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Bluesource Methane Reduction Program: Pool Charlie/ RWDI Reference #1902805

June 2019

Verification Report for:

Bluesource Methane Reduction Program: Pool Charlie/ RWDI Reference

#1902805

Proponent:

Bluesource Methane ULC

Prepared by:

RWDI Air Inc.

1000-736 8 Ave SW, Calgary, AB T2P 1H4

Prepared for:

Alberta Climate Change Office

Version:

Final

Date:

June 14, 2019


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Table of Contents

1.0 Summary – Offset Project ...................................................................................... 4 1.1 Summary – Facility ......................................................................................................... 8 2.0 Introduction ......................................................................................................... 9

2.1 Objective ............................................................................................................. 9 2.2 Scope ................................................................................................................ 10 2.3 Level of Assurance .............................................................................................. 12 2.4 Criteria .............................................................................................................. 12 2.5 Materiality .......................................................................................................... 12

3.0 Methodology ....................................................................................................... 13 3.1 Procedures ......................................................................................................... 13 3.2 Team ................................................................................................................. 16 3.3 Schedule ............................................................................................................ 17

4.0 Results .............................................................................................................. 18 4.1 Assessment of Internal Data Management and Controls ........................................... 18 4.2 Assessment of GHG Data and Information .............................................................. 19 4.3 Assessment against Criteria .................................................................................. 21 4.4 Evaluation of the GHG Assertion ............................................................................ 23 4.5 Summary of Findings ........................................................................................... 23 4.6 Opportunity for Improvement ............................................................................... 26

5.0 Closure .............................................................................................................. 26 5.1 Verification Statement ......................................................................................... 26 5.2 Limitation of Liability ........................................................................................... 26 5.3 Confirmations ..................................................................................................... 27

6.0 References ......................................................................................................... 27 Appendix A: Final Verification Plan and Sampling Plan ............................................................ 29 Appendix B: Statement of Qualifications................................................................................ 31 Appendix C: Findings and Issues .......................................................................................... 33 Appendix D: Statement of Verification .................................................................................. 40 Appendix E: Conflict of Interest Checklist .............................................................................. 42 Appendix F: Supplemental Diagrams/Tables/Figure ................................................................ 44

List of Tables

Table 1: Detailed Scope ...................................................................................................... 10 Table 2: Verification Procedures ........................................................................................... 15 Table 3: Recalculations of Emissions Reduction ...................................................................... 20 Table 4: Offset Criteria Assessment ...................................................................................... 22 Table 5: Summary of Findings ............................................................................................. 24 Table 6: Detailed Findings and Issues Log ............................................................................. 34

Instructions are in italics throughout and should not be deleted when report is complete.

Some instructions are specific to the verification of facilities and for offset projects. The

document is not restricted but do not alter the format, the layout, the headings or the overall

‘look and feel’ of the document. If it is more useful to paste information outside of the text box,

use the empty line just below the text box to drop text or tables int. This should not change the

headings or the formats. There are several dropdown boxes in the document that must be

completed.

• Complete report in Verdana 10pt font (no italics).


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• After the report is complete, right click the table of contents and ‘update field’ which will

update page numbers in Table of Contents.

• If an instruction only applies to facilities or only applies to offsets indicate ‘not applicable’.

• Appendix F is available for additional tables, diagrams etc.


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1.0 Summary – Offset Project

Item Description

Project Title

Enter project title (must match the registry

project title)

Bluesource Methane Reduction Program:

Pool Charlie

Project Description

Provide a brief description of the project

and baseline conditions.

The project is an aggregate project

consisting of various facilities, operated by

four different producers. Greenhouse gas

emission reductions are achieved by

reducing the volume of natural gas (mainly

methane) vented to the atmosphere, from

converting high-bleed pneumatic devices to

low-bleed pneumatic devices.

In the baseline condition, existing pressure

controllers, transducers and liquid level

controllers would continue to vent higher

volumes of natural gas (consisting of

primarily methane) to atmosphere, based

on existing designs. In the project

condition, existing high-bleed pneumatic

devices are replaced with lower bleed

devices that have significantly lower

manufacturer’s specified vent rates. The

project and baseline are functionally

equivalent in that the rate of change of the

oil and gas process control measure is

unaffected and independent of the project

activity.

Electrified devices, and vent gas capture

initiatives are not included within the scope

of project technologies presented in this

project.

Bluesource Methane ULC has requested, for

the purposes of the project and verification

reports, that the identity and specific

project location remain confidential.

Project Location

Include the latitude and longitude for each

unique location or installation. Include legal

land location if applicable and other

information identifying the unique location.

Various natural gas facilities in Alberta

operated by four different producers. The

majority of the facilities are located in

central and southern Alberta.


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Project Start Date

Enter the project start date.

July 3, 2018

Offset Start Date

Enter the start date for offset credit

generation.

July 3, 2018

Offset Crediting Period

Enter the offset crediting period, including

the offset start date. Include day, month

year.

July 3, 2018 – December 31, 2022

Reporting Period

Enter the reporting period being verified.

October 1, 2018 – March 31, 2019

GHG Assertion (Actual Emission

Reductions/Sequestration Achieved)

Enter the actual emissions reductions /

sequestration for the reporting period. Enter

serial numbers if available.

24,310 tonnes of CO2e (12,305 tonnes for

the period from October 1, 2018 to

December 31, 2018 and 12,005 for the

period from January 1, 2019 to March 31,

2019).

Protocol

Indicate the relevant protocol (if applicable)

Carbon Competitiveness Incentive

Regulation (AB. Reg. 255/17)

Alberta Emission Offset Program -

Quantification for Greenhouse Gas Emission

Reductions from Pneumatic Devices,

Version 2.0, January 2017.

Ownership

Enter offset project owner.

Bluesource Methane ULC (Bluesource) is

the aggregator and project proponent for

this project. Bluesource is given authority

to aggregate and register the project’s

Offset Credits through agreements with

each producer.

Project Activity

State how the project activity meets the

eligibility requirements

The project activities are eligible under the

Alberta Carbon Competitiveness Incentive

Regulation (CCIR) to generate offsets as

they meet the following conditions:

- Have occurred in Alberta – the project is

physically located in Alberta.

- Not be required by law – the project is

not required by any current law, and is

eligible for emissions offset generation until

December 31, 2022. Alberta Energy

Regulator, Directive 60 mandates that

vent gas releases be limited from

pneumatic devices, compressor seals, and


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glycol dehydrators starting January 1, 2023

(AER 2023).

- Result from actions taken on or after

January 1, 2002 – the project began in

2018.

- Reduction must be real, demonstrable,

and quantifiable and measurable – the

project has been verified according to the

following Verification Criteria:

• Climate Change and Emissions

Management Act, Statues of

Alberta, 2003

• Carbon Competitiveness Incentive

Regulation (CCIR) – Alberta

Regulation 255/2017

• Standard for Greenhouse Gas

Emission Offset Project Developers,

version 2.0, July 2018

• Standard for Validation, Verification

and Audit, Carbon Competitiveness

Incentive Regulation, version 3.0,

December 2018

• Quantification Protocol for

Greenhouse Gas Emission

Reductions from Pneumatic Devices,

version 2.0, January 2017

• Carbon Offset Emission Factors

Handbook, version 1.0, March 2015

• ISO 14064 Greenhouse gases – Part

2: Specification with guidance at the

project level for quantification,

monitoring and reporting of

greenhouse gas emission reductions

or removal enhancement, ISO, April

2006 (ISO 14064-2)

- owns the offset credits - the project

developer has provided sufficient and

appropriate evidence that Bluesource owns

the offset credits generated by the

respective sub-projects.

- Be counted once for compliance purposes

– the project offset credits are serialized on

the Alberta Emission Offset Registry

(AEOR).

- Be verified by a qualified third party –

RWDI is a qualified third-party verifier as

defined in Section 24 of the CCIR. RWDI is

accredited with the American National

Standards Institute (ANSI) in accordance

with ISO 14065 (Accreditation ID #1053).


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Project Contact

Enter contact name, company name,

mailing address, phone number and email

address.

Kelsey Locke

Bluesource Methane ULC

1605-840 7 Ave SW

Calgary, AB T2P 3G2

403-262-3026

[email protected]

Verifier

Verifier name, verifier’s company name,

address, phone number email etc.

Alena Saprykina

RWDI Air Inc.

1000-736 8 Ave SW

Calgary, AB T2P 1H4

403-232-6771

[email protected]

Verification Team Members

Include verification team members, roles,

training, training dates and qualifications.

Project Manager: Candace Bell, M.Sc.

Lead Verifier: Alena Saprykina, M. Sc.

(completed ISO 14064-3 training course in

2014)

Verifier and Signing Authority: Annik

White, P. Eng., M.A.Sc. (completed the ISO

14064-3 training course in 2018)

Verifier: Thana Boonlert, B. Eng, EIT

(completed the ISO 14064-3 training

course in 2018)

Peer Reviewer: Russ Lewis, M.Eng.,

P.Eng. (completed ISO 14604-3 training

course in 2018)

Designated Signing Authority

Enter the designated signing authority for

this verification.

Annik White, P.Eng.

Verification Strategy

Describe the verification strategy used for

the verification, including rationale for the

approach. Note, if a controls reliance is

used, provide justification for how the

project is able to support this approach.

The strategy was to use almost entirely

substantive testing in order to avoid relying

on the design and operating effectiveness

of internal controls; however, controls-

based testing was used to assess the

accuracy and completeness of primary

data, where original records were not

available or not amenable to substantive

testing, by inquiring about QA/QC

procedures around the data.

mailto:[email protected]


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1.1 Summary – Facility

Item Description

Facility Name and Company Name

List company name and facility name.

N/A – aggregated offset project and

therefore not a facility compliance reporting

verification.

Facility Description

Provide a brief description of the facility.

N/A

Baseline Emissions Intensity

Description

List the approved BEIA and the baseline

years.

N/A

Reporter Contact

Enter contact name, company name,

mailing address, phone number and email

address.

N/A

GHG Assertion

Enter the actual emissions, production,

emissions intensity and the reduction target

being verified.

N/A

Verifier

Verifier name, verifier’s company name,

address, phone number email etc.

N/A

Verification Team Members

Include verification team members, roles,

training, training dates and qualifications.

N/A

Designated Signing Authority

Enter the designated signing authority for

this verification.

N/A


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2.0 Introduction

Provide an introduction to the facility or project, the verification, and the background.

For Offset Project: summary of offset project baseline, changes to the baseline since project

start date and summary of changes at the project since the offset project start date or baseline

period.

For Facilities: Description of compliance or baseline report, facility/project boundary, facility

identification information, GHG historical performance, summary of changes since the baseline

or since the last compliance report.

RWDI Air Inc. (RWDI) was engaged by Bluesource Methane ULC (Bluesource) to conduct an

independent third-party verification of the greenhouse gas (GHG) assertion for the Bluesource

Methane Reduction Program – Pool Charlie. The verification pertains to the Project emission

reductions for the period from October 1, 2018 to March 31, 2019 under the Carbon

Competitiveness Incentive Regulation – Alberta Regulation 255/17 for submission to the Alberta

Emissions Offset Registry.

This aggregated project consists of the retrofit of the pneumatic devices from four natural gas

producers with facilities in central and southern Alberta. The greenhouse gas emissions

(specifically methane from natural gas) reduction occurs from the conversion of high-bleed

pneumatic devices to low-bleed pneumatic devices. Bluesource has a signed agreement with

the producers which makes them owners of the devices and offsets that they produce.

Bluesource is responsible for the collection of activity data used in the calculations and data

management for facility specific data. Bluesource is also responsible for the completion of the

calculations and completion of the GHG Assertion, and the Offset Project Report.

Baseline conditions are considered to be the high-bleed pneumatic devices that vent higher

volumes of natural gas under the same operating conditions as the project. The project

conditions are completed once the low-bleed devices have been installed and are operational.

The reductions corresponding to the conversion of pneumatic devices were then calculated and

submitted as the project assertion.

There were no changes in the reporting for this reporting period from October 1, 2018 to March

31, 2019, with respect to when the project started on July 3, 2018.

2.1 Objective

Describe the objective of the verification (should include expressing an opinion).

