ARC Resources Waste Heat Recovery Project

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ARC Resources Ltd.

ARC Resources Waste Heat Recovery Project

Verification Report

September 10, 2020

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Brightspot Climate Inc. – Verification Report ARC Resources Waste Heat Recovery Project

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1 Verification Objective and Details

The objective of the verification is to confirm data, controls and processes supporting the emission

reduction or removal calculations as presented in the GHG Report and corresponding GHG Assertion

according to the procedures set out in ISO 14064-3.

Additional objectives include confirming that the GHG Report and corresponding GHG Assertion

conformed to the requirements and principles of ISO 14064-2 and are without material discrepancies.

ISO 14064-2 defines the following terms used in the context of a GHG verification:

GHG Assertion: a declaration or factual and objective statement made by the Responsible

Party.

Project: activity or activities that alter the conditions identified in the baseline scenario which

cause greenhouse gas emission reductions or greenhouse gas removal enhancements.

ISO 14064-2 defines the following parties associated with the verification:

Responsible Party: person or persons responsible for the provision of the greenhouse gas

assertion and supporting GHG information.

The Responsible Party for this verification is ARC Resources Ltd. (ARC Resources).

Intended User: individual or organization identified by those reporting GHG-related information

as being the one who relies on that information to make decisions.

The Intended User for this verification is the CSA CleanProjects® Registry and its users.

Verifier: competent and independent person, or persons, with the responsibility of performing

and reporting on the verification process.

The Verifier for this verification is Brightspot Climate Inc. (Brightspot). The verification team

members are described in Section 1.11 of this report.

1.1 Project Title

ARC Resources Waste Heat Recovery Project.

1.2 Project Start Date

The project start date and crediting start date is January 1, 2020.

1.3 Verification Site Visit (date)

A site visit to ARC Resources Waste Heat Recovery Project facilities was conducted by Rodrigo

Cubedo from August 13, 2020. During the site visit ARC Resources personnel provided an overview of

the facility and answered questions related to the use of waste heat at the facilities, maintenance and

calibration of equipment, and associated data collection procedures. The internal processes for tracking

and monitoring daily operation parameters were demonstrated.

1.4 Expected Lifetime of the Project

The expected lifetime of the project is 15 to 20 years.


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1.5 Type of Greenhouse Gas Emission Reduction or Removal Project

The ARC Resources Waste Heat Recovery Project is an aggregated project that uses waste heat

recovery equipment to capture turbine waste heat. This recovered heat replaces natural gas

combustion to heat the process heat medium used in various applications.

1.6 Methodology Appropriateness

The project uses guidance from the Alberta Quantification Protocol for Waste Heat Recovery, Version

2.0 (the “Protocol”) for the selection of greenhouse gas sinks, sources and reservoirs (SSRs) and

quantification of associated GHG emissions.

The application of the Protocol methodology has been confirmed as appropriate for the Project based

on a review of the following:

• The reductions between the baseline scenario selected and project condition present in this

project.

• The fundamental assumptions and criteria for SSR emissions are met by the project.

• Quantification of baseline and project conditions are functionally equivalent, and;

• Quantification is based upon actual measurement and monitoring, where applicable.

1.7 Legal Land Description

The facilities included in the ARC Resources Waste Heat Recovery Project., along with their location,

are provided in Table 1. The latitude and longitude for the location was confirmed by cross-referencing

with the facility LSD.

Table 1. Facilities Included in the ARC Resources Waste Heat Recovery Project.

Facility LSD Latitude Longitude

Dawson III & IV Gas Plant 13-07-080-14W6 55.92524 -120.189902

1.8 Ownership Verification

Based on a review of facility data through Petrinex and the BC Oil & Gas Commission Data Centre, as

well as company annual reports, the owner and operator of the facilities included in the project is the

Responsible Party. ARC Resources is the Responsible Party making the GHG Assertion.

1.9 Reporting, Monitoring, and Verification Details

The GHG reporting period covered by this verification is January 1, 2020 to April 30, 2020.

The asserted total emissions reduction for the reporting period is 8,427 tonnes CO2e.


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The Responsible Party has developed a monitoring plan for each of the project parameters, including

the quantification variable used to calculate the emission reduction. The monitoring plan was reviewed

during the verification – see Section 3.5 for the verification results.

This Verification Report will be posted publicly on the GHG CleanProjects® registry along with the GHG

Project and related GHG Report and Assertion September 8, 2020, Version 1 to which it pertains.

1.10 Level of Assurance and Verification Summary

The verification was planned and executed to reach a reasonable level of assurance.

There were no discrepancies detected in the final GHG Assertion.

