Sustainability Benefits of Valorizing Associated Flare Gas for the Production of Transportation Fuels

Abstract

Associated gas is a form of natural gas primarily comprised of methane. The gas is released when the crude oil is extracted from the ground. However, the collection and aggregation of this associated gas for commercial applications has mainly been cost-prohibitive. Thus, drillers usually combust this associated gas (known as flaring) as an act of economic expediency. The global gas flaring has been hovering around 150 billion cubic meters annually for the last quarter-century, equivalent to Sub-Saharan Africa's total annual gas consumption in 2019.

Gas flaring contributes to global warming and climate change, with more than 400 million tons of CO2 equivalent emissions every year, approximately 1% of anthropogenic carbon dioxide emissions globally. Gas flaring also emits air pollutants that are detrimental to human health. For instance, fine particulate matter particles (i.e., PM2.5) can travel and penetrate deeply into the respiratory tract and therefore constitute a risk for health by increasing mortality from respiratory infections and diseases, lung cancer, and selected cardiovascular diseases. Furthermore, gas flaring has also been a significant waste of fossil energy, an unsustainable natural resource.

Therefore, this study aims to demonstrate that, instead of flaring, associated gas utilization by directly converting associated flare gas to transportation fuels at wellheads can be an attractive approach to mitigate climate change, decrease fossil resource depletion, and improve environmental well-being.

This study adopted a holistic approach to investigate the three core aspects of sustainability to quantify benefits: economic, environmental, and social. Specifically, methods combined various analyses, including cost-benefit analysis, life cycle assessment, and climate and health benefits assessment. Some critical data needed were gas flaring volume, capital costs, operating costs, emission factors, social cost of carbon, ambient air pollution attributable mortality rates, and population. In addition, the study also considered the impact of geographical differences on these benefits by comparing the United States, Russia, Nigeria, and China.

The results from this study provided a complete picture of the sustainability benefits of using associated gas for the production of transportation fuels. The benefits for valorizing one billion cubic meters of associated gas at wellheads were determined to be 1) economic—between 209 million USD (Nigeria) and 639 million USD (China); 2) climate—2.05 million metric ton CO2 equivalent averted (all countries); and 3) health—between 25 (the United States) and 461 (Russia) avoided mortality. The potential combined economic, climate, and health benefits present a three-in-one value proposition that can persuade the industry to switch from gas flaring to liquid fuel production and provide regulators guidance to set policies that favor associated gas utilization. Additionally, the results confirmed that countries that are more polluted and higher in mortality rates could potentially reap more significant health benefits due to converting associated gas to liquid fuels. In terms of avoided mortality, the potential benefits could help convince international financial institutions such as the World Bank to provide low-interest loans and grants to support the construction of small-scale facilities to valorize associated gas to produce transportation fuels.