The objective of this verification was to provide an opinion with a reasonable level of assurance

to the Alberta Climate Change Office (ACCO) as to whether the greenhouse gas emissions

reduction assertion is free from material misstatement, and is presented fairly in accordance

with the program criteria.


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2.2 Scope

Define the scope in terms of: geographical, organizational, activities and processes, sources,

sinks, categories and greenhouse gases included (considering the completeness of the

inventory), GHG assertion time period.

For offset verifications: include the serial range (i.e. XXXX-XXXX-XXX-XXX-XXX-XXX to XXXX-

XXXX-XXX-XXX-XXX-XXX) if assigned (i.e. in the case of government verification a serial range

will be available, otherwise not applicable).

For Facilities: ensure all specified gases and source categories are evaluated. Include list of

negligible emission sources and justification for Emission Performance Credits (EPCs). Include

listing of end products.

The verification assesses the operations and equipment associated with the project as well as

calculations and supporting information used to quantify the greenhouse gas emissions

reduction assertion for the period from October 1, 2018 – March 31, 2019. The detailed scope

is provided in Table 2.

The verification is for Bluesource Methane Reduction Program: Pool Charlie (the Project), and

their GHG Assertion for the period from October 1, 2018 to March 31, 2019. A total of 984

pneumatic devices were converted from high-bleed to low-bleed pneumatic devices, from four

producers, located at various locations across central and southern Alberta. The pneumatic

device types include pressure controllers, transducers and level controllers. Detailed scope is

provided in Table 1.

Table 1: Detailed Scope

Scope Description

Geographical Scope Bluesource Methane Reduction Program Pool

Charlie comprises of various natural gas

facilities from four producers located across

southern Alberta. The physical and

operational project boundaries include the

pneumatic devices (subprojects) themselves,

as well as the fuel gas supplied to the device.

The pneumatic device may be located on a

single wellsite, battery, satellite, within a

compressor building or dehydration building

etc. The legal land location of each device is

tracked within the Project inventory and the

Aggregated Project Planning sheet.

Organization Scope Direct emissions from regulated sources

within the organization and geographical

boundaries.

Activities and Processes Natural gas processing operations


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Scope Description

Sources and Sinks, Categories Direct Baseline Emissions:

B7 Vented Gas – Pneumatic control devices in

the oil and gas industry are commonly used

to control pressure flow, levels, and/or

temperature. Natural gas or fuel gas that is

consumed by these devices is vented to the

atmosphere.

B8 Uncaptured Fuel Gas – This source

identification was considered in the

verification assessment, but excluded from

this project.

Direct Project Emissions:

P7 Vented Gas - The low or non-venting

pneumatic devices in the project will reduce

emissions as part of normal operations

compared to high-venting pneumatic devices.

This source will be zero when pneumatic

devices are converted to instrument air or

solar-electric devices. The quantity of gas

vented in the project may have an impact on

the emissions reduction quantification for

controller conversions projects.

P9 Fuel Extraction and Processing - Each of

the fuels used throughout the project will

need to be sourced and processed. This will

allow for the calculation of greenhouse gas

emissions from the various processes

involved in the production, refinement, and

storage of the fuels. The total volumes of fuel

for each of the sources / sinks in this project

are considered in this source / sink. Types

and quantities of fuels used would need to be

tracked.

P6, P8, and P17 (Air Compression, Process

Control Electricity, and Vent Gas Capture,

respectively) were also considered in the

verification assessment, but excluded from

this project.

Emissions Scope CO2, CH4, N2O included in assertion;

however, we also consider any potential

emissions of SF6, HFCs, and PFCs during our

assessment of completeness.

GHG Assertion Time Period October 1, 2018 – March 31, 2019


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Scope Description

Serial range Not available

2.3 Level of Assurance

The verification was conducted to a reasonable level of assurance.

Choose type of verification from the dropdown box above.

Provide explanation on level of assurance.

Achieving the overall objective of this verification involved executing verification procedures

designed to generate evidence that is sufficient and appropriate to provide a basis for our

opinion with a reasonable level of assurance. Reasonable-level assurance is required by ACCO

for the purposes of the Carbon Competitiveness Incentive Regulation CCIR. It is a positive, but

not absolute form of assurance that the responsible party’s greenhouse gas assertion is

materially correct.

2.4 Criteria

Outline the program criteria used and relevant supporting documentation (acts, regulations,

protocols, standards, guidance documents, project documentation etc.).

Generating sufficient and appropriate evidence to support the verifying opinion involves

executing verification procedures that assess the assertion against the following criteria:

• Climate Change and Emissions Management Act, Statues of Alberta, 2003;

• Carbon Competitiveness Incentive Regulation (CCIR) – Alberta Regulation 255/2017;

• Standard for Greenhouse Gas Emission Offset Project Developers, Version 2.0, July 2018

• Standard for Validation, Verification and Audit, Carbon Competitiveness Incentive

Regulation, Version 3.0, December 2018;

• Quantification Protocol for Greenhouse Gas Emission Offset Project Developers - Version

2.0, January, 2017;

• Carbon Offset Emission Factors Handbook, Volume 1.0, AEP – March, 2015; and

• ISO 14064 Greenhouse gases - Part 2: Specification with guidance at the project level

for quantification, monitoring and reporting of greenhouse gas emission reductions or

removal enhancement, ISO, April 2006 (ISO 14064-2)*.

*Should any discrepancies exist between ISO and regulatory criteria, the regulatory criteria

shall take precedence.

2.5 Materiality

Define the materiality of the verification.

In accordance with Part 1 Section 5 (e) of the Standard for Validation, Verification and Audit,

Carbon Competitiveness Incentive Regulation (version 3.0) – December 2018, the threshold


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used to determine the materiality of combined misstatements on the overall assertion was 5%

of total reported emission offsets generated for emission offset project report.

3.0 Methodology

Statement that the verification is performed according to ISO 14064-3.

Summary of the assessments/tests/reviews/evaluations that were conducted during the

verification.

The verification will be conducted in accordance with:

• ACCO Standard for Validation, Verification and Audit, Version 3.0;

• ISO 14064-3:2006 Greenhouse Gases Part 3: Specification with guidance for the

validation and verification of greenhouse gas assertions*; and,

• ISO 14065:2013 Greenhouse Gases: Requirements for greenhouse gas validation and

verification bodies for use in accreditation of other forms of recognition*.

*Should any discrepancies exist between ISO and regulatory criteria, the regulatory criteria

shall take precedence.

Verification Plan

The final verification plan has been attached in Appendix A. In developing the plan, a

verification strategy was established, a detailed risk assessment was carried out, and a

sampling plan with accompanying verification procedures was developed. Some of the essential

elements of the plan are presented in this section.

Verification Strategy

The verification strategy shapes the overall approach of the verification by specifying the type

of verification procedures to be used. It affects the verification and sampling plan by defining

the level of testing that will be substantive versus the level that will be controls-based.

Development of the verification strategy is informed by the output of the risk assessment

process, which includes an assessment of the effectiveness of the responsible party’s data

management systems and internal controls.

For this verification, the strategy was to use almost entirely substantive testing in order to

avoid relying on the design and operating effectiveness of internal controls; however, controls-

based testing was used to assess:

The accuracy and completeness of primary data, where original records were not available or

not amenable to substantive testing, by inquiring about QA/QC procedures around the data

3.1 Procedures

Description of how the verification was conducted including: description of the nature, scale and

complexity of the verification activity, confidence and completeness of the responsible party’s

GHG information and assertion, assessment of GHG information system and its controls,


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assessment of GHG data and information, assessment of GHG information system and controls,

assessment against criteria, evaluation of the GHG assertion.

Describe steps of the verification including planning, assessment, site visit, off-site verification,

and report preparation.

Describe how the risk based approach was implemented in the sampling plan. Identify

categories of risk including inherent risk, and detection risk (organization and verifier). Include

the Verification Plan with the Sampling Plan in Appendix A. Paste the risk assessment table in

this section.

Verification procedures are described in detail in the Verification Plan with the Sampling Plan in

Appendix A. This section describes how the verification strategy and verification plan were

executed through two main components:

A site visit; and,

Desktop review

These activities involved carrying out substantive and controls-based tests (i.e., verification

procedures) as shown in Table 5A of the Verification Plan of Appendix A.

Site Visit

In accordance with Section 4.1 of ACCO’s Standard for Validation, Verification and Audit,

Version 3.0, site visits are a mandatory component of verifications.

The site visit was relied upon within the verification strategy to gain understanding of the

facilities operations, processes and equipment as well as the data management systems used to

track the data used for the purposes of GHG reporting. One of the most important aspects of

the site visit was to test the completeness of the GHG emissions inventory through inspection of

emissions sources on-site.

The site visit consisted of visiting a select number of devices from each producer. The number

of devices visited during the site visit was determined by performing a statistical analysis that

would yield 95% confidence level that not more than 5% of checks would fail. Therefore, 54

devices (subprojects) across the four producers were chosen. Other factors for selections

included: not selecting subprojects that were already visited by a previous verifier, the

geographical location of the sites to avoid excessive driving distances, and a proportional

quantity of subproject visits per producer. The site visit was conducted by Thana Boonlert of

RWDI on May 14, 15 and 17, 2019, at several different locations across central and southern

Alberta. RWDI coordinated the site visit directly with Bluesource staff. RWDI and Bluesource

staff met with Field Operators on-site who facilitated facility tours and escorted the staff to

required locations. The detailed site visit notes are provided in Appendix F. Details regarding

specific site visit checks and comparisons to Bluesource records are available upon request.

It should be noted that since the site visit resulted in one failure (issue 18/19-01 which was

later resolved), the total number of subproject checks was adjusted in order to meet the 95%

confidence level. An additional 32 subprojects were verified using installation records

comparison with primary data exports.

Desktop Review

As shown in Table 2 below, verification procedures executed during the desktop review were

split into three categories: Emissions Estimates, Primary Data and Records, and Data and

Information Management & Controls.


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Table 2: Verification Procedures

Category Verification Procedures

Emissions Estimates & Primary Data and

Records

Assess completeness of the GHG inventory in

terms of sources and sinks and

appropriateness of inventory boundaries;

Estimate or judge emissions for sources

deemed to be negligible;

Check that the methodologies used to

estimate emissions are consistent with AEP

technical guidance;

Check that the methodologies used to

estimate emissions are appropriate;

Check that emissions calculations were

performed correctly;

Check the availability and reliability of

primary data and records;

Test the assertion through inquiry,

observation, inspection,

Re-performance, analytical procedures, re-

calculation, tracing, and vouching; and,

Test data for extreme high/low values,

spurious values, values recorded during

periods of sensor malfunction or downtime,

and systematic abnormalities.

Data and Information Management &

Controls

Review the data management system to

assess whether it is reliable and transparent;

Review the flow of data and information to

assess whether it is validated, version

controlled and backed-up;

Assess whether monitoring instrumentation

used to generate primary data is maintained

and calibrated to an appropriate standard;

Evaluate the appropriateness of the

standards and procedures implemented and

their ability to ensure the accuracy of the

information provided;

Review relevant quality assurance records;

and,

Assess retention of relevant data and

information and availability of historical data.

Risk Assessment


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In the context of greenhouse gas assurance, risk assessments involve assessing the risk that

the emissions report presented to the intended user (i.e., the assertion) contains material

misstatements and/or has not been prepared in accordance with program criteria. RWDI uses a

two-tiered risk assessment process: assertion-level risk assessment and source-level risk

assessment.

The results of our assertion-level risk assessment are presented below. Further details

including the rationale for the assigned risk levels are provided in Table 2A of the Verification

Plan that has been attached in Appendix A.

Risk Category Risk Level

Verification Risk Low

Inherent Risk Medium

Control Risk Medium

Allowable Detection Risk Low

Source Level Risk Assessment

The second tier of RWDI’s risk assessment process is a source-level risk assessment. This step

involves assigning a level of risk to each emissions source that has been included in the

inventory in order to inform the design of an effective sampling plan and prioritize verification

efforts. Assignment of risk levels is based on the following risk calculation:

Risk = probability of misstatement x impact of misstatement

For the purpose of the risk assessment, risk is a calculated value ranging from 1 to 15,

probability is a value from 1 to 3 assigned based on the inherent and control risks affecting the

source, and impact is a value from 1 to 5 assigned based on the source’s contribution to total

emissions.

