verification report for: (8237-6623)€¦ · cap-op energy engine fuel management and vent gas...

Cap-Op Energy Engine Fuel Management and Vent Gas Capture Program (8237-6623) February 2019

Verification Report for:

Cap-Op Energy Engine Fuel Management and Vent Gas Capture Program (8237-6623)

Proponent:

Cap-Op Energy Inc.

Prepared by: Brightspot Climate Inc.

Prepared for:

Alberta Climate Change Office

Version:

Final

Date:

February 13, 2019


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Table of Contents 1.0 Summary – Offset Project ..................................................................................... 4 1.1 Summary – Facility ........................................................................................................ 7 2.0 Introduction ........................................................................................................ 8

2.1 Objective ............................................................................................................ 9 2.2 Scope ................................................................................................................. 9 2.3 Level of Assurance ............................................................................................. 10 2.4 Criteria ............................................................................................................. 10 2.5 Materiality ......................................................................................................... 11

3.0 Methodology ..................................................................................................... 11 3.1 Procedures ........................................................................................................ 11 3.2 Team ............................................................................................................... 29 3.3 Schedule .......................................................................................................... 31

4.0 Results ............................................................................................................. 31 4.1 Assessment of Internal Data Management and Controls .......................................... 31 4.2 Assessment of GHG Data and Information ............................................................. 34 4.3 Assessment against Criteria ................................................................................. 42 4.4 Evaluation of the GHG Assertion .......................................................................... 51 4.5 Summary of Findings .......................................................................................... 51 4.6 Opportunity for Improvement .............................................................................. 54

5.0 Closure ............................................................................................................. 55 5.1 Verification Statement ........................................................................................ 55 5.2 Limitation of Liability .......................................................................................... 55 5.3 Confirmations .................................................................................................... 55

6.0 References ........................................................................................................ 56 Appendix A: Final Verification Plan and Sampling Plan ............................................................ 57 Appendix B: Statement of Qualifications .............................................................................. 91 Appendix C: Findings and Issues ......................................................................................... 94 Appendix D: Statement of Verification ................................................................................. 98 Appendix E: Conflict of Interest Checklist ........................................................................... 101 Appendix F: Supplemental Diagrams/Tables/Figures ............................................................ 104

List of Tables Table 1: Risk Assessment .................................................................................................. 16 Table 2: Findings of Data Integrity Verification Procedures ..................................................... 33 Table 3: Findings of GHG Data and Information Verification Procedures .................................... 35 Table 4: Findings of Criteria Verification Procedures ............................................................... 42 Table 5: Offset Criteria Assessment ..................................................................................... 50 Table 6: Summary of Findings ............................................................................................ 52 Table 7: Confirmation Findings ........................................................................................... 56 Table 8: Detailed Findings and Issues Log ............................................................................ 95 Table 9: Supporting Documentation Reviewed .................................................................... 105


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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 if is more usefule 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). • 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)

Cap-Op Energy Engine Fuel Management and Vent Gas Capture Program

Project Description

Provide a brief description of the project and baseline conditions.

This Project endeavours to reduce emissions of greenhouse gases at a number of oil and gas production and processing sites by improving fuel use efficiency in engines and by reducing or eliminating vented gas emitted from pneumatic devices. This is achieved by implementing engine fuel management systems that control engine air-fuel ratios to improve fuel use efficiency, and by implementing vent gas capture systems to reduce or eliminate vented gas emitted from pneumatic devices. The Project is an aggregation of installations at multiple project sites.

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.

The project is located at various locations throughout Alberta. All emission reduction activities related to this project will occur within Alberta. Please refer to the Aggregated Project Planning sheet for the location of specific subprojects.

Project Start Date

Enter the project start date.

There are multiple project start dates depending on when the Project Participant implemented the pneumatic device vent gas reduction project; however, all projects were implemented after January 1, 2002. Please refer to the SDD for the exact start date for each subproject.

Offset Start Date

Enter the start date for offset credit generation.

The start date for offset credit generation was January 1, 2011 for all subprojects within this aggregated project.

Offset Crediting Period

Enter the offset crediting period, including the offset start date. Include day, month year.

The credit duration period for each project will be 8 years, from January 1, 2011 until December 31, 2018.

This project has been granted a five year extension, extending the crediting period to December 31, 2023.

Reporting Period

Enter the reporting period being verified.

January 1, 2017 to December 31, 2017.


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GHG Assertion (Actual Emission Reductions/Sequestration Achieved)

Enter the actual emissions reductions / sequestration for the reporting period. Enter serial numbers if available.

20,026 tonnes CO2e

Protocol

Indicate the relevant protocol (if applicable)

Quantification Protocol for Engine Fuel Management and Vent Gas Capture Projects, Version 1.0, October 2009

Ownership

Enter offset project owner.

The Proponent, Cap-Op Energy Inc., is not the owner of the engine fuel management or vent gas capture systems, and is not the originator of the offset credits generated by this project. The Proponent is an aggregator of carbon credits and acts as the agent of the originator and other originators to facilitate project development, credit verification and serialization.

Project Activity

State how the project activity meets the eligibility requirements

The project must meet the eligibility criteria stated in Part 3, Section 16 of the Carbon Competitiveness Incentive Regulation (CCIR). In order to qualify, emission reductions must:

• Occur in Alberta; • Result from an action taken that is not otherwise

required by law at the time the action is taken; • Result from actions taken on or after January 1,

2002; • Occur on or after January 1, 2002; • Be real, demonstrable, quantifiable and verifiable; • Be quantifiable and measurable, directly or by

accurate estimation using replicable techniques.

The verification included an evaluation of these criteria as well as the specific applicability criteria described in the Protocol. The results of this analysis are described in Section 4.3 of this report.

Project Contact

Enter contact name, company name, mailing address, phone number and email address.

Andrew McCausland

Senior Sustainability Engineer

Cap-Op Energy Inc.

610, 600 – 6th Ave SW

Calgary, AB T2P 0S5

+1 (403) 457-1029

[email protected]

Verifier Aaron Schroeder, P.Eng.


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Verifier name, verifier’s company name, address, phone number email etc.

Brightspot Climate

225 West 8th Avenue, Suite 300

Vancouver BC V5Y 1N3

+1 (604) 353-0264

[email protected]

Verification Team Members

Include verification team members, roles, training, training dates and qualifications.

Aaron Schroeder, P.Eng. Roles: Lead Verifier and Designated Signing Authority Training: Greenhouse Gas Verification – ISO 14064- 3, Canadian Standards Association, 2012; Instructor – Greenhouse Gas Verification – ISO 14064-3, University of Toronto, 2015 – 2018

Jeanna Brown, P.Eng. Role: Associate Verifier Training: GHG Validation and Verification, ISO 14064-3, University of Toronto, October 2017

Rodrigo Cubedo, EIT Role: Associate Verifier

Hector Sanchez, P.Eng. Role: Peer Reviewer Training: Greenhouse Gas Verification – ISO 14064- 3, Canadian Standards Association, 2012

Designated Signing Authority

Enter the designated signing authority for this verification.

