Methane Vent Mitigation Methane Vent Mitigation Proposal for Demonstration Proposal for Demonstration
ProjectsProjects
PTAC TIS PTAC TIS November, 2001November, 2001
New Paradigm Engineering Ltd., Edmonton,New Paradigm Engineering Ltd., Edmonton,Clearstone Engineering Ltd., CalgaryClearstone Engineering Ltd., Calgary
Areas to Cover
Introductions Why focus on Methane Vent Mitigation? What might be Achieved Economically? What is Happening Now? Why isn’t more Happening? How Are Demonstration Projects Going to Help? Proposal Details and Process Next Steps?
About New Paradigm Engineering Ltd. Independent consulting company, Inc. 1991 Engineer “new paradigms” for industry Small but supplement manpower with other
specialists and consultants as needed for the work. Last three years spent on assessing existing and new
options for reducing methane emissions, through a series of Vent Options Studies and other activities.
• Vent Option Studies Total - $190k (2000-01)• CHO Audits and Equipment Trials - $75k (1999-2001)• New Technology Development - $80k (1998-2001)
About Clearstone Engineering Ltd
In business since 1989 Process and Environmental Engineering Specialists Methane Related Experience: - Quantification of CH4 losses, and evaluation of
control opportunities at gas production, processing, transmission and distribution facilities in Canada, US, Europe and Asia.
- Preparation of CAPP’s control options document and emissions inventory for CH4 and VOCs
- Work for IPCC & UNFCCC on fugitive emissions
Methane from the Upstream Industry Over $400-$800M/yr of methane vented or emitted from
upstream sites (@$3-$6/GJ)• Equivalent to over 20% of Upstream O&G Industry energy use
At the same time methane is also being flared. Methane emissions from Upstream Sources
• Almost 50% of oil & gas GHG emissions • Over 8% of Canada’s GHG emissions• Over 30% of Alberta’s emissions
GHG, Flaring and Odour Issues affecting O&G Development
Methane emissions have almost doubled since 1990
Methane - An Economic GHG Target It has an economic value ($3-$6/GJ) It can provide the energy to support it’s own use It has a greater impact; 1 t CH4 = 18-21 tCO2e Lower cost to convert than to sequester CO2
• Sequestration of CO2 usually in the US$20/tonne range
• Many methane mitigation options are economic• <$US1.50/tCO2e to convert methane into CO2
Many opportunities to use existing technology to reduce emissions.
• Many designs based on gas at C$0.30/GJ and no concerns about methane.
What Comes with the Methane Vents? Lost Opportunities to Increase Sales Revenues or
to Reduce Energy Costs Heavier Hydrocarbons that Could be Recovered Volatile Organic Compounds (VOC’s), H2S and
BTEX emissions• Source of Odours, Health Concerns and Public
Resistance to Further Development and Lead to Flaring
Regulatory Pressure to Change
What Can Be Economically Achieved? Work by New Paradigm, Clearstone & Others shows: Fuel Displacement
• Vent or flared gas can be used to fuel equipment.• Small investments and rapid payouts (months)• No point reducing vent/flare if you can use it as fuel
Vent Volume Reductions• Economic at many sites – payouts months to years
Manage Large Surpluses• Sell Gas, Power, or Liquids – Payouts 2-4 years
Methane Conversion to CO2 for Credits
Gas Processing6%
Other1%
Conventional Oil Production
8%
Product Transmission
16%
Accidents and Equipment Failures
5%
Heavy Oil Production
29%
Gas Production35%Ref: CAPP Pub #1999-0009
Upstream Oil & Gas Methane Emission Sources
Conventional Heavy Oil Potential
Methane Sources – Production Casing (95%), Tanks (5%)
An estimated 25-50% Displace fuel on leases• Payouts can be as short as 1-4 months
Likely 25-35% Used for Managed Options• Compression and Sales• Power Generation• Small Scale EOR• Fuel is essentially FREE!
Remainder Convert to CO2 for Credits
Incomplete Combustion
Instrument Gas
Pumps
Fugitives
All Other
Glycol Dehydration
Methane Sources – Mainly Gas Operations
Example Source – Data from One Producer
Conventional Gas Production Potential Methane Sources – Dehydrators (25%), Instruments
(50%), Pumps (20%), Incomplete Combustion (5%) Almost all Displace fuel on leases with fired heaters
• In example case – Methane vents could displace up to 30% of the fuel used by direct fired heaters.
