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

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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. And 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 Examination. It's a nonprofit newsroom specializing in global health reporting. And the reporters on this story, Bloomberg's own Ben Elgin. He's an investigative reporter here at Bloomberg News. He's there in our

0:52 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.

1:12 Yeah, well, we were very intrigued by the fact that, you know, 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 man-made 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.

1:36 And so.

1:38 You know, 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.

2:01 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.

2:18 That's right. I mean, people live very close to these flares around the world. We, um, we talk to people who are, you know, their homes are 500 feet away. Um, they're, they're breathing it when these, these flares are burning gas and they're emitting a bunch of toxic substances and people are breathing it in. And they're, it's also, it's rattling their homes. It's, um, keeping them up at night. And it's happening in communities from Texas to the Niger Delta to Patagonia, all over the world.

2:55 And Will, what impact has it had on her life?

2:59 Well, I mean, I think Ben should probably speak to, he's the one who visited Norma at home.

3:04 Ben, come on in then.

3:05 Yeah. Sure.

3:07 Yeah, so this is a new flare. 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 flare stack in an oil site went up 500 feet away. And so it's really impacted.

3:25 The value of their homes.

3:26 It wakes them up at night. They're worried.

3:29 There was a.

3:30 Fire at the oil site back in December. They're extremely worried for the health of their children, grandchildren, and themselves.

3:38 Yeah, and you guys report about residents, you know, talking about the rattling of their homes, strong odors, as you mentioned. There have been the breathing problems. What I want to get into is, you know, you guys talk about some pretty significant loopholes in the World Bank's Zero Routine Flaring Initiative.

3:57 What's the biggest one? Because how are they getting around this? And Ben, do you want to pick that up or Will?

4:02 Yeah. Yeah. Sure. Yeah.

4:04 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

4:52 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.

5:09 Hey, Will, I want to bring you back into the conversation because Diamondback Energy said it was one of the first major oil companies in the world to eliminate the routine flaring like we've been talking about. But then what's the disconnect between the World Bank and then the loopholes that y'all found?

5:23 Yeah, one of the things we found was that we were able to dig up some documents that showed how oil companies were talking about this internally and how the World Bank was talking with oil companies about this initiative. So we found that publicly they're saying, we're going to stop routine flaring by 2030. But privately, the World Bank sent these oil companies presentations saying, actually, you could keep flaring past 2030. And You only need to eliminate routine flaring if it's economically viable. And what does that mean?

5:59 It's up to you. You can determine how profitable it needs to be to be kind of worth it to you to do so. So they're leaving it up to the companies themselves to decide. to determine what it means. And so we have these situations where, like, for example, Diamondback, as you mentioned, where, you know, the company says they're not doing routine flaring, but on the ground, it's flaring most days. You know, other examples, we found one in Oman, where Occidental Petroleum says we've eliminated routine flaring there. Satellites picked it up 99% of the time. What's going on?

6:36 It's really hard to get an answer because the companies are interpreting it themselves.

6:42 What recourse do people who are living around these sites have, and especially when they go to either local regulators? You have a case of, and forgive me if I mispronounce, Bodillo Ramirez, who did complain to Texas regulators. Ben, I see you nodding your head. Tell me, you know, goes to regulators, makes the complaint. This case was closed. So are regulators not listening?

7:08 Yeah, it's been a really frustrating experience for some people living near the flares. And so in the case of Bo Delio, or Bo as he goes by, yeah, so he filed a couple of different complaints. And the one that we discussed in the story, the flare was just going gangbusters late last year. And so the environmental regulators show up. They were there on site for 10 minutes, according to a copy of the investigation report that we obtained.

7:39 And they then went back and determined, yes, flaring is nonstop. Diamondback, can you please give us your flaring data? And so that data then included, should have raised more alarms because it indicated that the flaring occurring there was far beyond, in one single month, far beyond what the annual permit application said. And so nonetheless, despite all of this, the regulators decided it's within permitted limits. They declined to tell us how they arrived at that conclusion. And so somebody like Bodilio living next door is just left thinking, gosh, I'm just a nobody. I don't count compared to the oil companies in this equation.

8:24 You know, Ben and Will, Ben, I'm listening to you, and you're like, I just don't count. Like, I feel like... If you look at society on a broader basis, there's a lot of things going out where I think individual citizens feel like they don't count when it comes to either governments and lawmakers or large corporations. So we've got about two minutes left here. And I want to give you some time to wrap it up and just After reporting this out, what do you think actually changes the behavior?

8:53 Do we need voluntary corporate pledges, tougher regulation, or simply making companies disclose how much that they're really flaring? Will, why don't you pick it up here?

9:04 We've talked to a number of people in the industry who say, actually, there needs to be stronger regulation because otherwise it's not going to happen. The oil company is not going to voluntarily... It costs money to figure out what to do with this gas. It's a lot more expensive than just burning it off. The problem is that a lot of governments, they get revenues from this oil production, so they want to see the oil flowing too. There needs to be a concerted effort by governments, by companies.

9:38 That's where we found it broke down. You have the that's just based mostly on company promises. And meanwhile, people feel like they're not able to affect it. Companies are, you know, to some extent, care about how, you know, how they look in the public's eyes into their shareholders. And so they're saying, you know, in their sustainability reports, we're doing this, we're fixing this, we have, you know, zero routine flaring. And, but the problem is, as we found, that it's a lot more complicated than that. And it's not actually happening on the ground.

10:19 Hey, Ben, we only have about 30 seconds left, but what do you think changes this behavior?

10:25 That is a tough one because governments often make money off the production of oil themselves. So it puts them in a position where they don't really want to crack down too much. However, there's like one counterpoint, and that is Kazakhstan, right? I mean, they've cut flaring in their country 90%, I think, in the last decade. They've put in real enforceable rules and limits. So it can be done.

10:47 It's just that the governments really have to step up and make this not a choice for the oil producers. All right.

10:55 We got to leave it there. Highly recommend everybody head to the Bloomberg or Bloomberg.com to read all of the details in the stories. Gentlemen, thank you so much. Appreciate your time today. Ben Elgin, he's investigative reporter right here at Bloomberg News. Will Evans, senior reporter at The Examination.

11:10 As we said, this story, a partnership with The Examination, a nonprofit newsroom specializing in global health reporting.