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2. François Régis MOUTON World Bank GGFR Adviser

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4. Yuriy MYROSHNYCHENKO World Bank Operations Officer

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6. Policy and Regulatory Framework: Flaring and Venting in Canada Arden BERG P. Eng. EUB Board Member

7. Alberta EUB (IA) Endorsers Independent Agency (IA) and Gov’t Department British Columbia (IA) Saskatchewan (Dept) Manitoba (Dept) NEB (IA - federal) C-NLOPB (IA: joint federal & provincial Board)

8. Topics for Discussion Regulatory framework Themes for regulatory model success Roles of independent regulator CASA process – consultative approach Canadian Offshore Other Canadian initiatives

9. 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)

10. Regulatory Framework Diagram Government sets policy Government Departments (environmental standards, leasing,..) Public Regulators administer policy Industry develops projects LEGISLATION REGULATIONS

11. 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

12. 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"

13. 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

14. 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

15. 1996 vs. 2005 (flaring -72%, venting -59%) Percentage utilized Volume flared and vented Issue: 1996 @ 1.8 bcm and not declining 96.3%.67 bcm *bcm = billion cubic metres Year 1996 - baseline for flaring Year 2000 – baseline for venting

16. 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

17. 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

18. Newfoundland and Labrador Offshore Petroleum Board Terra Nova Field Gas 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 20022003200420052006 Year Cumulative Gas Totals (10 3 m 3 ) 0 5,000 10,000 15,000 20,000 25,000 Daily Average Oil Production (m³/d) Gas FlaredDaily Average Oil Produced White Rose Field Monthly 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-06Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06Sep-06 Oct-06Nov-06 Dec-06 Year Cumulative Gas Totals (10 3 m 3 ) 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Daily Average Oil Production (m³/d) Gas FlaredDaily Average Oil Produced Hibernia Field Gas 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 1997199819992000200120022003200420052006 Year Cumulative Gas Totals (10 3 m 3 ) 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 Daily Average Oil Production (m³/d) Gas FlaredDaily Average Oil Produced

19. 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

20. 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

21. Policy and Regulatory Framework: Flaring and Venting in Canada Arden BERG P. Eng. EUB Board Member

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23. The Norwegian Experience Marta Sophie LINDE MELHUS Norwegian Petroleum Directorate

24. Overview The Norwegian resource management to flare The international work

25. Norwegian CS Norwegian energy policy: - Combine the role of being a large energy producer with a pioneering position on environmental issues

26. The petroleum resources on the Norwegian 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 %

27. 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 → )

28. Historical view of the flaring on the NCS 0 5 10 15 20 25 30 35 40 19751979198319871991199519992003 Gas flaring (m3) per m3 sold o.e. Gas export started CO 2 tax introduced

29. 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 CO 2 Act; CO 2 tax has to be payed for all gas to fuel, flare and vented gas (about USD 0.1 per Sm3 gas)

30. 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

31. 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

32. 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

33. For more information you are welcome to visit the NPDs web side: www.npd.no

34. The Norwegian Experience Marta Sophie LINDE MELHUS Norwegian Petroleum Directorate

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36. Minimizing Flaring and Venting in Established Markets J. Michael MELANCON Regional Supervisor Production and Development MMS, Gulf of Mexico OCS Region U.S. Dept. of Interior

37. Oil Production 2005 Oil Production Source: Energy Information Administration (2004 data) 0 2 4 6 8 10 Saudi Arabia Russia United States Iran Mexico China NorwayCanada Venezuela Kuwait Nigeria United Kingdom Iraq Algeria Brazil Angola Ecuador Equatorial Guinea Gabon Cameroon Million Barrels/Day

38. Gas Production 2005 Gas Production Source: Energy Information Administration (2005 data) 0 10 20 30 40 50 60 70 United States Russia Canada Algeria Iran Norway United Kingdom Saudi Arabia Venezuela Nigeria Mexico China Brazil Kuwait Angola Iraq Equatorial Guinea Gabon Cameroon Ecuador Billion Cubic Feet/Day

39. US Gulf of Mexico 1947 2006

40. GOM Production (Bar height indicates volume)

41. Pipelines Pipeline Infrastructure

42. Flaring & Venting 2004 Worldwide Flaring & Venting Source: Energy Information Administration (2004 data) Percent of Production 0 20 40 60 80 100 Brazil Kuwait Iran Venezuela Algeria United Kingdom CanadaNorway US (non-GOM) US (GOM) Saudi Arabia

43. MMS Regulatory Program Flaring & Venting Categories 1.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

44. 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)