The Responsible Party’s asserted emission reduction is provided in the following table:

Table 2: GHG Assertions by Vintage Year

GHG Emission Reduction

January 1, 2020 – April 30, 2020: 8,427 tonnes CO2e

Source: GHG Report – ARC Resources Waste Heat Recovery Offset Project, Version 1, September 8, 2020

1.11 Roles and Responsibilities

REPORT VERIFIER

Brightspot Climate Inc.

409 Granville Street, Suite 401

Vancouver, BC V6C 1T2

A Statement of Qualifications for the verification team is included in Section 6. The verification team was

comprised of the following:

Lead Verifier

Aaron Schroeder, P.Eng.

[email protected]

+1 (604) 353-0264

The Lead Verifier was responsible for the oversight of all activities

conducted within the verification, including the development of the

Verification Plan, as well as the execution of the verification procedures.

The Lead Verifier was lead author of the Verification Report and executed

the Verification Statement.


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Associate Verifier

Katja Hetmanchuk, Jr. Eng.

[email protected]

+1 (438) 378-3188

Katja Hetmanchuk provided support to the verification team through the

development of the Verification Plan, the carrying out of the verification

procedures and the development of the Verification Report.

Associate Verifier

Rodrigo Cubedo, EIT

[email protected]

+1 (778) 814-1184

Rodrigo Cubedo provided support to the verification team by conducting

the site visits.

Peer Reviewer

Deepika Mahadevan, P.Eng.

[email protected]

+1 (647) 633-8310

The Peer Reviewer conducted an independent peer review of the

verification.

AUTHORIZED PROJECT CONTACT

Zainab Dadashi

Modern West Advisory

Unit 600, 505 2nd street SW

Calgary, AB T2P 1N8

[email protected]

+1 (403) 400-7106

PROJECT PROPONENT

ARC Resources Ltd.

Unit 1200, 308 4 Ave SW

Calgary, AB T2P 0H7

Contact: Kyla Cuthbertson

Environmental Coordinator

[email protected]

+1 (403) 503-8634


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1.12 Accreditation

Brightspot Climate Inc. is an accredited verification body by the Standards

Council of Canada1, accreditation number 07010.

This verification was completed in conformance with the requirements of the

ISO 14064-3, ISO 14065 and ISO 14066 standards.

1 The SCC Accreditation Symbol is an official symbol of the Standards Council of Canada, used under license.


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2 Verification Criteria

As per ISO 14064-3, the verification assessed the project document and all supporting information.

The Project was developed using guidance from project uses guidance from the Alberta Quantification

Protocol for Waste Heat Recovery, Version 2.0 (June 2018).

2.1 Scope

Table 3: Verification Scope

Geographic Boundary: Dawson III and IV Gas Plant (see Section 1.7)

Physical Operations: Waste heat recovery from combustion turbines

GHG Sources: • Process heat medium heater

• Fuel Extraction & Processing

Type of GHGs: • Carbon Dioxide (CO2)

• Methane (CH4)

• Nitrous Oxide (N2O)

Reporting Period: January 1, 2020 – April 30, 2020

2.2 Materiality

The quantitative materiality threshold identifies misstated or omitted information that would significantly

misrepresent the GHG Assertion to the intended user. For this project, the quantitative materiality

threshold is equal to 5% of the asserted greenhouse gas emission reduction. Qualitative discrepancies

will also be evaluated and considered against the needs of the intended user.


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3 Verification Plan

3.1 Preliminary Review

The verification team conducted a preliminary review of the project and project documentation. The

review was conducted by reviewing the draft GHG Report and interviewing representatives of the

responsible party. Through this review, the verification team confirmed that the team has the necessary

technical skills and competencies to review the nature, scale and complexity of the project.

A preliminary review of the completeness and appropriateness of the GHG Report and GHG Assertion

and data management systems confirmed that the project is ready for verification.

There were no issues raised through the preliminary review that would have precluded the completion

of the verification.

3.2 Verification Risk Assessment

The Verification Risk Assessment was completed during the verification planning stage. Verification risk

is defined as the risk of an incorrect verification conclusion. It can be calculated as the product of the

Project’s inherent risks, the Responsible Party’s control risks and the Verifier’s detection risks. The

verifier cannot affect the inherent risk or the control risk. Therefore, to reduce the overall verification risk

and reach the agreed level of assurance (defined in the verification scope), the verifier must design

verification procedures that reduce the detection risk.

The following table presents the results of the verification risk assessment. Each inherent and control

risk is described along with the risk evaluation (high/medium/low). The risk evaluation considers both

the magnitude of the activity data or inventory component on the overall GHG assertion as well as the

probability that the risk will result in a discrepancy, as assessed by the verifier.

In instances where a substantive approach is applied in the verification procedure (i.e. the procedure

tests the data, rather than the Responsible Party’s controls), the Responsible Party’s control is not

listed, but is denoted “N/A”; however, this does not imply that the Responsible Party does not have a

control in place.


