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Canadian Energy Centre

Canadian energy producers among worlds’ best at limiting gas flaring

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The Nahr Bin Omar oil field and facility near Iraq’s southern port city of Basra on February 11, 2022. In the oilfields of southern Iraq, billions of cubic feet of gas literally go up in smoke, burnt off on flare stacks for want of the infrastructure to capture and process it. (Photo by HUSSEIN FALEH/AFP via Getty Images)

From the Canadian Energy Centre

International comparisons of gas flaring among top oil producers

Canada contributed just 0.7% of the global amount of gas flaring despite being the world’s fourth-largest oil producer

By Ven Venkatachalam and Lennie Kaplan

This Fact Sheet analyzes the upstream oil industry’s record on flaring in Canada relative to other top oil-producing countries. Gas flaring is the burning off of the natural gas that is generated in the process of oil extraction and production. Flaring is relevant because it is a source of greenhouse gas emissions (GHGs) (see Appendix).

In 2022, 138,549 million cubic meters (m3) (or 139 billion cubic meters (bcm)) of flared gases were emitted worldwide, creating 350 million tonnes of CO2 emissions annually. Canada is a significant oil producer; it has the third-largest proven crude oil reserves and is the fourthlargest crude oil producer in the world (Natural Resources Canada, undated), and so contributes to flaring.

Flaring comparisons

This Fact Sheet uses World Bank data to provide international comparisons of flaring. It also draws on U.S. Energy Information Administration (EIA) crude oil production data to compare flaring among the top 10 crude oil producing countries.

Table 1 shows gas flaring volumes in 2012 and 2022. In absolute terms, Russia recorded more flaring than any other country at 25,495 million m3 (25.4 bcm) in 2022, which was 1,628 million m3 (7 per cent) higher than in 2012.

The four countries that are the top GHG emitters through flaring (Russia, Iraq, Iran, and Algeria) accounted for 50 per cent of global gas flaring in 2022.

At 945 million m3, Canada was the eighth lowest flarer in 2022 (23rd spot out of the top 30 countries). It decreased its flaring emissions by 320 million m3 from the 2012 level of 1,264 million m3, a 25 per cent drop.

In 2022, Canada contributed just 0.7 per cent of the global amount of gas flaring despite being the world’s fourth largest oil producer (see Table 1).

Sources: World Bank (undated)

Flaring declined worldwide between 2012 and 2022

Figure 1 shows the change in flaring volumes between 2012 and 2022. Nine countries flared more in 2022 than in 2012, while 21 countries flared less. In the last decade, the global flaring volume decreased by 3 per cent.

  • The three countries that most significantly increased flaring between 2012 and 2022 were the Republic of the Congo (65 per cent), Iran (56 per cent), and Iraq (41 per cent).
  • The three countries that most significantly decreased flaring between 2012 and 2022 were Uzbekistan (-76 per cent), Columbia (-75 per cent) and Kazakhstan (-74 per cent).
  • As noted earlier, flaring fell by 25 per cent in Canada between 2012 and 2022.
Sources: World Bank (undated)

Comparing flaring to increased production

The decreases in flaring in Canada between 2012 and 2022 shown in Table 1 and Figure 1 understate the magnitude of the decline in flaring in the country. That is because Canada’s crude oil production increased by 45 per cent in that period, even as absolute flaring decreased by 25 per cent (see Table 2).

Canada compares very favourably with the United States, which increased crude oil production by 82 per cent and decreased flaring by 16 per cent.

Sources: World Bank (undated) and EIA (2023)

Largest oil producers and flaring intensity

To fully grasp how much more effective Canada has been than many other oil producers in reducing flaring, Table 3 compares both flaring intensity (gas flared per unit of oil production) and crude oil production among the top 10 oil producing countries (which account for 73 per cent of the world oil production).

Canada is the fourth-largest producer of crude oil, and its gas flaring intensity declined by 48 per cenft between 2012 and 2022. Four of the top 10 oil producers witnessed their flaring intensity increase between 2012 and 2022.

Sources: World Bank (undated) and EIA (2023)

Conclusion

Gas flaring contributes to greenhouse gas emissions. However, it is possible for countries to both increase their oil production and still reduce flaring. Canada is one noteworthy example of a country that has significantly reduced flaring not only compared to its increased production of crude oil, but also in absolute terms.