Aaron Schroeder, P.Eng. Brightspot Climate 225 West 8th Avenue, Suite 300 Vancouver BC V5Y 1N3 +1 (604) 353-0264 [email protected]

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 verification strategy relied on both control and substantive approaches. The verification procedures, which are detailed later in this section and in the verification plan, were designed to test the activity data directly, wherever practical.

The Aggregator has controls in place to address inherent risks from any subproject. Therefore our controls approach was largely testing the controls of the aggregator, rather than the individual subprojects. Please refer to the Verification and Sampling Plan for more specific details on the specific Verification Procedures that were applied.


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1.1 Summary – Facility

Item Description

Facility Name and Company Name

List company name and facility name.

Not applicable for offset verification reports

Facility Description

Provide a brief description of the facility.


Baseline Emissions Intensity Description

List the approved BEIA and the baseline years.


Reporter Contact

Enter contact name, company name, mailing address, phone number and email address.


GHG Assertion

Enter the actual emissions, production, emissions intensity and the reduction target being verified.


Verifier

Verifier name, verifier’s company name, address, phone number email etc.


Verification Team Members

Include verification team members, roles, training, training dates and qualifications.


Designated Signing Authority

Enter the designated signing authority for this verification.



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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.

Summary of Offset Project Baseline

This Project endeavours to reduce emissions of greenhouse gases at a number of oil and gas production and processing sites by improving fuel use efficiency in engines and by reducing or eliminating vented gas emitted from pneumatic devices. This is achieved by implementing an engine control system that allows an engine to operate at a different range of air fuel ratios from that of the original engine design. This can result in a reduction in fuel consumption for the same work done, which leads to a reduction in GHG emissions.

The baseline condition is quantified as the GHG emissions from the fuel consumption of the unit under its original configuration, prior to the installation of the new engine control system. Fuel consumption is defined in terms of the brake specific fuel consumption (BSFC) which is a ratio of the fuel energy flow into the engine to the mechanical power produced by the engine. The quantification methodology in the Protocol requires direct measurement to determine the BSFC before the engine control system is installed (pre-audit) and after the engine modification is completed (post-audit). The fractional fuel consumption is calculated from the pre-audit and post-audit BSFC values as a function of engine load and RPM. The fuel consumption in the project condition is measured directly and used along with the average change in fuel consumption at the specific engine load and RPM to calculate the reduction in fuel consumption from the baseline, and subsequently the reduction in emissions.

Summary of Changes

The Responsible Party’s Offset Project Report (OPR) indicates that there have been no changes to the project boundaries and no equipment changes during the reporting period.

The OPR states that the project’s boundaries, operations and major sources of greenhouse gas emissions have not changed from those previously reported.

The following modifications to the original project have been made since the original Offset Project Plan was developed:

• Data parsing methods have been modified to interpret data files from the engine fuel management log files to improve the accuracy of data interpretation.

• In the original approach to the emission reduction quantification, on-site running data was used to calculate fuel savings. An updated method, which uses a combination of audit data and running data, allows for greater accuracy:

o Two point audits are interpolated if the percent change on load is within 5% o One point audits are used directly if the percent change on load and RPM is within

5% • In the absence of a post audit, an engine uses the average fractional change observed at

other engine fuel management sites of the same engine make and classification. If no


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average fractional change value is available, the engine will not generate credits for the reporting period.

• Waukesha F3521GSI and White Superior 8GTL-825 engine types have regression models and average fractional change values available for estimating the Brake Specific Fuel Consumption in the absence of a pre-audit. Waukesha L7042GSI has an average fractional change value in addition to the regression model described in the OPP. These models and values are based on onsite data and protocol requirements for quantification in absence of audit data and allow for improved accuracy in the assertion.

• A modification to the quantification methodology has been implemented to address scenarios where the percent change on load is greater than 25% for a pre-audit. In these cases, a regression model is used to predict the brake specific fuel consumption, otherwise credits are not available for the reporting period.

• New GHG data loggers have been installed at most sites which improve data quality and data validation.

Through the course of the verification, the changes described above were confirmed. No additional changes to the project boundary, emission sources, measurement and monitoring or quantification methodologies were found.

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

The objective of the verification is as follows:

• to issue an verification statement on whether the GHG assertion is without material discrepancy;

• to issue an verification report that provides details of the verification activities; and • to complete the “confirmations” activities defined in the Alberta Climate Change Office

Standard for Validation, Verification and Audit, Section 5.1.3.

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.

Project Name: Cap-Op Energy Engine Fuel Management and Vent Gas Capture Program

Serial Range: To be assigned at registration.


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Geographic Boundary: All subprojects are located within Alberta’s provincial boundary.

Physical Operations: Natural gas processing and compression:

• Reciprocating engines • Pneumatic devices and controllers

Emission Sources: Engine Fuel Management and Vent Gas Capture

• B1: Fuel Extraction and Processing • P1: Fuel Extraction and Processing • B4: Unit Operation • P4: Unit Operation • B5b: Venting of Emissions Captured in Project • P5b: Capture of Vent Gases

IPCC GHGs Emitted/Removed: Carbon Dioxide (CO2)

Methane (CH4)

Nitrous Oxide (N2O);

Remaining IPCC GHGs were not emitted in the baseline or project condition.

Reporting Period: January 1, 2017 – December 31, 2017

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.

The Standard for Validation, Verification and Audit, Version 2.0, June 2018 requires that verifications must be designed and completed to a reasonable level of assurance.

2.4 Criteria Outline the program criteria used and relevant supporting documentation (acts, regulations, protocols, standards, guidance documents, project documentation etc).

The program criteria used and relevant supporting documentation is as follows:

• Climate Change and Emissions Management Act • Carbon Competitiveness Incentive Regulation 255/2017, with amendments up to and

including Alberta Regulation 96/2018 • Standard for Validation, Verification and Audit, Version 3.0, December 2018. Alberta

Climate Change Office • Standard for Greenhouse Gas Emission Offset Project Developers, Version 2.0, July 2018 • Technical Guidance for the Assessment of Additionality, Version 1.0, May 2018


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• Quantification Protocol for Engine Fuel Management and Vent Gas Capture, Version 1.0, October 2009

2.5 Materiality Define the materiality of the verification.

The materiality threshold is defined in The Standard for Validation, Verification and Audit, Version 2.0, June 2018. For this verification, the materiality threshold is 5%.

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.

This verification was designed and completed according to the requirements of the ISO 14064-3 Standard.

