Country
Assessment
According to the Regulations for Air Pollution Control from Stationary Sources , air emissions listed in the appendix are to be measured by instruments. Fugitive emissions can be estimated using mass balance equations. Flaring and venting guidelines under development since 2017 suggest that reporting will be required to ensure compliance with targets to be established.
Chapter 8 of the Oil and Gas Law does not specify any penalties for violations of Article 39, which sets environmental requirements with respect to gas or violations of Articles 41–43, which outline provisions regarding gas use. However, Article 51 of Chapter 8 allows the minister of energy and minerals to determine penalties for violations of articles of the law not specified in the chapter. Article 31 of the Law on Conservation of the Environment and Prevention of Pollution deals with monetary penalties for violating certain articles of the law, including the need to obtain a permit and the prohibition on emitting more than the limits in the permit. The fine is set at RO 200–RO 2,000 (about US$520–US$5,200 as of September 2021), with an increase of 10 percent a day starting four days after notification of the violation. Article 36 provides for a fine of up to RO 500 (about US$1,300 as of September 2021) if environmental inspectors are prevented from exercising their powers. Article 40 sets a fine of between RO 1,000 and RO 5,000 (about US$2,600–US$13,000 as of September 2021) in case of failure to comply with Article 27, which calls on operators to establish “controls for optimum exploitation” of natural resources, including oil and gas (see section 3 of this case study). The penalty is doubled for a repeat violation.
According to Article 31 of the Law on Conservation of the Environment and Prevention of Pollution , the suspension of activity is possible if a violator does not correct the offense within a month. According to Article 32, the use of falsified data or statements to obtain an environmental permit is punishable by up to six months in prison, a fine of up to 5 percent of the invested capital, or both. The permit may even be canceled, in which case the activity must cease. Article 36 allows for prison time of up to three months if environmental inspectors are prevented from exercising their powers. This imprisonment can be in addition to a fine. The court may also shut down the facility for up to a month.
The PDO has followed the practice of minimizing routine flaring in new installations and the principle of reducing flaring and venting to as low a level as reasonably practicable. The Regulations on Air Pollution Control from Stationary Sources set limits on six pollutants that can be emitted from flaring in petroleum fields and refineries. They also state that any combustion cannot emit smoke darker than “shade 1 on the Ringlemann Scale (20 percent opacity).”
Chapter 7 of the Oil and Gas Law provides several provisions with respect to natural gas. Article 41 requires the concessionaire to preserve natural gas and allows its exploitation, with MEM approval, to enhance oil recovery, store it underground, commercialize it, or use it for any other purposes as decided by the MEM. Article 42 provides for “features, incentives and facilities to encourage gas exploitation” to be stipulated in the concession agreement. For example, the concessionaire is allowed to recover gas discovery expenses if the MEM decides to postpone production to meet future domestic market demand.
Oman has two associated gas recovery and utilization projects under the CDM, both operated by Occidental of Oman and hosted by the MEM, representing the government. The first project, at Block 9, was registered in December 2012. The recovery of associated gas that would otherwise have been flared or vented started in 2010. Over the crediting period (December 31, 2013–December 30, 2020), about 2.1 billion cubic meters (bcm) of associated gas was recovered, with an average methane content of about 70 percent. The project had reduced emissions by about 4.2 million tonnes of carbon dioxide equivalent (tCO2e) by the end of 2020. The second project, at the Khamilah oil field area in Block 27, was registered in August 2020. Over the crediting period (August 3, 2020–August 2, 2030), about 2 bcm of associated gas is estimated to have been recovered, with an average methane content of about 78 percent. The project is expected to reduce emissions by about 0.43 million tCO2e annually.
Natural gas consumption has been increasing in Oman, primarily to generate electricity and run desalination plants but also for use in downstream refining and petrochemicals facilities. Oman is a significant exporter of LNG, but it also imports pipeline gas from Qatar to balance domestic demand with export obligations. However, with increased investment in gas fields and, to a lesser extent, more aggressive policies toward capturing associated gas, Oman intends to phase out imports and expand domestic pipeline infrastructure. Low domestic gas prices have presented a challenge to achieving the goal of supplying gas for domestic purposes from domestic sources. The MEM and the Oman Gas Company have supplied gas to industrial and power generation plants at prices set by a gas allocation committee, which includes representatives of the MEM and the Ministry of Commerce, Industry, and Investment Promotion (the Financial Affairs and Energy Resources Council before August 2020). These prices, as well as the price of electricity (which is almost exclusively generated by gas-fired power plants), have been below cost. The government of Oman raised natural gas prices to industry and power generation plants, but low oil prices after 2016, especially in 2020, stressed the government’s budget and slowed further price reforms. The Energy Development Oman was created as a company that could raise capital at a lower cost than the government and undertake major energy transition projects . The Oman Gas Company, along with eight other state-owned companies across the oil and gas value chain, is now part of OQ, created in 2019. The newly integrated company is fully government-owned, but a partial public offering of shares is under consideration, as the government continues to focus on its budget deficit. The net effect of the changes cited in this section on domestic gas consumption, the development of new gas pipelines, and associated gas utilization will become apparent over the coming years.
Federal Decree No. 1148, 2012, limits flaring or venting to 5 percent of the total volume of associated gas produced. This target was first mentioned in the Energy Strategy for Russia for the Period up to 2030 (approved by Federal Decree No. 1715-r, 2009).
Overall responsibility for overseeing subsoil resources, including policies for flaring and venting of associated gas, lies with the Federal Ministry of Natural Resources and the Environment. Federal Law No. 7-FZ on Environmental Protection, 2001 established a specialized authority. This law assigns responsibility for oversight of compliance with energy regulation to the Federal Service for Supervision of Natural Resources. Article 3 of Federal Law No. 2395-1 on Subsoil, 1992 establishes the Federal Agency for Mineral Resources as the central administrative agency for subsurface resources. It has no direct responsibilities regarding flaring and venting.
No evidence regarding flaring or venting without prior approval could be found in the sources consulted.