Easy And Economic Solutions To Mitigating Methane Emissions
The good news is that, on the practical front, many solutions to the energy transition are also good business. One of the key actions we can take, right now, is to reduce fugitive emissions such as methane. For producers, on the business side, keeping methane in the system and monetizing it at the sales meter also make economic sense.
Shrinkage between the wellhead and the pipeline takes many forms, including accounting losses and processing losses. One key factor is loss to the atmosphere, and even if this represents 1 per cent of sales, 1 per cent can mean a lot on the net profit line.
Methane is one of the most powerful contributors to Greenhouse Gasses (GHG), and the commonly accepted Global Warming Potential (GWP) of methane estimated to be a 25 times greater threat to global warming over a 100 year period compared to carbon dioxide. This is very serious, and can be reduced! That is why we want to focus on the methane emissions in this narrative, and specifically the ways that we can effectively measure it and mitigate its release into the atmosphere.
The Paris Climate Accord was a monumental watermark for action on energy transition. It defined a number of specific emission targets that allowed industry, banks, and regulators to focus on defining actions for industry to follow. These Paris targets will not be met by 2040 without action on methane emissions, and that is why the UN Climate and Clean Air Coalition is asking governments to use their NDCs (nationally determined contributions) to significantly reduce methane emissions. The targets proposed are 45 per cent by 2025 and 60–75 per cent by 2030, which would achieve a near-zero methane intensity target. This is achievable, with the help of innovation, the financial sector, and government regulators.
Perhaps as a leading indicator for what was to come in early December 2015 at the UN Climate Change Conference in Paris, the United Nations adopted 17 Sustainable Development Goals in September of that year as a means to integrate social development and environmental protection. Similarly, a trend is now emerging that some might call a leading indicator for emissions management in the oil and gas industry – investor demands. While the Sustainable Development Goals are voluntary measures countries and companies can take to minimize their impact on GHG emissions and GWP, accessing financial capital to execute corporate development objectives is not optional, and therefore this rising tide of investor decisions integrating corporate social and environmental performance becomes critical. Measuring, monitoring, and mitigating methane emissions is clearly a part of this investor matrix.
As is noted above, methane emissions are the second-greatest source of greenhouse gas emissions after carbon dioxide on a mass basis, but has a much more harmful short term effect due to a greater warming effect or GWP. The impact of this is significant and easily misinterpreted - the largest gas by volume is not the most dangerous by GWP.
There are two types of sources for methane emissions: anthropogenic and naturally occurring. The anthropogenic sources, which account for 61 per cent of the total, are agriculture, fossil fuels, waste (including landfills, sewage treatment & animal waste), biofuels and biomass burning. The natural sources are wetlands, and other naturally occurring sources such as volcanic gasses, termites and many other smaller natural sources. Chart #2 outlines the major anthropogenic and natural sources of methane.
The oil and gas sector consistently appears to account for 20 per cent of global methane emissions. A factor we did not discuss is whether this includes the end user or not, which can make a big difference. Let’s assume for now we are not including the end user.
The oil and gas industry is obviously a large emitter of methane emissions. As an energy provider, this industry should be leading the way on methane emissions mitigation. In some jurisdictions, this is the case. In the oil and gas industry, there are upstream segments (exploration, drilling, well completions – the process of completing the wellbore with tubulars for permanent use) that find the source and tie it into the grid. This grid, or infrastructure, is known as the midstream segment, which includes (processing, gathering, local and inter-jurisdictional pipelines) that carry out pre-market readiness functions. The final segment is downstream (refining and preparation for final use or local distribution system), which is where the energy is transferred to the consumer.
Of these segments, the leaders in methane measurement and mitigation (MEMM) are midstream functions as well as downstream operations, as in both cases it is possible to document and plan all of the operations in a permanent facility design process. In addition to design documentation and construction of permanent facilities, leaks or escape of methane is relatively easy to measure and mitigate. Upstream, which is all comprised of temporary components, including exploration, has primarily been able to reduce emissions through the replacement or restriction of flaring. Many parts of the upstream value chain have not been addressed, including the temporary procedures of hydraulic fracturing and the ‘flowback’ post-fracture treatment. This has only recently been addressed. A recent paper on minimizing emissions in sand separators stated:
For 1 m3 of sand stopped by each sand separator the vertical geometry would produce 72 per cent of the carbon of the spherical vessel while the horizontal desander would produce 26 per cent of the spherical and the low angle tilt would produce 11 per cent.
This represents a quick reduction of methane venting to atmosphere of 89 per cent just by analysing the geometry of the vessel and moving from spherical to a slightly tilted horizontal vessel. Amazing! – also known as low-hanging fruit.
More readily available are the gains at upstream and midstream facilities, where many innovations and technological changes can replace such things as pneumatically driven devices, various kinetic energy sources using line gas, convert fossil-fuel-powered motors to solar-powered motors and actuators, and switching from line gas to instrument air (compressed air), ideally using a solar-powered source.
A large component of methane emissions is entirely due to leakages, both on the surface and in the subsurface. To find these, leak detection technologies are used. There has been an explosion of available technology for this activity, from the large (via satellite) to the small (valve- or fitting-specific scan). Hand-held optical gas imaging cameras are currently the standard, and will continue to be used in very specific locations on the ground at each valve or fitting, identifying source point leaks.
Other emerging technologies being developed at universities, in government labs, in private workshops, and in the field include drone-mounted sensors, fence-line scanners, mobile equipment that can be moved from site to site, and truck-mounted solutions. This exciting and rapidly emerging space is gaining a lot of attention from industry, government, and environmental non-government organizations (ENGOs) alike. A great example of this is the Canadian Association of Petroleum Producers’ Alberta Methane Field Challenge, ‘an international competition to test emerging methane detection technologies in a real world setting’.
