Why Gas Flares Keep Burning Despite Big Oil’s 2030 Pledges

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You're listening to Bloomberg Businessweek with Carol Massar and Tim Stenovec on Bloomberg Radio.

Tim Stenovec (0:15)

For more than a decade, oil companies have pledged to eventually eliminate what the industry terms routine flaring. That's burning gas because producers consider it too costly or difficult to capture, sell or re-inject underground. Yet, we've seen Exxon, Occidental and Diamond dip back.

Among those touting efforts to end that routine gas flaring, but as we said, their flames keep spewing pollution around the world. This story that we're going to get into was reported in partnership with The Examination. It's a non-profit newsroom specializing in global health reporting, and the reporters on the story, Bloomberg's own Ben Elgin. He's investigative reporter here at Bloomberg News. He's there in our San Francisco Bureau. Ben, good to have you here. Will, also good to have you here. Will Evans, a senior reporter at The Information out there in San Francisco as well. Gentlemen, good to have you here.

Ben, and Will, and Ben, why don't you kick it off for us? Tell us what you guys set out to do.

Ben Elgin (1:12)

Yeah, well, we were very intrigued by the fact that there's tens of thousands of these flames at oil sites around the world.

They're a huge source of emissions. I mean, it's like 1% of manmade heat trapping emissions. It's a big source of pollution for nearby communities. It's a big waste of resources. I mean, each year these flames burn about half of Europe's annual gas consumption or the equivalent thereof. And so, for decades, the industry has been talking about fixing this and the numbers are going the other way. It's going the wrong direction. And so we set out to figure out what is going on. And with all the oil companies talking about reducing or eliminating quote unquote routine flaring, it sort of ran counter to what we're seeing with the numbers. So Will and I rolled up our sleeves and decided to investigate.

Carol Massar (2:00)

Hey, Will, I want to bring you into this conversation because putting a human element into this, I know you were speaking with Norma Lopez Cadena about trying to keep her granddaughters indoors. Talk to us anecdotally in the human element and how the impacts of, this is affecting people's daily lives right now.

Will Evans (2:18)

That's right. I mean, people live very close to these flares around the world. We talk to people who are, their homes are 500 feet away.

They're breathing it when these flares are burning gas and they're emitting a bunch of toxic substances and people are breathing it in. And it's also, it's rattling their homes, it's, you know, keeping them up at night. We, and that's, and it's happening in communities from Texas to the Niger Delta, to Patagonia, all over the world.

Tim Stenovec (2:55)

And Will, what impact has it had on her life?

Will Evans (2:59)

Well, I mean, I think Ben should probably speak to, he was the one who visited Norma at home.

Tim Stenovec (3:04)

Ben, come on in then.

Ben Elgin (3:06)

Yeah, sure. Yeah, so this is a new flair. I mean, these folks have lived in this neighborhood of South Ranchito outside of Odessa, Texas for 50 plus years.

And suddenly two years ago, a big flair stack in an oil site went up 500 feet away. And so it's really impacted the value of their homes, wakes them up at night. They're worried, there was a fire at the oil site back in December. They're extremely worried for the health of their children, grandchildren and themselves.

Tim Stenovec (3:37)

Yeah, and you guys report about residents talking about the rattling of their homes, strong odors, as you mentioned, their bed, the breathing problems. What I want to get into is you guys talk about some pretty significant loopholes in the World Bank's Zero Routine Flaring Initiative.

What's the biggest one? Because how are they getting around this? And Ben, do you want to pick that up or Will? Yeah.

SPEAKER_2 (4:04)

Sure.

Ben Elgin (4:04)

Yeah. So this is a program that has been set up by the World Bank. And the oil industry has really partnered with them and teamed up to help set this program up. And so this program defines routine flaring in a way that, say, the average person on the street isn't going to sort of understand.

Basically, you can have flares going on all the time, frequently yet still be considered non-routine. And so one example we encountered, I'll just give you an example, off the coast of Angola. BP and the Italian oil giant ENI have long operated assets there, oil production sites. A few years ago, they bundled their operations into a single joint venture. Now, suddenly, that joint venture is technically the operator of those oil sites. So even though BP and ENI still own this stuff, right? I mean, they still profit tremendously from this. They no longer, from a routine flaring definition standpoint, they no longer have to consider themselves the operator. And therefore, those flares come off of their environmental ledgers.