Appendix

Background

Flaring and venting are two ways in which an oil or natural gas producer can dispose of waste gases. Venting is the intentional controlled release of uncombusted gases directly to the atmosphere, and flaring is combusting natural gas or gas derived from petroleum in order to dispose of it.¹ As Matthew R. Johnson and Adam R. Coderre noted in their 2012 paper on the subject, flaring in the petroleum industry generally falls within three broad categories:

  • Emergency flaring (large, unplanned, and very short-duration releases, typically at larger downstream facilities or off-shore platforms);
  • Process flaring (intermittent large or small releases that may last for a few hours or a few days as occurs in the upstream industry during well-test flaring to assess the size of a reservoir or at a downstream plant during a planned process blowdown); and
  • Production flaring (may occur continuously for years while oil is being produced).

To track GHGs from flaring and venting, Environment Canada (2016) defines such emissions as:

  • Fugitive emissions: Unintentional releases from venting, flaring, or leakage of gases from fossil fuel production and processing, iron and steel coke oven batteries, or CO2 capture, transport, injection, and storage infrastructure.
  • Flaring emissions: Controlled releases of gases from industrial activities from the combustion of a gas or liquid stream produced at a facility, the purpose of which is not to produce useful heat or work. This includes releases from waste petroleum incineration, hazardous emission prevention systems, well testing, natural gas gathering systems, natural gas processing plant operations, crude oil production, pipeline operations, petroleum refining, chemical fertilizer production, and steel production.
  • Venting emissions: Controlled releases of a process or waste gas, including releases of CO2 associated with carbon capture, transport, injection, and storage; from hydrogen production associated with fossil fuel production and processing; of casing gas; of gases associated with a liquid or a solution gas; of treater, stabilizer, or dehydrator off-gas; of blanket gases; from pneumatic devices that use natural gas as a driver; from compressor start-ups, pipelines, and other blowdowns; and from metering and regulation station control loops.

1. Many provinces regulate flaring and venting including Alberta (Directive 060) British Columbia (Flaring and Venting Reduction Guideline), and Saskatchewan (S-10 and S-20). Newfoundland & Labrador also has regulations that govern offshore flaring.

Notes

This CEC Fact Sheet was compiled by Ven Venkatachalam and Lennie Kaplan at the Canadian Energy Centre: www.canadianenergycentre.ca. All percentages in this report are calculated from the original data, which can run to multiple decimal points. They are not calculated using the rounded figures that may appear in charts and in the text, which are more reader friendly. Thus, calculations made from the rounded figures (and not the more precise source data) will differ from the more statistically precise percentages we arrive at using source data. The authors and the Canadian Energy Centre would like to thank and acknowledge the assistance of an anonymous reviewer in reviewing the data and research for this Fact Sheet.

References (All links live as of September 23, 2023)

Alberta Energy Regulator (2022), Directive 060: Upstream Petroleum Industry Faring, Incinerating, and Venting <https://bit.ly/3AMYett>; BC Oil and Gas Commission (2021), Flaring and Venting Reduction Guideline, version 5.2 <https://bit.ly/3CWRa0i>; Canada-Newfoundland and Labrador Offshore Petroleum Board (2007), Offshore Newfoundland and Labrador Gas Flaring Reduction <https://bit.ly/3RhKpKu>; D&I Services (2010), Saskatchewan Energy and Resources: S-10 and S-20 <https://bit.ly/3TBrVGJ>; Johnson, Matthew R., and Adam R. Coderre (2012), Compositions and Greenhouse Gas Emission Factors of Flared and Vented Gas in the Western Canadian Sedimentary Basin, Journal of the Air & Waste Management Association 62, 9: 992-1002 <https://bit.ly/3cJRqPd>; Environment Canada (2016), Technical Guidance on Reporting Greenhouse Gas Emissions/Facility Greenhouse Gas Emissions Reporting Program <https://bit.ly/3CVQR5C>; Natural Resources Canada (Undated), Oil Resources <https://bit.ly/3oWWhW0>; U.S. Energy Information Administration (undated), Petroleum and Other Liquids <https://bit.ly/2Ad6S9i>; World Bank (Undated), Global Gas Flaring Data <https://bit.ly/3zXuxGX>.

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Canadian Energy Centre

Ignoring the global picture and making Canadians poorer: Energy and economic leaders on Ottawa’s oil and gas emissions cap

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From the Canadian Energy Centre

By Deborah Jaremko

The federal government’s draft rules to cap emissions – and by credible analysis, production – from Canada’s oil and gas sector will make Canadians poorer, won’t reduce world emissions, and are a “slap in the face” to Indigenous communities.