The inherent and control risks affecting each source are determined based on a review of

source contributions as well as the data management systems and controls related to each

source. The results of the source-level risk assessment are presented in Table 4A of Appendix

A. Further details, including rationales for the assigned risk levels, are provided in Tables 3A

and 4A of the Verification Plan that has been attached in Appendix A.

Sampling Plan

Based on the risk assessment, the verification team designed an initial sampling plan that

targeted areas of elevated risk. The initial sampling plan was modified as needed throughout

the verification process when issues were identified or new information was obtained. The

resulting final sampling plan, including details of the verification procedures carried out, is

presented in Table 5A of the Verification Plan that has been attached in Appendix A.

Reporting

The verification report for the project for the period October 1, 2018 – March 31, 2019 was

performed using Verification Report Template provided by CCIR (December, 2017).

3.2 Team

List verification team members including peer reviewer(s).


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Describe the qualifications and training of the team members and peer reviewer(s) including

dates of training and certifications.

For Offsets: fill in the sample Statement of Qualification provided and included in Appendix B.

For Facilities: include the Statement of Qualifications from the facility compliance form in

Appendix B.

Verifier and Designated Signing Authority: Annik White, M.A.Sc P.Eng.

Completed Greenhouse Gas Verification Using ISO 14064-3 Training, October 3-4, 2018

Certificate No. 50064648-50071743

P.Eng. Member No: 100041245

Lead Verifier – Alena Saprykina, M.Sc., RWDI AIR Inc.

Completed Greenhouse Gas Verification Using ISO 14064 Training, January 21-23, 2014

Certificate No. 0000448155

Verifier – Thana Boonlert-Mounarath, EIT, RWDI AIR Inc.

Completed Greenhouse Gas Verification Using ISO 14064 Training, October 3-4, 2018

Certificate No. 50064648-50071743

Peer Reviewer – Russ Lewis, M.Eng., P.Eng., RWDI AIR Inc.

Completed Greenhouse Gas Verification Using ISO 14064 Training, October 3-4, 2018

Certificate No. 50064648-50071743

P.Eng. Member No: 37067

Project Manager – Candace Bell, M.Sc., RWDI AIR Inc.

Statement of qualification is included in Appendix B

3.3 Schedule

Provide a list or table of verification activities and dates. Indicate when the verification was

completed.

Kickoff meeting with Bluesource – April 18, 2019

Initial Verification Plan sent to Bluesource – May 6, 2019

Conduct Site Visits – May 14, 15, and 17, 2019

Verification – May 20 – June 6, 2019

Peer Review – June 6, 2019


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Draft Report and Verification Statement – June 7, 2019

Final Report and Verification Statement – June 14, 2019

4.0 Results

Add introduction to results section here, if desired.

Our assessment of the GHG information management system and the results of our

independent recalculation of emissions are presented below. These sections are followed by a

summary of the non-compliances and opportunities for improvement, as well as any other

relevant limitations or uncertainties that were identified during the verification and remain

unaddressed. A complete list of errors, omissions, misstatements or non-compliances identified

during the verification is provided in the Issues Log in Appendix C.

4.1 Assessment of Internal Data Management and Controls

Provide a summary the information system(s) and its controls for sources of potential errors.

Include information on the selection and management of data, process for collecting and

consolidating data, data accuracy systems, design and maintenance of the GHG system, the

systems and processes that support the GHG information system and results from previous

assessments if applicable.

Bluesource Canada is the project proponent that provides GHG consulting services and creates

the emission calculation spreadsheet and Offset Project Report. The producers are ultimately

responsible for collection, storage and the data management of the primary data used for the

GHG calculations. The producers are responsible for tracking operations, activity data and

measured data (e.g., run-time hours and gas compositions). The producers provide this

information and other primary data to Bluesource for processing and use in GHG offset credit

calculations. The preparation of the GHG report by Bluesource results in less involvement by

producers’ personnel in terms of defining the GHG inventory boundaries and verifying

completeness and accuracy/relevance of primary data. There are certain risks associated with

this team structure. With four different producers within the Charlie Pool project, and an

additional team of contractors, there is some additional risk due to different staff and their

responsibility of providing Bluesource with the primary data. However, Bluesource has in place

detailed and formalized QA/QC measures to ensure that data is being managed appropriately.

Thus, the risk is managed with the experience and consistency from the Bluesource personnel.

Project data is stored and managed in the cloud-based database called Lukla. Data is uploaded

and managed in this database by the project management contractors that are hired by

Bluesource. The contractors employed by Bluesource are responsible for device replacements

and installation record uploads. These records include photos of decommissioned devices,

photos of the new installed devices, and the field installation form. The following information is

tracked for each installation:

- Surface Legal Subdivision LSD

- Installation date

- Baseline high-bleed manufacturer and model number


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- Project low-bleed manufacturer, model number, and serial number

- Existing supply pressure (psig)

- Supply pressure following installation (psig)

- Output pressure range (psig)

- Device Characteristics

The installation template requires several field visits to be completed by the device installer

including uploading the pictures of old and new devices. In addition, the installer is then

required to upload an electronic form in Lukla. If pictures are not uploaded or an installation

record is not filled properly the installation is marked as in-complete by Bluesource until

corrected by the installer. Furthermore, access to records is restricted depending on the user

and this is ensured by providing “read and write” or “read-only” access to certain individuals.

Any changes to installed devices are additionally tracked through Control Change Records. After

installs have begun, a Control Record of Change is sent to the main contact at the producer

company. The record is to be filled out and send back to Bluesource any time a pneumatic

device is removed, the fuel gas is altered, or maintenance is required. This record serves as a

control against the removed controllers.

Bluesource performs a weekly formalized internal QA/QC procedure for each device to sample

the accuracy and consistency of manually entered data into Lukla and the installation record.

Bluesource’s contractors also have their own QA/QC process for data that is submitted, and the

project management team meets weekly with Bluesource staff.

Project offset calculations are completed via spreadsheets developed by Bluesource.

Information from the installation records are compiled by the Lukla data management program

and are available for excel export for further analysis and use within Bluesource calculation

spreadsheets (calculator). The calculator undergoes detailed senior review within Bluesource

prior to finalization and issuance to the verifier.

Overall, the GHG data management system is organized and mostly complete. There was some

inconsistency in content that was found to be uploaded by installers into the data management

system, where not all records contained pictures of old devices. Nonetheless, Bluesource

demonstrated that the GHG data management system is frequently accessed by their team and

that QA/QC checks are performed regularly. Thus, the GHG data management system appears

to be robust with the experience and consistency from the Bluesource personnel and the

contractors installing the devices.

4.2 Assessment of GHG Data and Information

Provide a summary of the information found during the verification of the GHG data and a

summary of the GHG Assertion that was assessed.

For Facilities: Confirm that the quantification methodologies that were used in the compliance

report are the same as those reported in the BEIA.


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For Offset Projects: Confirm that the quantification methodologies that were used by the project

proponent are the same as those described in the project plan. Indicate which quantification

methodologies were used by the project proponent.

One of the verification procedures carried out by the verification team was a recalculation of

emissions for all emission sources. These recalculations were based on the quantification

methodologies specified in the offset project plan and offset project report, and primary data

obtained from Bluesource. This procedure did not directly test the appropriateness of the

methodologies used by Bluesource or the quality (e.g., accuracy, completeness) of the primary

data. This procedure was a test of the mechanics of the calculations completed by Bluesource

(i.e., assuming that methodologies and input data are appropriate, have the calculations been

completed correctly). The appropriateness of the calculation methodologies and the quality of

the primary data were tested through other procedures as summarized in Table 2.

Emissions were recalculated for the following sources:

- Project Vented Gas (P7) (CO2 and CH4): from low-bleed devices

- Project Fuel Extraction/Processing (P9) (CO2, CH4, and N2O): from natural gas extraction and

processing

- Baseline Vented Gas (B7) (CO2 and CH4)

After completing the recalculations, the verification team compared the recalculated results to

those reported by Bluesource in their final submitted OPR and GHG quantification calculator.

For each source, differences between the recalculated emissions and those calculated by

Bluesource have been indicated in Table 3. The recalculated values were compared to the

reported data in the final submitted OPR. There were no material differences found. The GHG

calculations performed by Bluesource appear to be correct based on the recalculations. The

detailed recalculations are available upon request.

Table 3: Recalculations of Emissions Reduction

Producer Recalculated 2018 CO2e emissions

reductions

Tonnes

Reported 2018 CO2e emissions reduction Tonnes

Difference

Tonnes for 2018

Recalculated 2019 CO2e emissions

reductions

Tonnes

Reported 2019 CO2e emissions

reductions

Tonnes

Difference

Tonnes for 2019

Producer 1 3528 3541 13 3451 3463 13

Producer 2 5746 5767 21 5603 5624 21

Producer 3 902 905 3 881 884 3

Producer 4 2084 2093 8 2024 2034 10

Total 12260 12305 45 11958 12005 46

Total % Error 0.4% for 2018 0.4% for 2019


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4.3 Assessment against Criteria

Provide a description of how eligibility criteria is met or not met.

For Offset Project: Complete Table 1 to indicate if the GHG Assertion conforms to the

Regulation and Standard for Greenhouse Gas Emission Offset Project Developers eligibility

criteria.

For Facilities: Delete Table 1 and Indicate if verification criteria are met or not met and explain.


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Table 4: Offset Criteria Assessment

Offset Eligibility

Criteria

Assessment

Reduction or

sequestration

occurs in Alberta

The Project is located in Alberta, as described above in Section

1.0 of this report.

Result from actions

not required by

Law at the time the

action is taken

The Project originates from voluntary action, i.e. the Project

activities are not required by law. The Project uses approved

ACCO quantification protocol, which indicates that the activity is

undertaken by less than 40% of the industry and is therefore

not considered to be sector common practice.

Result from Actions

taken on or after

January 1, 2002

and occur on or

after January 1,

2002

The Project began operation on July 3, 2018, i.e. after January

1, 2002.

Reduction or

sequestrations is

real and

demonstrable

The Project is creating real reductions that are not a result of

shutdown, cessation of activity or drop in production levels. The

Project reductions are demonstrable.

Quantifiable and

measureable

This Project and its emission reductions are quantifiable and

verifiable as outlined in this report.

Verified by a third

party verifier that

meets the

requirements in

Part 1 for the

Standard for

Verification.

The Project was verified by a qualified third-party verifier -

RWDI Air Inc.


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4.4 Evaluation of the GHG Assertion

The verification assessment is that the GHG Assertion meets the requirements of the Carbon

Competitiveness Incentive Regulation

Provide an assessment of the evidence collected during the verification. Determine if the data

and information available support the GHG assertion. Provide a conclusion on whether the

assertion meets the materiality requirements and the level of assurance agreed to at the

beginning of the verification process.

In forming our opinion for the final verification statement, the verification findings presented

below were evaluated in the context of the evidence collected and generated during the

verification process as a whole. To this end, the following factors were taken into

consideration:

The quantification methodologies, data and supporting documentation used for the offset

project are appropriate and reasonably comprehensive and consistent.

Bluesource personnel were knowledgeable of operations and information management systems

and demonstrated competency and care in their work.

The net error of the quantitative issues identified is approximately (details for each error are

provided in Section 4.5 of this report):

Emission Reductions 2018: overstated by 0.4%, absolute error =0.4%.

Emission Reductions 2019: overstated by 0.4%, absolute error =0.4%.

With these considerations in mind, it is our opinion that the opportunities for improvement, and

other limitations or uncertainties presented below do not preclude a positive overall finding for

this reasonable-level assurance engagement. Furthermore, it is our opinion that the evidence

generated during the verification is appropriate and sufficient to support an overall positive

finding with a reasonable level of assurance. The verification opinion and verification statement

are presented in the following section.

4.5 Summary of Findings

Provide a summary of material and immaterial discrepancies expressed in tonnes and as net

and absolute error in Table 2. Include whether the discrepancy was an understatement or an

overstatement.

