Country
Assessment
No information specific to requiring a development plan for associated gas as part of the field development approval for greenfield projects was identified. However, Federal Resolution No. 105/1992 requires the operator to prepare an EIA for the development phase. The EIA must specify the installations to manage associated gas or dispose of it after a technical-economic study confirms that its use is not viable. Article 20 of the Neuquén province’s Decree No. 2.656/1999 outlines norms and procedures regulating environmental protection during oil exploration and production similar to those in Resolution No. 105/1992.
Resolution No. 143/1998 , subsection 5 of Annex 1 (“Norms and Procedures for Venting Gas, Section 5, Reasons for Exception–Gas Venting”), requires a technical and economic feasibility study in cases in which gas at the venting point has a high content of inert or toxic gases and the gas-to-oil ratio in each well is less than the 1,500 m³ of gas per m³ of oil, the limit stipulated in Section 3.2. The study should include analysis of the effects of the flow rate and total volume of vented gas. This analysis should demonstrate that neither the flow rates nor the volumes to be vented will reduce the exploitation of the gas. The study should include the flow rates and composition of the vented gas and the disposal method for each type of toxic gas produced. The Neuquén province’s Decree No. 29/2001 sets the same criteria as Resolution No. 143/1998.
Section 6 of Annex 1, on norms and procedures for venting gas, of Resolution No. 143/1998 covers flow rate measurement and registering. It requires the establishment and implementation at each venting point of a system to measure and record the flow of flared or vented gas and its composition in all cases. Article 14 of the Neuquén province’s Decree No. 29/2001 includes similar requirements.
Aside from penalties for general violations of the laws, regulations, and technical provisions, no specific monetary penalties for flaring or venting were identified. Article 87 of the Hydrocarbons Law, 1967 , sets fines for failure to comply with any of the obligations arising from authorizations and concessions that do not constitute causes for revocation. Decree No. 488/2020 introduces a new formula for calculating the fines in its Article 10. The fines vary with the severity and incidence of the breach, ranging from a minimum equivalent to the value of 22 m³ of national crude oil in the domestic market to a maximum of 2,200 m³ of the national crude oil in the domestic market for each violation.
Article 6 of the Neuquén province’s Law No. 2.175/1997 subjects emissions of unauthorized associated gas above the limits established in Article 5 to monthly payments. Article 2 of the Neuquén province’s Decree 29/2001 takes only the volume of gases released into account to calculate the rate to be charged for gas venting. Since December 31, 2001, these volumes have been set per cubic meter of gas flared or vented, beginning at 500 percent of the weighted average sales price of natural gas at the custody transfer point. Article 8 states that noncompliance with the limits imposed on associated gas from oil wells is subject to fines, based on the gravity of the offense, determined by the quality and quantity of the gas. The frequency of payments is monthly.
A newspaper article dated September 21, 2018, indicates that a provincial regulator, the Secretaria de Energía de Rio Negro, imposed a penalty on the national oil company, YPF, for venting rather than flaring. The fine was Arg$134,000 (about US$1,350 as of September 2021), following the formula introduced in Decree No. 488/2020 . YPF tried to reverse the fine by appealing to the Civil Chamber of Cipolletti. The ministry stated that YPF had committed 11 infractions since the renegotiation of its oil contracts, when it had agreed to make sizable investments in its facilities to avoid venting gas. No evidence could be found in the sources consulted as to whether the provincial government had collected any of the fines.
Section 9 of Resolution No. 143/1998 on inspections and sanctions, cites noncompliance with it as a sufficient reason for revoking the corresponding authorizations, except where the Energy Secretariat deems the noncompliance justified. Section 9 sets out the appeal process. Any transgression of the resolution will make the concessionaire or permit holder liable to the sanctions imposed in Law No. 17.319, 1967, under the law’s Titles VI and VII. The Energy Secretariat may request the revocation of the concession or exploration permit granted in the event of the assumptions outlined in Article 80 of the law.
No evidence regarding performance requirements could be found in the sources consulted.