The following verification activities (assessments/tests/reviews/evaluations) were conducted through the course of this verification. The specific verification activities that were conducted are detailed in the Verification Plan, which is appended to this report. They are also listed with the verification findings throughout section 4 of this report.

• Observations: the site visit included a tour of a sample of the project sites to observe emission sources, metering, and data systems used for recording metered quantities;

• Review of documentation: documentation supporting the activity data was reviewed, including review of any manual transcription that was applied between documents and the emission quantification software;

• Recalculation: emissions quantities were recalculated using metered data and original data sources and by applying the quantification methodologies stated in the Responsible Party’s Offset Project Report; the methods for calculating any averages used in the emission quantification were recalculated and evaluated for accuracy and appropriateness;

• Inquiry: the site visit included an interview of plant operation and instrumentation personnel;

• Analytical procedures: a year-over-year comparison of overall emissions offsets was performed.

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, assessment of GHG data and information, assessment of GHG information system and controls, assessment against criteria, evaluation of the GHG assertion.


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The verification strategy relied on both a control and a substantive approach. The verification procedures, which are detailed later in this section, were designed to test the activity data directly, wherever practical. The Aggregator has controls in place to address inherent risks from any subproject. Therefore our controls approach was largely testing the controls of the aggregator, rather than the individual subprojects. Please refer to the Verification and Sampling Plan for more specific details on the specific Verification Procedures that were applied.

Regarding the scale and complexity of the verification procedures, the verification risk assessment was leveraged to design verification activities appropriate to address the inherent, controls and detection risk evaluated in relation to each activity data and boundary condition. In most cases, these verifications involved review of documentation, recalculation or analytical procedures designed to produce verification evidence to support the accuracy, completeness and consistency of the information. All activity data and boundary conditions were evaluated through the verification risk assessment and verification activities were designed and completed commensurate with the verification risk assessed.

In a similar way, the data integrity, quantification methodologies and quantification itself were assessed through the verification risk assessment. Verification procedures were designed and completed to address each of these key areas.

Verification evidence was developed from each of these verification activities, which was used to establish a verification conclusion regarding the GHG information systems, the Responsible Party’s controls and ultimately, the GHG Assertion.

Describe steps of the verification including planning, assessment, site visit, off-site verification, and report preparation.

The verification was conducted according to the ISO 14064-3 standard, which establishes four primary phases of a greenhouse gas verification as described in this section. The relevant sections from the ISO standard are noted below.

Agreement (ISO Section 4.3)

The verification level of assurance, objectives, criteria, scope and materiality was affirmed in the contract for services and re-affirmed during a verification kickoff meeting.

A conflict of interest review was conducted prior to beginning work and monitored throughout the verification. A conflict of interest statement is appended to this report.

Internally, Brightspot Climate began documenting the verification upon contract signing. All documentation related to the verification will be maintained for a period of seven years following the date of the verification statement.

Approach (ISO Section 4.4)

Brightspot Climate conducted an initial review of the Project’s greenhouse gas information, primarily by reviewing the reports and the Offset Project Plan. Brightspot Climate prepared a verification risk assessment based on this information, evaluating:

a) the inherent risks of discrepancies for each variable used to calculate each emission source and the general greenhouse gas reporting system;

b) the risk that the Responsible Party’s controls are insufficient to detect and prevent each inherent risk from causing a discrepancy in the GHG assertion; and

c) the potential magnitude of each inherent and control risk described above resulting from the contribution of the associated emission source.


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This information was used to develop an appropriate verification procedure for each identified risk. Each procedure was designed to reduce the probability that the verification would not detect a discrepancy that has not been corrected by the Responsible Party’s controls. The tolerable error for each emission source is stated in the verification risk assessment.

Generally, a substantive approach was applied to the verification. Therefore, the verification procedures relied more heavily on data analysis than on controls testing.

Verification Plan

Brightspot Climate developed a Verification Plan that documents the level of assurance, verification objective, verification criteria, verification scope, and materiality. Additionally, the Verification Plan provides general description of the Project, documents operational and organizational changes that have occurred since the previous verification, explains the Project’s control environment, and describes the safety requirements of the site visit.

The results of the verification risk assessment and the verification procedures (including the sampling plan) has been included in the Verification Plan, but will not be disclosed to the Responsible Party until the final Verification Statement is issued.

Assessment (ISO Sections 4.5 – 4.7)

The verification procedures consist primarily of tests, analysis and review focused on the following six critical areas:

a) The completeness and relevance of emission sources included in the GHG Assertion;

b) The consistency of the emission sources and quantification methodologies between the Protocol, the Offset Project Plan, Offset Project Report and the tools used to quantify the emission reduction;

c) The accuracy and level of transparency of measured and estimated data sources, data integrity of electronic and manual data transfers and transcription between data systems and the GHG calculation;

d) The accuracy of the GHG emissions reduction calculations;

e) The completeness, accuracy and transparency of information presented in the Offset Project Plan and Offset Project Report documents, including the implementation of stated methodologies and emission factors in the quantification of emissions reductions; and

f) The accuracy of transcription of final calculated values into the GHG Assertion, including the “confirmations” required by ACCO as described in the ACCO Standard for Validation, Verification and Audit document.

The principles defined in the preceding six areas are defined in ISO 14064-1 (accuracy, completeness, consistency, relevance and transparency).

Site Visit

Jeanna Brown attended two full-day site visits to a sample of the subproject sites within the aggregated project. The selection of sites to be visited was made during the verification risk assessment process. The selection considered site ownership and subproject types, and the magnitude of the emission reduction for each site within the aggregated assertion. A total of five engines from this pool were inspected during the site visits, representing approximately 10% of the total emission reduction claim.

During the site visits, completeness of data sources, accuracy of measurement and data system integrity were tested through observation and interviews with site operations and instrumentation personnel.


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The following Responsible Party staff were interviewed regarding various aspects of the Project:

• Andrew McCausland, Senior Sustainability Engineer, Cap-Op Energy • Andria Panidisz, Sustainability Engineer, Cap-Op Energy • Parker Turner, Field Operator, Cenovus • Chance Thomson, Field Operator, Cenovus • Chris Catonio, Field Operator, Cenovus • Mike Harink, Field Operator, Cenovus • Amy Zell, Manager - Carbon Solutions, Blue Source • Wade Krauss, Field Operator, Torxen • Michael Galipeau, Field Operator, Torxen • Scott Green, Field Operator, IPC

Further details of the verification activities that were conducted on site, including observations and inquiries, are provided in Section 4 of this report.

Verification Procedures

The remainder of the verification procedures was conducted through a desk review following receipt of the draft GHG Assertion.