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Table 4: Verification Risk Assessment

Activity Data / Inventory

Component

Inherent Risk Control Risk Detection

Risk Design

Description of Verification Procedure

GENERAL APPLICABILITY REQUIREMENTS

Ownership must be clearly

defined

Relevance – Low

The Responsible Party may

not have ownership or be

the operator of the facilities

in the Project.

N/A – verification is

not relying on

Responsible Party

Controls.

Low Substantive test: Confirm ownership of facilities

through the BC Oil & Gas Commission Data

Centre.

ISO 14064-2 REQUIREMENTS

Project information Completeness – Medium

The project information

provided in the GHG report

may not include all

information required by ISO

14064-2.


not relying on

Responsible Party

Controls.

Low Substantive test – review all information provided

in the GHG Report, comparing it to observations

made during the site visit and data and

documentation provided by the Responsible

Party. Confirm that all required data is included in

the report and is accurate.

Definition and selection of

Sources, Sinks and

Reservoirs (SSRs)

Completeness – High

SSRs identified and

selected for quantification

may be incomplete or may

not be relevant to the

project.


not relying on

Responsible Party

Controls.

Low Substantive test – review the GHG Report and

supporting documentation, comparing the

selection of SSRs described in these documents

to observations made during the site visit.

Evaluate the justifications provided for excluding

SSRs, confirming that a conservative approach

has been applied.


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Component


Risk Design


Data monitoring for each

quantification parameter


Plan for monitoring data

may be incomplete,

inappropriate or may not

provide for sufficient

transparency in data.


not relying on

Responsible Party

Controls.

Low Substantive test – review the GHG Report and

supporting documentation, comparing the

selection of SSRs described in these documents

to observations made during the site visit.

Evaluate the justifications provided for excluding

SSRs, confirming that a conservative approach

has been applied.

BOUNDARY CONDITIONS

Emission sources Completeness – Low

The Responsible Party may

have not included all

relevant sources in the

quantification


not relying on

Responsible Party

Controls.

Low Substantive test: Review provided

documentation for errors, omissions and

abnormalities.

Substantive test: Interview field personnel and

observe facility during site tour to confirm

possible emission sources.

Substantive test: Interview field personnel and

observe facility during site tour to confirm that

waste heat would be dissipated in absence of the

Project (no alternative uses of waste heat).


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Component


Risk Design


Reporting period Cut-off – Low

The quantification may

include activity data from

outside the reporting

period.


not relying on

Responsible Party

Controls.

Low Substantive test: Confirm data is relevant to the

reporting period defined by reference criteria.

METHODOLOGIES

Emission quantification

methodologies

Consistency – High

The quantification

methodologies may be

inconsistent between the

Responsible Party’s

quantification document

and the calculations.


not relying on

Responsible Party

Controls.

Low Substantive test: Confirm methodologies are

consistent with reference criteria.


relevance

Relevance – High

The selected protocol may

not be applicable to meet

the criteria.


not relying on

Responsible Party

Controls.

Low Substantive test: Evaluate functional equivalence,

baseline condition, project condition, boundary

and additionality as described by the Responsible

Party. Confirm that operating conditions are

represented by the information presented in the

GHG Report for these parameters.


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Component


Risk Design


ACTIVITY DATA

WHR unit operating hours Accuracy – Medium

Operating hours may be

incorrect.

Transcription of values may

not have been transcribed

accurately into calculation

spreadsheet.


not relying on

Responsible Party

Controls.

Low Substantive test: Compare operating hours with

process heat medium fluid flowrate data and

identify any anomalies.

Substantive test: Confirm accurate transcription

of values into quantification spreadsheet.

Completeness – Medium

Operating hours may be

incomplete.


not relying on

Responsible Party

Controls.

Low Substantive test: Review activity data for

completeness and identify any anomalies.

Process heat medium fluid

inlet temperature, outlet

temperature and flowrate

Accuracy – High

Meters may provide

incorrect values.

Accuracy –

Medium

Responsible Party

uses internal

review.

Low Substantive test: Confirm accurate transcription

of values into quantification spreadsheet and

review engineering estimates for appropriateness.

Controls test: Review meter maintenance

records.


Meter data may be

incomplete.


not relying on

Responsible Party

Controls.

Low Substantive test: Review activity data for

completeness and identify any anomalies.

Substantive test: Observe equipment and

metering locations during site tour.


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Component


Risk Design


Natural gas composition Accuracy – Medium

The gas composition may

be incorrect.


not relying on

Responsible Party

Controls.

Low Substantive test: Confirm the accurate

transcription of the gas analysis data and review

compositions for abnormal concentrations.

Natural gas emission

factors

Accuracy – Medium

Quantification of emissions

may be over- or

underestimated.


not relying on

Responsible Party

Controls.

Low Substantive test: Compare emission factors used

in quantification to reference sources.