Include a more detailed description and log of results in Appendix C the “Issues Log”. This log

will include both resolved and unresolved issues from the verification. Unresolved issues should

be brought forward to Table 2.


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Table 5: Summary of Findings

Number the finding with the year and provide a unique # for each finding.

Note: A detailed description of all material and immaterial findings should be provided in Table 3 of Appendix C.

Provide only a summary statement (1-4 sentences) for each unresolved immaterial finding and each material finding (resolved or

unresolved). If the finding is a resolved material finding, then put the tonnes net and absolute in the summary description column

and indicate n/a in the net and absolute columns. Do not include the tonnes in the total error calculation.

Indicate the type of error (qualitative or quantitative).

Indicate the Source Category (for facilities) or the Source/Sink (for offsets).

Indicate if the finding is an understatement or overstatement.

Provide both net and absolute error in tonnes of CO2 eq and as a % of the assertion.

Provide the total net error and the total absolute error in tonnes of CO2 eq and as a % of the assertion.

Result # Type Summary Description of Finding

Source Category or Source/Sink

Understat

ement/Ov

erstateme

nt

Tonnes

CO2 eq

% net

Tonnes

CO2 eq %

absolute

18/19-03 Qualitative There was some inconsistency in the

content that was uploaded by the

installers into the data management

system for old pneumatic devices. Not all

records contained pictures of the old

devices (e.g. out of 87 records checked,

33 did not have a picture of the old

device). Old devices were verified by

looking at the installation forms (pictures

of the hand-written notes) which

included the model/type of the high-

bleed devices and low-bleed devices and

date of installation for each device

checked.

N/A N/A N/A

18/19-05

Part 2

Quantitative RWDI recalculations resulted in 24,218

tonnes of offset reductions, while the

reported value was 24,310 tonnes for

2018 and 2019 combined. This

corresponds to an overstatement of

offset reductions by 45 tonnes (0.4%)

Over-

statement

for 2018

45 tonnes

(0.4%)

for 2018

45 tonnes

(0.4%) for

2018


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Result # Type Summary Description of Finding

Source Category or Source/Sink

Understat

ement/Ov

erstateme

nt

Tonnes

CO2 eq

% net

Tonnes

CO2 eq %

absolute

for 2018 and overstatement by 46

tonnes (0.4%) for 2019.

These differences are due to the

following reason:

a) RWDI calculated CO2 and CH4

densities to be 1.858 kg/m3 and 0.677

kg/m3, respectively. These correspond to

60°F and 14.7PSI (i.e. the reference STP

used in manufacturers’ specifications for

pneumatic devices). Bluesource used

slightly different values of 1.871 and

0.680 kg/m3 for CO2 and CH4 from Air

Liquide, respectively. The difference

between the published values and RWDI

calculated values are immaterial.

Over-

statement

for 2019

46 tonnes

(0.4%)

for 2019

46 tonnes

(0.4%) for

2019

Total Error 2018 0.4%

Total Error 2019 0.4%


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4.6 Opportunity for Improvement

Provide feedback on the data management system and controls, transparency, completeness of

the inventory, additions to the quantification methodology document or diagrams, etc. Include

positive considerations and observations also.

Identify strengths and weaknesses that may help to improve the report/s for the current

facility, sector, and compliance program. Identify ways in which the project/facility could be

more easily verified.

Below is a list of opportunity for improvements that relate to the qualitative findings listed in

Table 2 of Section 4.5:

There was some inconsistency in the content that was uploaded by the installers into the data

management system for old pneumatic devices. Not all records contained pictures of the old

devices (e.g. out of 87 records checked, 33 did not have a picture of the old device). Old

devices were verified by looking at the installation forms (pictures of the hand-written notes)

which included the model/type of the high-bleed devices and low-bleed devices and date of

installation, for each device checked. An opportunity for improvement exists to present the data

correctly.

5.0 Closure

5.1 Verification Statement

Include the signed verification statement in Appendix D.

Instructions to insert a pdf: 1. Click Insert>Object 2. In the Object dialog box click Create from

File and then click Browse. 3. Find the pdf you want to insert then click Insert. 4.Click OK.

For Offset Projects: fill in the sample Verification Statement provided, sign, scan and paste.

For Facilities: paste a signed version of the Verification Statement from the facility compliance

form. Include the conclusion on the GHG assertion and any qualification or limitations and the

level of assurance.

Provide the verification conclusion in the drop down box below.

The verification conclusion is:

Positive

5.2 Limitation of Liability

Include signed Conflict of Interest Checklist in Appendix E.

For Offset Projects: fill in the sample Conflict of Interest Checklist provided, sign, scan and

paste.

For Facilities: paste the signed Conflict of Interest Checklist from the facility compliance form.

Insert limitation of liability statement and include information in an Appendix F if applicable.

The Conflict of Interest Checklist is included in Appendix E.

This report has been prepared by RWDI AIR Inc. under and in accordance with its Validation

and Verification Program. The contents of this report are strictly confidential and are intended

solely to the client. Access to, or distribution of this report by any other party is unauthorized


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without explicit consent. Any opinions expressed within this report are limited in application to

the Industrial Emissions Management program managed by ACCO through the Climate Change

and Emissions Management Act, and the Carbon Competitiveness Incentive Regulation –

Alberta Regulation 255/2017.

5.3 Confirmations

Document information confirmed, including any discrepancies or inconsistencies, as per the

Confirmations section in the Standard for Greenhouse Gas Verification.

The following was confirmed:

• Bluesource used the CCIR offset project report form.

• Correct entry of administrative fields such as legal location in the offset project report

(OPR).

• The OPR and the offset project plan (OPP) provide quantification methodologies, any

changes from the OPP are documented in the OPR (some methodologies are confidential

but were provided to the verifier).

• Simplified process flow diagrams were provided in the OPR and the OPP.

• Additional request items/forms (e.g. spreadsheets) were complete and reasonable

justification provided where needed.

• Project report information details were provided in the OPP and the OPR.

• Aggregated Project Reporting Spreadsheet was reviewed and compared with Aggregated

Project Planning Spreadsheet. The final APRS (BlueSource Pool Charlie Pneu 5609-

4507_APRS_v6.xlsx) had no discrepancies.

6.0 References

Author. Year. Title. (no hyperlinks)

ACCO. 2018. Standard for Validation, Verification and Audit, Carbon Competitiveness Incentive

Regulation - Version 3.0

AEP. 2015. Carbon Offset Emissions Factors Handbook, No. 1.

ACCO. 2017a. Carbon Competitiveness Incentive Regulation – Alberta Regulation 255/2017.

ACCO. 2017b. Quantification for Greenhouse Gas Emission Reductions from Pneumatic Devices

- Version 2.0

ACCO. 2017c. Standard for Greenhouse Gas Emission Offset project developers – Version 2.0

AER 2018: Directive 60. Release date: December 13, 2018. Effective date: January 1, 2020,

unless otherwise indicated.

ISO 14064-3:2006 Greenhouse Gases Part 3: Specification with guidance for the validation and

verification of greenhouse gas assertions.


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ISO 14065:2013 Greenhouse Gases: Requirements for greenhouse gas validation and

verification bodies for use in accreditation of other forms of recognition.

ISO 14064: 2006 Greenhouse gases Part 2: Specification with guidance at the project level for

quantification, monitoring and reporting of greenhouse gas emission reductions or removal

enhancement.

Government of Alberta. 2017. Climate Change and Emissions Management Act.

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Appendix A: Final Verification Plan and Sampling Plan


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Information to be included in the Verification Plan and Sampling Plan:

Revisions to the sampling plan

Date originally sent to Facility/project

Level of assurance agreed with the facility/project developer

Verification scope

Verification criteria

Amount and type of evidence (qualitative and quantitative) necessary to achieve the agreed

level of assurance

Methodologies for determining representative samples

Sampling Plan and Procedures

Risk Assessment: Risks of potential errors, omissions or misrepresentations that are identified

throughout the verification process including:

- Details of site visit

-offset/facility boundaries

- Methodologies, emissions factors and conversions used

- Comparability with the approved baseline

- Conformance to the program criteria

- Integrity for the responsible party’s data management system and control (organization chart,

GHGH management plan, personnel/consultant training, protocols used, control system

documentation, software/program documentation/certifications)

- Greenhouse gas data and information, including the type of evidence collected, verification

testing and crosschecking, inventory of emission sources

- Discussion of data management, (measurement, fuel sampling, calibration, consistent use

of standard conditions, data storage, procedures to fill missing data; procedures to repair

inconsistent data, adjustment of variables and factors)

- Other relevant information

Verification Plan, Risk Assessment & Sampling Plan

RWDI VVP Document Code Form Issued Version Version Issued

JOB-FRM-011 2014-06-06 2.0 2019-01-17

Date: May 6, 2019

RWDI Reference #: 1902805

Facility: Bluesource Methane Reduction Program Charlie Pool

Revision: 1

Verification SummaryA summary of information relevant to this verification has been provided in Table 1.

Table 1: Verification Summary

Project Name

Project Location

Project Description

NAICS Code

Reporting Program

Quantification

Protocol(s)

Initial GHG Assertion

Manager, Methane Program

RWDI AIR Inc. (RWDI) was retained by Bluesource Methane ULC (Bluesource) to provide third party Greenhouse Gas (GHG) verification

services for Bluesource Methane Reduction Program (BMRP) Charlie Pool, with facilities at various locations across Alberta. The

verification pertains to the facility’s GHG emissions report in accordance with the Carbon Competitiveness Incentive Regulation (CCIR) for

the six month period, October 1, 2018 to March 31, 2019. This verification plan serves to document the scope and breadth of

verification activities being performed.

General Information

Bluesource Methane Reduction Program Charlie Pool

Aggregated offset project - facilities are found at various locations throughout southern Alberta. Total number

of subprojects consists of 984 low-bleed pneumatic devices that were converted from the high-bleed pneumatic

devices.

Office address:

Bluesource

1605-840 7 Avenue, SW

Calgary, Alberta

T2P 3G2

Project locations:

see below, Geographical Boundary section

Primary Contact

Kelsey Locke

403-262-3026 ext. 228

[email protected]

1605-840 7 Avenue, SW

Calgary, Alberta

T2P 3G2

The BMRP Charlie Pool is an aggregated offset project involving the conversion of existing high-bleed

pneumatic devices used in their oil and gas process operations, to an equivalent low-bleed venting device.

n/a

Carbon Competitiveness Incentive Regulation (CCIR) - Alberta Regulation 255/2017

Alberta Emission Offset Program - Quantification for Greenhouse Gas Emission Reductions from Pneumatic

Devices, Version 2.0, January 2017.

24,310 tonnes of CO2e







Reporting Period

Organizational

Boundary

Geographical

Boundary

Operational Boundary

Emissions Scope

Protocol Reference

Quantification for

Greenhouse Gas

Emission Reductions

from Pneumatic

Devices

Quantification for

Greenhouse Gas

Emission Reductions

from Pneumatic

Devices

Quantification for

Greenhouse Gas

Emission Reductions

from Pneumatic

Devices

Quantification for

Greenhouse Gas

Emission Reductions

from Pneumatic

Devices

Quantification for

Greenhouse Gas

Emission Reductions

from Pneumatic

Devices

This source identification was considered in the verification

assessment, but excluded from this project.

Bluesource Methane Reduction Program Charlie Pool comprises of various natural gas facilities from four

producers located across southern Alberta.

The physical and operational project boundaries includes the pneumatic device itself, as well as the fuel gas

supplied to the device. The pneumatic device may be located on a single wellsite, battery, satellite, within a

compressor building or dehydration building etc. The legal land location of each device is tracked within the

Project inventory and the Aggregated Project Planning sheet.

All subprojects are located within Alberta’s provincial boundary.

Direct emissions from regulated sources within the organization and geographical boundaries.

CO2, CH4, N2O included in assertion; however, we also consider any potential emissions of SF6, HFCs, and PFCs

during our assessment for completeness.

Source of Greenhouse Gas Description

B7 - Vented Gas

Pneumatic control devices in the oil and gas industry are

commonly used to control pressure flow, levels, and/or

temperature. Natural gas or fuel gas that is consumed by

these devices is vented to the atmosphere.

