Continuing, needless flaring of natural gas still persists across the fossil fuel industry, raising questions of greenwashing for companies claiming carbon neutrality.
“As the LNG industry rushes to offset its carbon emissions, there is no way of knowing whether sufficient carbon credits are being retired to cover the flaring-related emissions embedded in each cargo,” writes Energy Flux founding editor Seb Kennedy.
Liquefied natural gas operators claim to provide a market for “stranded” gas that might otherwise be flared, or burned off, at upstream oil wells. However, citing open-access data from flare capture analysis firm Capterio, Kennedy says flaring still occurs downstream at liquefication plants and regasification terminals.
A recent report from Capterio says a lack of standardization and transparency in carbon neutral certification systems means this downstream flaring is not being properly accounted for in the industry’s emission reduction claims.
Despite this underreporting, recent advances in satellite monitoring have been raising awareness among non-industry stakeholders. While Shell, BP, and TotalEnergies have all sold LNG cargos they claim are carbon neutral, a recent ranking from Capterio lists them as three of the top four worst offenders.
As the European Union and, possibly, the United States, begin enforcing carbon border adjustment mechanisms, awareness of this “hidden” flaring could affect sales of LNG from companies who put on a carbon neutral cloak, Kennedy writes. High levels of gas flaring at an LNG facility run by Algeria’s Sonatrach, for example, could complicate that company’s exports to Europe.
“Consumers will be tracking the embedded emissions in oil and gas imports,” said Capterio CEO Mark Davis—and, since “there are choices,” they may put their dollars elsewhere.
But the volume burned off at LNG facilities is only a small part of the total flaring in the oil and gas industry. Flaring also occurs when infrastructure is outdated or inadequate for the supply, meaning operators may be able to reduce the practice by upgrading their equipment. Kennedy says the savings that result could quickly exceed any investment. He adds that flaring destroys product and erodes margins, meaning there is plenty of incentive for oil and gas companies to stop the practice.
And yet, “the gap between rhetoric and reality is woefully large,” he writes. While there are targets and commitments in place for the LNG industry and several major oil and gas companies have committed to eradicate routine flaring by 2030, now is the time to act.