QUANTIFICATION

Emission quantification Accuracy – High

Emissions or production

quantification may be

inaccurately calculated.


not relying on

Responsible Party

Controls.

Low Substantive test: Perform independent

calculations of emissions.

DATA INTEGRITY

Activity data and emission

factor data integrity

Accuracy – Medium

Values may be inaccurately

transcribed between

electronic systems and

calculation sheets.


not relying on

Responsible Party

Controls.

Low Substantive test: Use data from original source

for quantification calculations where possible.

Substantive test: Confirm data collection

procedures through observation and inquiry

during the site visit.


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Component


Risk Design


All inventory emission,

production and reporting

quantities

Accuracy – Medium

Final emission reduction

may not have been

transcribed accurately from

calculation spreadsheets

into the Offset Project

Report.


not relying on

Responsible Party

Controls.


from GHG calculation to final reporting

documents.

Completeness – Medium

Final quantities may be

incompletely transcribed.


not relying on

Responsible Party

Controls.


from GHG calculation to final reporting

documents.

3.3 Sampling Plan

No verification procedures that could apply sampling of the project data were performed.


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3.4 GHG Report

The final GHG Report subject to this verification is dated September 8, 2020.

The asserted emission reduction quantity is shown in Section 1.9 of this report.

3.5 Verification Findings

The results of the verification risk assessment provided the basis for the verification procedures. Table 5, below, provides a summary of the

verification procedures where discrepancies were detected. Table 6, which follows, provides a description of every verification procedure that

was completed.

Detailed working papers regarding the verification procedures are available on request.

Table 5: Verification Findings Summary

There were no unresolved discrepancies detected in the final GHG Assertion.


Component Description Discrepancy Description

Discrepancy

Type

Discrepancy

Magnitude


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Table 6: Findings of Verification Procedures


Component Description

Verification Procedures Verification Findings


Ownership must be clearly

defined

Substantive test: Confirm ownership

of facilities through the BC Oil & Gas

Commission Data Centre.

A review of facility data through Petrinex and the BC Oil & Gas

Commission Data Centre, as well as company annual reports, showed

that Responsible Party owns and operates the facilities where the

project is implemented.

Observations during the site visit did not indicate the ownership by any

other entity than the Responsible Party.

No discrepancies detected.


Project information Substantive test – review all

information provided in the GHG

Report, comparing it to

observations made during the site

visit and data and documentation

provided by the Responsible Party.

Confirm that all required data is

included in the report and is

accurate.

The project information described in the GHG Report accurately

represents the baseline and project conditions and the quantification of

the emission reduction, as observed during the site visit.



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Definition and selection of

Sources, Sinks and Reservoirs

(SSRs)

Substantive test – review the GHG

Report and supporting

documentation, comparing the

selection of SSRs described in

these documents to observations

made during the site visit. Evaluate

the justifications provided for

excluding SSRs, confirming that a

conservative approach has been

applied.

The SSRs described in the GHG Report and the selection of SSRs for

quantification appropriately represents the relevant SSRs observed

during the site visit.


Data monitoring for each

quantification parameter

Substantive test – review the data

monitoring plan for each

quantification parameter, evaluating

for completeness and relevance

based on understanding of the

overall project. Review level of

transparency in project data to

confirm sufficient transparency to

conduct the verification at a

reasonable level of assurance and

meet the needs of the intended

user.

The monitoring plan for each parameter was reviewed and found to

describe the components required to sufficiently monitor the

parameter.

The project data has been provided at a sufficient frequency to conduct

the verification.



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BOUNDARY CONDITIONS

Emission sources Substantive test: Review provided

documentation for errors, omissions

and abnormalities.

Substantive test: Interview field

personnel and observe facility

during site tour to confirm possible

emission sources.

Substantive test: Interview field

personnel and observe facility

during site tour to confirm that

waste heat would be dissipated in

absence of the Project (no

alternative uses of waste heat).

All emission sources reviewed were found to be included in the GHG

Assertion.

The GHG Report describes a natural gas heater used in the case of

interruption to the waste heat recovery system. Since additional

required heat would also be produced by natural gas heaters in the

baseline condition, this source is not included in the calculation of the

emission reduction. Only the amount of heat recovered from the

turbines is considered for the baseline and project conditions.

ARC Resources personnel confirmed during the site visit that recovered

waste heat is only used for transfer to the process heat medium.


Reporting period Substantive test: Confirm data is

relevant to the reporting period

defined by reference criteria.

Review of all data used for the emission reduction calculation was

confirmed for activities that occurred during the reporting period.



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METHODOLOGIES


methodologies

Substantive test: Confirm

methodologies are consistent with

reference criteria.

The GHG Report presents emission quantification methodologies and

states that they are consistent with the Alberta Quantification Protocol

for Waste Heat Recovery, Version 2.0. The methodologies in the GHG

Report and the referenced protocol were reviewed and found to be

consistent with the methodologies used to quantify the emissions

reduction.