P7 - Vented Gas

The low or non-venting pneumatic devices in the project

will reduce emissions as part of normal operations

compared to high-venting pneumatic devices. This source

will be zero when pneumatic devices are converted to

instrument air or solar-electric devices. The quantity of gas

vented in the project may have an impact on the emissions

reduction quantification for controller conversions

projects.

P9 - Fuel Extraction and Processing

Each of the fuels used throughout the project will need to

be sourced and processed. This will allow for the

calculation of greenhouse gas emissions from the various

processes involved in the production, refinement, and

storage of the fuels. The total volumes of fuel for each of

the sources / sinks in this project are considered in this

source / sink. Types and quantities of fuels used would

need to be tracked.

P6 - Air CompressionThis source identification was considered in the verification


P8 - Process Control Electricity

Emissions Sources

Inventory Scope

October 1, 2018 to March 31, 2019 (6-month period)

Bluesource Methane Reduction Program Charlie Pool

Quantification for

Greenhouse Gas

Emission Reductions

from Pneumatic

Devices

Quantification for

Greenhouse Gas

Emission Reductions

from Pneumatic

Devices

Verification Objective

Level of Assurance

Verification Scope

Materiality Threshold

Achieving the overall objective of this verification involves executing verification procedures designed to

generate evidence that is sufficient and appropriate to provide a basis for our opinion with a reasonable level

of assurance.

B8 - Uncaptured Fuel GasThis source identification was considered in the verification


P17 - Vent Gas CaptureThis source identification was considered in the verification


· ISO 14065:2013 Greenhouse Gases: Requirements for greenhouse gas validation and verification bodies

for use in accreditation of other forms of recognition*.

* Should any discrepancies exist between ISO and regulatory criteria, the regulatory criteria shall take

precedence.

In accordance with ACCO criteria, the threshold used to determine the materiality of combined misstatements

on the overall assertion of 5% of total emissions reductions.

· Standard for Validation, Verification and Audit, Carbon Competitiveness Incentive Regulation

(version 2.0) – June 2018

The verification assesses the operations and equipment within the inventory boundary as well as calculations

and supporting information used to quantify the greenhouse gas emissions presented in the Emissions

Reduction Report for the period October 1, 2018 – March 31, 2019.

Verification Standards

The verification will be conducted in accordance with:

Program Criteria

Generating sufficient and appropriate evidence to support our opinion will involve executing verification

procedures that assess the assertion against the following criteria:

· Standard for Greenhouse Gas Emission Offset Project Developers, Version 2.0, July 2018;

· ISO 14064 Greenhouse gases – Part 2: Specification with guidance at the project level for quantification,

monitoring and reporting of greenhouse gas emission reductions or removal enhancement, ISO, April 2006 (ISO

14064-2)*.

*Should any discrepancies exist between ISO and regulatory criteria, the regulatory criteria shall take

precedence.

· Carbon Competitiveness Incentive Program (CCIR) - Alberta Regulation 255/2017;

· Alberta Emission Offset Program - Quantification Protocol for Greenhouse Gas Emission Reductions from

Pneumatic Devices, Version 2.0, January 2017;

· Specified Gas Emitters Regulation - Carbon Offset Emission Factors Handbook, Version 1.0, March 2015;

· Climate Change and Emissions Management Act.

· Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance – Version 2.0;

· ISO 14064-3:2006 Greenhouse Gases Part 3: Specification with guidance for the validation and

verification of greenhouse gas assertions*; and,

Provide an opinion with a reasonable level of assurance to the Alberta Climate Change Office (ACCO) as to

whether the October 1, 2018 to March 31, 2019 (6-month period) Methane Emissions Reduction Report for the

Bluesource Methane Reduction Program Charlie Pool is free from material misstatement, and is presented

fairly in accordance with the program criteria.

Verification Fundamentals

Verification TeamThe team for this assurance engagement includes:

Project Manager: Candace Bell, M.Sc., RWDI AIR Inc.

Lead Verifier: Alena Saprykina, M.Sc., RWDI AIR Inc.

Signing Authority: Annik White, M.A.Sc., P.Eng., RWDI AIR Inc.

Verifier: Thana Boonlert, B.Eng, EIT, RWDI AIR Inc.

Peer reviewer: Russ Lewis, M.Eng., P.Eng., RWDI AIR Inc.

Verification ScheduleTo date, RWDI has performed the following verification activities:

· Internal impartiality assessment.

· Initial review of emissions report and supporting documents provided to date.

· Kickoff meeting.

· Risk assessment based on the review of information systems and controls

· Sampling plan to verify sources, systems or facilities deemed to have elevated risk of material misstatement

(included herein).

The following schedule is proposed for the remaining verification milestones:

· Conduct site visit

· Draft issues log by

· Draft report submitted by

· Final report and verification statement by

May 9, 2019; May 13 - May 14 (tentative) May 30, 2019

June 7, 2019

June 14, 2019

Risk Assessment

Assertion-level Risk Assessment

Verification Risk = Inherent Risk x Control Risk x Detection Risk

A summary of the assertion-level risk assessment, including details of inherent and control risks is provided in Table 2.

In the context of greenhouse gas assurance, risk assessments involve assessing the risk that the emissions report presented to the

intended user (i.e., the assertion) contains material misstatements and/or has not been prepared in accordance with program criteria.

RWDI uses a two-tiered risk assessment process: assertion-level risk assessment and source-level risk assessment.

The first tier of RWDI’s risk assessment process is an assertion-level risk assessment, which establishes the overall level of risk that RWDI

is willing to accept on this engagement. This overall level of risk is called the Verification Risk and is related to Inherent Risk, Control

Risk, and Detection Risk according to the following:

The levels of Inherent and Control Risk established after our preliminary review of the responsible party’s GHG information

management system and controls inform the level of Detection Risk that we must strive to obtain through our verification strategy and

sampling plan in order to obtain the selected level of Verification Risk.

Table 2: Summary of Assertion-level Risk Assessment

Risk Category Risk Level

Verification Risk Low

Detection Risk Low

Control Risk Medium

• The GHG information management system is mostly complete with most

supporting records readily available. The GHG information management system has

been used in the past year/reporting period with minimal changes. (medium)

• The organization's corporate structure is not common. Bluesource doesn't own

the facilities, but owns the low-bleed pneumatic devices and emissions reductions

credits to a certain extent. (medium)

Data trails between the assertion and the primary data may be long, but they are well-

documented and traceable. Some QA/QC procedures were described and actual

supporting records were provided. (medium)

Based on the above inherent and control risks, detection risk should be set at Low in

order to achieve the target verification risk of low.

Inherent Risk Medium

• There is a low variety of source types that are commonly encountered in this

project that mainly comprises of pneumatic controller devices. GHG inventory

reductions include venting from High to Low or No Bleed Controller Conversions

(Pressure Controllers, Pressure Transducers, Liquid Level Controllers). (low)

• Reporter uses default methodologies and/or emission factors consistent with

program-specific guidance accepted by ACCO: "Quantification Protocol for

Greenhouse Gas Emission Reductions from Pneumatic Devices" and the "Carbon

Offset Emission Factors Handbook". Methodologies are common within the sector.

However, the methodologies require significant level of data pre-processing, the

data trail appear to be transparent and traceable. There is some manual entry within

the GHG calculator spreadsheet. (medium)

• The inventory boundary includes 984 subprojects distributed within 4 producers.

Operations have a small level of integration with other facilities. There is a large

volume of pneumatic device conversions (emissions reductions) located at several

different locations throughout the subprojects across southern Alberta. (high)

• Operations are almost never subject to unplanned shutdowns. The temporal

scope is standard for the program/regulation. (low)

• Responsible staff have experience in greenhouse gas reporting. Bluesource

analysts are familiar with the operations and equipment at the project's sites and are

responsible for gathering primary data and calculating the project's emissions

reductions. (medium)

This is the level of risk that RWDI is willing to accept for this particular engagement.

• Inventory team roles and responsibilities are mostly defined. There are a few

individuals involved in collecting, processing, and checking data and/or calculations.

Ownership of and accountability for the inventorying process rests with a small

group of key individuals. Bluesource is responsible for the preparation and

submission of the emissions report, and calculations of the GHG emissions

reduction. A number of field technicians are responsible for recording and uploading

data collection on-site. There is evidence suggesting that new staff have received

training on the process and have access to experienced resources. (medium)

• Staff integral to GHG data gathering and reporting have not been working with

Bluesource for an extended period of time. The lead quantifier has been at

Bluesource for two years. (medium)

Discussion

Source-level Risk Assessment

risk = probability of misstatement x impact of misstatement

Tolerable Error

Tolerable error is the misstatement allowed in a particular category (for each baseline and project source) that would be acceptable to

the verifier without needing additional assessment. The conservative value of 0.1% was selected for the overall tolerance percent for all

baseline and project sources. The detailed materiality planning is provided in Table 6.

Risk is a calculated value ranging from 1 to 15, probability is a value from 1 to 3 assigned based on the inherent and control risks

affecting the source, and impact is a value from 1 to 5 assigned based on the source’s contribution to total emissions.

The inherent and control risks affecting each source are determined based on a review of the data management systems and controls

related to each source. A summary of this review is provided in Table 3. The risk calculation for each source is documented in Table 4.

Detailed Sampling Plan is provided in Table 5.

The second tier of RWDI’s risk assessment process is a source-level risk assessment. This step involves assigning a level of risk to each

emissions source that has been included in the inventory in order to inform the design of an effective sampling plan and prioritize

verification efforts. Assignment of risk levels is based on the following risk calculation:

Table 3: Qualitative Notes for Data Management Systems and Controls

Emissions Source ParametersData Acquisition Equipment, Sampling Frequency, Analytical

MethodData Processing and Tracking Emissions Calculations Management Policies and Practices

Operating hours of pneumatic devices Operating hours are tracked per site (surface location) and are

taken from Petrinex (production hours) or entered from SCADA or

entered manually by the operator (site equipment runtime).

Operating hours are summarized monthly in the "Bluesource

Methane Reduction Program - Data Request" sheets for each

producer.

Site equipment runtime, pressurized or energized hours is the

most accurate representation of pneumatic hours because the

devices will vent as long as they are energized and connected to a

natural gas supply, regardless of production hours.

If pressurized hours are not available, production hours may be

supplied per surface LSD. If there are multiple downhole wells

associated with the surface location, UWI & hours for all wells are

listed.

Where multiple meters exist per LSD, or multiple sources of

information are available (e.g. Petrinex and SCADA) the source

displaying the great number of hours is used.

The metered operating hours are collected in SCADA and Petrinex

by producers and are provided to Bluesource. Bluesource analysts

manages and organizes the hours in a spreadsheet (for example

"Scada Hours Master", "Petrinex Summary Hours master", and

"Producer 41 Hours October").

Where SCADA or Petrinex hours are not available, specific

equipment run hours are manually entered.

The operating hours from these spreadsheets are then copied into

the producer's main calculator (for example "BMRP_Charlie

RP2_Producer 4_v2_20190426"). The pneumatic devices are

assigned operating hours depending on their site location and

associated equipment.

Vent Rate of high bleed baseline devices Vent rates of high bleed pneumatic devices are gathered as per

manufacturer specifications and Table C2 of "Quantification

Protocol for Greenhouse Gas Emission Reductions from Pneumatic

Devices". High-bleed device records, including make and model,

are entered and stored in the online cloud-based data

management system called Lukla. Each record has a unique

specific ID assigned to a new low bleed device.

Vent rates of high bleed pneumatic devices are compiled in tables

found in the main calculations spreadsheets under the tab

"REF_Vent Rates". Device inventory are tracked by field technicians

and Bluesource analysts using the cloud-based data management

system, Lukla.

CO2 and CH4 composition Annual monitoring and measurement of gas compositions are

based on third party laboratory (Maxxam) analyses of gas samples

where applicable. Where gas analysis is not available, default gas

compositions are used, as approved by AEP in the letter titled

"Request to Deviate from the Quantification Protocol for

Greenhouse Gas Emission Reduction from Pneumatic Devices".

Gas compositions are manually entered from the laboratory

analysis sheets and into summary spreadsheets. The frequency of

analyses will be confirmed.

