twg comments on the first draft of the oil and gas production protocol for western regional air...

TWG Comments on the First Draft of the Oil and Gas Production Protocol

TWG Comments on the First Draft of the Oil and Gas Production Protocol

ForWestern Regional Air Partnership

Oral PresentationJuly 22, 2009Presented by: Science Applications International Corporation

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Presentation OverviewPresentation Overview

Brief overview of comments Detailed summary of comments on major policy and other qualitative issues:• Wednesday Afternoon—Major Policy Issues:

Contractor emissions and related issues Field-level reporting and related issues Permit-level reporting

• Thursday Morning—Other Policy Issues: TCR reporting options Potential interactions with mandatory reporting Uncertainty assessment Metrics

• Thursday Afternoon—Major Methodology Issues: Stationary Combustion Methods (Chapter 12) Flaring Emissions Water Ponds Missing sources

Water Handling Including Steam

Gathering Separation & Distribution

Gas Treating Facilities

Gas Exporting Facilities

Injection (Water, Steam, Gas)

Oil & Gas Distribution Oil Treating

Facilities Oil Exporting

Facilities

Pumpjack

Production Transmission Storage

& Distribution

Processing

Drilling & Completion

Oil Industry SectorOil Industry Sector

Distribution Engine

Compressor Stations

Separator Gas Plant

Liquids Liquids LNG

Underground Storage

Well

C

C

Compressor Stations

Gas

Production Processing Transmission, Storage & Distribution

Drilling & Completion

Exploration

Natural Gas Industry SectorNatural Gas Industry Sector

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Brief Overview of CommentsBrief Overview of Comments

Comments were received from 11 individuals, representing 9 organizations, including:• 3 industry organizations• 1 state agency• 1 environmental organization• TCR• 4 organizations that are members of TCR’s Verification Advisory Group and are Registry-recognized verification bodies

Total number of comments: 212• Approximately one-third were of an editorial or organizational nature

• Approximately one-third are technical comments on the methodologies

• Remaining comments (about 70) dealing with higher-level issues are the primary focus of the remainder of this presentation

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Brief Overview of CommentsBrief Overview of Comments

Broad findings:• Consensus still lacking on contractor emissions

• Broad consensus appears to exist on field-level reporting

• Comments are split on permit-level reporting (some for, some against)

• Appears to be a general interest in providing further guidance for estimating flaring emissions: A number of suggestions have been offered

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Major Policy Issues:Contractor EmissionsMajor Policy Issues:Contractor Emissions

Proposed Reporting of Scope 3 Contractor Emissions:– Requirement goes too far: 3 commenters– Requirement is good but does not go far enough: 1

commenter1 commenter raises question: What mechanism is in place

to prevent a contractor from double reporting these emissions?:• SAIC clarification: Unlike for Scope 1, there is always the

potential for double, triple, etc. reporting of Scope 3 emissions; therefore Scope 3 emissions should never be summed across reporters

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Arguments against the reporting of any Contractor Emissions:– It presents legal problems

– One commenter anticipates contractors will not respond to requests for emissions-related data

– Current practice does not require contractors to report emissions unless stipulated in their contracts

Arguments in favor of requiring and extending the reporting of contractor emissions:– Contractor emissions are significant at some fields

– Drilling, completions and workovers are central to E&P

– Contractor emissions occur at the command of the operator

– Reporting should be extended beyond drilling, completions and workovers, because other significant contractor emission sources exist (such as mobile sources)

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Alternative suggestions concerning contractor emissions:• Simplified procedures could be developed for reporting emissions from drilling, completions, and workovers in order to create an incentive for the optional reporting of these emissions

• Contractors that emit more than 25,000 tons CO2 should be included as Registry Members

• Contractor emissions should not be classified as Scope 3 emissions, because this implicitly asserts that contractor emissions are outside the control of the reporting entity

• Members should be allowed to report contractor emissions in CO2-e as data by GHG may not be available

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Major Policy Issues:Simplified Methods for Contractor

Emissions


Emissions

Allowing contractor emissions to be estimated using simplified methods when data are not available:• Against: 1 commenter• For: 2 commenters• For with caveats: 1 commenter (not preferable but needed to deal with contractors unwilling to provide data)

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Emissions


Emissions

Arguments against:• Simplified methods are intended for use by TCR when both emissions are small and the effort to obtain data greatly outweighs the benefit

Arguments for:• If contractors refuse to provide data there is little else that can be done other than a simplified approach

• It will be difficult to convince contractors to provide data without threatening to terminate them—which could disrupt long-term working relationships and make it difficult to find contractors

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Emissions


Emissions

Suggested additions to the proposed exemption:• The protocol should define what constitutes an unsuccessful attempt to obtain data (otherwise it is easy for operators to circumvent the 5% threshold)

• The exemption should be limited to leaseholders with leases in effect as of some date, or else the exemption will incentivize lease language designed to trigger the exemption

Suggested alternatives to the proposed exemption:• An alternative methodology should be provided in the protocol when contractor data is not forthcoming:

Reporters would be required to demonstrate their attempt to obtain contractor data in order to use the alternative method

NOTE: One commenter notes that data available to field operators could include nominal information about heat throughput capacity rating and accounting of hours worked—Question from SAIC: Is this sufficient to develop an alternative method?