The desk review included an independent recalculation of the emissions reduction assertion, as well as a review of supporting documentation for a sample of subproject sites within the aggregated project. The selection of sites reviewed during the supporting documentation review considered site ownership and subproject types, and the magnitude of the emission reduction for each site within the aggregated assertion. Documents reviewed included gas analysis reports, records of installation/conversion and audit reports.

Through the course of the assessment phase of the verification, Brightspot Climate issued questions and requests for additional documentation and data. These requests were consolidated in a simple electronic tracking system to maintain a common record of communication.

The Responsible Party had the opportunity to address any issues that were raised through the course of the verification before they were documented as discrepancies in the Verification Report.

Evaluation and Statement (ISO Sections 4.8 – 4.9)

Following the completion of all verification procedures and consideration of all information received from the Responsible Party, the verifier was tasked with concluding whether the GHG assertion is without material discrepancy and whether the verification reviewed sufficient and appropriate evidence to support a reasonable level of assurance.

If any outstanding discrepancies remained, their materiality would have been calculated according to ACCO guidance such that both the aggregate net quantitative error and the absolute quantitative error could be reported. In such circumstances, qualitative discrepancies would be evaluated based on the potential impact on the GHG assertion and the potential impact on the Intended User’s ability to use the reported information.

Peer Review

The independent Peer Reviewer conducted a complete review of the verification. The peer review process examined:

a) The completeness of the verification risk assessment; b) The appropriateness of the verification procedures considering the inherent and control

risks identified in the verification risk assessment;


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c) The appropriateness of any sampling conducted in each of the verification procedures; d) The completeness of each verification procedure, including the verifiers documentation

of work completed; e) Closure of any issues raised by the verifier through the course of the verification; f) The sufficiency and appropriateness of all evidence reviewed through the verification to

support a reasonable level of assurance; and g) A review of the final Verification Statement and Conflict of Interest Statement.

Verification Report

The Verification Report includes a Verification Statement, Statement of Qualifications, Conflict of Interest Statement and a report on the findings of the verification. The final Verification and Sampling Plan has been appended to the Verification Report, including the results of the verification risk assessment.

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 risk is defined as the risk of an incorrect verification conclusion. It can be calculated as the product of

• The Project’s inherent risks; • The Responsible Party’s control risks; and • The detection risks associated with the verifier’s verification procedures.

Inherent Risk × Control Risk × Detection Risk = Verification Risk

The verifier cannot affect the inherent risk or the control risk. Therefore, to reduce the overall verification risk and reach the agreed level of assurance (defined in the verification scope), the verifier must design verification procedures that reduce the detection risk.

Each inherent and control risk was provided with the risk score (high/medium/low). The risk analysis of inherent and control risks considers both the magnitude of the activity data or inventory component on the overall GHG assertion as well as the probability that the risk will result in a discrepancy, as assessed by the verifier.

The Verification Risk Assessment Summary on the following pages describes the following information: • Activity Data / Inventory Component: The boundary, eligibility requirement, data

component or reporting activity being evaluated. • Inherent Risk: The verifier’s evaluation of inherent risk. Inherent risks have been

categorized according to the ISO 14064-1 principles (accuracy, completeness, consistency, relevance, transparency).

• Control Risk: A description of the Responsible Party’s controls (if any controls are applicable) and the verifier’s evaluation of control risks.

• Max Detection Risk: The maximum detection risk that can be applied and still result in an overall verification risk that meets the agreed level of assurance.


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• Designed Detection Risk: The detection risk of the verification procedure that the verifier intends to complete. Note that the designed detection risk must always be equal to or lower than the maximum detection risk.

• Verification risk: the product of the inherent, control and (designed) detection risk, as defined in the equation above.

Important note: The verification strategy for this verification applies both substantive tests and control tests. Substantive tests are designed to focus on directly testing activity data or inventory components and their associated inherent risks. Control tests are designed to focus on testing the Responsible Party’s controls and if the test is successful, relying on the Responsible Party’s control. Therefore, control tests indirectly test activity data or inventory components.

Each verification procedure listed in the following table denotes if the procedure is a substantive or control test.

Table 1: Risk Assessment

Activity Data/ Inventory Component

Inherent Risk Control Risk Max Detection Risk

Detection Risk Design

Description Verification Risk

Protocol Applicability Requirements

Determination of BSFC and fractional change in fuel consumption must be completed according to Protocol guidelines

Accuracy (low)

Equipment modifications could impact the measured BSFC and therefore the validity of the calculated fuel savings.

The Responsible Party does not have a control specifically designed to address this inherent risk.

High Medium Substantive test: Observe operations and interview operations staff during site visit to determine if any modifications have been made to equipment that may impact the measured BSFC.

Low

Functional equivalence must be demonstrated; engine performance must not be impaired because of the project

Relevance (high)

Level of service may have changed between the baseline and project conditions.


Low Low Substantive test: Observe operations and interview operations staff during site visit to determine level of service provided by project implementation.

Low


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Capture of vent gas must not be required by regulation

Relevance (high)

Vent gas capture may be required by Directive 60, Section 2.8.


Low Low Substantive test: Review the daily gas volume captured for each site and compare against the Directive 60 requirements. If necessary, review the economic analysis defined in Directive 60 for each site.

Low

The project must comply with all air emission regulations in Alberta

Relevance (high)

Vent gas capture may be required to be flared or captured.


Low Low Substantive test: Review the daily gas volume captured for each site and compare against the Directive 60 requirements.

Low

Substantive test: Determine if vent gas is captured from glycol dehydrators and if the requirements of Directive 60, Section 8.3 apply, which may disqualify the site.

Low


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Projects must use “flaring” as the baseline condition if flaring is required by any regulation

Relevance (high)

The appropriate baseline condition may not have been applied.


Low Low See “Capture of vent gas must not be required by regulation”, above.

Low

The project must not occur within the boundary of a site that is regulated by the Specified Gas Emitters Regulation.

Relevance (high)

The project site may be regulated by the Specified Gas Emitters Regulation and therefore, be ineligible.


Low Low Substantive test: Compare the project locations to the list of facilities regulated by the Specified Gas Emitters Regulation.

Low

Quantification must be based on actual measurements and monitoring.

Relevance (high)

Estimates may have been applied, particularly for missing data.


Low Low Substantive test: Review quantification data for anomalies or missing data.

Low

The project must meet the requirements of the Alberta Offset System

Relevance (high)

The project may not have met the requirements of the Alberta Offset System.


Low Low Substantive test: Evaluate the project developer’s evidence regarding the general requirements of the Alberta Offset System.

Low


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Project developer must establish the ownership of the emission reduction for each site within the aggregated project

Completeness (high)

Ownership may not be established with documentation for all sites within the aggregated project.


Low Low Substantive test: Review ownership documents for each project site within the aggregated project.

