producer partner reported opportunities

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

Reducing 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


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


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


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%


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


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


Top PROs Currently ReportedTop PROs Currently Reported

Partner Reported Opportunities Exx

onMobil

Corp.

Chevro

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Burlingto

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Resourc

es In

c.

Mar

athon

Kerr-M

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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


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


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


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


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


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


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


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


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


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


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


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


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?

producer partner reported opportunities

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