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relevance

Substantive test: Evaluate functional

equivalence, baseline condition,

project condition, boundary and

additionality as described by the

Responsible Party. Confirm that

operating conditions are

represented by the information

presented in the GHG Report for

these parameters.

The project meets the conditions for functional equivalence as the level

of service and quality of product delivered in the project condition

remains the same as in the baseline condition. Recovered waste heat is

only used for transfer to the process heat medium.

The calculation of fuel demand and associated emissions from

extraction, processing and combustion in the baseline is estimated

based on WHR operating time, process heat medium inlet and outlet

temperatures, and flow rates. Manufacturer’s specifications for the

process heat medium are used to estimate the fuel demand in the

baseline condition.

Fuel consumption for natural gas heaters in the project condition, in the

case of WHR system interruption, would be equivalent in the baseline

condition as heat would also be provided by natural gas heaters. There

is no electricity consumption in the project condition.

Based on our review, all appropriate SSRs are included in the emission

reduction calculation.

Regarding additionality, this is a greenfield project and there are no

conditions prior to project initiation. In standard industry practice, waste

heat from turbines would be vented to the atmosphere. Implementation

of the project did not occur without the economic incentive of revenue

from the sale of emission offset credits.



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ACTIVITY DATA

WHR unit operating hours Substantive test: Compare

operating hours with process heat

medium fluid flowrate data and

identify any anomalies.

Substantive test: Confirm accurate

transcription of values into

quantification spreadsheet.

A validation was performed using original 15-minute increment data to

determine if any anomalous medium fluid flowrates were included in the

calculated WHR operating hours. No anomalies were detected with

regards to this data.

A validation was also performed to evaluate the calculated monthly

WHR operating hours. This activity data was found to reasonably

match the operating hours presented in the calculation spreadsheet.


Substantive test: Review activity

data for completeness and identify

any anomalies.

The Dawson IV WHR units became operational in March 2020. The first

day of gas sales from that plant was March 31, 2020 and therefore only

data from that date onwards was included in the emission reduction

calculation.



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Process heat medium fluid inlet

temperature, outlet

temperature and flowrate


transcription of values into

quantification spreadsheet and

review engineering estimates for

appropriateness.

Controls test: Review meter

maintenance records.

A validation was performed using original 15-minute increment data on

the monthly averages used in the emission reduction calculation. The

monthly averages for the process heat medium inlet temperature, outlet

temperature and flow rate, as well as the WRH operating hours, were

found to reasonably match those presented in the calculation

spreadsheet.

The emission reduction calculation used devised formulas to calculate

the process heat medium density and specific heat based on tables

from the manufacturer’s specifications. These formulas were tested,

and inputted values returned the expected results.

Calibration and maintenance tags were observed on the waste heat

recovery units during the site visit.


Substantive test: Review activity

data for completeness and identify

any anomalies.

Substantive test: Observe

equipment and metering locations

during site tour.

A validation was performed using original 15-minute increment data to

determine if any gaps or abnormal values were present in the activity

data. Data where the flow rate was below a certain threshold or where

there was no temperature increase in the heat medium through the

system was excluded for use in the emission reduction calculation by

the Responsible Party.

The WHR units were observed during the site visit.



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Natural gas composition Substantive test: Confirm the

accurate transcription of the gas

analysis data and review

compositions for abnormal

concentrations.

The transcription of the natural gas compositions from the gas analyses

to the calculation spreadsheet was found to be accurate. No anomalies

were detected in the gas composition data.

Gas sampling and frequency was discussed during the site visit. Gas

analyses are conducted periodically by an accredited laboratory. One

gas analysis was available for the reporting period. This meets the

required frequency stated in the Protocol.


Natural gas emission factors Substantive test: Compare emission

factors used in quantification to

reference sources.

The Responsible Party used a calculated site-specific CO2 emission

factor for natural gas combustion. We agree that this is more

appropriate than using the reference default factor.

Emission factors for CH4 and N2O for natural gas combustion used in

the emission reduction calculation are those required for mandatory

emission reporting in British Columbia. These emission factors have the

same values as those indicated by the reference source.


QUANTIFICATION

Emission quantification Substantive test: Perform

independent calculations of

emissions.

The recalculation of the emission reduction reasonably matched the

Responsible Party’s quantification.



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DATA INTEGRITY

Activity data and emission

factor data integrity

Substantive test: Use data from

original source for quantification

calculations where possible.

Substantive test: Confirm data

collection procedures through

observation and inquiry during the

site visit.

The activity data were reviewed to detect any abnormal values, zeroes

or missing data amongst the data provided.


All inventory emission and

reporting quantities


transcription from GHG calculation

to final reporting documents.

The final emission reduction quantities were correctly transcribed into

the GHG Report.