That’s the view of several leaders in energy and the economy calling out the negative consequences of Ottawa’s new regulations, which were announced on November 4.

Here’s a selection of what they have to say.

Goldy Hyder, CEO, Business Council of Canada

“At a time when Canada’s economy is stalling, imposing an oil and gas emissions cap will only make Canadians poorer. Strong climate action requires a strong economy. This cap will leave us with neither.”

Deborah Yedlin, CEO, Calgary Chamber of Commerce

“Canada would stand as the only country in the world to move forward with a self-imposed emissions cap.

“Given that our economic growth numbers have been underwhelming–and our per-person productivity lags that of the United States by $20,000, one would expect the government to be more focused on supporting sectors that are critical to economic growth rather than passing legislation that will compromise investment and hamper our growth prospects.

“…If the Canadian government wants to reduce emissions, it should follow the private sector’s lead – and strong track record – and withdraw the emissions cap.”

Stephen Buffalo, CEO, Indian Resources Council of Canada

“Over the past four decades, Canadian governments urged and promoted Indigenous peoples to engage in the natural resource economy. We were anxious to break our dependence on government and, even more, to exercise our treaty and Indigenous rights to build our own economies. We jumped in with far more enthusiasm and commitment than most Canadians appreciate.

“And now, in a bid to make Canada look ecologically virtuous on the world stage, the Liberal government imposed further restrictions on the oil and gas sector. This is happening as Indigenous engagement, employment and equity investment are growing and at a time when our communities have had their first taste of real and sustainable prosperity since the newcomers killed off all the buffalo. Thanks for nothing.”

Trevor Tombe, professor of economics, University of Calgary School of Public Policy

“[The emissions cap] is a wedge issue that’s going to be especially popular in Quebec. And I don’t think the [federal government’s] thinking goes much further than that.”

Kendall Dilling, president, Pathways Alliance

A decrease in Canadian production has no impact on global demand – meaning another country’s oil will simply fill the void and the intended impact of the emissions cap is negated at a global level.

“An emissions cap gives industry less – not more – of the certainty needed to make long-term investments that create jobs, economic growth and tax revenues for all levels of government. It simply makes Canada less competitive.”

Michael Belenkie, CEO, Advantage Energy

“Canada’s emissions profile is not unusual. What’s unusual about Canada and our emissions is we seem to be the only exporting nation of the world that is willing to self-immolate. All we’re doing is we’re shutting ourselves down at our own expense and watching global emissions increase.”

Kevin Krausert, CEO and co-founder, Avatar Innovations

“The emissions cap risks delaying – if not derailing – a whole suite of emissions-reduction technology projects. The reason is simple: it has added yet another layer of uncertainty and complexity on already skinny investment decisions by weakening the most effective mechanism Canada has in place.

“…After nearly 15 years of experimenting in a complicated regulatory system, we’ve finally landed on one of the most globally effective and fungible carbon markets in the world in Alberta, called TIER.

“What the federal emissions cap has done is introduce uncertainty about the future of TIER. That’s because the cap has its own newly created cap-and-trade system. It takes TIER’s 15 years of experience and market knowledge and either duplicates functioning markets or creates a whole new market that may take another 15 years to get right.”

Dennis Darby, CEO, Canadian Manufacturers & Exporters

“The federal government’s announcement of a cap and trade on oil and gas emissions threatens Canada’s energy trade, economic interests, and national unity.

Adam Legge, president, Business Council of Alberta

“The oil and gas emissions cap is a discriminatory and divisive policy proposal—the epitome of bad public policy. It will likely cap Canadian prosperity—billions of dollars and tens of thousands of jobs lost for no benefit, and the burden will be borne largely in one region and one sector.”

Lisa Baiton, CEO, Canadian Association of Petroleum Producers

“The result would be lower production, lower exports, fewer jobs, lower GDP and lower revenues to governments to fund critical infrastructure and social programs on which Canadians rely.”

Statement, Canadian Association of Energy Contractors

“The Trudeau government does not care about Canadian blue-collar, middle-class energy workers who rely on the industry to support their families. It does not care about small, medium and Indigenous energy service businesses that operate in rural and remote communities across Western Canada. And it certainly does not care about supporting our allies who are desperate for oil and gas from sources other than regimes such as Russia or Iran.”

