Methane Emissions and Reduction Opportunities in Natural Gas Production

Roger Fernandez, EPA

Carnegie Institute

Thursday, May 19, 2011

Natural Gas in a Low-Carbon Future: Challenges and Opportunities

Agenda

• U.S. natural gas industry emissions and Inventory methodology changes

• Emissions sources and reductions

– Well completions

– Liquids unloading

– Pneumatic devices

– Compressor seals

• Mitigated production emissions (2009)

• EPA Mandatory Greenhouse Gas Reporting Rule - Subpart W

• Planned improvement to the U.S. Inventory prior to Subpart W data

• Contacts and further information

2

Natural Gas STAR Program

The Natural Gas STAR Program is a flexible, voluntary partnership

between EPA and the oil and natural gas industry designed to cost-effectively reduce methane

emissions from natural gas operations.

• Over 129 Program Partners across four sectors

• 13 International Partners

• 20 Endorser Associations

Background: Global Methane Initiative

37 Partner Governments and the European Commission

North America Canada

Dominican Republic

Mexico

United States

Africa Ethiopia

Ghana

Nigeria

South America Argentina

Brazil

Chile

Colombia

Ecuador

Nicaragua

Peru

Asia Pacific Australia

China

India

Indonesia

Japan

Kazakhstan

Republic of Korea

Mongolia

Pakistan

Philippines

Thailand

Vietnam

Europe Bulgaria

European Commission

Finland

Georgia

Germany

Italy

Poland

Russia

Serbia

Turkey

Ukraine

United Kingdom

• Private companies, multilateral development banks and other relevant organizations participate by joining the Project Network

• For more information globalmethane.org Note: Bold text indicates the 14 founding partner countries

Emissions from Natural Gas Systems

5

Oil and Gas Production,

397 Bcf 64%

Transmission and Storage, 110 Bcf

18%

Distribution, 72 Bcf 11%

Processing, 44 Bcf

7%

Oil Downstream, 2 Bcf <1%

Bcf = billion cubic feet

EPA. Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990 – 2009. April, 2011. Available on the web at:

epa.gov/climatechange/emissions/usinventoryreport.html.

2009 U.S. Oil and Gas Industry Methane Emissions (624 Bcf / 252 million tonnes CO2E)

Recent Changes in U.S. Inventory Methodology

6

0

50

100

150

200

250

PneumaticDevices

OffshoreOperations

Dehydrators andPumps

CompressorFugitives,

Venting, andEngine Exhaust

Meters andPipeline Leaks

Well Venting andFlaring

Storage TankVenting

Other Sources

Production Sector Methane Emissions in 2008 • Blue – 2008 inventory by former emissions estimation methods • Red – 2008 inventory restated using updated emissions estimation methods

Bcf = billion cubic feet

Emissions Sources

20

08

Me

tha

ne

Em

iss

ion

s (

Bc

f)

103 Bcf / 42 million tonnes 376 Bcf / 152 million tonnes

EPA. Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990 – 2009. April, 2011. Available on the web at:

epa.gov/climatechange/emissions/usinventoryreport.html.

Major Changes to Production Emissions Estimates • Largest changes to sources after 2008:

– Production: • All gas well completions were previously assumed to be flared –

now 68% assumed flared or recovered

• Well completions with hydraulic fracturing have much larger emissions due to less flaring and revised emission factor

• Gas STAR Partner-reported emissions and reductions for well liquids unloading are much higher than the previous Inventories

• This includes only data reported to the Gas STAR program – Anecdotal information says that a lot of reductions occur outside of

Gas STAR – EPA welcomes industry to share this data such that we can continue to improve the inventory.

7

Revised Estimate of 2009 Production Emissions

8

2009 Production Sector Methane Emissions (397 Bcf / 160 million tonnes CO2E )

EPA. Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990 – 2009. April, 2011. Available on the web at:

epa.gov/climatechange/emissions/usinventoryreport.html.

