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Crude Oil Screening - General Meeting
Results of Initial Screening Processto Identify Potential HCICOs
Gordon SchrempCalifornia Energy Commission
February 17, 2011
Overview• Objectives & Background• Marketable Crude Oil Names – Review & Update• Potential High-Carbon Intensity Crude Oils (HCICOs)
– Initial screening steps
• Preliminary results of initial screening & associated issues– Flaring– Thermally Enhanced Oil Recovery (TEOR)– Mining/upgrading
• Upgrading refers to the use of further processing of crude oil to increase API gravity• Canada and Venezuela use upgraders
• Continuing Work– Confidential industry survey – Screening of additional “MCONs of Interest”
2/17/2011 2
Objective & Background
• Apply ARB’s potential High-Carbon Intensity Crude Oil (HCICO) screening process to list of Marketable Crude Oil Names (MCONs)– Sequential procedure to assign “pass” or “fail” based on:
• Flaring intensity• Thermally enhanced oil recovery (TEOR)• Mining extraction of bitumen• Use of upgrading facilities to produce synthetic crude oils
– Identification of shortcomings– Example of a false “pass” - identification of potential HCICO from
other information sources
• For a description of information resources, process and contents of the initial MCON list see CEC 9-10-10 presentation http://www.arb.ca.gov/fuels/lcfs/lcfs_meetings/090910cec.pdf
2/17/2011 3
Marketable Crude Oil Names - Review
• Proprietary information resources used to finalize initial list– International Crude Oil Handbook (ICOM)– Journal of Commerce – Petroleum Import Exports Reporting System– Crude Information Management System from PetroTech Intel
• Two sources used to create list of MCONs– Selected all marketable crude oil names from ICOM– Included any additional crude oil names that appeared as foreign
imports in the PIERS data base
• Nearly all marketable crude oil names have been matched to primary & tertiary fields – but not the relative contributions
• Total number of MCONs – 251– 47 different countries, including the United States
2/17/2011 4
Marketable Crude Oil Names - Update
• New names from 2010 ICOM list– Pyrenees – Australia– Frade - Brazil– Tupi – Brazil– Jubilee – Ghana (new country for MCON list)
• New names that appeared for first time in California in the PIERS data set for 2010– Marlim Sul – Brazil– Ostra – Brazil
• Revised MCON list expanded to 257 names & 48 countries• All new MCONs are offshore sources
2/17/2011 5
California MCON ImportsUpdated for 2010
2/17/2011 6
Sources: CEC Analysis of PIERS Data
Between 22 & 28 additional MCONs imported from non-2006 Base Line countries
Country 2006 2007 2008 2009 2010 Country 2006 2007 2008 2009 2010Algeria 1 1 1 1 Mexico 2 1 2 1 1Angola 3 5 6 5 1 Neutral Zone* 1 1 1 2Argentina 1 1 1 3 2 Nigeria 1 2 1 1Australia 2 1 1 Norway 1 1 1Azerbaijan 1 1 Oman 1 1 1 1 1Brazil 2 3 5 5 4 Peru 1 1 1 1 1Cameroon 1 1 1 Russia 2 2Canada 1 2 4 4 3 Saudi Arabia 3 3 3 3 2Chad 1 1 1 1 Thailand 1Columbia 3 4 4 4 4 Trinidad & Tobago 1 1 1Ecuador 2 2 2 2 2 UAE - Abu Dhabi 1 1 1 1Equatorial Guinea 1 Venezuela 6 4 3 6 3Indonesia 1 1 Vietnam 1Iraq 1 1 1 1 1 Yemen 1 1Malaysia 1 Totals 36 41 41 45 34
* Kuwait Portion
Step A – Does marketable crude oil name (MCON) originate from a 2006 Base Line country?
No Yes MCON is not a potential HCICO Step B – Does MCON originate from a country that has an average flaring intensity greater than 10.0 m3/bbl for the most recent year?
No Yes MCON is a potential HCICO Step C1 – Does MCON originate from a country that has any Thermally Enhanced Oil Recovery (TEOR) operations per the most recent O&GJ annual survey?
No Yes Step C2 – Are any of the MCON source fields listed as TEOR?
No Yes MCON is a potential HCICO
Step D – Is the MCON sourced from any mining activity or output from any form of upgrading facility?
No Yes MCON is a potential HCICO MCON is not a potential HCICO
Initial Screening Steps
• 4 sequential steps
• 257 MCONs screened
• Test takes a few minutes...
