producer partner reported opportunities
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Producer Partner Reported OpportunitiesProducer Partner Reported Opportunities
Lessons LearnedLessons Learnedfrom Natural Gas STARfrom Natural Gas STAR
Producers Technology Transfer WorkshopProducers Technology Transfer Workshop
ExxonMobil Production Company,ExxonMobil Production Company,American Petroleum Institute andAmerican Petroleum Institute andEPA’s Natural Gas STAR ProgramEPA’s Natural Gas STAR Program
September 21, 2004September 21, 2004
Page 2Reducing Emissions, Increasing Efficiency, Maximizing Profits
Partner Reported Opportunity Partner Reported Opportunity Overview: AgendaOverview: Agenda
Production Sector EmissionsProduction Sector Emissions
Top Partner Reported Opportunities (PROs)Top Partner Reported Opportunities (PROs)
Potential Emission Savings from Other Potential Emission Savings from Other OpportunitiesOpportunities
Discussion QuestionsDiscussion Questions
Page 3Reducing Emissions, Increasing Efficiency, Maximizing Profits
Natural Gas and Petroleum Industry Natural Gas and Petroleum Industry EmissionsEmissions
Production sector responsible for largest Production sector responsible for largest portion of emissionsportion of emissions
•EmissionsEmissions
•ReductionsReductions
Transmission & Storage Transmission & Storage 96 Bcf 96 Bcf
Production Production 149 Bcf149 Bcf
Processing Processing 36 Bcf 36 Bcf
Distribution Distribution 77 Bcf77 Bcf
26 Bcf26 Bcf
5 Bcf5 Bcf
20 Bcf20 Bcf
1 Bcf1 BcfOil Downstream Oil Downstream 2 Bcf 2 Bcf
Inventory of U.S. Inventory of U.S. Greenhouse Gas Greenhouse Gas Emissions and Sinks Emissions and Sinks 1990 - 2002 1990 - 2002
Page 4Reducing Emissions, Increasing Efficiency, Maximizing Profits
Oil and Gas Production Sector Oil and Gas Production Sector EmissionsEmissions
The production sector has several large The production sector has several large methane emission sources that can be methane emission sources that can be targeted for reductionstargeted for reductions
Pneumatic Pneumatic DevicesDevices59 Bcf59 Bcf
Dehydrators Dehydrators and Pumpsand Pumps14 Bcf14 Bcf
Meters and Pipeline LeaksMeters and Pipeline Leaks11 Bcf11 Bcf
Gas Engine ExhaustGas Engine Exhaust12 Bcf12 Bcf
Well Venting Well Venting and Flaringand Flaring12 Bcf12 Bcf
Storage Tank Storage Tank VentingVenting23 Bcf23 Bcf
Other Sources Other Sources 18 Bcf18 Bcf
Inventory of U.S. Inventory of U.S. Greenhouse Gas Greenhouse Gas Emissions and Sinks Emissions and Sinks 1990 - 2002 1990 - 2002
Page 5Reducing Emissions, Increasing Efficiency, Maximizing Profits
Best Management Practices (BMP)Best Management Practices (BMP)
BMP 1: Identify and replace high bleed BMP 1: Identify and replace high bleed pneumatic devicespneumatic devices
BMP 2: Install flash tank separators on glycol BMP 2: Install flash tank separators on glycol dehydratorsdehydrators
BMP 3: Partner Reported Opportunities BMP 3: Partner Reported Opportunities (PROs)(PROs) 81% of production81% of production
sector reductionssector reductionscame from PROscame from PROs
Top PROsTop PROs59%59%
Other PROsOther PROs22%22%
BMP1BMP116%16%
BMP2BMP23%3%
Page 6Reducing Emissions, Increasing Efficiency, Maximizing Profits
Highly Implemented PROsHighly Implemented PROs
The Gas STAR program has identified 39 The Gas STAR program has identified 39 PROs that are applicable to the production PROs that are applicable to the production sectorsector
Nine “top” PROs:Nine “top” PROs: PROs most reported by production Gas STAR PROs most reported by production Gas STAR
partnerspartners All target major emissions sourcesAll target major emissions sources Responsible for over 2/3 of PRO emissions Responsible for over 2/3 of PRO emissions
reductionsreductions
Page 7Reducing Emissions, Increasing Efficiency, Maximizing Profits
Top PROsTop PROs
Determine which top PROs are not currently Determine which top PROs are not currently implemented at your companyimplemented at your company
Revisit economics of top PROs using currentRevisit economics of top PROs using currentgas pricegas price
Rank Top PROs PaybackMethane Savings
1 Install Instrument Air Systems <1 yr 20,000 Mcf/yr2 Install Plunger Lifts <1 yr >4,700 Mcf/yr3 Pipe Glycol Dehydrator to Vapor Recovery Unit <1 yr 3,300 Mcf/yr4 Convert Gas-Driven Chemical Pumps to Instrument Air <1 yr 2,500 Mcf/yr5 Eliminate Unnecessary Equipment and/or Systems <1 yr 2,000 Mcf/yr6 Install Vapor Recovery Units 1-3 yr >4,900 Mcf/yr7 Consolidate Crude Oil Production and Water Tank Storage 1-3 yr 4,200 Mcf/yr8 Install Electric Compressors >10 yr 6,440 Mcf/yr9 Install Flares None 2,000 Mcf/yr
Page 8Reducing Emissions, Increasing Efficiency, Maximizing Profits
Top PROs Currently ReportedTop PROs Currently Reported
Partner Reported Opportunities Exx
onMobil
Corp.