Density of CO2 and CH4 The density of CO2 (1.8714 kg/m3) and CH4 (0.6797 kg/m3) is sited

from the Air Liquid Gas Encyclopedia at standard temperature and

pressure (STP), 1.013 bar and 15 oC.

n/a

B7 - Vented Gas

Vent Gas from Pressure Controllers,

Transducers and Level Controllers

Emissions calculations include CO2 and CH4; total CO2e .

The baseline vented gas volumes are calculated by multiplying

the operating hours with the specific (high bleed) device vent

rate.

CO2 and CH4 amounts are calculated by multiplying the gas

vented gas volume by gas content, and gas density.

The CO2e is calculated by multiplying the gas volumes with their

corresponding GWPs and summing the gases.

These emissions were determined using the calculation

equations as found in the "Quantification Protocol for

Greenhouse Gas Emission Reductions from Pneumatic Devices",

section 4.1, Table 6.

Bluesource has a thorough and well documented QA/QC

procedures document to ensure the integrity of the data. This

document is called "BMRP Data QAQC Procedure 2018-10-01".

Several measures are put in place to ensure consistent and

accurate primary data is recorded into their cloud-based data

management system Lukla.

New and old devices are tracked using unique ID and following

written procedure (BS Install Template _ with Instructions.pdf) -

this work is performed by the filed coordinators.

Installation data is checked monthly against the installation record

upon receipt of work ticket from the

field contractor following Installation Record Quality Procedure by

Lukla (160055-QMS-(D)QA-001(0~C0)_DRAKKEN QAQC policy.pdf)

All records (including photos of old and new devices) are saved in

Lukla.

Bluesoure checks each record in Lukla.

Calculations are performed by a qualified emission analysts and

independent peer review is completed by a senior consultant to

screen for any errors. During the QA/QC process, input data and

calculation results are reviewed to ensure that any outliers are

investigated and justified.

Emissions Source ParametersData Acquisition Equipment, Sampling Frequency, Analytical

MethodData Processing and Tracking Emissions Calculations Management Policies and Practices

Operating hours of pneumatic devices Same as B7 but in relation to low-bleed devices. Same as B7 but in relation to low-bleed devices.

Vent Rate of low bleed project devices Same as B7 but in relation to low-bleed devices. Same as B7 but in relation to low-bleed devices.

CO2 and CH4 composition Same as B7 Same as B7

Density of CO2 and CH4 Same as B7 n/a

Volume of fuel in the project (equivalent to

volume of vented gas in the project)

These volumes are equivalent to the low-bleed vented project

volumes calculated in the above section P7.

These volumes are calculated in the producers' main calculation

spreadsheets as described in details in the above section.

CO2, CH4, N2O emission factors Emission factors for fuel extraction and processing are listed in

Table 4 of the SGER Carbon Offset Emission Factors Handbook.

n/a

Notes:

[1] Actual producer name was replaced with the name Producer 2 (for confidentiality)

Fuel Extraction and Processing

Emissions for Vent Gas from

Pressure Controllers, Transducers

and Level Controllers

Emissions from fuel extraction and processing are calculated by

multiplying the volume of fuel in the project (equivalent to

volume of vented gas from the low-bleed devices) by the

emission factor for fuel extraction and processing, and the

corresponding GWPs.





Same as B7 - Vented Gas category above.

P7- Vented Gas




Emissions calculations include CO2 and CH4; total CO2e

Emissions reductions are calculated by finding the baseline

vented gas subtracted by the project vented gas.

The project vented gas amounts are calculated in the same

manner as the baseline vented gas, however, using the new (low

bleed) device's vent rate.





Same as B7

Table 4: Risk Calculations

Rank Emissions SourceFuel/Input

Type

Fuel/Input

Amount [1]

Methane and CO2

Content [1]

Total Emissions [1]

(tonnes CO2e)

% of Emissions [2]

Inherent Risks Control Risks Risk Calculation



Producer 1

Natural gas



Producer 2

Natural gas



Producer 3

Natural gas



Producer 4

Natural gas



Producer 1

Natural gas



Producer 2

Natural gas



Producer 3

Natural gas



Producer 4

Natural gas


Emissions for Vent Gas from Pressure

Controllers, Transducers and Level

Controllers Producer 1

Natural gas





Natural gas





Natural gas





Natural gas

Notes:

[1] As obtained from the producers' main calculator spreadsheet.

[2] Excluding carbon dioxide generated from the combustion of biomass.

1 Medium

-Same as B7

Medium

-Same as B7

Probability = Medium x Medium = 2

Impact = 98.55% = 5

Risk = Probability x Impact = 10 out of 15

High Risk.


Impact = 100% = 5


High Risk.

P7- Vented Gas

1

98.55%

To be updated once the calculator is received.

To be updated once the calculator is received.

B7 - Vented Gas

Medium

-Emissions source is related to equipment, operations or processes that do not

require specialized technical knowledge to understand. (low)

-Emissions calculations depend on a medium number of data input parameters.

There is some manual entry throughout the GHG calculation spreadsheet.

(medium-high)

-Emissions are calculated using default methodologies and/or emission factors

consistent with program-specific protocols. (medium).

- Emissions calculations require a large level of data pre-processing, but the data

trail is reasonably transparent. (medium to high)

-Data systems are primarily electronic and automated. There is some manual

data entry. Data is centrally organized, easy to search, and routinely monitored

for accuracy. (medium)

-Staff responsible for acquisition/processing of primary data and

delivery/communication of primary data to staff responsible for GHG calculations

have experience in their operational role as well as a moderate understanding of

greenhouse gas reporting. (medium)

Medium

-Emissions calculations rely on data from information management systems

that are well-developed and have been in use in a previous reporting cycle.

The calculations are transparent, but there are some manual entries found

within the GHG calculation spreadsheet. (medium).

- The Bluesource OPP ("Offset Project Plan Form") does describe the

methodologies used to calculate the emissions. The OPP describes the details

in how most of the primary data is collected, measured and processed. A

separate document describes the online cloud-based data management

system and controls. (medium)

-Data trails between the assertion and the primary data are reasonably short

and somewhat traceable. However, there are some manual entry within the

main GHG calculation spreadsheet. (medium)

-Primary data are unlikely to be lost or corrupted due to the implementation

of robust data security measures. (low)

100.00%


Medium

Same as B7.

Medium

Same as B7.


Impact = 1.47% = 2


Medium Risk.

2 1.47%

Table 5: Sampling Plan & Verification Procedures

Emissions Source or Scope Item Risk ID Verification Procedures

1.1 During the office site visit, ask the Bluesource analysts how all of the high-

bleed pneumatic devices are accounted for and tracked. Ask to see a map

of all of the producers and sites within the Charlie Pool project. Ask to see

the management system (Lukla) and how it works.

1.2 Select the representative sample of sites to visit for all 4 producers. During

the site visit check any available records for old devices ( e.g. from the site

log book, if available). Record old devices make and model and later

compare with the data uploaded in Lukla.

1.3 Compare the summarized spreadsheet list of high-bleed pneumatic

devices with an output report of all high-bleed devices from their data

management system, Lukla.

1.4 Check how hours of operations are tracked (manually recorded hours vs

Scada vs petrinex). If multiple sources of information is available, check

which method is the preferred method. Verify that the appropriate

methods are used.

1.5 Select representative sample of sites and performed detailed checks on

hours of operation (including verifying location and making sure that the

correct number of hours is recorded for the sites).

Verify that these devices used the appropriate site location and operation

hours. Where multiple meters are present at a given LSD, confirm that the

meter containing the greater operating hours were used.

1.6 During the site visits interview the field operators to check how hours are

recorded. Enquire about any known site shutdowns and how these affect

the estimated hours for pneumatic devices.

1.7 Request raw data (Scada records, manually recorded hours or petrinex) for

hours of operations and compare with the data used in calculations.

1.8 Enquire about any QA/QC process involved in checking operating hours.

1.9 Check that the calculated hours account for the "Date Subproject begins

generating offsets" using APRS Spreadsheet.

1.10 Recalculate run-time hours using raw data for the representative sample of

sites and compare with those used by Bluesource.

1.11 Verify that the vent rates used in the calculation spreadsheets for high-

bleed devices references the equipment-specific values found in the

appropriate protocol or manufacturer's spec sheets.

1.12 Select representative sample of data for the detailed check (making sure

that each unique device is included into the analysis). Check uploaded

pictures by the field technicians into Lukla, and compare the pictures with

the reported make and models. Make sure that the correct vent rate is

used for each selected device.

1.13 Perform recalculations for vent rates for the representative sample of the

high-bleed devices.

1.14 Verify that any gas analysis done by 3rd party laboratories were applied to

the appropriate sites and devices.

1.15 Where gas analysis is not available, verify that the default gas compositions

used, are in accordance to the approved ACCO values found in the letter

titled "Request to Deviate from the Quantification Protocol for Greenhouse

Gas Emission Reduction from Pneumatic Devices".

Are the CO2 and CH4 densities referenced correctly? 1.16 Verify that the density values used are referenced from an appropriate

source and applied correctly using the right STP conditions.

1.17 Cross-check calculation methodology for the baseline emissions against

the description contained in the OPP/OPR – are important assumptions

and uncertainties disclosed? Check if the OPP/OPR methodology uses

appropriate calculations and check calculation methodology with CCIR

Quantification documents.

1.18 Recalculate the final GHG baseline emissions. Review the emissions

reported in the main calculation spreadsheet and verify the emissions are

correctly reported. Verify that emissions are within tolerable error.

2.1 During the office site visit, ask the Bluesource analysts how all of the low-

bleed pneumatic devices are accounted for and tracked. Ask to see a map

of all of the producers and sites within the Charlie Pool project. Ask to see

the management system and how it works.

2.2 Physically locate a sufficient number of relevant low-bleed pneumatic

devices at each producer and take photos where acceptable (if not possible

record take note of device identifications, device type and characteristics,

and locations). Compare the obtained data with the records in Lukla.

Verify and note any other emission sources that may not have been

captured as part of the emissions inventory.

B7 - Vented Gas



Are the vent rates of the various high-bleed devices

referenced and used correctly?

Are the baseline emissions calculations performed

correctly?

Has the total number of high-bleed pneumatic

devices (pressure controllers, transducers, and level

controllers) been accounted for?

Have all the operating hours for high-bleed devices

been estimated correctly?

Are the CO2 and CH4 gas compositions used

correctly?

P7- Vented Gas



Has the total number of low-bleed pressure

controllers, transducers, and level controllers been

accounted for?

Emissions Source or Scope Item Risk ID Verification Procedures

Check APRS spreadsheets and make sure that the records match

calculation spreadsheets.

Have all the operating hours for low-bleed devices

been estimated correctly?

2.3 This is covered under B7 source.

2.4 Verify that the vent rates used in the calculation spreadsheets for low-bleed

devices references the equipment-specific values found in the appropriate

protocol or manufacturer's spec sheets.

2.5 Select representative sample of data for the detailed check (making sure

that each unique device is included into the analysis). Check uploaded

pictures by the field technicians into Lukla with those obtained during the

site visit, verify that the correct make and models were used in the

calculations.

2.6 Perform recalculations for vent rates for the representative sample of the

low-bleed devices.

Are the CO2 and CH4 gas compositions used

correctly?


Are the CO2 and CH4 densities referenced correctly? 2.8 This is covered under B7 source.

2.9 Cross-check the project calculation methodology for the emissions against

the description contained in the OPP/OPR – are important assumptions

and uncertainties disclosed? Check if the OPP/OPR methodology uses

appropriate calculations and check calculation methodology with CCIR

Quantification documents.

2.10 Recalculate the final GHG project emissions. Review emissions reported in

the main calculation spreadsheet and verify the emissions are correctly

reported. Verify that emissions are within tolerable error.

Is the volume of fuel used in the project referenced

appropriately?


Are the correct emission factors used for CO2, CH4,

N2O?

3.2 Verify that the emission factors were correctly referenced from the

appropriate protocol.

3.3 Cross-check calculation methodology for project fuel extraction and

processing emissions against the description contained in the OPP/OPR –

are important assumptions and uncertainties disclosed. Check if the

OPP/OPR methodology uses appropriate calculations and check

calculation methodology with CCIR Quantification documents.