Peter Tertzakian, executive director, ARC Energy Research Institute

“Focusing on a single sector while ignoring others is problematic because each tonne of emissions has the same impact on climate change, regardless of its source. It makes little sense to impose potentially higher economic burdens on one economic sector when you could reduce emissions elsewhere at a lower cost.”

Shannon Joseph, chair, Energy for a Secure Future

“Canada continues to pursue its climate policy in a vacuum, ignoring the big picture of global emissions. This places at risk our international interests, tens of thousands of good paying jobs and important progress on reconciliation.”

Adam Sweet, director for Western Canada, Clean Prosperity

“Layering on a new cap-and-trade system for oil and gas producers adds uncertainty and regulatory complexity that risks undermining investment in emissions reductions just as we’re getting close to landing significant new decarbonization projects here in Alberta.”

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Alberta

For second year in a row, Alberta oil and gas companies spend more than required on cleanup

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From the Canadian Energy Center

By Grady Semmens

$923 million spent cleaning up inactive wells, sites and pipelines in 2023

As a business owner, Ryan Smith values few things more than predictability when it comes to the oil and gas market and the demand for his company’s services.

That’s why knowing that next year in Alberta, the regulator requires at least $750 million worth of work cleaning up inactive oil and gas wells and other legacy energy infrastructure is tremendously helpful for the CEO of Calgary-based 360 Engineering & Environmental Consulting.

“Having a minimum spend in place for the province makes the market more predictable and consistent, which in turn helps our clients and our business plan for the future, which is a good thing,” says Smith, whose company has completed more than 5,000 site closure activities in Canada and internationally since 2015.

“Site closure has really emerged as a growth market over the last decade, especially in Western Canada where the regulatory systems for oil and gas are more advanced than anywhere else we are exposed to. It is an integral part of the energy lifecycle, and if it is done well it adds a lot of value to the industry.”

The Alberta Energy Regulator (AER) introduced an industry-wide minimum “closure” spending requirement in 2022, part of Alberta’s Inventory Reduction Program to accelerate the remediation of inactive oil and gas wells, facilities and pipelines across the province.

The mandatory quota determines the minimum level of work a company must conduct primarily to decommission and reclaim a proportion of its inactive inventory.

Inactive wells are defined as those that have not been used for six months or a year, depending on what they are being used for. When a company decides that they will not reactivate an inactive well they decommission it through a process called abandonment.

A well is considered successfully abandoned after it is cleaned, plugged with cement, cut to a minimum of one meter below the surface and covered with a vented cap. After abandonment comes remediation and reclamation, where the land around the well is returned to the equivalent of its original state.

The first two years under the new rules saw Alberta’s energy industry significantly exceed the minimum closure requirements.

In 2022, companies spent more than $696 million, about 65 per cent more than the initial threshold of $422 million. The AER increased the minimum spend to $700 million in 2023, which producers surpassed by 22 per cent with total expenditures of $923 million.

The 2024 minimum remains at $700 million, while in July the regulator announced that the minimum spend for 2025 was raised to $750 million.

This closure work does not include remediation of oil sands mining sites, which is handled under the Mine Financial Security Program, nor does it include the closure of orphan wells (wells without a legal owner) managed by the industry-funded Orphan Well Association.

Gurpreet Lail, CEO of Enserva, an industry association representing energy service companies, suppliers and manufacturers, says there was an initial rush of closure work when the quotas were first put in place, but activity has since become more even as companies develop long-term closure plans.

“A lot of the low-lying fruit has been taken care of, so now companies are working on more complex closure files that take more time and more money,” Lail says.

Facility owners say that Alberta’s rules provide direction for planning closure and remediation work, which in the past may have been put on hold due to the ups and downs of the oil and gas market.

“When commodity prices are up, everyone is focused on drilling more wells and when prices are down, budgets are strained for doing work that doesn’t bring in revenue. Having a minimum spend makes sure closure work happens every year and ensures there is longer-term progress,” says Deborah Borthwick, asset retirement coordinator for Birchcliff Energy, an oil and natural gas producer focused in Alberta.

Over the last few years, Birchcliff has budgeted more than $3 million for annual facility closure work, far above its required minimum spend.

The company completed 11 well abandonments and decommissioned 23 facilities and pipelines in 2022, according to its latest environmental, social and governance report.

Borthwick says having the closure quota for 2025 already set has allowed it to plan ahead and line up the necessary service companies well in advance for next year’s remediation work.

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