Low

Accuracy (high)

Emission offsets may be claimed for subprojects that have been removed from this aggregated project.


Low Low Substantive test: Review aggregated project planning and reporting sheets to confirm that subprojects that have been removed from the aggregated project do not claim emission offsets after the date they were removed.

Low

Protocol Flexibility

Changes in the quantity of waste gas or process emissions may be quantified.

N/A N/A N/A N/A Not applicable for this project.

N/A


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Fractional fuel savings data from other engines of the same make and classification may be applied for engine fuel management projects where pre and post audit data is not available

Accuracy (medium); Relevance (medium)

Available data may not be sufficient or may be applied incorrectly.


Low Low Substantive test: Review instances where pre and post audit data are not available, and evaluate if fractional fuel savings was applied appropriately.

Low

Substantive test: Recalculate the emission reduction from original data applying the fractional fuel savings method where appropriate.

Low

Implementation of vent gas capture at multiple facilities.

Completeness (medium)

The project aggregates installations at multiple project sites. The data and documentation may not be complete for all sites.


Low Low Substantive test: Evaluate the completeness of the required data and documentation for all project sites included in the aggregated project.

Low


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For engines that operate at constant speed, the simple or advanced approaches may be altered to include measurement at one rpm for each load.

N/A N/A N/A N/A Not applicable for this project (no constant speed engines are included in the aggregated project).

N/A

Site specific emission factors may be applied

N/A N/A N/A N/A Not applicable for this project.

N/A

Quantification Data

Mass of fuel gas consumed in the engine

Accuracy (high)

The metered fuel gas may be incorrect if meters are not properly maintained.

Control: The Responsible Party has implemented a meter maintenance program that includes periodic meter calibration.

Control Risk: The maintenance program may not be operating effectively (low).

Low Low Controls test: Review meter calibration reports to determine if the meter maintenance program is operating effectively.

Low


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Average Engine Load

Completeness (low)

The fractional change in fuel consumption calculation may not include a valid average engine load value for each period at the required frequency.


High Low Substantive test: Review the monthly average engine load values for completeness.

Low

RPM Completeness (low)

The fractional change in fuel consumption calculation may not include a valid RPM value for each period at the required frequency.


High Low Substantive test: Review the monthly RPM values for completeness.

Low

Fuel gas analysis (density of vent gas, % CnHm, LHV)

Accuracy (low)

Reported gas compositions may not accurately represent the gas composition or may be incorrectly transcribed into the emission reduction calculation.

Control: Gas analysis is conducted by an independent lab. An internal process is used to validate results.

Control Risk: Validation process may not be properly implemented or transcription errors may be introduced (low).

High Low Substantive test: Analyze gas compositions for significant fluctuations or abnormal gas concentrations. Confirm the accurate transcription of the gas analysis into the emission reduction calculation.

Low


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Completeness (low)

The gas compositions may not include a valid gas composition for each period at the required frequency.


High Medium Substantive test: Review completeness of gas composition data.

Low

Mass of vent gas consumed in the engine

Accuracy (high)

The metered captured vent gas may be incorrect if meters are not properly maintained.

Control: The Responsible Party has implemented a meter maintenance program that includes periodic meter calibration.

Control Risk: The maintenance program may not be operating effectively (low).

Low Low Controls test: Review meter calibration reports to determine if the meter maintenance program is operating effectively.

Low


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Vent gas analysis (density of vent gas, % CnHm, LHV)

Accuracy (low)

Reported gas compositions may not accurately represent the gas composition or may be incorrectly transcribed into the emission reduction calculation.

Control: Gas analysis is conducted by an independent lab. An internal process is used to validate results.

Control Risk: Validation process may not be properly implemented or transcription errors may be introduced (low).

High Low Substantive test: Analyze gas compositions for significant fluctuations or abnormal gas concentrations. Confirm the accurate transcription of the gas analysis into the emission reduction calculation.

Low

Completeness (low)

The gas compositions may not include a valid gas composition for each period at the required frequency.


High Medium Substantive test: Review completeness of gas composition data.

Low


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Ambient temperature data

Completeness, Accuracy (low)

The regression equations used to calculate brake specific fuel consumption in the absence of valid pre/post audit data use site specific monthly average ambient temperature data. The temperature data may be incomplete or inaccurate for the specific site.


High Low Substantive test: Review the monthly average ambient temperature data used in the regression calculations.

Low


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Ground elevation data

Completeness, Accuracy (low)

The regression equations used to calculate brake specific fuel consumption in the absence of valid pre/post audit data use site specific ground elevation data. The ground elevation data may be incomplete or inaccurate for the specific site.


High Low Substantive test: Review the ground elevation value for each site used in the regression calculations.

Low

Emission Quantification and Reporting

Inclusion of applicable emission sources

Completeness, Relevance (low)

Emission sources may be excluded from the Project.

Control: OPP is used to document emission sources that are included in the Project.

Control Risk: OPP may be inaccurate or out of date (medium).

High Low Substantive test: Observe emission sources during site tour and review against included SSs in the Protocol.

Low


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Application of the approved quantification protocol

Accuracy (high)

The project developer may not have implemented approved quantification methodologies or applied additional methodologies.

Control: Responsible Party has developed an Offset Project Plan that is intended to conform to the requirements of the approved quantification protocol.

Control Risk: The protocol requirements may not have been implemented correctly (medium).

Low Low Controls test: Compare the methodologies described in the Responsible Party’s Offset Project Plan to the methodologies described in the approved quantification protocol.

Low

Substantive test: Recalculate the emission reduction using original metered data and methods described in the approved quantification protocol.

Low

Quantification of emission reduction

Accuracy (high)

Emission reduction calculation may contain arithmetic errors.


Low Low Substantive test: Recalculate the emission reduction using original data.

Low


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Data Integrity

Activity data and emission factor data integrity

Accuracy (medium)

Data may not have been accurately transferred between electronic systems and calculation sheets.

Control: The Responsible Party uses electronic data transfers whenever possible to maintain data integrity.

Control Risk: Electronic data transfers may result in errors or may not be available for all data (medium).

Low Low Controls test: Analyze all metered data for abnormal data (zeros, missing data, values outside range).

Low

Substantive test: Recalculate the complete emission reduction using original data.

Low


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Transcription of final emission reduction into Offset Project Report

Accuracy (low)

Final emission reduction may not have been transcribed accurately from calculation spreadsheets into the Offset Project Report.


Low Low Substantive test: Compare the final emission reduction quantity reported by the Responsible Party to the quantity reported in the Offset Project Report. Also, compare these quantities to the recalculated quantity in previous verification procedures.

Low

3.2 Team List verification team members including peer reviewer(s).

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.