3.4 Recalculate the final GHG emissions from the projects' fuel extraction and

processing. Review emissions reported in the main calculation spreadsheet

and verify the emissions are correctly reported. Verify that emissions are

within tolerable error.

Emission Reduction Have the emission reductions been calculated

correctly?

4.1 Recalculate the emissions reduction based on the verified baseline and

project level emissions identified in the verification procedures above.

Aggregated Project Reporting Sheet Was the information provided in APRS correct? 5.1 Check that information in APRS matches calculation spreadsheet. Check for

any errors in APRS spreadsheet.

Baseline and Project sources and sinks Are the baseline and project sources included

correctly based on the preliminary data provided?

5.2 Do a high level check on the baseline and project sources to determine if

there are any sources missing and compare these to previous reporting's

source inventory. Assess completeness of emissions inventory during site

visit and assess rationales provided for any sources that have been

excluded.

Is offset project information consistent across offset

project documentation?

5.3 Review most updated OPR for consistency with OPP and emissions

calculator.

5.4 Confirm offset project location per site visit.

5.5 Obtain AER license for plant operations (if applicable).

Do OPR and OPP exist? 5.6 Obtain OPP and OPR.

Are offset project contact, report dates, emission

reduction numbers reported correctly?

5.7 Verify the OPR and OPP information for consistency and accuracy.

Are process flow diagrams complete and accurate? 5.8 Obtain process flow diagrams and review for completeness and

consistency with emissions calculations.

5.9 Verify that the specified gas emissions reduction occur in Alberta

5.10 Verify and confirm that the emissions reduction are from an action that is

not otherwise required by law at the time it was initiated.

5.11 Verify that the emissions reduction are real and demonstrable

5.12 Verify that reduction result from an action taken on or after January 1,

2002, and occur on or after January 1, 2002

5.13 Verify that the emissions reduction are quantifiable and measurable.


Other Scope Items

Fuel Extraction and Processing Emissions for



Are the emissions calculations performed correctly?



Are the vent rates of the various low-bleed devices

referenced and used correctly?

Are the project emission calculations performed

correctly?

Emissions Offset Credits

Offset Project Confirmations

Have offset project location and any applicable

approvals information been provided?

Program Criteria Verify that the requirements of Part 3, Section 16 of

the Alberta Regulation 255/2017 have been met

Has the total number of low-bleed pressure

controllers, transducers, and level controllers been

accounted for?

of 45

Appendix B: Statement of Qualifications

Report Type Reporting Period

from 1-Oct-18

to 31-Mar-19

I ,

Per:

Date

Last Name

E-mail Address Phone Number

519-823-1311 ext 3036

☐ Same as third party verifier??

Last Name


403-232-6771 ext 6273

Last Name


403-232-6771 ext 6241

Completed the Greenhouse Gas Verification ISO 14064-3 training, October 3-4, 2018.

First Name

Russ Lewis

[email protected]

Training Received Under ISO 14064 Part 3

Peer Reviewer

P.Eng. [email protected]

Lead Verifier

First Name

Alena Saprykina

Professional Designation

MSc. [email protected]


Completed the Greenhouse Gas Verification ISO 14064 training, January 21-23, 2014


Third-party verifiers described in Section 29 of the Carbon Competitiveness Incentive Regulation.

Verifying Company Name

RWDI Air Inc.

Signature of Third Party Verifier

13-Jun-19


Completed the Greenhouse Gas Verification ISO 14064-3 training, October 3-4, 2018.

First Name

Annik White

Reporting Company Legal Name

Blue Source Methane ULC Offset Report


Annik White (Third Party Verifier), meet or exceed the qualifications of third party

Bluesource Methane Reduction Program - Pool

Charlie5609-4507

Statement of Qualifications

Offset Report

Project Name Offset Project ID







of 45

Appendix C: Findings and Issues

of 45

Table 6: Detailed Findings and Issues Log

Number the issue with the year and provide a unique # for the issue. If the issue resolved during the verification, indicate that in

the resolution column. If the issue is not resolved during the verification, or if the issue was material (whether resolved or not)

record it as a finding in Table 2 and provide a cross reference to the finding # in the resolution column.

Describe the issues investigated. State the verification criteria that are not met. Provide a description of how it is not met and

provide the evidence. Indicate the Source Category (for facilities) or the Source/Sink (for offsets).

Indicate if the finding is an understatement or overstatement.

Summarize information between verifier and client.

Provide a conclusion including % discrepancy, if applicable.

Item

(YR-

##)

Description of the Issues

Investigated During the

Verification

Summary of information

exchanged between

verifier and client

Resolution Conclusion

(including %

discrepancy if

applicable)

18/19-

01

Actual Device ID and database

record for device PCIRL202 were

incorrectly labelled PCIRL462.

Bluesource confirmed that the

ID number is replicated and

incorrectly placed on what

should have been PCIRL202.

They confirmed that the

device itself or reductions are

not double counted.

It was

confirmed

during the

site visit that

the actual

serial

number is

correct, and

only the ID

was wrong.

There is no

discrepancy

related to this

issue in the

final assertion.

18/19-

02

For Producer 1, the following 5

devices have zero supply

pressure in the calculations:

TXIRL041, TXIRL863,

TXIRL1045, TXIRL1118 and

TXIRL638. However, the sites

were running based on the

information from

SCADA/Petrinex. This might

result in a potential

underestimation of offset

reductions.

Bluesource indicated that

these controllers were put on

different parts of the site

which are out of service (e.g.

booster station) but the hours

pulled from Petrinex refer to

the site as a whole.

Addressed

before the

final

submission.

N/A

of 45

Item

(YR-

##)



Verification


exchanged between

verifier and client


(including %

discrepancy if

applicable)

18/19-

03

There was some inconsistency in

the content that was uploaded

by the installers into the data

management system for old

pneumatic devices. Not all

records contained pictures of the

old devices (e.g. out of 87

records checked, 33 did not

have a picture of the old

device). Old devices were

verified by looking at the

installation forms (pictures of

the hand-written notes) which

included the model/type of the

high-bleed devices and low-

bleed devices and date of

installation, for each device

checked.

No information was

exchanged prior to adding this

issue to the issues log.

Not

addressed.

An opportunity

for

improvement

exists, to have

consistent

record keeping.

18/19-

04

For Producer 4, minor

discrepancies were identified in

run-time hours at two sites,

between Petrinex data and data

used in the calculations.

For site 1: Petrinex hours for

November 2018 and December

2018 were 672 and 588,

respectively. Hours used in

calculations for November 2018

and December 2018 were 720

and 744, respectively.

For site 2: March 2019 Petrinex

value was 744 hours, while

calculations showed zero.

Bluesource corrected the

errors.

Addressed

before the

final

submission.

N/A

of 45

Item

(YR-

##)



Verification


exchanged between

verifier and client


(including %

discrepancy if

applicable)

18/19-

05

Part 1

Minor discrepancies in

calculations were identified:

a). For Producer 4, for the

number of sites with multiple

gas compositions, Bluesource

used a less conservative

composition (with the highest

CH4%).

b). For Producer 1, for three

locations, Bluesource used

default CO2 and CH4

compositions, while site specific

values were available.

Bluesource corrected items a).

and b).

Addressed

before the

final

submission.

N/A

18/19-

05

Part 2

RWDI recalculations resulted in

24,218 tonnes of offset

reductions, while the reported

value was 24,310 tones for

2018 and 2019 combined. This

corresponds to an

overstatement of offset

reductions by 45 tonnes (0.4%)

for 2018 and overstatement by

46 tonnes (0.4%) for 2019.

These differences are due to the

following reason:

c). RWDI calculated CO2 and

CH4 densities to be 1.858 kg/m3

and 0.677 kg/m3, respectively.

These correspond to 60°F and

This was communicated to

Bluesource in the draft issues

log. Bluesource indicated that

they are using published

densities from Air Liquide in

order to account for possible

non-idealities in the gases and

calculation of densities. The

Pneumatics Protocol does not

state which calculation

method or published value

should be used for gas

densities, only that it should

be at STP. The difference

between the published values

and RWDI calculated values

are immaterial.

Not

addressed.

Overstatement

45 tonnes

(0.4%) for

2018

Overstatement

46 tonnes

(0.4%) for

2019

of 45

Item

(YR-

##)



Verification


exchanged between

verifier and client


(including %

discrepancy if

applicable)

14.7PSI i.e. the reference STP

used in manufacturers’

specifications for pneumatic

devices. Bluesource used slightly

different values of 1.871 and

0.680 kg/m3 for CO2 and CH4,

respectively.

18/19-

06

For Producer 1, 2018 and 2019

Greenhouse Gas reductions by

gas species summaries were

switched in the calculation

spreadsheet under the tab

<Offset Summary> (i.e. 2019

data is presented for 2018 and

2018 data is presented for

2019). This doesn’t affect the

overall assertion.


Bluesource in the draft issues

log.

Addressed

before the

final

submission.

N/A

18/19-

07

Last year’s verification period

from July 3, 2018 to September

30, 2018 had 7,960 tonnes

CO2e reductions.

This verification period from

October 1, 2018 to March 31,

2019 has 24,310 tonnes CO2e

reductions, which is over 3

times higher than for the

previous period. It would

typically be expected that the

value would be 2 times higher

since the reporting period is

twice as long; the results are

due to the runtime hours, which

went up significantly for the


Bluesource and explanation

was received. The reason the

hours are significantly less is

due to the installation dates of

the devices aligning with the

reporting period. Since

devices were installed during

the third quarter from July to

September, they were not

able to report full operating

hours. For instance, if the

device was installed in

August, it would have 0 hours

in July, limited hours in

August, and potentially full

hours in September.

Addressed

before the

final

submission.

N/A

of 45

Item

(YR-

##)



Verification


exchanged between

verifier and client


(including %

discrepancy if

applicable)

current reporting period,

compared to the previous

reporting period. It is unclear

why run-time hours went up

significantly.

Comparatively, that device

would have the potential to

report full hours from October

to March depending on the

uptime of the well, as

observed in the current

reporting period.

18/19-

08

The OPR states “Devices are

inspected at least once annually

to ensure the pneumatics are

not damaged and excessively

venting, and maintenance

records are kept, as required by

Section 1.2 (4), less a discount

factor is to be applied to the

emission claim. The inspection

process is further discussed in

Appendix A (Confidential) of this

report”. RWDI enquired about

the records or examples of

maintenance records.

Bluesource indicated that the

devices are inspected annually

every year following the first

calendar year they were

installed (i.e., devices

installed in 2017 need to be

inspected once in 2018, 2019,

2020 etc. and devices

installed in 2018 need to be

inspected once in 2019, 2020,

etc.). The devices for Pool

Charlie have been installed in

2018 and therefore have an

inspection deadline of

December 31, 2019 which

does not need to be

accounted for in this

verification.

Resolved before

the final

submission.

N/A

18/19-

09

Minor discrepancies were

identified in APRS:

a). reporting period start date

was incorrect.

b). Producer 1 - one device had

a wrong activity start date.

Bluesource corrected

discrepancies.

Addressed

before the

final

submission.

N/A

of 45

Item

(YR-

##)



Verification


exchanged between

verifier and client


(including %

discrepancy if

applicable)

c). Producer 2 - one device had

a wrong activity start date and

10 devices had LSD location

different from the database

system.

d). Producer 4 - 2018 and 2019

GHG reductions were switched

(i.e., 2019 data was presented

for 2018 and 2018 data was

presented for 2019).


June 2019

Page 40 of 45

Appendix D: Statement of Verification

Offset Project Project ID #

5609-4507

Serial Range Start Report Period

October 1, 2018 – March 31, 2019

Serial Range End

Not Available

GHG Assertion

Value Units

Total Baseline Emissions) tonnes CO2eq

Total Project Emissions ) tonnes CO2eq

Other ) tonnes CO2eq

Net Reductions) tonnes CO2eq

Statement of Assertion

Conclusion



First Name Last Name

Annik

Professional Designation Phone Number

519-823-1311 ext 3036

Project Developer

Statement of Verification

Associated SGER Submission

Protocol

Bluesource Methane Reduction Program - Pool

Charlie

Quantification Protocol for Greenhouse Gas

Emission Reductions from Pneumatic Devices,

Version 2.0, January 25, 2017

Signature of Third Part Verifier

Blue Source Methane ULC Not Available

Statement of Verification

29,823

5,513

Not Applicable

24,310

October 1, 2018 to March 31, 2019 - Emissions reduction for Bluesource Methane Reduction

Program - Pool Charlie Offset Project is 24,310 tonnes of CO2 equivalent.