Section 8 of Annex 1 of Resolution 143/1998 states that as a condition for granting the exception to gas venting, the licensees must provide a guarantee of investments in emission abatement within 15 calendar days from the notification of the approval to the company. The amount of the guarantee depends on the emission flows during the exception period and the abatement investments to be made. Guarantees are set for each project by semester or as a fraction of the exception period and of the investment to be made. The guarantee will be called if the company does not execute the agreed investments for each project at the expiration of each term.
According to the Fourth Biennial Update Report to the UNFCCC in 2021, there were 58 projects registered with carbon markets, 46 of them under the Clean Development Mechanism (CDM). However, there were no new projects under CDM between 2016 and the publication of the 2021 report, while projects registering in voluntary markets had increased. Most of the energy projects centered on wind, solar, hydro, and biomass power generation; several captured and used methane emissions from the waste sector.
YPF has two projects registered under the CDM, intended to reduce emissions in the La Plata and Luján de Cuyo industrial complexes. Combined, the two projects avoided about 168,687 tCO2 emissions in 2019. YPF also engages in carbon offset programs, such as reforestation in the Neuquén province. Started in 1998, these efforts sequestered an estimated 760,000 tCO2e over the course of 30 years.
Natural gas provides more than 60 percent of power generation and more than half of the total energy consumed. Law No. 24.076, 1992, known as the Natural Gas Law, established the basis for deregulation of natural gas transport and distribution industries. The Federal Gas Regulatory Authority, created in 1992 by Decree No. 2255/92, oversees the transportation and distribution of natural gas.
Natural gas prices are a mix of regulated and market prices. Before the 2015 energy reform, domestic oil and gas prices were significantly lower than those at trade parity, and public services tariffs did not cover operational costs. The domestic supply of oil and gas was insufficient to meet demand. After 2015, domestic oil and gas prices started to align with international levels. Resolution No. 46-E/2017, as amended by Resolutions No. 419/2017 and 12/2018, introduced producer subsidies to attract investments in unconventional natural gas reservoirs in the Neuquén Basin. A minimum price of US$7.50 per million British thermal units (mmBtu) was guaranteed during 2018, decreasing by US$0.50/mmBtu a year to US$6/mmBtu by 2021. On December 31, 2021, the program was to end, at which point prices were expected to match import-parity values.
Law No. 26.197, 2006 , vests the federal government with the authority to grant concessions for interprovincial and export transport. Transport concessions located within the territory of only one province and not connected to export facilities were transferred to the provinces. Operators of pipelines and other transport and distribution infrastructure are required to provide open access to third parties if they have available capacity. Third parties have the right to access this transport infrastructure if they comply with the relevant procedures.
The growth of natural gas production will require substantial new investment in infrastructure and export routes in the near and medium term as well as cost-effective production and transport systems. The federal government launched a public tender for constructing and operating a new gas pipeline from the Vaca Muerta area in Neuquén to Saliqueló, south of Buenos Aires. Construction is underway.
Australia’s flare gas volumes have been dramatically inconsistent since 2012, ranging between 0.7 and 1.4 billion cubic meters per year (figure 1). Flaring intensity follows this trend; Australia demonstrates average performance, having flared 6.21 cubic meters of gas per barrel of oil produced. Developments since 2019 indicate a sustainable downward trend in absolute volumes and flaring intensity. However, Australia’s flaring intensity is still higher than producers such as Canada, the United Kingdom, and the United States. This is partially explained by the fact that coal bed methane (CBM) operations, predominantly located in Queensland, involve a fair amount of flaring due to operational reasons.
Figure 2. Gas flaring volume and intensity in Australia, 2012–22
Note: The flare data graphs in this report are based on global flaring data estimates of the Global Flaring and Methane Reduction (GFMR) Partnership using satellite data from the Colorado School of Mines. This approach is consistently applied to all countries covered in this report.
In June 2022, Australia submitted an updated Nationally Determined Contribution (NDC) to the United Nations Framework Convention on Climate Change (UNFCCC). The NDC’s unconditional target was to reduce greenhouse gas (GHG) emissions by 43 percent below 2005 levels by 2030. The country also reaffirmed its target to achieve net-zero emissions by 2050. In 2018, the Government of Western Australia endorsed the World Bank’s Zero Routine Flaring by 2030 initiative.
Australia also participates in the Global Methane Initiative and the Global Methane Pledge.