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3.6 Verification Records

All records used to conduct the verification will be maintained by Brightspot for seven years from the

date of this report.

3.7 Facts discovered after the verification

If any facts are discovered after the completion of the verification that may result in a mater

discrepancy, Brightspot will notify the project proponent and GHG CleanProjects® Registry within

seven days.

3.8 Verification Schedule

The verification was completed according to the schedule established between the Responsible Party

and the Verifier in the Verification Plan. The verification reached important milestones on the following

dates:

• Verification Kickoff Meeting: July 28, 2020

• Site Visit: August 13, 2020

• Final GHG Report September 8, 2020

• Draft Verification Report : September 8, 2020

• Final Verification Report September 10, 2020


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4 Verification Statement

CSA CleanProjects® Registry

178 Rexdale Blvd.

Toronto, ON

Canada M9W 1R3

September 10, 2020

Introduction

ARC Resources Ltd. (the “Responsible Party”) engaged Brightspot Climate Inc. (Brightspot Climate) to

review their greenhouse gas (GHG) emission reduction and removal project, ARC Resources Waste

Heat Recovery Project (the “Project”). The Project was developed the Alberta Quantification Protocol for

Waste Heat Recovery, Version 2.0, dated June 2018 (the “Methodology”).

The Responsible Party’s “GHG Assertion” is comprised of the GHG Report and supporting

documentation. The GHG Assertion covers the reporting period January 1, 2020 to April 30, 2020 and

states an emission reduction and removal claim of 8,427 tonnes CO2e over this period.

The emission reduction and removal claims consist of no vintage credits.

The Responsible Party is responsible for the preparation and presentation of the information within the

GHG Assertion. Our responsibility as the verifier is to express an opinion as to whether the GHG

Assertion is materially correct, in accordance with the requirements of the CSA CleanProjects® Registry

and the requirements of ISO 14064-2: Specification with guidance at the project level for quantification,

monitoring and reporting of greenhouse gas emission reductions or removal enhancements.

Scope

We completed our review in accordance with ISO 14064 Part 3: Greenhouse Gases: Specification with

Guidance for the Validation and Verification of Greenhouse Gas Assertions (ISO, 2006). As such, we

planned and performed our work to provide positive, but not absolute assurance with respect to the

GHG Assertion.

The verification procedures that were performed through the course of the verification were developed

based on the results of a risk assessment that was completed during the verification planning stage.

These verification procedures are described in the Verification Report.


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Conclusion

I believe our work provides a reasonable basis for my conclusion.

There were no unresolved discrepancies detected in the final GHG Assertion.

Based on our review, it is my opinion at a reasonable level of assurance that the GHG Assertion is

materially correct and presented fairly in accordance with the relevant criteria.

Sincerely,



Westmount, Quebec


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5 Conflict of Interest Statement

Brightspot Climate monitored threats to independence throughout the duration of the project. The

following declaration affirms that the following principles were upheld:

Yes No Details

Independence:

The verifying organization remained independent of the activity being

verified, and free from bias and conflict of interest.

The verifying organization maintained objectivity throughout the

verification to ensure that the findings and conclusions are based on

objective evidence generated during the verification,

a N/A

Ethical Conduct:

The verifying organization demonstrated ethical conduct through

trust, integrity, confidentiality and discretion throughout the verification

process.

a N/A

Fair Presentation:

The verifying organization reflected truthfully and accurately

verification activities, findings, conclusions and reports.

The verifying organization reported significant obstacles encountered

during the verification process, as well as unresolved, diverging

opinions among verifiers, the responsible party and the client.

a N/A

Due Professional Care:

The verifying organization exercised due professional care and

judgment in accordance with the importance of the task performed

and the confidence placed by clients and intended users.

Members of the verification team have the necessary skills and

competences to undertake the verification.

a N/A

Date: September 10, 2020

Location: Westmount, Québec

Signed:

Aaron Schroeder

Lead Verifier. Brightspot Climate

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6 Statement of Qualifications

Lead Verifier Details

Lead Verifier Name: Aaron Schroeder

Professional Designation: Professional Engineer

Email: [email protected]

Phone Number: +1 (604) 353-0264

Verifying Company Name: Brightspot Climate Inc.

Lead Verifier Training

• GHG Verification - ISO 14064-3, Canadian Standards Association, 2012

• CCP 403 - GHG Validation and Verification, University of Toronto, 2016 (Instructor)

Verification Team Biographies

Lead Verifier: Aaron Schroeder, P.Eng. has twelve years of professional experience analyzing,

quantifying and auditing greenhouse gas emissions in North America. Mr. Schroeder’s hands on

experience conducting over 150 greenhouse gas verifications includes numerous engagements for

industrial facilities in power generation, oil and gas production and processing, natural gas pipelines and

a wide range of emission reduction projects in beef and dairy management, conservation cropping

(zero-tillage) and nitrogen fertilizer management, and renewable energy and waste management. Mr.