Responsibilities of Project Developer and Third Party Verifier

RWDI Air Inc. has reviewed the Bluesource Methane Reduction Program - Pool Charlie Offset Project emissions reduction for

the period of October 1, 2018 to March 31, 2019. Bluesource Methane ULC was responsible for preparing the offset project

emission reduction report. RWDI Air Inc.’s objective and responsibility is to provide an opinion to the Alberta Climate Change

Office as to whether the GHG assertion is free from material misstatements, and is presented fairly in accordance with the

program criteria.

During the course of the verification, no material misstatements were identified. It is our opinion, because the total

misstatement is below the materiality threshold of 5%, the GHG assertion does present fairly the Project’s emissions reduction

for the period of October 1, 2018 to March 31, 2019. Furthermore, it is our opinion that the evidence generated during the

verification is appropriate and sufficient to support an overall positive finding with a reasonable level of assurance.

White

E-mail Address


RWDI Air Inc. Per:

Date:

13-Jun-19




of 45

Appendix E: Conflict of Interest Checklist

Report Type Report Period

October 1, 2018 –

March 31, 2019

False

False

False

False

False

False

False

False

I ,


Per:

Signature of Third Party Verifier Date

Last Name


519-823-1311 ext 3036

Conflict of Interest Checklist

Associated SGER Submission

Offset Project Protocol

Bluesource Methane Reduction Program -

Pool Charlie

Quantification Protocol for Greenhouse

Gas Emission Reductions from Pneumatic

Devices, Version 2.0, January 25, 2017

1The relationship between my firm and this reporting company poses unacceptable threat to

or compromises the impartiality of my firm.

2 The finances and sources of income of my firm compromise the impartiality of my firm.

Project Developer

Blue Source Methane ULC Offset Project

Checklist

Respond either "True" or "False" to each of the following statements:

4My firm participated in some manner in the development or completion of the associated

offset submission for this reporting company.

3The personnel my firm has scheduled to participate in the verification may have an actual

or potential conflict of interest.

5 My firm provided greenhouse gas consultancy services to this reporting company.

6My firm will use personnel that have, are, or will be engaged or previously employed by the

reporting company.

7 My firm will outsource the Statement of Verification for the associated offset submission.

Annik White (Third Party Verifier), have personally examined and am familiar

with the information contained in this Conflict-of Interest Checklist, and can demonstrate freedom from any conflict of interest related

to the reporting company for which the verification was performed. I hereby warrant that the information submitted in this Conflict-of

Interest Checklist is true, accurate and complete to the best of my knowledge, and that all matters affecting the validity of this Conflict-

of-Interest Checklist have been fully disclosed. Impartiality shall be monitored over the duration of the verification and any identified

actual or potential conflict-of-interest situations will be communicated to AEP directly.

RWDI Air Inc.

8 My firm offers products or services that pose an unacceptable risk to impartiality.

Important: If you have checked "True" to any of the above, you may not fulfill the "independence" requirement for third party verifiers.

Please contact Alberta Environment and Parks for further instruction. If the potential conflict of interest is a sufficient threat to

impartiality (perceived or actual), or cannot be effectively managed, you Third Party Verification Report will not be acceptable to

Alberta Environment and Parks.



13-Jun-19

First Name

Annik White




of 45

Appendix F: Supplemental Diagrams/Tables/Figure

SITE VISIT PLAN

RWDI AIR INC. VVP DOCUMENT CODE: FORM ISSUED: VERSION: VERSION ISSUED: PAGE:

JOB-FRM-012 2013-07-13 2.0 2017-05-08 1 of 7

This document is intended for the sole use of the party to whom it is addressed and may contain information that is privileged and/or confidential. If you have received this in error, please notify us immediately. ® RWDI name and logo are registered trademarks in Canada and the United States of America.

rwdi.com

General Information

Site(s) to visit: Bluesource – Various facilities at Producer 1, 2, 3, and 4

Date(s) of site visit: Producer 1 – Tuesday, May 14, Producer 2 and Producer 3 –

Wednesday, May 15, Producer 3 and Producer 4 – Friday,

May 17

RWDI field verifiers: Thana Boonlert

Client hosts: Alex Fritz

Meeting location: Tim Hortons on 16th Ave, 240 16 Ave NE

Meeting time: Tuesday, May 14 – 7:00 am

Wednesday, May 15 – 7:45 am

Safety training requirements prior

to arrival on site:

H2S Alive

Safety training requirements upon

arrival to site:

Facility Operator to advise.

Personal protective equipment

required:

Fire retardant coveralls, hard hat, safety glasses, steel toe

boots, work gloves.

Additional notes (including required

training and PPE):

N/A

The general tasks to be completed during the site visit include:

• Safety and site orientation;

• Brief description of site visit objective;

• Overview of project history, operations, processes and equipment;

• Visit sample locations of device conversions at the four different producers within the Charlie

Pool boundary, and verify that the pneumatic devices installed are as reported;

The general criteria to be observed at each device location include:

• Make and model of device

• Serial number

• PSI value

• Installation records (if log book is available)

• Device functionality

Specific tasks to be completed are listed in the table below. The tasks are not necessarily listed in the

order that they must be completed. It is advised that the task list be reviewed in detail prior to the site

visit in order to ensure that appropriate personnel are available for discussion with verifiers and to

ensure that the requested data and records will be retrievable from their original sources.

SITE VISIT PLAN


JOB-FRM-012 2013-07-13 2.0 2017-05-08 2 of 7

This document is intended for the sole use of the party to whom it is addressed and may contain information that is privileged and/or confidential. If you have received this in error, please notify us immediately. ® RWDI name and logo are registered trademarks in Canada and the United States of America.

Time Task Notes Follow-up

Day#1 – Producer 1 – Tuesday, May 14, 2019

Safety and site orientation as required − n/a - n/a

Brief description of the site visit objective − completed. Discussed with operator the

objective of the site visit and key items that the

team was looking for.

- n/a

Discuss how hours of operations are recorded for specific

sites.

− Wells are metered and recorded through their

SCADA system

- n/a

Discuss with the operator and Bluesource the process in

which devices are replaced.

− Pronghorn installed all of the new devices and

also did the inventory for pneumatics.

- n/a

Identify any missing or extra devices that could be part of

the GHG inventory.

− No new extra devices were found. Any device

that might have been missed and need

replacing would be included in future pools.

- n/a

Review GHG inventory boundaries within each site − The boundaries include all the locations of the

new devices.

- n/a

Discuss shutdowns or periods of irregular operation that

occurred during the reporting year:

• Descriptions

• Dates and durations

• Effects on GHG emissions

− During shutdowns/turnarounds, the SCADA

system flags “zero” runhours, then staff needs

to address this in the system manually before

continuing. This forces them to also go check on

the facility’s operations/wells/equipment.

- n/a

Discuss changes for the reporting period (if applicable):

• Changes to operations, processes, equipment,

emissions sources

− None - n/a

General tour of facility

• Observe pneumatic devices

• Observe gas analyzers (if applicable)

• Gather information about old devices (inventory,

make and model)

− Gas analysis at each battery (at least) happen

annually.

− Log files for device replacement are recorded

by Pronghorn and scanned into the Lukla

system. Physical documents are kept and

stored by Pronghorn.

- n/a

SITE VISIT PLAN


JOB-FRM-012 2013-07-13 2.0 2017-05-08 3 of 7

Page 3


• Observe facility log file (for device replacement

dates)

Complete the tasks and notes as described in the Site Visit

Verification Checklist for each pneumatic device visited.

− Completed. Detailed report is available upon

request.

- n/a

Interviews with selected facility specialists (if applicable).

For example:

• Maintenance/operations specialist (knowledge of

measurement device specs and

maintenance/calibration procedures)

− Dennis Olsen (present at the facility office).

Lead Operator (4 years at site, 9 years with

Producer 1). Dennis demonstrated their

SCADA system and Production Volume

Reporting (PVR) system.

− Giacomo Bertamini (escorted team to various

sites). Contract Operator (6-months in this role,

1.5 years as a sub contractor in similar role at

Producer 1).

Pascal Bonnet (not present,

but could be a good

resource for primary data)

Staff – Production

Measurement Analyst

Pulls data from systems and

sends to Bluesource

Main contact for data

extraction

Additional items − None. - n/a

Site Visit Close-out Meeting − Completed. Additional questions were asked

where applicable for clarification, and any

follow-up items were reviewed.

- n/a

SITE VISIT PLAN


JOB-FRM-012 2013-07-13 2.0 2017-05-08 4 of 7

Page 4


Day#2 – Producer 2 and Producer 3 (1 location) – Wednesday, May 15, 2019





- n/a


sites.

− Wells are metered and recorded through their

SCADA system

- n/a



− Producer 2 -> Techmation (contractors)

replaced all of the devices and do maintenance

as required.

− Producer 3 -> Tarpon did installations

Alex Fritz to confirm if

Tarpon installations for

Producer 3


the GHG inventory.

− No new extra devices were found. Any device

that might have been missed and need

replacing would be included in future pools.

- n/a


new devices.

- n/a



• Descriptions



− Producer 2

− clearSCADA -> auto-downloads hours to

Prodview (Bluesource has access to their

Prodview). During shutdowns, SCADA systems

flags a warning and operators are forced to

address issue and manually write in cause of

issue.

Clarify how data goes from

Proview to Petrinex

Discuss changes for the reporting period (if applicable):


emissions sources

− None - n/a

SITE VISIT PLAN


JOB-FRM-012 2013-07-13 2.0 2017-05-08 5 of 7

Page 5






make and model)


dates)

− Producer 2

− Gas analysis are auto-recorded in their

Protrend software.

− There is also an annual gas analysis done per

battery.

− Two devices that were planned for visit could

not be accessed due to poor road conditions.

Therefore, four other devices were chosen to

visit (these device IDs and locations were

recorded).

Make sure that the new

device visited are within the

Charlie Pool scope and were

also not visited/verified in

the past.




request.

- n/a


For example:




− Producer 2

− Ryan Munro (escorted site visit), Day-Operator,

5-years

− Producer 3

− Tyler Pletz (escorted site visit at 1 location

visited for Producer 3), Operator, 5-years.

- n/a

Additional items − Producer 2

− For one of the devices visited, the supply

pressure gauge was missing. It was replaced

with a “plug”. Specific picture is saved in site

visit pictures folder. This is most likely because

the gauge either broke or was leaking.

Confirmed that there is currently no leak

(otherwise a reading would show on the output

pressure gauge, and we would also hear a

hissing sound.

- n/a

SITE VISIT PLAN


JOB-FRM-012 2013-07-13 2.0 2017-05-08 6 of 7

Page 6


Site Visit Close-out Meeting

− Completed. Additional questions were asked



- n/a


Day#3 – Producer 3 (1 location) and Producer 4 – Friday, May 17





- n/a


sites.

− DataWorks (data management system), SCADA - n/a



− Contractor from Bluesource performs

installations

- n/a


the GHG inventory.

− None - n/a


new devices.

- n/a



• Descriptions



− None this past year - n/a

Discuss changes for the reporting period (if applicable): − none - n/a

SITE VISIT PLAN


JOB-FRM-012 2013-07-13 2.0 2017-05-08 7 of 7

Page 7



emissions sources





make and model)


dates)

− A device with an expected identification tag

number was not found at one of the locations.

Instead, a different identification number was

found that is supposed to be at a different

location.

- Kelsey to follow-up

regarding the reasoning for

mismatched IDs.




request.

- n/a


For example:




− Greg Tipton

Shift lead operator (12 years) provided the site

tours.

- n/a

Additional items − none - n/a

Site Visit Close-out Meeting

− completed. Additional questions were asked



- n/a

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