Flare gas utilization
Oil producers grapple with increased regulatory oversight and infrastructure hurdles
Gas flaring and venting practices have come under increasing scrutiny due to the ESG movement and new US government climate change policies, leading to potentially negative financial impacts on companies that regularly engage in these practices; therefore, oil producers must comply with gas flaring regulations and prioritize ESG considerations to meet the growing demands of stakeholders, despite the economic challenges presented by a lack of midstream infrastructure.
Typically, the lack of midstream infrastructure near producing wells results in gas flaring and venting as the most economically viable option. However, this presents challenges for oil producers, specifically in terms of regulatory compliance regarding gas flaring and the growing emphasis on ESG considerations from stakeholders.
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Investors are demanding greater accountability from oil-producing companies, as evidenced by Blackrock’s assertion that a “near elimination of flaring” is necessary to achieve a net-zero goal by 2050, making it imperative for companies to deploy gas engines at drilling sites to convert wasted gas into power, resulting in significantly reduced emissions that can be included in ESG reporting.
250 mcf/d otherwise flared gas can be converted into 1.25 MW of electricity. The reduction of emissions depends on the compound and other specifications of available gases.