ISO 14064-3 defines sixteen subject matter areas in which the verifier should demonstrate familiarity (see ISO 14064-3, Section A.2.2.3). The verification team has competencies in each of these sixteen subject matter areas.

Lead Verifier: Aaron Schroeder, P.Eng.

Aaron Schroeder will be the Lead Validator and Designated Signing Authority. His extensive experience quantifying and verifying greenhouse gas emissions satisfies all sixteen subject matter areas defined in the standard.

Biography: Aaron Schroeder has eleven years of professional experience analyzing, quantifying and verifying greenhouse gas emissions in North America. Prior to forming Brightspot Climate Inc. in 2015, Aaron worked for several years leading a team of fifteen greenhouse gas verification and policy analysts across Canada with ICF International. He provided leadership for this team and led the development of ICF’s standardized verification


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process, conformant with ISO 14064-3. In 2012, ICF’s verification process was accredited by the American National Standards Institute (ANSI).

Mr. Schroeder’s hands on experience conducting greenhouse gas verifications includes numerous engagements for oil and gas extraction and processing, refining, pipeline, electricity generation and petrochemical facilities. Additionally, he has conducted verifications of emission reduction projects in industrial facilities, renewable energy, waste management and agriculture. He is sought after for his expertise devising strategies to bridge the gap between theoretical and practical implementation of methodologies for quantifying, reporting and verifying.

In 2014, the University of Toronto engaged Mr. Schroeder to instruct professional development courses on greenhouse gas inventory and project quantification, reporting and verification. Since 2014, Mr. Schroeder has instructed several of these courses in live, two-day sessions and on-line instruction as a sessional lecturer through the university’s School of Environment. Additionally, Mr. Schroeder has worked with the School of Environment to re-write and update the courses.

Training: Greenhouse Gas Verification – ISO 14064-3, Canadian Standards Association, 2012; Instructor – Greenhouse Gas Verification – ISO 14064-3, University of Toronto, 2015 - 2017

Associate Verifier: Jeanna Brown, P.Eng.

Biography: Jeanna Brown is a Professional Engineer with thirteen years of experience in the oil and gas industry. During her previous employment, she focused on drilling engineering and well planning for wells of varying complexity. She has experience with field based drilling engineering/operations, wellsite supervision and exploration projects. More recently, Jeanna’s technical focus concentrated on in-situ oil sands projects and thermal/steam well design. Since joining Brightspot, Jeanna has gained experience working on greenhouse gas verifications for a variety of projects related to oil and gas production and processing, pulp and paper, agriculture and electricity generation. This has included both emission reduction (offset) projects and annual industrial facility reports under the Alberta Specified Gas Emitters Regulation (SGER). Jeanna’s other work in greenhouse gas quantification includes scenario modelling for regulatory compliance, quantification of corporate inventories and consulting on offset project development.

Training: Jeanna received GHG Validation and Verification, ISO 14064-3, training through the University of Toronto in September 2017.

Associate Verifier: Rodrigo Cubedo, B.Eng.

Biography: Rodrigo Cubedo has a background in mechanical engineering, specializing in aerospace projects. Rodrigo has leveraged his engineering experience to understand and systematically improve the processes used to work with international clients. He is fluent in Spanish, English, French and basic Mandarin. His experience working with a large accounting firm through an in-house deployment of analytical software exposed him to a systematic research framework, which he has recently used to complete GHG verifications.

Training: Rodrigo Cubedo graduated as a mechanical engineer from McGill University in June of 2016.

Peer Reviewer: Hector Sanchez, P.Eng.

Biography: Hector Sanchez is a Professional Engineer with over 10 years of experience. He holds a Bachelor of Engineering Science in Chemical and Environmental Engineering from the University of Western Ontario and is registered as a Professional Engineer in the Province of Ontario. Hector has completed supplementary verification training, receiving a GHG verification certificate of training for ISO 14064. Hector has acted as a Lead Verifier in over 50 GHG verifications in in a range of projects under Alberta, British Columbia, Ontario and Quebec’s Greenhouse Gas Reporting Regulations. These projects included work at sour gas processing


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facilities, oil sands SAGD facilities, natural gas pipelines, mining refining, as well as several coal and natural gas combined-cycle electric generating facilities. Additionally, Hector has helped upstream oil and gas producers to comply with the different flaring regulations in the Province of Alberta and Saskatchewan (Directive S10) which provides enforceable regulatory requirements for reducing flaring and venting of associated gas. Hector’s previous work experience as an engineer in a sour natural gas processing facility provides important technical knowledge for these projects.

Training: Greenhouse Gas Verification – ISO 14064-3, Canadian Standards Association, 2012

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

Verification Kickoff Meeting August 1, 2018

Draft Verification Plan August 3, 2018

Site Visit August 16, 2018 and November 1, 2018

Supplementary Information Request November 27, 2018

Draft Verification Report January 28, 2019

Final Verification Report February 13, 2019

4.0 Results Add introduction to results section here, if desired.

The verification results are presented in the following five subsections. Subsections 4.1 – 4.3 present the results of the verification procedures for the data integrity (4.1), Quantification Methodologies and Quantification (4.2), and Boundary Conditions and Activity Data (4.3).

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.

The Responsible Party’s GHG quantification is primarily performed in a proprietary software program, known as “Distributed Energy Efficiency Project Platform (DEEPP)”. All data required to quantify emissions reductions for the Project are input into DEEPP via spreadsheets, which are either manually transcribed into these spreadsheets or electronically transferred from other spreadsheets. The final calculated quantities are exported from DEEPP into spreadsheets and then manually transferred into the Offset Project Report. Data validation is completed before information is transferred into the report. The functionality of the DEEPP software was not directly tested or investigated through the course of this verification. However the input data


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required for the quantification were reviewed and validated, and outputs from the DEEPP software were found to reasonably match the results of the independent recalculation.

All activity data are either metered or referenced from third party laboratory reports or manufacturer specifications.

The Responsible Party maintains an Offset Project Plan (OPP) and produces an Offset Project Report (OPR), which document the emission sources, processes for collecting GHG activity data, equations applied to quantify emissions reduction, calculation assumptions, meter calibration procedure and schedule, and a discussion of GHG data management.

Findings from Previous Verification

There were no unresolved material findings noted in the previous verification report.

The previous verification report noted one immaterial qualitative discrepancy related to the method applied for one point audit using regression. When engine load change is greater than 5% and less than 25%, and one audit point is available, the regression model is used to predict the fractional change, rather than calculating a normalized BSFC which is the recommended method in the Protocol.

This finding was found to persist in this reporting period. However the Verification Team determined that the Responsible Party’s method, which is based on multiple measured data points rather than a single point taken under different operating conditions, is more representative of actual operating conditions, and is expected to improve accuracy. The Verification Team concluded that the methodology developed by the Responsible Party is appropriate; no discrepancy.