Venting, in all its forms, is another major source of methane emissions. The difference between fugitive gas (unplanned) and vented (planned but not measured) gas release is simply a matter of design. In an emergency, venting can occur safely to try to bring the pressure situation back into control. When pressure builds too quickly, it must be de-pressured in a safe manner to avoid an explosion, a practise similar to a pressure release valve in a household appliance. Venting is designed to depressure an explosive situation. Many facilities are planned and built to allow de-pressurization in certain situations. This is often categorized as venting, and it is designed to release pressure, but usually not measured. In the example of the flowback of fluids after the conclusion of a hydraulic fracturing treatment, or post-frac flowback as cited above, the objective was that the highly erosive sand would be removed from the flowback process. The pressurized vessel containing the sand, however, is designed to de-pressure by venting or releasing the unwanted gas to the atmosphere before removing the trapped sand. Again, this is gas that can be collected and re-injected into the sales pipeline. The releasing of this gas from the pressure vessel, or venting, harms the environment and loses potential revenue.
Tank vents are arguably the most problematic source of methane emissions. They are difficult to measure (due to health and safety concerns and lack of available equipment) and equally difficult to mitigate given the lack of cost-effective technologies. On the plus side, there are emerging technologies that support the reduction in liquid loading from tanks. While this is a small source of overall methane emissions from the oil and gas supply chain, it is indicative that innovators are focusing on reliable solutions. While measurement may continue to be problematic for these tank-venting sources, it is important to focus on solutions that mitigate the emissions while simultaneously building better emissions measurement solutions.
This leads us to one of the biggest issues limiting rapid uptake of methane-reduction solutions – finding high-quality data on a worldwide scale. Producers are not required to report through a rigorous system, and there are no widely accepted quantification methodologies within a single jurisdiction, let alone any that apply to multiple producing regions. This makes both local and global data sparse. Voluntary schemes and non-robust self-reporting do not always give accurate data.
The lack of high-quality data is a challenge for both regulators and investors, because there is no standard or benchmark that can be used to measure performance. The problem is exacerbated by the fact that there are a multitude of data points that comprise a single company’s methane emissions profile. Collecting equipment inventories (e.g. valves, controllers, fittings, and pumps), identifying emissions sources and quantifying the plumes (e.g. intentional and unintentional leaks, blowdowns, and flashing losses), and using reliable emissions quantification methodologies each present challenges in data management. Fortunately, there are a number of well-built emissions data management systems available to the market. Unfortunately, with the lack of standardized databases, methodologies, and regulatory requirements, these data management systems cannot necessarily be compared as apples to apples, which makes benchmarking performance between organizations and jurisdictions difficult.
We have defined the problem and its various manifestations, but what about solutions? What is driving or forcing change in the industry? There are several key stakeholders, each with its own influence over emissions performance. Industry has been pursuing emission reduction for over a decade, largely driven by corporate responsibility initiatives. The public, First Nations (Aboriginal communities), and ENGOs aim to hold industry accountable by raising awareness of matters that are important to them.
Sustainability concerns and climate change leadership from the investment community is now driving change. The most notable example is the position that BlackRock, a large financial institution, has taken:
Climate change is driving a profound reassessment of risk and we anticipate a significant reallocation of capital.… BlackRock recently brought on board a leading impact investing team that offers clients alpha through a portfolio of companies chosen on their measurable, positive impact to society.
Finally, and perhaps most critically, governments are driving change through new policies and regulations. Consequently, many regulatory agencies around the globe now understand the issue, and most are planning and reacting to varying degrees.
One of the most proactive jurisdictions is the province of Alberta, Canada. The regulatory body responsible for managing and reducing fugitive emissions is the Alberta Energy Regulator. Recently it has been enforcing a strict measurement guideline, followed by a prescriptive mitigation policy. In 2015, the Government of Alberta directed the Regulator to ‘develop requirements to reduce methane emissions from upstream oil and gas operations by 45 per cent (relative to 2014 levels) by 2025. Given that the oil and gas industry accounts for 70 per cent of the province’s methane emissions, it simply had to be done. The work was carried out in a pragmatic two-stage process, using two industry rules: Directive 060, Upstream Petroleum Industry Flaring, Incinerating, and Venting; and Directive 017, Measurement Requirements for Oil and Gas Operations.
Since several Canadian provinces have taken a leading role on this issue, Canada has become one of the leading jurisdictions globally on measuring fugitive methane emissions and mitigating the source of the emission. The practical ability to do this is a very large step past the simple acknowledgement of the need for change or even the building of policy to address the issue. Regulatory or Government Policy must be enforceable and practical, and must reduce methane emissions without restricting the growth of an industry that has globally best-in-class social and environmental standards. This is where technology is playing a leading role.
Innovation in this space is moving at lightning speed. With new jurisdictional direction and enforcement, coupled with the need to prove carbon accounting to financial institutions, new technologies have a fertile space where they can innovate, test, and commercialize their solutions in very short cycle times. The results have been very positive.
There are many practical examples and concrete evidence of solutions ready today for reducing greenhouse gases, and they are measurable. This is an easy win, and it is economic.
In conclusion, when there is commitment from government, regulators, industry, and ENGOs to collaborate and act, the results can be stunning. History will record us as being quick, proactive innovators if we work together to solve a problem. Our efforts in measuring and mitigating methane emissions require all of these pieces working in parallel, not successively. We can do something, and we can do it now.
Originally published by Oxford Institute for Energy Studies.
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