Bcf = billion cubic feet

Storage Tank

Venting

14 Bcf

Other Sources

13 Bcf

Pneumatic Devices

67 Bcf

Well Venting

and Flaring

217 Bcf

Includes

completions

and liquids unloading

Offshore Operations

37 Bcf

Dehydrators

and Pumps

19 Bcf

Meters and

Pipeline Leaks

12 Bcf

Compressor Fugitives,

Venting, and Engine

Exhaust

18 Bcf

What Causes Completion Natural Gas Emissions?

• Gas wells in tight formations, coal beds, and shale require hydraulic fracture

• It is necessary to clean out the well by backflowing the fracture fluids (water and sand) – After new completions – After well re-fracturing workovers

• Flowback is a mixture of water, sand, and reservoir gas

– When flowing back to an impoundment, gas escapes to the atmosphere – Specially designed equipment can separate the gas so it can be sent to a sales line or it can be flared

• Vent or flare the natural gas produced – or produce it! • Hydraulic fracturing video:

www.northernoil.com/drilling.php

9

Source: Newfield

How Can We Recover Completion Emissions?

• Equipment specially designed to separate sand from fluids during flowback and separate gas from liquids

• Preconditions to send captured gas to sales:

– Must have a sales line – this can be installed prior to drilling

– Acceptable quality gas

• Anecdotally , the use of reduced emissions completions (RECs) are higher than used in the Inventory but more can be done by industry.

10 Temporary, Mobile Surface Facilities (Source: BP) Source: Williams

What Causes Liquids Unloading Emissions?

• In depleted conventional reservoirs, water produced with the gas accumulates to the point where it stops gas flow

• To reestablish gas flow, the well used to be blown to the atmosphere to expel this accumulated water

11

Plunger Lifts

Installed

A Plunger Lift Reduces Emissions During Liquids Unloading

• A metal plunger travels up and down the well tubing, efficiently lifting liquids to the surface

• Gas pressure in the reservoir pushes the plunger and the liquids up the well tubing

• Only external energy requirements may be a solar panel for automating the cycle timer

• Gas STAR Program anecdotal use of plunger lifts are higher than used in the Inventory but again, more

can be done.

12

Source: Weatherford

Source: Weatherford

What Causes Pneumatic Device Emissions?

• Because remote production sites often do not have electricity, produced gas pressure (pneumatic gas) is used to automate process control valves

• Examples of pneumatic

devices:

– Liquid level controller

– Pressure controller

– Temperature controller

• Although each device has small emissions (typically 1 ft3/minute) there are over 400,000 in industry

– A high bleed device can emit over 200 tonnes per year!

13

Pneumatic Controller

Process Measurement

Liquid Level Pressure

Temperature Flow

Weak Signal Bleed (Continuous)

Strong Signal Vent (Intermittent)

Process Flow Control Valve

Valve Actuator

Strong Pneumatic Signal

Weak Pneumatic

Signal (3 to 15 psi)

Regulator

Gas 100+ psi

Regulated Gas Supply

20 psi

psi = pounds per square inch

How Can We Reduce Pneumatic Gas Emissions?

• Option 1: Replace high gas usage (“high-bleed”) devices with low gas usage (“low-bleed”) devices

• Option 2: Retrofit controller with bleed reduction kits

• Option 3: Maintenance to reduce leakage and gas usage

• Gas STAR Partners have reported large reductions in pneumatic gas emissions

14

Source: www.norriseal.com

Norriseal Pneumatic Liquid Level Controller

Fisher 2500, 2506 Retrofit w/ Mizer, bracket, tubing & relay plug Source: www.emersonprocess.com

Source: www.emersonprocess.com

Fisher Electro-Pneumatic Transducer

Invalco 415, 215, 402 Retrofit w/ Mizer valve, block & gauges Source: www.fmctechnologies.com