45. US Offshore Law OCS Lands Act 43 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

46. 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

47. 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

48. 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

49. Infrared Video Camera

50. Infrared Video Camera Flare boom Naked Eye Infrared Video Camera

51. Infrared Video Camera Flotation Unit (treats produced water) Naked Eye Infrared Video Camera

52. Satellites (Courtesy of Goddard Space Flight Center) (Data from European Space Agency World Fire Atlas)

53. Minimizing Flaring and Venting in Established Markets J. Michael MELANCON Regional Supervisor Production and Development MMS, Gulf of Mexico OCS Region U.S. Dept. of Interior

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55. François Régis MOUTON World Bank GGFR Adviser

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57. Flares As Seen From The Sky Dr. Christopher D. ELVIDGE U.S. Department of Commerce National Oceanic and Atmospheric Administration National Environmental Satellite and Information Service National Geophysical Data Center

58. Flares as seen from the sky Post 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?

59. Flares as seen from the sky Post Forum Workshop 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

60. Flares as seen from the sky Post Forum Workshop 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

61. 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. Flares as seen from the sky Post Forum Workshop Pros and Cons of DMSP

62. 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. Flares as seen from the sky Post Forum Workshop Nighttime Lights Annual Products

63. Flares as seen from the sky Post Forum Workshop Processed time series of annual cloud-free composites 1992F10 1993F10 1994F10F12 1995F12 1996F12 1997F12F14 1998F12F14 1999F12F14 2000F14F15 2001F14F15 2002F14F15 2003F15 2004F15F16 2005F15F16* 2006F15F16* * Processing not complete

64. Flares as seen from the sky Post Forum Workshop Cloud-free Coverages From Satellite F16 In 2004

65. Flares as seen from the sky Post Forum Workshop Average Digital Number of Lights Detected From Satellite F16 In 2004

66. Flares as seen from the sky Post Forum Workshop 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.

67. Flares as seen from the sky Post Forum Workshop Convert To A One Km 2 Equal Area Projection (Mollweide)

68. Flares as seen from the sky Post Forum Workshop 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.

69. Flares as seen from the sky Post Forum Workshop 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

70. Flares as seen from the sky Post Forum Workshop 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

71. Flares as seen from the sky Post Forum Workshop 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

72. Flares as seen from the sky Post Forum Workshop 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.

73. Flares as seen from the sky Post Forum Workshop 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

74. Flares as seen from the sky Post Forum Workshop Reference BCM data from GGFR 2004 and a set of metered flares in West Africa. Nigeria Iran Iraq Angola

75. Flares as seen from the sky Post Forum Workshop Standard deviations for the 2004 BCM estimates generated from monthly nighttime lights for 2004.

76. Flares as seen from the sky Post Forum Workshop Global estimate of 2004 flaring based on DMSP data is 175 BCM (std. dev. = 26 BCM).

77. Flares as seen from the sky Post Forum Workshop Top twenty 2004 BCM estimates from DMSP nighttime lights BCM Std. Dev.+/- Russia (excluding KM)29.823.8512.9% Khanty Mansiysky26.362.9611.2% Nigeria 23.443.6215.4% Iran12.241.7814.5% Iraq 8.150.9311.4% Kazakhstan 6.011.4524.1% Algeria 5.751.0217.7% Angola 5.450.8415.4% Libya 4.550.39 8.6% Saudi Arabia 3.290.6419.4% Qatar 3.280.8525.9% China 3.130.4715.0% Indonesia 3.030.5417.8% Kuwait 2.850.3411.9% Oman 2.710.8531.4% Gabon 2.630.3814.4% North Sea 2.580.3112.0% UAE 2.510.28 11.2% Uzbekistan 2.300.3013.0% Venezuela 2.250.4118.3%

78. Flares as seen from the sky Post Forum Workshop Russia (excluding KM) Khanty Mansiysky Nigeria Iran Iraq 4-5 BCM: Kazakhstan Algeria Angola Libya 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

79. Flares as seen from the sky Post Forum Workshop Patterns in annual trends: steady

80. Flares as seen from the sky Post Forum Workshop Patterns in annual trends: sharp decline in early 1990’s

81. Flares as seen from the sky Post Forum Workshop Patterns in annual trends: declines

82. Flares as seen from the sky Post Forum Workshop Patterns in annual trends: increasing flaring

83. Flares as seen from the sky Post Forum Workshop Global flaring remains largely stable

84. 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. Flares as seen from the sky Post Forum Workshop Conclusions:

85. Flares as seen from the sky Post Forum Workshop 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 chris.elvidge@noaa.gov

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87. Round Tables Russia / Caspian Sea Anastasiya ROZHKOVA – Delibes room (level 1) Africa Gulf of Guinea Dominique LALLEMENT – Lulli room (level 1) Middle East / North Africa Silvia PARIENTE-DAVID – Berlioz room (level -1) Latin America Francisco SUCRE – Mozart room (level 1) 10h45 – 12h15

88. Closing Session Wrap-Up of round tables 12h30 – 13h15 Cocktail lunch in Opera Room 13h15 – 14h30

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