During the production of oil by energy companies, unwanted natural gas is regularly burned off and released into the atmosphere. This is known as “gas flaring” - a cheap but environmentally damaging process.

There are a number of reasons for flaring. In the past, gas was considered to be a waste product and global warming was not an issue. Secondly, contracts between governments and oil companies allowed flaring, and there was no obligation to find a market for the gas that was found while exploring for oil.

A third issue is that, until recent years, there hasn’t been such a developed market for gas as there was for oil, and it’s much more difficult and costly to get gas to consumers.

As a result, oil-producing countries and companies burned off gas worth $40 billion at US prices last year. That’s equivalent to 5.5 per cent of the world's total production of natural gas, according to one recent study of flaring.

The negative impact of flaring is threefold. It represents a waste of energy, it causes serious health and contamination problems for local communities in oil-producing areas, and it contributes to greenhouse gas emissions.

Nowadays, gas flaring is increasingly recognised as a large environmental problem, contributing more than 1% to global emissions of CO2. Eight countries - Algeria, Angola, Indonesia, Iran, Mexico, Nigeria, Russia, and Venezuela - account for 60% of flaring worldwide, according to World Bank estimates. By contrast, in western Europe, 99 per cent of ‘associated’ gas, found during oil exploration, is used or re-injected into the ground.

Nigeria is Africa’s biggest producer of crude oil and flaring levels are the highest in the world. Nigeria currently burns off almost half of its daily production because the gas-gathering network is insufficient. In fact, over the past 45 years, most of the natural gas discovered together with the country's oil has simply been burned off.

Governments and the energy industry have been trying to cut back on flaring for years, but with little success. The total volume of gas flared each year has been more or less the same since the mid-1990s. Nigeria’s government is now committed to ending gas flaring by the end of 2008, but several Western oil companies have already said they cannot meet the deadline.

Natural gas is now seen as a valuable natural resource, and there is increasing investment in gas-gathering networks. However, at a time of high oil prices, there is pressure on oil companies and governments to favour higher levels of oil production, which, in turn, leads to higher levels of gas flaring.