• If MCON has been coded & all source fields are listed for TEOR country MCON
• Zero “unknown” results
• 1 false “pass”
2/17/2011 7
Potential HCICOs – Initial Screening Results
• 191 MCONs receive a “pass” – 32 from Base Line countries– None of the Base Line country MCONs would have received a “fail”
• 66 MCONs receive a “fail” and are potential HCICOs– 8 of 45 import MCONs during 2009– 7 of 34 import MCONs during 2010 (could be more)
• Lokele – Cameroon• Albian Heavy Synthetic - Canada• Cold Lake Blend – Canada• ESPO Blend - Russia• Vityaz Blend - Russia• Petrozuata - Venezuela• Zuata Sweet (Formerly Sincor) – Venezuela
• One false “pass”– Oman Blend has been determined to contain crude from TEOR fields
2/17/2011 8
2010 Calif. Foreign Import Sources (Jan-Nov)
2/17/2011 9
23.4%
20.8%20.2%
7.2% 7.0%6.3% 5.8%
2.6%1.5% 1.5% 1.2% 1.1%
0.5% 0.4% 0.3% 0.1% 0.1%0%
5%
10%
15%
20%
25%
Saud
i Ara
bia
Ecua
dor
Iraq
Braz
il
Cana
da
Russ
ia
Colu
mbi
a
Ango
la
Om
an
Peru
Vene
zuel
a
Arge
ntina
Nig
eria
Aust
ralia
Kuw
ait
Uni
ted
Arab
Em
irate
s
Trin
idad
& To
bago
Perc
ent o
f Tot
al F
orei
gn C
rude
Oil
Impo
rts
2006 Base Line Country
Potential HCICO
Non-HCICO
Source: CEC Analysis of EIA Company Level Import Data
CA Refinery receipts Jan-Nov 2010Crude Oil Millions Percent
Source Barrels of TotalForeign 267.8 48.2%
California 210.6 37.9%Alaska 77.3 13.9%
Flaring Screen – Initial Results & Issues
• 47 MCONs exceed the 10.0 m3 per barrel limit – “fail” using the O&GJ crude oil production data for the intensity calculation
• Two issues associated with flaring screen– Copyright infringement– Updated NOAA & EIA data
• Flaring intensity is a measure of flaring emissions by country divided by crude oil production– There are two sources of oil production
• Oil & Gas Journal (OGJ) - proprietary• Energy Information Administration (EIA) – public
• NOAA flaring estimate is public data– If O&GJ data is used, anyone can “back out” the O&GJ values– This scenario would be a copyright infringement
2/17/2011 10
Flaring Screen – Issues
• EIA data should be used to calculation flaring intensity– Will reduce the number of “fail” grades from 47 to 36
• Algerian Condensate - Algeria• Saharan Blend – Algeria• Zarzaitine - Algeria• Alba Condensate - Equatorial Guinea• Ceiba - Equatorial Guinea• New Zafiro Blend - Equatorial Guinea• CPC Blend - Kazakhstan• Karachaganak Condensate - Kazakhstan• Kashagan - Kazakhstan• Kumkol - Kazakhstan• Tengiz – Kazakhstan
– None of these MCONs were imported to California during 2010
2/17/2011 11
Flaring Screen – Issues
• NOAA flaring data from 2009 available– Use of revised 2009 NOAA data with 2009 EIA crude oil production
numbers show a decline in flaring intensity for Papua New Guinea (PNG) that drops them from 24.1 to 7.3 m3/bbl
2/17/2011 12
00.05
0.10.15
0.20.25
0.30.35
0.40.45
Esti
mat
ed G
as F
lare
d (B
CM)
PNG
Source: NOAA's National Geophysical Data Center (NGDC)
The sole PNG MCON, “Kutubu”, was not imported to California during 2010
2008 flaring intensity using EIA data was 25.7 m3/bbl
2008 flaring intensity using O&GJ data was 24.1 m3/bbl
TEOR Screen – Initial Results
• 64 MCONs originate from countries that are listed in the Oil & Gas Enhanced Oil Recovery Survey in 2010– 54 of the MCONs receive a “pass” – no fields associated with TEOR– 8 MCONs receive a “fail”
• Cold Lake Blend - Canada• Peace River Heavy - Canada• Seal Heavy - Canada• Duri - Indonesia• BCF-17 - Venezuela • Cerro Negro (New name Monagas 18) - Venezuela• Monagas 18 (Formerly Cerro Negro) - Venezuela• Tia Juana Light - Venezuela
– 1 “unknown” grade for Western Canadian Select – but “fails” upgrade– Oman Blend false “pass” becomes a “fail”
2/17/2011 13
Likely same MCON
Oman TEOR Example
• At least 144,000 b/d crude oil production from TEOR– 40 KB/D at Qarn Alam
• Thermally assisted gas/oil gravity drainage (TAGOGD)
– 104 KB/D at Al Mukhaizna
• Modified SAGD
• 18% of Oman Blend• TEOR projects expected
to increase to nearly 300 KB/D by 2012
2/17/2011 14
Source: Petroleum Development Oman (PDO)
TEOR Screen – Issues• O&GJ 2010 Enhanced Oil Recovery Survey
– Does not capture all EOR projects– Is a voluntary survey that occurs every two years
• Other industry information resources may need to be reviewed to expand scope of coverage to identify other active TEOR projects– Heavy oil organizations – Oil Sands Developers Group– Company reports for organizations involved in TEOR work
• Bottom line, TEOR activity will continue to increase– MCONs that have received a “pass” grade may merit a “fail” based on
future projects over the near and mid-term periods
• Some MCONs are only fractional TEOR– Should there be some lower-level “pass”?
