“Ministry of Natural Resources has decided to strengthen penalties for combustion of associated petroleum gas”, said the Minister Yuri Trutnev to the RBC Daily press-correspondent. This was the first interview of the Minister to mass-media in 2007.

About 55-60 billion cubic metres of associated petroleum gas (APG) are extracted in Russia annually. Only 26% of the total APG volume is processed, while 30% is combusted. The rest might be considered as technological losses. In other words, about 15 billion cubic metres of gas are combusted annually, which is comparable to a large gas field. Annual budget losses from APG combustion account for approximately 13.5 billion USD.

Nevertheless, according to Minister Trutnev, the Government has two options to promote oil companies to use this resource fully. The first option is to make relevant amendments to the existing legislation, thus making obligations to process APG an inseparable part of any license agreement. Practically, it means a total ban of the APG combustion. The second option is to strengthen economic sanctions for the APG combustion in considerable amounts. Today the penalties don’t exceed 0.02 rub per 1 cubic metre, while they can be advanced, for example, 20 times for an excessive emission. The Russian Government should find a compromise option rather soon, as the combusted APG turns into tax and energy losses and contributes to the greenhouse effect. Projects aimed at the APG procession, which will be implemented by the entrepreneurs, might obtain additional financing from both foreign and national investors interested in additional carbon credits.
According to Yuri Trutnev, APG procession is one of the priority tasks of the Government now. At this moment a package of 18 amendments to the existing legislation, including provisions on APG, is being elaborated.

Under information of the Ministry of Natural Resources of Russia (www.mnr.gov.ru).

Julia Dobrolyubova
Expert on Climate Change and Kyoto Protocol
Russian Regional Environmental Centre