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Major Policy Issues:Other Issues Related to

Contractor Emissions

Major Policy Issues:Other Issues Related to

Contractor Emissions

Proposed provision of partial confidentiality exemptions for contractor emissions:• TCR does not offer partial confidentiality exemptions• One commenter is not concerned about contractor emissions from a confidentiality perspective

• Another commenter sees an issue with a contractee publicly releasing contractor emissions that the contractor does not necessarily endorse: Public release could dissuade contractors from providing data

Requirement to verify contractor emissions:• 2 commenters are against this requirement (both of these are also against the required reporting of contractor emissions

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Major Policy Issues : Field-Level Reporting


Proposed aggregation of emissions by field:– For: 3 commenters– Against: 0 commenters

Proposed separate aggregation of emissions from standard facilities (e.g., natural gas processing plants):– For: 4 commenters– Against: 0 commenters (but one commenter suggests that for

simplicity the option to aggregate all emissions to the field level should be provided)

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Further suggestions:• If an alternative EPA approach is developed, that approach should be adopted by TCR

• TCR should adopt term like “Oil field installations” to designate field-aggregated facilities, to avoid confusion with the term “facility”

• Adopt field names and boundaries, per the designation in well drilling permits, as provided by permitting authorities

• We suggest aggregating emissions by different source types (e.g., wells) within each field: Question for TWG: Is this unreasonable or not useful for this sector? Additional question from SAIC: What would the definitions of the source

types be?

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Major Policy Issues : Other Issues Related to Field-Level

Reporting


Reporting

Suggestion to associate standard facilities (e.g., gas processing plants) within a field to the field:– For: 1 commenter

– This would allow querying and calculation of a Registry Member’s total emissions for the field

– Against: 1 commenter– May not provide useful info, because in many cases gas

processing plants process gas from multiple fields and multiple companies

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Reporting


Reporting

Should TCR require separate reporting of in-field pipeline emissions from out-of-field pipeline emissions:– For: 1 commenter

– Necessary to get true emissions totals for a field

– Against: 1 commenter– Based on past experience, sometimes a single pipeline segment

may be reported separately, and sometimes an entire complex network upstream of a gas plant may be reported separately. Trying to allocate back to individual pipeline segments in the latter case involves much effort for no real gain (no improvement in emissions estimates)

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Major Policy Issues : Permit Level Reporting


Alternate approach of requiring two levels of aggregation (by state permit within each field):– For: 2 commenters

– Against: 2 commenters

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Arguments in favor of aggregating by permit:– Will facilitate benchmarking the accuracy of TCR emissions

against the EPA requirements (may be the only way to assess accuracy of TCR’s emission estimates)

– It could help to identify and notify companiesArguments against aggregating by permit:

– Will add confusion and additional reporting burden without improving accuracy

– Permitting practices/extents vary widely (esp. outside U.S.); therefore reporting by permit will not add to consistency

– Where permits are unit specific this will defeat the purpose of aggregating geographically dispersed sites

– State and local jurisdictions will still maintain their prerogative of crafting requirements to meet their circumstances

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Suggested alternative:•Make aggregation by permits a reporting option as opposed to a requirement

Additional information relevant to reporting by permit:•One commenter anticipates that the state env. agency (i.e., TCEQ) reporting at the facility permit level will be required

•It is in alignment with state inventory reporting requirements and EPA’s GHG Reporting Rule

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Other Policy Issues: TCR Reporting Options

Other Policy Issues: TCR Reporting Options

TCR provides a number of options for defining organizational boundaries (Operational control, Financial control, Equity Share)

Two comments and one question for the TWG were received on these options:• The protocol does not state which reporting option is most accurate; the choice of ownership method should be explicit: SAIC clarification: The GRP states control + equity share is

preferred

• We have hundreds of partners and lease agreements; burden of tracking JV emissions is too great and the emissions too small—simplification is needed: SAIC clarification: You will not need to report emissions from JV operations for which

you are not the controlling operator if you choose to report using a control option

• Question for TWG: Would anyone ever want to report using financial control? Would it be of any value for a carbon footprint?

