As part of the recent announcement of Alberta’s Climate Leadership Plan, the provincial government has committed to a 45% reduction in methane emissions from the oil and gas industry by 2025. This closely correlates with the recently announced commitment by the leaders from both the Canadian and U.S. federal governments to reduce methane emissions from the oil and gas sector by 40-45 percent below 2012 levels by 2025.
While these may sound like admirable targets from a policy perspective, being able to, first, properly baseline a company’s methane emission inventory, and then further, to demonstrate that these reduction targets have been achieved, will pose a significant challenge to oil and gas companies over the short and medium term for a number of reasons:
- The vast majority of methane emissions from the oil and gas industry are from unmetered sources. This includes both unintentional fugitive emissions from equipment leaks, as well as emission sources where natural gas is intentionally vented.
- Main sources of intentionally vented methane include wellhead casing gas, pneumatic devices and chemical injection pumps that are driven with natural gas, flashing losses from storage tanks, well blowdowns, equipment and pipeline blowdowns, compressor start gas and glycol dehydrators. Since these sources are typically unmetered, the volumes must be calculated using engineering estimates and/or manufacturer data.
- These sources of methane emissions are typically of low volume individually (<0.5 E3m3/day). However, there are literally hundreds of thousands of these emission points in the field which makes the collection and ongoing management of these volume estimates particularly challenging.
- Current Field Data Capture (FDC) systems are not designed to incorporate this unmetered data in any sort of systemized or organized manner. Since these unmetered volumes are not typically well-managed within the FDC, the collection and management of this data at the field level has traditionally been handled through some sort of field tracking system using paper logs or spreadsheets, which poses a number of significant challenges. In most cases, these spreadsheets may cover the collection of some of the required data, but are typically not comprehensive enough to collect all the emission source categories (both routine and non-routine) described above.
- For most companies, an accurate inventory of pneumatic devices and chemical injection pumps that vent natural gas is either not available or not well maintained. In addition to this, any estimated volumes from these sources are currently being reported to PETRINEX under the category of “Fuel Gas” (as per current provincial Directives) and are not broken out as a vented emission. However, from a methane emissions (and greenhouse gas) perspective, there is a significant difference whether that volume of unmetered fuel is combusted or vented. This reporting nuance will need to be taken into account when creating the methane baseline.
- In order to properly baseline methane emissions (and comply with other provincial Directives), questions that companies need to ask themselves include the following:
Questions O&G Companies Must Ask When Evaluating Their Business Processes and Controls
- How confident are you that all the routine and non-routine sources of unmetered fuel, flare and vent volumes required to be reported under the various provincial Directives are being captured by Operations using their existing tracking system?
- How confident are you that the volume estimations adhere to established methodologies applicable for the jurisdiction that the facilities are operating in?
- Are the bases for the estimates transparent and auditable?
- How confident are you that the volumes that are reported on the current flare and vent tracking system are being captured by production accounting and reported to the government as per Directives 007, 017 and 076?
Envirosoft’s Fuel-Flare-Vent Manager™ provides a unique, fit-for-purpose solution to the oil and gas industry for providing a systemized solution to overcoming these challenges. Please contact us today to find out more!