Sites without fired equipment Reduce Volume• Change chemical pumps to drip pots• Replace instruments to low vent types
Where it is uneconomic to reduce vents Convert
Compression and Processing Potential Methane Sources – Fugitives (70%), Incomplete
Combustion (18%), Compressor Ops (12%)• About 16% of methane Gas Transmission
Fugitives Detection, Isolation and Repair of Leaks• Most of the emissions are from <0.5% of the fittings• To be economic – minimize cost of finding the leakers
as the cost to fix usually minimal. Compression a Large Fuel Demand
• Improve combustion efficiency• Conserve starting gas, blowdowns, and seals – use
as fuel
Gas Production
Conventional Oil
Production
Heavy Oil Production
Accidents and Equipment
Failures
Product Transmission
Drilling, Well Servicing and
Testing
Crude Bitumen
Production Gas Processing
Summary of THC Emissions by Industry Sector
Oil Production Potential
Methane Sources – Mainly Tank Vents, Instruments and Pumps
• Need better data to breakdown relative shares. Oil Production only 8% of methane but 32% THC
due to product losses from tank vents. Liquids Recovery
• Use methane in vents to fuel vent condensors to recover liquids
Displace Fuel• Use gas from instruments and chemical pumps for
building heat and burners.
Energy Losses from Thermal Heavy Oil Operations
Generator Stack15%
Other4%
Flare5%
Wellbore26% Produced Water
10%
To Reservoir40%
Thermal Heavy Oil Potential
Main problem is energy efficiency more than methane venting
• Highest per bbl oil energy cost low value bbls Initial focus of options studies on small thermal
operations in Lloydminster area• Greatest challenge as no economies of scale
Improve Efficiency of Surface Facilities Increase Percentage of Energy Going into the
Reservoir Investigate low cost fuel switching
Methane Conversion Any Sector
Methane Sources: Small isolated vents; Fugitives too small to stop; Incomplete Combustion (engines, burners)
Pressurized Streams Relatively Easy• Conversion cost is lower than any CO2 reduction
options• Flares, combustion units and catalytic converters
Dilute Sources Require More Research:• Collection and Concentration of Methane• Conversion• Energy Recovery
Methane Conversion Calculations
The “math and science” of converting methane to CO2 Stoichiometric formula is:
• CH4 + 2O2 CO2 + 2H2O + Energy• Molar basis – 1 mole methane 1 mole of CO2. • Mass Basis – 1t CH4 + 4t O2 2.75t CO2 + 2.25t H2O
GHG emissions based on mass; 1 t CH4 = 21 t CO2(eq)
1 t CH4 converted to CO2 forms 2.75 tonnes of CO2. Emission reduction = 21 – 2.75 = 18.25 tCO2(eq).
If vent gas displaces fuel gas then 21 tCO2(eq) is saved.
Methane Conversion Economics GHG credits normally considered as a change from
1990 levels so may have to determine base line emissions level
• Need someone to test the system. Value of GHG credits
• Recent trades US$0.50-$2/tCO2(eq) to C$4.50-$17.00 Some on-line trading going on: GERT, KEFI & Others For positive economics conversion of 50 m3/d of
methane cost of system must be about C$5k• Payout in 10 years @ C$1.50/tCO2e
• Payout in 1 year @ C$15/tCO2e
What is Happening Now?
Reporting through Voluntary Change Registry (VCR)• Not all companies are participating• Focus is on high-level volumes and not economics• Often results achieved or hidden by takeovers and
mergers• Too high a level to help others• Options good for one situation may not be good for all
Leading Producers are Making Gains in Some Sectors• Other companies or even departments don’t hear about
it.• Management often assumes that cost is high and gains
are for public image, not economic indicators.
Real Life ExamplesCHO Fuel displacement
Husky using vent gas at many leases year round using engine waste heat for tracing lines to stop freezing.
Devon (Anderson) used basic separators and methanol on 82 wells and saved $1.6 million/yr and over 145,000 t CO2(eq)/yr in GHG emissions. $3000/well & $230/mo.
Others have used small compressors, CaCl dryers, electric tracing off drive engine to utilize vent gas.
Demonstration Projects would provide resources to document these successes more fully.
Why isn’t More Happening?
High Demands on Resources • Exploration, acquisition and asset growth require money
and people. Few people have time to work on vent issues.
• Focus on own Business Units, rather than Corporate or Industry Targets
Economic Value of Vent Gas Not Recognized Responsibility Passed to Field Staff w/o Resources It is a change from “Common Practice” Lower Cost to Change New Sites than Fix up Old Ones
How Are Demonstration Projects Going to Help? Provide knowledgeable resources to help sort out what
to do and provide assistance. Method to pass results on to others at no cost to
Producer and no staff time away from everyday work. Results and Analysis Reported in a consistent fashion Transfer what is learned in one area or sector to others
with similar issues. Help Leaders improve and get better. Motivate Followers to learn and get started.
Demonstration Project Goals
Encourage and support producers (Producer Benefits).• Audits to highlight and quantify the main sources• Recommendations to achieve cost effective solutions• Enable proactive decisions rather than reactive band-aids• Focus on the largest emission areas first
Promote communication (Industry & Society Benefits)• Develop both technical and economic results• Consistent reporting by a third party• Provide manpower and funds to communicate widely• Papers, presentations, web-sites and courses.