Chevro
nTexac
o
Burlingto
n
Resourc
es In
c.
Mar
athon
Kerr-M
cGee
Corp
.
Devon
Methane Savings per Application
Compressors/ Engines
Install Electric Compressors x x 6,440 Mcf/yrDehydratorsConvert Gas-Driven Chemical Pumps to Instrument Air
x x x x2,500 Mcf/yr
Pipe Glycol Dehydrator to Vapor Recovery Unit
x x x3,300 Mcf/yr
WellsInstall Plunger Lifts x x x x 4,700 Mcf/yr
Page 9Reducing Emissions, Increasing Efficiency, Maximizing Profits
Top PROs Currently Reported Cont.Top PROs Currently Reported Cont.
Partner Reported Opportunities Exx
onMobil
Corp.
Chevro
nTexac
o
Burlingto
n
Resourc
es In
c.
Mar
athon
Kerr-M
cGee
Corp
.
Devon Methane Savings per Application
Pneumatics/ Controls
Install Instrument Air Systems x x x x 20,000 Mcf/yrTanks
Consolidate Crude Oil Production and Water Tank Storage
x x
4,200 Mcf/yrInstall Vapor Recovery Units x x x x x x 4,900 Mcf/yrOtherInstall Flares x x x x x x 2,000 Mcf/yrEliminate Unnecessary Equipment and/or Systems
x x x x x2,000 Mcf/yr
Page 10Reducing Emissions, Increasing Efficiency, Maximizing Profits
Implementation of Top PROsImplementation of Top PROs
These PROs have been proven to reduce These PROs have been proven to reduce emissions economicallyemissions economically
Top PROs target the largest sources of Top PROs target the largest sources of methane emissions in the production sectormethane emissions in the production sector
Room for a great deal of further emissions Room for a great deal of further emissions reductionsreductions
Page 11Reducing Emissions, Increasing Efficiency, Maximizing Profits
Emissions Targeted by Top PROsEmissions Targeted by Top PROs
BMPs and top PROs target over 75% of BMPs and top PROs target over 75% of production sector emissions but have only production sector emissions but have only reduced emissions by 20%reduced emissions by 20%
This means:This means: Partners that report PROs recognize major Partners that report PROs recognize major
sources of methane losses and are taking sources of methane losses and are taking steps to mitigate emissionssteps to mitigate emissions
Partners not practicing all BMPs and top Partners not practicing all BMPs and top PROs may have further opportunities for PROs may have further opportunities for methane savingsmethane savings
Page 12Reducing Emissions, Increasing Efficiency, Maximizing Profits
Installing Vapor Recovery UnitsInstalling Vapor Recovery Units
Only 18% of emissions from crude oil storage Only 18% of emissions from crude oil storage tanks were recovered in 2002tanks were recovered in 2002
Lessons Learned studies show that vapor Lessons Learned studies show that vapor recovery units save 5,000 to 100,000 Mcf/yr recovery units save 5,000 to 100,000 Mcf/yr per applicationper application
Installing vaporInstalling vaporrecovery units mayrecovery units mayhave room for more have room for more savings in emissions savings in emissions and moneyand money
Storage Tank EmissionsStorage Tank Emissions22 Bcf22 Bcf
Emissions Emissions RecoveredRecovered4.7 Bcf4.7 Bcf
Page 13Reducing Emissions, Increasing Efficiency, Maximizing Profits
Gas Price and Methane SavingsGas Price and Methane Savings
Economics of implementing new PROs change with Economics of implementing new PROs change with gas pricegas price
PRO fact sheets use nominal gas price of $3/McfPRO fact sheets use nominal gas price of $3/Mcf Many PROs were reported when gas price <$2Many PROs were reported when gas price <$2
Wellhead Natural Gas Prices to 2025
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
1990 1995 2000 2005 2010 2015 2020 2025
Year
Pri
ce
($
/Mc
f)
EIA EIA Annual Energy Outlook with Projections to 2025. http://www.eia.doe.gov/oiaf/aeo/gas.htmlAnnual Energy Outlook with Projections to 2025. http://www.eia.doe.gov/oiaf/aeo/gas.html
Page 14Reducing Emissions, Increasing Efficiency, Maximizing Profits
Economics of Vapor Recovery UnitsEconomics of Vapor Recovery Units
Installing a 50 Mcf/day vapor recovery unit Installing a 50 Mcf/day vapor recovery unit (VRU) will save about 8,700 Mcf/yr of (VRU) will save about 8,700 Mcf/yr of saleable gassaleable gas Costs associated with the VRU include a Costs associated with the VRU include a
$19,500 capital investment with 50% for $19,500 capital investment with 50% for installation and $6,000/yr operating and installation and $6,000/yr operating and maintenancemaintenance
