European Union on track to meet Kyoto commitments

A recent report by the European Environment Agency indicates that the EU is on track to meet their Kyoto commitments to 2012; clearly the economic crisis and recession started in 2009 plays a role in emissions reductions and industrial activity drops.

However when considering the unilateral 20% reduction commitment made by 2020 by Europe it is clear that with current and planned actions to curb emissions will not be enough to reach that target. The main opportunities are identified in the residential, transport and agricultural sectors where legally binding targets have been set.

The report encourages member states to make use of the flexible mechanisms from the Kyoto Protocol such as CDM. This presents a challenge for the streamlining of international offset projects as currently the cost of verification is a significant roadblock to implement a large number of measures that could add up to very significant reductions.

A similar situation is found in Canada, and in particular in Alberta where offset protocols are expensive to develop and verification requirements add to the cost to an extent where clearly identified actions to reduce emissions are not executed and are waiting for a streamlined approach to verification and emissions credits. It is our belief that direct measurement and auditing for verification could be supplemented with sound engineering calculations and appropriate data management systems that can reduce the cost of verification significantly and open the door for industry to achieve emissions reductions and get credit for them

What is going on with GHG emissions reporting in the Oil & Gas sector?

After sometime of no activity here is a summary of how various reporting initiatives stand to date. Clearly the economic slowdown of 2009-2010 has affected the climate change priorities in many countries and, not surprisingly, environment took a back seat (and has stayed there since).

The US Government has not been able to fully implement their EPA reporting mandate and is in the middle of a number of legal proceedings with Industry over the reporting requirements- who knows how long that will take.

WCI has kept going but with less certainty as a few years ago. The 2012 start day remains valid so we shall see what happens soon.

The only protocol that has gone ahead, not without complaints from industry, is the British Columbia system.

Enough inertia exists in the reporting drive so as to have created a new set of certifications for GHG quantification/validation professionals. See the Greenhouse Gas Management Institute website (www.ghgmi.org) for details of these programs.

More details coming soon.

WCI and reporting in Canada

The WCI Reporting Committee hosted a stakeholder call to discuss the recently released proposal for revising and harmonizing the WCI essential reporting requirements (ERs) for use in Canadian jurisdictions. It was interesting to note that no official representative from Alberta was present at the meeting and only members of the BC, ON, SK and QC governments attended the call.

Since EPA released their own set of reporting requirements, WCI has been involved in a harmonization process both for US and Canada, the goal is to ensure that reporting entities do not have to duplicate efforts when reporting to both (or more) programs for GHG emissions management.

October 12, 2010 has been set as a deadline for public comments on the harmonization proposal. WCI will tend to require higher accuracy on emission estimation and measurement compared to other reporting programs and it appears that when the source is difficult/expensive to quantify to the level demanded by cap-and-trade it will be excluded altogether (e.g. fugitive emissions). It is likely that the requirements for reporting may be less onerous in Canada since third party verifications are required by Environment Canada in contrast to EPA.

The objective of one-window reporting in Canada implies that the data will be submitted to Environment Canada once and the reports distributed from there to other jurisdictions, this has been the mandate from the Canadian Council of Ministers; a similar development is expected in US where the reporting window will be EPA. Some details were discussed around the definition of emissions sources that are classified as “reporting only” which include sources that are small, hard to measure or both and are not suitable for trading programs.

It was clarified that for BC regulations, the deadline for the 2010 emissions report is March 31 2011 for all facilities at 25,000 tonnes and above. Further technical details were addressed in the Q&A session including:

- Portable equipment in use in oil & gas such as emergency generators and portable flares will be excluded

- Stationary combustion sources over 250 MMBTU/hr heat input must measure carbon content of fuel or install CEMS (continuous emissions monitoring systems)

- Some emission factors were published with errors and have been fixed

- When using natural gas of a specified HHV range, emission factors are acceptable

- There will be flexibility in methods for process vents

A new conference call will be announced to deal specifically with oil & gas reporting, it is expected that EPA will also publish a final version of Subpart W for this sector in the near future.

Emission Factors in Oil Refineries

The most efficient approach to estimate GHG emissions from a number of Oil & Gas facilities relies on the use of generic emission factors that are usually tied with production volumes. Recently a representative from Petrobras presented some interesting information about their approach to GHG emissions inventories. The main sources for emission factors they have used are EPA- AP42 and ARPEL.

AP-42, Compilation of Air Pollutant Emission Factors, has been published since 1972 as the primary compilation of EPA's emission factor information. EPA has published supplements and updates to the fifteen chapters available in Volume I, Stationary Point and Area Sources. (see http://www.epa.gov/ttnchie1/ap42/)

ARPEL (REGIONAL ASSOCIATION OF OIL AND NATURAL GAS COMPANIES IN LATIN AMERICA AND THE CARRIBBEAN) has also published some emission factors that are more closely representative of conditions in the region.

The main conclusions from the comparisons made by Petrobras are that ARPEL’s factors tend to overestimate emissions by some 4x although these factors are specifically for oil refineries. A few other considerations and differences between emission factor sources refer to basic assumptions in their development; for instance it was noted that AP42 does not consider air preheating effects in their prediction of NOx (the effect here is that at higher temperatures thermal efficiency improves but NOx formation increases as well).

AP42 trends were to underestimate 2-3X emissions for individual sources. A drawback from these systems is that they have been calculated based on “typical” fuels and do not apply well for refinery off gases. Overall however the authors noted that the deviations introduced by these emission factors tended to cancel each other and that, for a site with a large number of sources, the final inventory would be fairly accurate.

It was accepted to consider +/- 50% as acceptable accuracy for emission factors. My final conclusion is that emission factors should not be used to consider single sources. Managing GHG emissions in terms of reductions and trading opportunities will require much better than this.

A&WMA Conference in Calgary- GHG Science

Last week the Air and Waste Management Association Annual Conference took place in Calgary; I had the chance to attend most of the GHG-related technical sessions and one of the main conclusions I could gather from the event is that the regulatory situation in North America (and in other parts of the world as well) is still rather fluid.

Particularly as it related to emissions from the UOG sector it seems that we are all waiting to see what the USEPA will decide with respect to process venting and other non-combustion sources.

I will post a brief summary of some of the key sessions I attended to keep as a reminder of the status today

Why write about GHG emissions in oil & gas

Well I don't think the answer is too hard; the sector is one of the most energy intensive industrial activities in the world, not to mention that the end product is no less than the fossil fuel itself!

Current legislation and other policy instruments are falling short to instil a sense of real urgency in the sector. Sure there are some companies that are doing a better job than others but with so much expertise in PR and so little in the science and engineering to manage emissions it is hard to make any statements.

May get a bit technical as we go but I think that generic inventories of GHG emissions are not detailed enough or real enough to enable good decision making. After spending some years in the energy efficiency area I can say that the law of unintended consequences rules; particularly when you get into complex industrial facilities in an interconnected market.

We shall see if there is something interesting to post here; anyway its a test