent across Siberia that it rivals the Great Wall of China as the most obvious man-made feature visible from space.  

In April, President Vladimir Putin highlighted the urgency of the problem when, in his message to the Federal Assembly of the Russian Federation, Putin directed the oil and gas industry to start getting control of the problem by installing equipment to measure how much associated petroleum gas (APG) is being produced.

“A system of measures has proven its effectiveness all over the world,” Putin said in his address. “Appropriate record keeping systems must be put in place immediately – penalties for environmental damage will increase, and license requirements for subsoil users will become more rigorous.”

These requirements were only the start. Putin later issued orders for government organizations to equip fields with meters, to increase fines for environmental damage, and to offer companies incentives to utilize APG by the end of 1st Q 2008.

In response, representatives of government organizations, scientists and industrialists met at an International Conference in Moscow recently to discuss the President’s orders and other issues surrounding the utilization of associated petroleum gas in Russia.

The Conference was at the initiative of the International Bank of Reconstruction and Development (IBRD), the Global Gas Flaring Reduction Partnership and Russia's Ministry of Industry and Energy (MIE). It was also supported by Russia’s Union of Oil and Gas Producers, which arranged the event as part of the Fifth International Forum “Fuel and Energy Resources of Russia – 2007”.

“Fair” Flare?

Conference participants were perplexed by the significant difference in the data presented by Russia's government Statistics Committee, Geological Fund and Central Dispatch Administration of the Fuel and Energy Complex (FEC CDA) on the volume of associated gas flared in Russia in 2005 (13.1; 13.4; and 14.9 bcm respectively). These data were presented by Alexander Savinov, Head of the Department of Regulatory Control, Industrial Safety and Ecology for Oil and Gas Complex at the MIE.  

None of the national figures cited for last year exceeded the 20 bcm that Putin mentioned, even when discrepancies in data from different organizations are accounted for. But PFC Energy, an international consulting company, came up with a much higher for 2006 – 38 bcm. Klaus Roland, the director and permanent representative of the World Bank in Russia, presented satellite acquisition slides from the U.S. National Oceanic and Atmospheric Administration that showed the astounding gas flares that “Yuri Gagarin would see from space today.” The presentation convincingly showed that Russia flared at least 50 bcm of gas in 2006, 24 bcm in the Khanty-Mansiysk Autonomous District (KhMAD, Yugra) alone.

Vitali Troinin, Head of the Engineering Office and Surgutneftegaz’s Deputy Chief Engineer, represents those who support APG flaring. On the World Bank’s data, he commented: “In September, Rostekhnadzor inspected flares at 70 fields in KhMAD and had few criticisms. We supply the Surgut State District Power Station (GRES) with only 12 bcm