Gas Price ($/Mcf) 2.00$ 3.00$ 4.00$ Gas Saved (Mcf/yr) 8,700 8,700 8,700 Annual Savings ($/yr) 17,400$ 26,100$ 34,800$ Installed Cost 29,250$ 29,250$ 29,250$ Operating Cost 6,000$ 6,000$ 6,000$ Payback Period (years) 2.6 1.5 1.0
Page 15Reducing Emissions, Increasing Efficiency, Maximizing Profits
Install Pressurized Storage of Install Pressurized Storage of CondensateCondensate
This PRO is reported to save 7,000 Mcf/yr This PRO is reported to save 7,000 Mcf/yr but requires high capital investment for but requires high capital investment for pressurized transport vehiclespressurized transport vehicles
A partner estimated the capital cost at A partner estimated the capital cost at $37,500 with an annual operating cost of $37,500 with an annual operating cost of $2,500$2,500
The decision to implement this PRO The decision to implement this PRO depends upon current gas pricesdepends upon current gas prices
Page 16Reducing Emissions, Increasing Efficiency, Maximizing Profits
Economics of Pressurized Economics of Pressurized CondensateCondensate
High gas prices make the economics of High gas prices make the economics of implementing this PRO much more implementing this PRO much more attractiveattractive
Efforts to reduce emissions should be Efforts to reduce emissions should be intensified when gas prices are high and intensified when gas prices are high and capital investments pay back quicklycapital investments pay back quickly
Gas Price ($/Mcf) 2.00$ 3.00$ 5.00$ Gas Saved (Mcf/yr) 7,000 7,000 7,000 Annual Savings ($/yr) 14,000$ 21,000$ 35,000$ Installed Cost 37,500$ 37,500$ 37,500$ Operating Cost 2,500$ 2,500$ 2,500$ Payback Period (years) 3.3 2.0 1.2
Page 17Reducing Emissions, Increasing Efficiency, Maximizing Profits
Other OpportunitiesOther Opportunities
The Gas STAR program currently The Gas STAR program currently documents 39 PROs applicable to the documents 39 PROs applicable to the production sectorproduction sector 7 Compressor/Engine related7 Compressor/Engine related 5 Dehydrator related5 Dehydrator related 3 Pneumatics/Controls related3 Pneumatics/Controls related 4 Pipeline related4 Pipeline related 4 Tank related4 Tank related 5 Valve related5 Valve related 7 Well related7 Well related 4 Miscellaneous4 Miscellaneous
Page 18Reducing Emissions, Increasing Efficiency, Maximizing Profits
Other PROs with High Potential Other PROs with High Potential SavingsSavings
Partners implementing all top PROs have Partners implementing all top PROs have further opportunities for emissions reductionsfurther opportunities for emissions reductions
These PROs reduce emissions and with These PROs reduce emissions and with higher gas prices pay back more quicklyhigher gas prices pay back more quickly
Rank PROs PaybackMethane Savings
1 Install Compressors to Capture Casinghead Gas <1 yr 32850 Mcf/yr2 Rerouting of Glycol Skimmer Gas <1 yr 7600 Mcf/yr3 Connect Casing to Vapor Recovery Unit <1 yr 7300 Mcf/yr4 Inspect & Repair Compressor Station Blowdown Valves <1 yr 2000 Mcf/yr5 Use Ultrasound to Identify Leaks <1 yr 2000 Mcf/yr
Page 19Reducing Emissions, Increasing Efficiency, Maximizing Profits
New PROs in DevelopmentNew PROs in Development
Install an additional phase of separation to Install an additional phase of separation to recover gas from separatorsrecover gas from separators
Route gas to a portable desiccant dehydrator Route gas to a portable desiccant dehydrator during glycol dehydrator maintenanceduring glycol dehydrator maintenance
Recover gas produced during rich gas field Recover gas produced during rich gas field pigging operationspigging operations
Zero emissions glycol dehydratorZero emissions glycol dehydrator
Page 20Reducing Emissions, Increasing Efficiency, Maximizing Profits
Discussion QuestionsDiscussion Questions
Do you find any of the top PROs to be Do you find any of the top PROs to be economically unattractive?economically unattractive?
How do you take into account the price of How do you take into account the price of gas when examining which PROs to gas when examining which PROs to implement?implement?
What are some of the other issues that are What are some of the other issues that are preventing you from implementing these preventing you from implementing these practices?practices?
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