2/17/2011 15
100.0% 100.0%
80.0%
100.0%
17.7% 19.7%
0.4% 0.4% 1.9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Cold Lake Blend
Canada
Peace River Heavy
Canada
Seal Heavy Canada
Duri Indonesia
Oman Blend Oman
BCF-17 Venezuela
Cerro Negro Venezuela
Monagas 18 Venezuela
Tia Juana Light
Venezuela
MCONs – TEOR Portion (less diluent)
2/17/2011 16
Source: CEC Analysis.
Cerro Negro/Monagas 18 “fails” upgrade screen.
Exact portion of Seal Heavy that is cold production is uncertain.
Mining/Upgrade Screen – Initial Results• 4 MCONs sourced from bitumen mines & “fail” screen
– All are upgraded as part of the extraction process• Albian Heavy Synthetic – Canada• Premium Albian Synthetic (PAS) - Canada• Syncrude Sweet Premium (SSP) - Canada• Western Canadian Select - Canada
• 8 additional MCONs are processed by upgraders & “fail” screen– All in Venezuela
• Cerro Negro (New name Monagas 18)• Hamaca • Monagas 18 (Formerly Cerro Negro)• Petrozuata • Sincor (New name Zuata Sweet)• Zuata• Zuata Medium• Zuata Sweet (Formerly Sincor)
2/17/2011 17
Likely same MCON
Likely same MCON
191
47
4
3 24 6
Pass
Fail Flaring Only*
Fail Substantial TEOR Only
Fail Partial TEOR Only
Fail Partial TEOR & Upgading
Fail Mining & Upgrading
Fail Upgrading Only
Summary of Screening Results
2/17/2011 18
Source: CEC Analysis.
* Drops to 35 if EIA oil production & updated NOAA data used to calculate flaring intensity
Continuing Work - Confidential Survey
• CEC Petroleum Industry Information Reporting Act request– Most recent period (January 2008 through December 2010)– EIA-856 data due first couple of weeks of March– Will use information to verify MCON imports and volumes
2/17/2011 19
Version No.: 20010.01
Page of
EIA ID NUMBER:
Report Period:
Date submitted:(d) (e) (f) (h) (I) (k) (m) (n) (o) (p)
Port Date of Con- Acquisi- Other LandedDate of of Landing tract/Point tion Price Cost Cost Days
Crude Type Gravity Loading Desti- (YYMM) Code ($/BBLs) ($/BBL) ($/BBL) Credit N(YYMMDD) nation
Form Approved
MONTHLY FOREIGN CRUDE OIL ACQUISITION REPORTFORM EIA-856
PART III. TRANSACTIONS
OMB Number: 1905-0174 Expiration Date: 12/31/2012
(l)(c) (j)Volume
Loading(BBLs)
Acquired Trans-
Country/ Port
ber actionNum- Trans- Crude Code of
(g)
action
(a) (b)
VesselType of
Name of Vendor
(q)
Continuing Work – Additional MCONs
• California Energy Commission has requested companies to provide a confidential list of additional MCONs that do not appear on the current list of 257
• CEC will characterize each MCON using various resources• Potential HCICO screens will be performed• Work will continue over the next couple of months• Revised list and screening results will be provided once the work
has been completed• “Sanitized” list of MCONs will be provided to the Expert Working
Group members next week– No fields– “Masked” O&GJ flaring intensity values – above & below 10 m3/bbl
2/17/2011 20
Additional Q&A
2/17/2011 21
Long-tailed Sylph, San Isidros, Eastern Ecuador – October 14, 2010