Work Scope – Prioritized Target Sectors Conventional Heavy Oil Gas Production Facilities Oil Production Facilities Thermal Heavy Oil Operations Gas Processing/Compression Facilities Methane Conversion – Credit/Offset Trading
Effort varies with the sector, what has already been done by the Producers and size of the operation
Proposed Process #1 - Producer Decisions Initial audit by team
• Type and volumes of sources• Identify Local Opportunities• Highlight best options for the area• Recommend Implementation Method and estimate
Budget Producer reviews audit with team support
• Decides which opportunities to pursue• Plans project• Sets budget • Decides if they want to make results public• Decides if they want to be named or be anonymous
Proposed Process #2 – Demo Approval Team Prepares summary of demonstration details
• Key emissions targeted, budget and plan• Assessment of value as a model for the sector• Prepare plan and budget for detailed case study and
communications. Participant’s Panel (funders plus demo hosts)
• Reviews opportunity summary and plan.• Allocates a percentage of the pre-committed funds to
the demo project.• Locates additional funding if appropriate ($100k min
assumes $15k/demo and only 6 demos.)
Proposed Process #3 – Demo Execution Producer Proceeds with Project Implementation
• May or may not wait for Demo Approval• Controls project schedule, cost and scope• Adjusts as appropriate• Team provides support as requested and reports on
progress as appropriate. Team Prepares Follow-up Report
• Compare Plan to Actual• Demonstrated reductions and economics, etc.• Takes information “on the road” to communicate to
others
Proposed Deliverables per Sector
Audit Report on Volumes and Proposed Actions• Analysis & Recommendations to Producer
Action Plan Preparation• Producer decides on what emissions to tackle and
assigns resources. Summary taken to Participant Panel
Follow-up Report• Full Document with results, technical and economic,
lessons learned, recommendations for others• Powerpoint format (paper and electronic)
Presentations (CIM and others), Courses
Demonstration Summaries Standard format and contents:
• Site Layout,• Emission Sources and Volumes• Potential Options Identified• Options Selected and Why • Implementation Plan and Budget • Project Execution• Technical and Economic Results,• Operator Issues, • Post Project Emissions Audit,• Implementation/Regulatory Issues
Funding
Producers fund initial audits and implementation• Retains control at all times, not committed to do anything
that is uneconomic, unsafe, experimental, etc.• Site audits $2k-$25k/each (depends on scope)• Potential for 50% of audit (up to $5k) paid for NRCan• Implementation $50k?? (depends on opportunities)
Participating Organizations fund non-economic activity• Prescreening of proposed demo sites• Preparation of a comprehensive report for each demo• Communication of results by Team• Min $100k from CAPP, Alta Gov’t, Federal Gov’t, others
Agreement Terms
For Initial Audit and Planning (Producer/Team)• Standard P.O. or Invoice to either New Paradigm or
Clearstone, based on standard rates & scope set by Producer
Agreement to Participate (Producer/Participants)• Producer agrees to make information available to the
Team that is necessary to complete an analysis.• May include information exclusions if defined up front. • Participants - no responsibility for execution, or liability
for releasing information provided by the Producer. Funding Agreements (Participants/Team)
• Similar in scope but vary with funding agency.
Summary of Proposal
Want to develop the project as a Win-Win• Producers get needed support to achieve economic
results, emissions reductions while retaining control• Funding Participants get results communicated
widely to stimulate new activity and understanding of issues; leading to more and accelerated emission reductions
• Proponents get to apply their knowledge and receive compensation for analyzing and promoting the results
Demonstrate potential benefits for all Conventional Upstream Oil and Gas Sectors
Next Steps?
Applications are being submitted to a number of potential funding sources (Industry and Gov’t)
• Seeking upfront commitment to an initial $100k• Funds only spent if Producer’s come forward• PTAC considering administering NRCan funds for
audits Producers Approached by Team to Discuss:
• Potential target projects that might serve as demos• Potential concerns with information releases• Potential agreement terms
Initiate the first demonstration to serve as a model
Questions and Discussion?
Producers:• Do you believe there are economic solutions?• Do you want support to assess, implement and report
on your successes?• What are your initial concerns?
Potential Funders• Can you allocate funds up front, before Producers
sign on• What are your initial concerns?
Other Stakeholders (Vendors, Researchers, NGO’s)• What are your thoughts and concerns?
Acknowledgements
Support of Husky (Ron Schmitz) and Alberta Environment (Bob Mitchell) for this information session.
Current Participants for Conventional Heavy Oil – AEC, Devon, Husky, CNRL, Nexen, Exxon-Mobil, EnerPlus Group, CAPP, AERI
Current Participants for Thermal Heavy Oil – Nexen, Husky, CAPP
Current Participants for Conventional Oil and Gas – BP Energy, Husky, CAPP
Support from the Petroleum Technology Alliance Canada (www.ptac.org)
Contact Information
New Paradigm Engineering Ltd.
C/o Advanced Technology Centre
9650-20 Avenue
Edmonton, Alberta
Canada T6N 1G1
tel: 780.448.9195
fax: 780.462.7297
email: [email protected]
web: www.newparadigm.ab.ca