Results of Verification Procedures

There were three verification procedures completed to test data integrity. The results of these procedures are provided in the following table.


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Table 2: Findings of Data Integrity Verification Procedures

GHG Report Element

Detection Risk

Verification Procedures Verification Findings

Activity data and emission factor data integrity

Low Controls test: Analyze all metered data for abnormal data (zeros, missing data, values outside range).

Metered data was reviewed and evaluated for anomalies such as zeros, missing data points, values outside range, etc.

Some instances of duplicate dates were noted in the raw GHG logger data. The procedure for how this is handled by the DEEPP software is included in the OPP. The Verification Team found this methodology to be a reasonable approach, and confirmed that it was correctly applied by conducting an independent recalculation.

Some instances were noted in the raw GHG logger data files where greater than 24 hours were included for one date. The data associated with these dates were removed from the quantification, which is a conservative approach.

By default, the Responsible Party’s DEEPP software sets Slipstream Yesterday Mass to zero for the very first reading of the year. The program calculates daily fuel mass by subtracting a value from the previous day so setting the first reading to zero prevents calculation errors as in most cases the start of the file is January 1.

Excluding the slipstream volumes for the first day of the year results in an immaterial quantitative understatement of approximately 0.02% of the total emissions reduction claim.


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GHG Report Element

Detection Risk

Verification Procedures Verification Findings

Low Substantive test: Recalculate the emission reduction using original metered data.

The recalculated emission reductions matched the quantities asserted by the Responsible Party. It is therefore a reasonable conclusion that data integrity has been maintained from points of metering through reporting.

No discrepancies were detected in the accuracy of the emission reduction quantification.

Transcription of final emission reduction into Offset Project Report

Low Substantive test: Compare the final emission reduction quantity reported by the Responsible Party to the quantity reported in the Offset Project Report. Also, compare these quantities to the recalculated quantity in previous verification procedures.

Values reported in the Offset Project Report match the values quantified by the Responsible Party.

No discrepancies were detected in the transcription of values in the Offset Project Report.

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.

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.

The GHG information consists of the activity data applied to quantify emissions reductions, the source documentation for the activity data, the information in the Offset Project Plan, as described in the previous section of this report, and the documentation supporting the boundary, methodologies, meter calibration, and emission factors.


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Table 3: Findings of GHG Data and Information Verification Procedures

GHG Report Element

Detection Risk


Verification Findings

Quantification Data

Mass of fuel gas consumed in the engine

Low Controls test: Review meter calibration reports to determine if the meter maintenance program is operating effectively.

Meter calibration reports were provided for two of the subproject participants’ sites. A sample was reviewed and no discrepancies were identified.

Calibration reports were provided for the third subproject participant’s meters, but are not linked to a specific location. Although it is not possible to review a specific report linked to each site, the Verification Team reviewed all of the reports along with an explanation of the subproject participant’s meter swap-out procedure (described in the OPR) and these were deemed to be acceptable.

No discrepancies were detected in the meter maintenance program.

Average Engine Load

Low Substantive test: Review the monthly average engine load values for completeness.

The engine load values were independently recalculated from the raw data and were found to be complete and accurate.

No discrepancies were detected in the monthly average engine load values.

RPM

Low Substantive test: Review the monthly RPM values for completeness.

The monthly average RPM values were independently recalculated from the daily RPM data and were found to be complete and accurate.

No discrepancies were detected in the monthly average RPM values.


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GHG Report Element

Detection Risk



Fuel gas analysis (density of vent gas, % CnHm, LHV)

Low Substantive test: Analyze gas compositions for significant fluctuations or abnormal gas concentrations. Confirm the accurate transcription of the gas analysis into the emission reduction calculation.

Review of the gas compositions did not reveal significant fluctuations or abnormal concentrations.

No discrepancies were detected in the gas composition analyses used in the quantification.

Medium Substantive test: Review completeness of gas composition data.

Gas composition data was complete for all subprojects.

No discrepancies were detected in the completeness of gas composition data.

Mass of vent gas consumed in the engine

Low Controls test: Review meter calibration reports to determine if the meter maintenance program is operating effectively.

A sample of the vent gas meter calibration reports was reviewed and no discrepancies were identified.

No discrepancies were detected in the meter maintenance program.

Vent gas analysis (density of vent gas, % CnHm, LHV)

Low Substantive test: Analyze gas compositions for significant fluctuations or abnormal gas concentrations. Confirm the accurate transcription of the gas analysis into the emission reduction calculation.

Review of the gas compositions did not reveal significant fluctuations or abnormal concentrations.

No discrepancies were detected in the gas composition analyses used in the quantification.

Medium Substantive test: Review completeness of gas composition data.

Gas composition data was complete for all subprojects.

No discrepancies were detected in the completeness of gas composition data.


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GHG Report Element

Detection Risk



Ambient temperature data

Low Substantive test: Review the monthly average ambient temperature data used in the regression calculations.

Monthly average ambient temperature data was compared to the reference source data for a sample of the sites that used the regression equation methodology. Two discrepancies were detected which were corrected by the Responsible Party. An expanded sample was reviewed and no further discrepancies were identified.

No discrepancies were detected in the ambient temperature data used in the quantification.

Ground elevation data

Low Substantive test: Review the ground elevation value for each site used in the regression calculations.

The reference source for the ground elevation values used in the quantification was not available from the Responsible Party. Ground level elevation values were sourced for a sample of sites from Petroninja and compared to the values used in the quantification. Minor discrepancies were noted in each site in the sample. The average absolute magnitude of error noted in the sample was extrapolated to the full population of data to estimate the potential impact on the emission reduction claim.

The estimated discrepancy represents a conservative approximation of the potential error given the available data.

The potential error in ground level elevation values used in the regression equations results in an immaterial quantitative discrepancy of 0.16% of the total emission reduction.


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GHG Report Element

Detection Risk



Emission Quantification and Reporting

Inclusion of applicable emission sources

Low Substantive test: Observe emission sources during site tour and review against included SSs in the Protocol.

Some EFM / vent gas capture systems involve the installation of additional pneumatic devices which, if supplied by instrument gas, may result in additional venting in the project condition, or an inflated baseline condition (if they are tied into the VGC system).

The Verification Team was not able to confirm definitively that additional pneumatics have not been installed as a result of implementing the Project.

The impact of incremental venting emissions from additional pneumatic devices would have a very small impact on the total emissions reduction and is noted as an immaterial qualitative discrepancy.


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GHG Report Element

Detection Risk



Application of the approved quantification protocol

Low Controls test: Compare the methodologies described in the Responsible Party’s Offset Project Plan to the methodologies described in the approved quantification protocol.

The verification team compared the methods described in the Offset Project Plan to the methods described in the approved Quantification Protocol.

