Do they still just burn off that gas?
Often methane as a by-product of oil production is flared, because the amount is small enough that it's not worth setting up processing plants and supply chains for. Other times, the fluid is heavily contaminated by e.g. sulfur compounds, and would be costly to purify. Still other times the production of the fluid is unreliable or intermittent, and cannot sustain a continuous production process.
Although, flare gas recovery systems exist nowadays to make use of these waste gases, commonly for local power production for the refinery itself.
But the burned up ethanol would be perfectly suitable for products.
Nowadays there are some regulations to prevent that, so they may sell up ethanol at negative prices sometimes.
UPDATE: Ethene, not ethanol.
1) using some potentially useful products as fuel to burning off things you don't want and
2) the buffer to keep non-steady inflows in a suitable ready condition for steady-state processing. (When real world steady-state is less than ideal.)
Number 2 is really what dominates the equation, as shutting in gas sources or even just turning off pipelines is incredibly more complicated than just an 'off' switch.
And turning back on is even more complicated. In the case of wells, once you shut in, turning back on may never result in the same level of production as before.
Cogeneration like that is huge. When PURPA was passed in 1978 requiring utilities to buy cogenerated power it was a major reason for the end of the first wave of nuclear power plant construction in the US.
One unfortunate consequence of this is bird injury, particularly raptors. They like to perch on the flare stack, and when it flares to life... if they are lucky, only their feathers are damaged and they can be rehabbed. This can probably be ameliorated by design of the stack to avoid perching, but that isn't always done.
Sources include captured landfill gas and bio digesters processing animal manure.
Captured bio gas is injected into adjacent natural gas transmission pipe lines and commingled with chemically identical fossil natural gas.
You'd need to either liquify that gas or collect it to a pipeline in order to make it useful. I remember reading that modern refineries make use of the gases instead of flaring them though I'm not sure how.
But if something is wrong, yea you can bet they will be burning off with big flares.
