Country
Assessment
No evidence regarding performance requirements could be found in the sources consulted.
The main instruments for restricting GHG emissions—emissions trading and the carbon dioxide tax— are economic; they provide financial incentives to minimize emissions. Norway was one of the first countries in the world to introduce a carbon tax, in 1990. Sections 1, 2, and 4 of the CO2 Tax Act, 1990 , require a carbon dioxide tax payment for flared or vented natural gas and any other carbon dioxide discharged to the atmosphere during the production and transport of oil and gas unless otherwise exempted by the Storting (Parliament). The operator calculates, reports, and pays the total tax amount to the NPD on behalf of all other licensees. The operator provides the NPD with the documentation for metering petroleum and calculating the tax within a month of the expiry of each term. If the tax is not paid on time, it accrues interest. According to Section 3 of the CO2 Tax Act, 1990, the carbon dioxide tax is not deductible from the calculation of the production fee (defined in Section 4 of the Norwegian Petroleum Act, 1996 . According to Norway’s Climate Action Plan, the government may consider the introduction of a tax on methane emissions from onshore petroleum facilities, corresponding to the tax that already applies to offshore activities. For 2023, the tax rate is proposed at NKr 1.78 (about US$0.16 as of June 2023) per cubic meter (m3) of gas or per liter of oil or condensate. For emissions of natural gas, the tax rate is NKr 13.67 (about US$1.24 as of June 2023) per m3. For combustion of natural gas, the rate is equivalent to NKr 761 (about US$69 as of June 2023) per tonne of carbon dioxide (tCO2). The companies also pay European Union Emissions Trading System (EU ETS) allowance costs. The Norwegian government proposes to gradually raise the total cost of carbon (the Norwegian carbon dioxide tax and the cost of EU ETS allowance) to NKr 2,000 (about US$181.4 as of June 2023) per tCO2e by 2030.
Carbon dioxide emissions from the oil and gas sector are covered under the EU ETS Act No. 99 Relating to Greenhouse Gas Emission Allowance Trading and the Duty to Surrender Emission Allowances, 2004 , which entered into force in 2005. Norway joined the EU ETS in 2008.
Section 59 of the Regulations to Act Relating to Petroleum Activities, 1997 , grants operators undertaking downstream natural gas activities and eligible customers the right to access pipeline networks. The access is subject to the quality of the gas being compatible with technical specifications or efficient operation of the pipeline network. The pipeline network operator may require additional conditions after consulting with existing users of the pipeline network.
There are no targets or limits on the volumes of natural gas flared or vented. However, regulations are under development, which are expected to include targets.
The MEM regulates flaring and venting. It negotiates exploration and production-sharing agreements with investor companies. All agreements are based on a template, but negotiations can lead to additional clauses and modifications, including flaring and venting restrictions. The Environmental Authority regulates environmental impacts, including from oil and gas operations.
Since 2017, Oman has reportedly been considering developing flaring and venting guidelines consistent with widely accepted international practices. Alignment with international practice would suggest that flaring or venting without approval would be allowed during emergencies but immediately followed by reporting to the regulator of flaring or venting details.
International practices, which Oman’s new flaring and venting guidelines are expected to follow, typically ban all routine flaring but allow exceptions for flaring during well testing (permitted within limits) and for volumes approved in the gas conservation plan.
Alignment with international practices would suggest that gas conservation plans have to consider all reasonable utilization options before flaring and venting and that the MEM ensures compliance with the gas conservation plan during the development and operation of assets.
Oman’s new flaring and venting guidelines are expected to follow international practices and build on the PDO’s practice of conducting an economic evaluation of flaring and venting projects. Since 2018, the PDO has been managing all nonroutine flaring activities using the concept of measures that are as low as reasonably practical. The PDO has developed an electronic system, Flaring Waiver and As Low as Reasonably Practical Demonstration Tool, to conduct an economic and environmental evaluation of each nonroutine flaring scenario. The PDO has tested a micro-turbine to convert flared gas into electricity at Anzauz. If replicated across Block 6, about 500,000 cubic meters (m³) of gas currently flared a day could be recovered. The PDO’s Gas Directorate, through its energy management efforts, saved 46,000 m³ of natural gas a day that was previously flared or used as a fuel, in 2019. At the end of 2018, the PDO issued a request for bids from companies with proven gas-to-power technology and experience using gas being flared. In early 2021, Japan’s Sumitomo Corporation and an independent Omani company, ARA Petroleum, initiated a feasibility study on a project to produce hydrogen from associated gas from ARA’s oil field that would otherwise be flared. In addition, a 20-megawatt solar farm will provide electricity to a methane steam reformer for hydrogen production. Oman has been trying to promote hydrogen, and several companies have expressed interest in pursuing hydrogen projects in special economic zones in Oman.