> Straight up burning methane is the same whether it is via flare or generator.

This isn't correct. Flaring can be fairly inefficient. https://arstechnica.com/science/2022/09/oil-industry-flaring...

Even if you can make flaring more efficient, you're going to need a fairly hard stick to keep oil producers in line because flaring efficiently is a pure cost. On the other hand, running it through a generator presumably earns money, so is a carrot that businesses can pursue.

The big stick approach might work fine in the US with a strong handed state, but methane emissions are a global problem, and most poor oil producers in regions with no big stick may not even bother flaring at all and just vent, whereas they might pursue more money.