Compressor Seals

15

• Natural Gas STAR Partners reported higher emissions and reductions from compressor seals

• Alternative seal technologies

reduce emissions from this source

• Inventory based on reported pipeline data to

Department of Transportation

• Most recent Inventory improved the seal

emission factor

Shaft

Seal

Economics of Methane Emissions Reduction

• Reduced Emissions Completions

– Gas capture ranges from 70 to 90%

– Typical contracted implementation cost $32,400

• Transportation of portable equipment cost $600

– Typical gas sales at $4/Mcf is $43,200 per completion

• Plunger Lift for Well Liquids Unloading

– Gas capture ranges from 90 – 100%

– Typical cost ranges from $2500 to $10,000

• Higher cost involves tubing string replacement

– Typical gas sales at $4 gas is $14,000 to $75,000 per year

DRAFT - DELIBERATIVE - DO NOT CITE OR QUOTE 16

Economics of Methane Emissions Reduction

• Pneumatic controllers – Gas savings is 90%

– Typical replacement cost ranges from $200 to $2000

– Typical gas sales at $4/Mcf is $200 to $1000 per year

• Compressor seal replacement – Gas savings is 97 to 99%

– Typical retrofit cost is $324,000

– Typical gas sales at $4/Mcf is $180,000 per year

• Other operational cost savings are $90,000 per year

– New practice of simply routing the vented gas to the fuel line may only cost $15,o00

DRAFT - DELIBERATIVE - DO NOT CITE OR QUOTE 17

0

50

100

150

200

250

Liquids unloading Pneumatic devices Completions/workovers0

50

100

150

200

250

Liquids unloading Pneumatic devices Completions/workovers

Mitigated Production Emissions (2009)

18

Current Estimates

Based on 2009 Inventory

Potential Emission Mitigation

Based on complete penetration of technologies

• Reductions not reported to Gas STAR are somewhere between the two

• Subpart W will give much clearer view of current emissions

reduced (27 Bcf)

reduced (6 Bcf)

recovered (25 Bcf)

vented (79 Bcf)

flared (24 Bcf)

vented (209 Bcf)

vented (23 Bcf)

reduced (206 Bcf)

reduced (50 Bcf)

recovered (42 Bcf)

vented (35Bcf)

flared (26 Bcf)

vented (31 Bcf)

vented (4 Bcf)

Reductions shown are reported to Gas STAR

Me

tha

ne

Vo

lum

e (

Bc

f)

Me

tha

ne

Vo

lum

e (

Bc

f)

Mandatory Greenhouse Gas Reporting Rule - Subpart W

• Subpart W will collect greenhouse gas data from the entire oil and gas industry and therefore create a more accurate depiction of emissions from these sources and others

• For major emissions sources, Subpart W will obtain: – Better activity data (e.g. equipment counts, practice frequency)

– Better emission factors

– Scope of reduction activities (e.g. reduced emissions completions, artificial lifts)

• Data from Subpart W will be used to improve the U.S. GHG Inventory – Improved accuracy of source emissions

– Substantially larger data set

– Better data to inform future policy

19

Planned Improvement to the U.S. Inventory Prior to Subpart W Data

• Plans for additional improvements to the U.S. Inventory:

– Continue improving data on tight gas drilling and hydraulic fracturing emissions

– Include reductions beyond those reported by Gas STAR

– Incorporate Subpart W reported emissions

– No substantial changes are anticipated in the gas transmission sector

20

Contacts and Further Information

• Roger Fernandez

EPA Natural Gas STAR Program

fernandez.roger@epa.gov

+1 (202) 343-9386

• Links – 2011 U.S. Greenhouse Gas Inventory:

epa.gov/climatechange/emissions/usinventoryreport.html

– GHGRP Subpart W: epa.gov/climatechange/emissions/subpart/w.html

– Natural Gas STAR: epa.gov/gasstar/

– Global Methane Initiative: globalmethane.org/gmi/

21