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Other Policy Issues: Mandatory Reporting and Uncertainty

Assessment

Other Policy Issues: Mandatory Reporting and Uncertainty

Assessment

Potential interactions with mandatory reporting:• The Protocol should be careful not to undermine the prerogatives of

individual states that may wish to establish more robust and comprehensive programs (either mandatory or voluntary)

No uncertainty assessment of the widely divergent estimation methods, raising the following questions:• What criteria will Members use to select a specific method?

Significant divergence in emissions estimates for similar situations resulting from Member’s preferences?

• How accurate are the reported emission estimates?• What mechanisms would motivate TCR Members to improve their

estimates if all methods are equally acceptable?• Possible solution: Create and apply an accounting of uncertainty

applicable to each data type, and use resulting levels of uncertainty to caveat emissions reports

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Other Policy Issues: MetricsOther Policy Issues: Metrics

If metrics are consistently being reported the protocol should include methods for calculating them

Questions for the TWG on optional metrics:• Would your customers like these metrics to help them

calculate their own (upstream fuel) Scope 3 emissions?• Who would the metrics be valuable to?• Are the emissions from E&P too low to matter relative to the

emissions from combusting the fuels?Further questions on optional metrics:

• Should the Registry require the reporting of metrics?• If so, which metrics?• Are there any metrics in the new API Compendium?

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Other Policy Issues: Simplified Methods

Other Policy Issues: Simplified Methods

The protocol does not define simplified methods; clarifying guidance should be provided to ensure the most accurate estimates

Question for WRAP SC and TCR:• In general, do emission estimates systematically increase as

simpler methods are used?• If so, then use of higher order methods may be encouraged,

and we recommend TCR and WRAP disclose any information available on trends in method results to assess the impact of the use of simplified methods

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Major Methodology Issues: Stationary Combustion

Major Methodology Issues: Stationary Combustion

The methods provided in Section 12.4 (for stationary combustion devices lacking fuel consumption data) seem to be simplified methods and may not be verifiable, which raises following questions:•What is the relative magnitude of these emissions?• Is time of use metered?•Can reporters document time of use?•Could mass balance be used to determine fuel use

instead?

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Major Methodology Issues: Flaring and Water Ponds

Major Methodology Issues: Flaring and Water Ponds

Should we attempt to provide generic methods for flaring and water ponds rather than allow use of simplified methods?:– Yes: 3 commenters:

– But 2 of the 3 notes the proposed use of simplified methods is acceptable

– No: 1 commenter

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Major Methodology Issues: FlaringMajor Methodology Issues: Flaring

Comments on, and suggested methods for, flaring:– Our flaring emissions in S. Texas are very small (<5 MCFD), but those in our

Louisiana and Exploration operations are large (>5%)– Eliminating flaring from the materiality threshold may discourage

measurement of gas volumes– The Protocol should not assume that no measured data exists– Flare emission factors are available from CAPP and IPCC– Flare efficiencies are provided in the International Flare consortium report– It may be overly restrictive to require direct monitoring for all reporters, due to

safety issues and voluntary nature of TCR:– However, where a facility has already installed monitors, TCR should require the use of those

devices for reporting (but exempt all flaring emissions from the 5% materiality threshold)

– Agree that flare volumes vary by orders of magnitude, precluding the use of average emission factors, but:

– Facility level flare volumes are reported to the regulators in Canada (based on a combination of metered volumes and engineering calculations), and are used to estimate royalties

– If reported flare volumes are adequate for royalty payments, they are adequate for GHG reporting

– Companies should be able to estimate flaring emissions based on rated size and burn time

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Major Methodology Issues: Water Ponds

Major Methodology Issues: Water Ponds

Comments on water ponds:– We do not expect any methane emissions from water ponds– In Canada the norm is to collect produced water in

atmospheric tanks; surface water runoff collected in ponds would not be a source of GHGs from dissolved gases (but might be a source from biological activities)

– The method used to calculate emissions from atmospheric tanks is similar to that for estimating flash losses from oil storage tanks

– One commenter points to emission factors for tertiary sumps from an ARB test program in 1980s

– There may be significant CO2 associated with water ponds due to CO2 affinity with water; flash studies have shown this

Major Methodology Issues: Missing sources?

Major Methodology Issues: Missing sources?

Well Cellars (Not mentioned – water collection areas are) Carbon Adsorbers (Unclear if there are GHG emissions) Compressor Seals (Covered in Table 21.7) Other Natural Gas Processing: (Unclear why these need specific mention)• De-nitrification• Fractionation• Mercury removal

Pigging (Covered in pipeline section) Tank Degassing (This is a form of venting) Separation Units (Unclear why separators need specific mention)

Sumps and Pits (Not mentioned – however water collection areas are covered)

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twg comments on the first draft of the oil and gas production protocol for western regional air...

Documents

contractor emissionsarguments

double reporting

afternoonmajor policy

qualitative issues

higherlevel issues

technical comments

twg comments

fieldlevel reportingcomments