Country
Assessment
No evidence regarding performance requirements could be found in the sources consulted.
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.
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 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.
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.
Gas flaring and venting are regulated at the federal and provincial levels. The federal regulatory authority is the Undersecretariat of Hydrocarbons (Subsecretaría de Hidrocarburos), part of the Federal Energy Secretariat (Secretaría de Gobierno de Energía). The federal regulatory authority for natural gas is the Energy Secretariat. Decree No. 7/2019 created the Ministry of Productive Development and placed the Energy Secretariat under its authority. Each oil- and gas-producing province has its own regulator, governed by the Hydrocarbons Law, 1967 , and by provincial legislation and regulations. The regulatory authority is the Undersecretariat of Energy, Mining and Hydrocarbons, under the Ministry of Energy and Natural Resources in Neuquén, the Ministry of Hydrocarbons in Chubut, the Energy Institute in Santa Cruz, and the Energy Secretariat in Rio Negro.
Article 4 of Resolution No. 143/1998 requires the operator to submit a request for exemption to the undersecretary for breaching the permitted limits. Annex 1 of the resolution describes the procedure for submitting such a request. The regulator has 90 days from the date of receipt of the request to issue the approval or rejection of the request. Every request for an exemption must demonstrate for each reservoir the technical reasons for exceeding the limits and the maximum flow rate of gas to be flared or vented. The documentation and data should be updated every six months by May 31 and November 30 of each year in which exemptions are requested. Section 3 of Annex 1 of Resolution No. 143/1998 states that the Energy Secretariat may judge whether venting should be reduced, either temporarily or permanently, on a case-by-case basis. Section 3 requires allowed venting to follow appropriate procedures and minimize the emissions of harmful gases into the environment. Section 3 also states that Sections 3, 4, and 5 of Resolution No. 105 should be followed in all cases. The Neuquén province’s Decree No. 29/2001 outlines the same criteria as Resolution No. 143/1998.
Resolution No. 143/1998 prescribes that gas be flared, not vented, through appropriate procedures. If, for technical reasons, the gas cannot be flared, the operator is required to submit a report to justify venting. Annex 1 (“Norms and Procedures for Venting Gas”) lists the circumstances under which gas venting is allowed: section 3.1 permits flaring or venting when the gas-to-oil ratio at the vent point does not exceed 1 m³ of gas per 1 m³ of crude oil produced. section 4.4 permits periodic venting of gas when there are no conduction lines to capture the gas at the wellhead. section 5.1 permits venting when it occurs during well testing. The authorities should be notified in writing of all flaring and venting for all causes (maintenance, operations, or emergencies) within 24 hours. The reasons for the contingency, flow rates and damages, and the immediate measures and corrective measures implemented must be detailed. The Neuquén province’s Law 2.175/1997 prohibits gaseous emissions from oil and gas wells. Emissions from flares can be authorized for oil wells if the emissions are not characterized as a hazardous waste. Article 2 of Neuquén Provincial Decree No. 29/2001 requires the operator to submit a report documenting a justification for venting if the unused gas cannot be flared for technical reasons and to follow the same criteria for venting as stipulated in Resolution No. 143/1998.
According to Section 10 of the Offshore Petroleum (Royalty) Act, 2006, royalty is not payable if the Western Australia state minister “is satisfied that the petroleum has been flared or vented in connection with operations for the recovery of petroleum” and flaring and venting did not contravene the OPGGS Act, 2006 , and associated regulations. In Queensland, according to the Petroleum and Gas (Production and Safety) Act, 2004 , an operator is exempt from paying petroleum royalty if the revenue commissioner is satisfied that the volumes flared or vented were part of exploration drilling (Section 591). The exemption applies to gas flared or vented during the production testing period but only up to 3 million cubic meters (Section 591A). As per Section 926, petroleum royalty is not payable for volumes flared or vented if approval was given under the Petroleum Act, 1923, before December 31, 2004. In Western Australia, according to the Petroleum and Geothermal Energy Resources Act, 1967, and the Petroleum (Submerged Lands) Act, 1982 , operators may apply to the DMIRS for exemption from royalty payment for petroleum that—with the minister’s approval—is flared or vented in connection with petroleum recovery operations. Under New South Wales’ Petroleum (Onshore) Act, 1991 , royalty is not payable if the minister approves gas flaring or venting (including of gas or other forms) for operations connected with petroleum recovery (Section 87). In South Australia, according to the Petroleum and Geothermal Energy Act, 2000 , royalty is not payable if petroleum or any associated substance is “destroyed or dissipated in accordance with sound production practice” (Part 7). In Tasmania, security deposits are required and must be high enough to cover environmental liability.