Schroeder is a sessional instructor at the University of Toronto’s School of Environment for professional

development. He instructs the school’s greenhouse gas quantification and verification courses.

Associate Verifier: Katja Hetmanchuk, Jr. Eng. With ISO 14064-3 training and experience in greenhouse

gas verifications for projects related to oil and gas production, electricity generation and industrial food

processing, Katja is a junior engineer who also has experience analyzing, evaluating and implementing

environmental regulatory requirements. She has conducted case studies analyzing climate change

mitigation within the framework of impact assessments, including the role of greenhouse gas (GHG)

programmes. Prior to joining Brightspot, Katja tracked and analyzed environmental compliance

obligations for companies, performed environmental site assessments, and contributed to site

remediation projects.

Associate Verifier: Rodrigo Cubedo, EIT. Rodrigo completed a Bachelor’s in Mechanical Engineering at

McGill University in 2016. Rodrigo also completed the GHG Validation and Verification, ISO 14064-3, at

University of Toronto in 2019. Following his undergraduate degree Rodrigo worked at

PricewaterhouseCoopers in Hong Kong (PwC HK), where he leveraged his engineering experience to

understand and systematically improve the processes used to work with international clients operating

in the Chinese market. At Brightspot, Rodrigo conducts GHG quantification, reporting, facility report

verifications, offset project verifications, regulatory compliance strategy, emissions and emission

reduction forecasting.

29

Peer Reviewer: Deepika Mahadevan, P.Eng. conducted an independent peer review of the verification.

Ms. Mahadevan has more than five years of experience conducting greenhouse gas verifications for

industrial facilities and emission reduction (offset) projects in jurisdictions across Canada. She has

completed specific training for the application of ISO 14064-3.

I, Aaron Schroeder, meet or exceed the qualifications required for third-party verifiers defined by the CSA Clean Projects Registry.



Westmount, Quebec

ARC Resources Ltd.

ARC Resources Waste Heat Recovery Project

Verification Plan

August 12, 2020

2

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1

Introduction

This document serves to communicate information between the parties associated with the independent verification of the emission report.

This document contains four sections:

1. The Introduction, which defines the principles by which this verification will be conducted;

2. The Verification Plan, which defines the verification parameters and the GHG inventory principles that will be tested by the verification. This section also provides information regarding the verification team and site visit;

3. The Evidence-Gathering Activities, which describes the potential sources of risk in the overall GHG report and the evidence-gathering activities that have been developed to reduce the overall verification risk; and

4. The Approval, which confirms that this Verification Plan has been reviewed and approved by the Lead Verifier.

GHG Quantification Principles

ISO 14064-1 defines five principles that are fundamental to the fair accounting and reporting of GHG information. The evidence-gathering activities will test that these principles have been upheld through the Responsible Party’s inventory, accounting and reporting processes.

Section 3.2 – 3.6 of ISO 14064-1 defines these principles as follows:

Accuracy: reduce bias and uncertainty as far as practical

Completeness: include all relevant emission sources

Consistency: enable meaningful comparisons of reported emissions (from year to year or between facilities or between companies)

Relevance: select GHG sources, sinks and reservoirs, data and quantification methodologies appropriate to the needs of the intended user

Transparency: disclose sufficient and appropriate GHG information to facilitate verification and to allow intended users to make decisions with relative confidence

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Verification Plan ARC Resources Ltd. ARC Resources Waste Heat Recovery Project: January 1, 2020 - April 30, 2020 CSA Clean Projects Registry Verification

Verification Principles

ISO 14064-3 defines four fundamental principles to conducting a greenhouse gas verification, namely independence, ethical conduct, fair presentation and due professional care.

Brightspot Climate has implemented processes, including mandatory training for all verification team members, to ensure the application of these principles for this verification.

Regarding the principle of independence, Brightspot Climate conducted an assessment of threats to independence prior to initiating this verification. No real or perceived threats to independence were identified. Brightspot Climate will continue to monitor for threats to independence throughout the course of this verification. A final “Conflict of Interest Report” will be appended to the Verification Statement.

Verification Parameters

The verification will be conducted according to the plan defined in the following table:

Table 1: Verification Parameters

Responsible Party

ARC Resources Ltd.

Client Modern West Advisory

Type of Engagement

Verification

GHG Program

CSA Clean Projects Registry

Level of Assurance

Reasonable assurance

Objectives

• issue a verification statement on whether the GHG assertion is accurate and conforms with the criteria as listed below;

• issue a verification report that provides details of the verification activities.

3

Criteria

• Quantification Protocol for Waste Heat Recovery, Version 2.0, June 2018. Government of Alberta.

