Gas flaring and sustainable development - Thomas Eid (NORAD)


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  • Gas flaring and sustainable development - Thomas Eid (NORAD)

    1. 1. Oil for Development – OfD Workshop; Amsterdam Thomas Eid/03.12.08 Januar 2008
    2. 2. Past & Present <ul><li>Norway has given petroleum assistance from the mid 1980s (VietnamMozambique) </li></ul><ul><li>A special program (Oil for Development) started in 2005. Strengthened environmental and financial aspects of the assistance </li></ul><ul><li>Budget : USD 35 mill. Operates in 25 countries plus regional programs. </li></ul>
    3. 3. OfD – our foundation <ul><li>OfD is built around three integrated themes: </li></ul><ul><li>Resource management </li></ul><ul><li>Environmental protection </li></ul><ul><li>Revenue management </li></ul>Principles of good governance, transparency and accountability are a fundamental part of the three themes
    4. 4. OfD – main objective <ul><li>Help cooperating countries to manage their petroleum resources in a way that generates sustainable economic growth , promotes the welfare of the whole population and is environmentally benign </li></ul><ul><li>Combats the ”resource curse” </li></ul>
    5. 5. Core countries
    6. 6. Flaring and Resource Management <ul><li>Flaring of associated gas is a massive resource waste </li></ul><ul><li>Flaring in Africa 40 bcm – enough to generate 250 TWh/year of electricity </li></ul><ul><ul><li>Twice the electricity consumed in Sub Sahara Africa (excluding South Africa) </li></ul></ul><ul><li>Bringing flared gas to markets diversifies energy supplies and reduces energy import dependence </li></ul><ul><li>Better to re-inject (and save for future generations) than to flare gas </li></ul>
    7. 7. Flaring and Environmental Protection <ul><li>Flaring a major source of greenhouse gas emissions </li></ul><ul><ul><li>Some 400 MT CO2e emitted annually from gas flaring </li></ul></ul><ul><ul><li>2 times EUs Kyoto Compliance Gap per annum </li></ul></ul><ul><li>So far no sign of downward trend it flaring, but a mixed picture </li></ul><ul><ul><li>Some countries are successful in flare reduction efforts </li></ul></ul><ul><ul><li>But new flares emerge in regions with poor market outlets </li></ul></ul><ul><li>Climate change concerns require swift action to reduce flaring </li></ul><ul><ul><li>Companies must become more pro-active </li></ul></ul><ul><ul><li>Governments must impose adequate and effective policies </li></ul></ul><ul><ul><li>The Kyoto Mechanisms (CDM;JI) must play a role </li></ul></ul><ul><li>Flare reduction projects grossly underrepresented in CDM and JI </li></ul>
    8. 8. Flaring and Revenue Management <ul><li>Flare elimination – revenue potential for the state </li></ul><ul><li>Corporate taxes and royalty from gas sales </li></ul><ul><li>State-owned oil companies </li></ul><ul><li>Revenues from carbon credits </li></ul>
    9. 9. Flaring and Local Benefits <ul><li>Flaring elimination has positive effects for local communities </li></ul><ul><ul><li>Local air pollution </li></ul></ul><ul><ul><ul><li>Health impacts </li></ul></ul></ul><ul><ul><ul><li>Less pressure on natural environment </li></ul></ul></ul><ul><ul><li>End to continuous light and noise from flares </li></ul></ul><ul><li>Flare elimination can provide access to modern and clean fuels </li></ul><ul><ul><li>LPG can be processed from previously flared gas and be distributed locally </li></ul></ul><ul><ul><li>Offers an attractive alternative to unsustainable use of tradition fuels </li></ul></ul><ul><ul><ul><li>traditional fuels often result in land degradation and serious health problems </li></ul></ul></ul>
    10. 10. OfD – WHO are stakeholders? <ul><li>National governments </li></ul><ul><li>Norwegian ministries; The Norwegian Petroleum Directorate, Petrad, the Norwegian Pollution Control Authority, consultancies and research institutions </li></ul><ul><li>The Extractive Industries Transparency Initiative (EITI) </li></ul><ul><li>Norwegian and international oil and service companies; where appropriate </li></ul><ul><li>NGOs </li></ul><ul><li>World Bank, African Dev. Bank, IMF, UNDP </li></ul>
    11. 11. HOW do we work? - Resource mgt. <ul><li>Strengthening of local institutions (ministries & directorates) </li></ul><ul><li>Development/assessment of petroleum legal frameworks </li></ul><ul><li>Framework for exploration and production of petroleum </li></ul><ul><li>Resource databases </li></ul><ul><li>Strategies for transparent licensing and tendering processes </li></ul><ul><li>Policies to stimulate technology development and the involvement of local industry </li></ul>
    12. 12. HOW do we work? - Environmental mgt <ul><li>Build environmental management capacity within the sector </li></ul><ul><li>Basic legislation, rules and regulations covering environmental dimensions of the petroleum sector </li></ul><ul><li>Minimise discharges from activities </li></ul><ul><li>Environmental impact assessments </li></ul><ul><li>Manage gas flaring and other national/global climate challenges that are directly related to the petroleum industry </li></ul>
    13. 13. OfD Gas flaring <ul><li>÷ Economy </li></ul><ul><li>÷ Environment </li></ul><ul><li>÷ Sustainability </li></ul>