• Final Essential Requirements of Mandatory Reporting, Western Climate Initiative, December 21, 2011

• Project Document - ARC Resources Waste Heat Recovery Project

• ISO 14064-2

Scope

Facility Name: ARC Resources Waste Heat Recovery Project

Organizational Boundary: Operational Control

Geographic Boundary: Dawson III and IV Gas Plant

Physical Operations: Waste heat recovery from combustion

turbines

Emission Sources: Process heat medium heater

Fuel Extraction & Processing

IPCC GHGs Emitted:

Carbon Dioxide (CO2)

Methane (CH4)

Nitrous Oxide (N2O)

Reporting Period: January 1, 2020 – April 30, 2020

Materiality Quantitative materiality threshold is 5% total error

Table 2: Verification Logistics

Verification Team

Lead Verifier Aaron Schroeder, P.Eng.

Associate Verifier Katja Hetmanchuk, Jr. Eng.

Associate Verifier Rodrigo Cubedo, EIT

The Independent Reviewer will be assigned during the verification.

Responsible Party Contact

Kyla Cuthbertson, Environmental Coordinator, ARC Resources Ltd.

4

Verification Schedule

Verification Kickoff Meeting July 28, 2020

Verification Plan to Responsible Party August 12, 2020

Site Visit August 13-14, 2020

Receipt of Data from Responsible Party July 31, 2020

Draft Verification Report August 26, 2020

Final Verification Report and Statement August 31, 2020

5

Evidence-Gathering Activities

A risk assessment was developed in order to identify:

• The risk of material errors, omissions or misrepresentations; and

• Conformance to the requirements of ISO 14064-2 and ISO 14064-3.

Evidence-gathering activities were designed to minimize the verification detection risk associated with each identified source of risk. These activities are identified in Table 3, below. A complete list of findings associated with each evidence-gathering activity will be provided in the Verification Report.

Table 3: Risks and Evidence-Gathering Activities

Source of Risk Evidence-Gathering Activity


Ownership must be clearly defined Substantive test: Confirm ownership of facilities through the BC Oil & Gas Commission Data Centre.


Project information Substantive test – review all information provided in the GHG Report, comparing it to observations made during the site visit and data and documentation provided by the Responsible Party. Confirm that all required data is included in the report and is accurate.

Definition and selection of Sources, Sinks and Reservoirs (SSRs)

Substantive test – review the GHG Report and supporting documentation, comparing the selection of SSRs described in these documents to observations made during the site visit. Evaluate the justifications provided for excluding SSRs, confirming that a conservative approach has been applied.

Data monitoring for each quantification parameter

Substantive test – Review the data monitoring plan for each quantification parameter, evaluating for completeness and relevance based on understanding of the overall project. Review level of transparency in project data to confirm sufficient transparency to conduct the verification at a reasonable level of assurance and meet the needs of the intended user.

BOUNDARY CONDITIONS

6


Emission sources Substantive test: Review provided documentation for errors, omissions and abnormalities.

Substantive test: Interview field personnel and observe facility during site tour to confirm possible emission sources.

Substantive test: Interview field personnel and observe facility during site tour to confirm that waste heat would be dissipated in absence of the Project (no alternative uses of waste heat).

Reporting period Substantive test: Confirm data is relevant to the reporting period defined by reference criteria.

METHODOLOGIES

Emission quantification methodologies Substantive test: Confirm methodologies are consistent with reference criteria.

Emission quantification relevance Substantive test: Evaluate functional equivalence, baseline condition, project condition, boundary and additionality as described by the Responsible Party. Confirm that operating conditions are represented by the information presented in the GHG Report for these parameters.

ACTIVITY DATA

WHR unit operating hours Substantive test: Compare operating hours with process heat medium fluid flowrate data and identify any anomalies.

Substantive test: Confirm accurate transcription of values into quantification spreadsheet.

Substantive test: Review activity data for completeness and identify any anomalies.

Process heat medium fluid inlet temperature, outlet temperature and flowrate

Substantive test: Confirm accurate transcription of values into quantification spreadsheet and review engineering estimates for appropriateness.

Controls test: Review meter maintenance records.

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Substantive test: Review activity data for completeness and identify any anomalies.

Substantive test: Observe equipment and metering locations during site tour.

Natural gas composition Substantive test: Confirm the accurate transcription of the gas analysis data and review compositions for abnormal concentrations.

Natural gas emission factors Substantive test: Compare emission factors used in quantification to reference sources.

QUANTIFICATION

Emission quantification Substantive test: Perform independent calculations of emissions.

DATA INTEGRITY

Activity data and emission factor data integrity

Substantive test: Use data from original source for quantification calculations where possible.

Substantive test: Confirm data collection procedures through observation and inquiry during the site visit.

All inventory emission, production and reporting quantities

Substantive test: Confirm accurate transcription from GHG calculation to final reporting documents.

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