The quantification methods described in the Responsible Party’s Offset Project Plan adhere to the methods described in the approved Quantification Protocol with one exception related to the method applied for one point audits using regression. When engine load change is greater than 5% and less than 25%, and one audit point is available, a regression model is used to predict the fractional change. This approach, developed by the Responsible Party, uses multiple measured data points rather than a single point taken under different operating conditions. It is therefore more representative of actual operating conditions than the recommended method in the Protocol, and is expected to improve accuracy.

The Verification Team has concluded that the quantification methods have been implemented in the Responsible Party’s data management system appropriately.

No discrepancies were detected in the methodologies described in the Offset Project Plan.


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GHG Report Element

Detection Risk



Substantive test: Recalculate the emission reduction using original metered data and methods described in the approved quantification protocol.

The independent recalculation of the emission reduction resulted in the same emission reduction quantity asserted by the Responsible Party. Therefore, the approved Protocol quantification methods were applied in the Responsible Party’s emission reduction quantification.

No discrepancies were detected in the methodology used in the calculation of the emission reduction.


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GHG Report Element

Detection Risk



Quantification of emission reduction

Low Substantive test: Recalculate the emission reduction using original data.

The functionality of the DEEPP calculation software was not directly tested or investigated through the course of this verification. However the input data required for the quantification were reviewed and validated, and outputs from the DEEPP software were compared to the results of the recalculation.

A programming error in DEEPP appears to select the average fractional change value on certain occasions when a calculated value should be used. This issue only applies to engines with one audit point and was found to impact only two engines in the full population of Pool A.

Otherwise the outputs from the DEEPP software were found to reasonably match the results of the independent recalculation. Therefore, the Verification Team concluded that no arithmetic or calculation errors were made by the Responsible Party in the emission reduction quantification.

The incorrect selection of average fractional change resulted in an immaterial quantitative understatement of approximately 0.21% of the total emission reduction claim. Otherwise no discrepancies were detected in the recalculation of the emission reduction.


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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.

Table 4: Findings of Criteria Verification Procedures

GHG Report Element

Detection Risk



Protocol Applicability Requirements

Determination of BSFC and fractional change in fuel consumption must be completed according to Protocol guidelines

Medium Substantive test: Observe operations and interview operations staff during site visit to determine if any modifications have been made to equipment that may impact the measured BSFC.

During the site visits, equipment was observed and operations personnel were interviewed to determine if any modifications have been made since the installation of the engine fuel management systems. The Pre/Post Audit Reports were also reviewed by the Verification Team for sites where audits were completed.

No discrepancies were detected in the determination of BSFC and fractional change in fuel consumption.

Functional equivalence must be demonstrated; engine performance must not be impaired because of the project

Low Substantive test: Observe operations and interview operations staff during site visit to determine level of service provided by project implementation.

During the site visits, the verification team observed the engine fuel management and vent gas capture systems, and found that an equivalent level of service is provided by all installations.

Operations personnel indicated that the systems work well and reliably, and that engine performance and level of service have not been impacted.

No discrepancies were detected in the functional equivalence of the baseline and project conditions.


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GHG Report Element

Detection Risk



Capture of vent gas must not be required by regulation

Low Substantive test: Review the daily gas volume captured for each site and compare against the Directive 60 requirements. If necessary, review the economic analysis defined in Directive 60 for each site.

Daily volumes of vent gas captured did not exceed the thresholds indicated in Directive 60 for any of the subproject sites. No regulations requiring the capture and destruction or conservation of vent gas emissions were found to apply to the subprojects included in this aggregated project.

No discrepancies were detected in the eligibility of captured vent gas.

The project must comply with all air emission regulations in Alberta

Low Substantive test: Review the daily gas volume captured for each site and compare against the Directive 60 requirements.

Daily volumes of vent gas captured did not exceed the thresholds indicated in Directive 60 and none of the criteria listed in Protocol Applicability #4 were found to apply to any of the subproject sites.

No discrepancies were detected in the project’s compliance with Alberta air emission regulations.

Substantive test: Determine if vent gas is captured from glycol dehydrators and if the requirements of Directive 60, Section 8.3 apply, which may disqualify the site.

No vent gas captured in any of the subprojects was found to be associated with glycol dehydrators.

No discrepancies were detected in the project’s compliance with Directive 60 or other air emission regulations in Alberta.

Projects must use “flaring” as the baseline condition if flaring is required by any regulation

Low See “Capture of vent gas must not be required by regulation”, above.

Daily volumes of vent gas captured did not exceed the thresholds indicated in Directive 60 for any of the subproject sites. No regulations requiring the flaring of vent gas were found to apply to the subprojects included in this aggregated project.

No discrepancies were detected in the baseline condition applied for captured vent gas.


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GHG Report Element

Detection Risk



The project must not occur within the boundary of a site that is regulated by the Specified Gas Emitters Regulation.

Low Substantive test: Compare the project locations to the list of facilities regulated by the Specified Gas Emitters Regulation.

None of the subproject sites were found to be located inside the boundary of a site that is regulated by the Specified Gas Emitters Regulation (SGER) / Carbon Competitiveness Incentive Regulation (CCIR).

No discrepancies were detected in the eligibility of subprojects with respect to the SGER/CCIR.

Quantification must be based on actual measurements and monitoring.

Low Substantive test: Review quantification data for anomalies or missing data.

All subprojects included in this aggregated project are equipped with a GHG data logger unit which records the relevant parameters used in the quantification on a daily frequency.

Some instances of duplicate dates were noted in the raw GHG logger data. The procedure for how this is handled by the DEEPP software is included in the OPP. The Verification Team found this methodology to be a reasonable approach, and confirmed that it was correctly applied by conducting an independent recalculation.

Some instances were noted in the raw GHG logger data files where greater than 24 hours were included for one date. The data associated with these dates were removed from the quantification, which is a conservative approach.

No discrepancies were detected in the source or basis of the data used in the quantification.


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GHG Report Element

Detection Risk



The project must meet the requirements of the Alberta Offset System

Low Substantive test: Evaluate the project developer’s evidence regarding the general requirements of the Alberta Offset System.

Occurs in Alberta – All sites in the aggregated project are located within Alberta, as confirmed by project documentation.

Actions not otherwise required by law – No regulatory requirements were found to apply to the project activity for the sites in the aggregated project.

Actions taken on or after January 1, 2002 – Installation and commissioning of all devices occurred after this date, as confirmed by project documents and inquiries of site operations staff.

Real, demonstrable, quantifiable – The verification procedures confirmed that the emission reductions in the aggregated assertion meet these requirements. The specific verification procedures supporting this conclusion include observation during the site visits, review of supporting meter calibration reports and documentation and the independent recalculation of the emission reduction.

Clearly established ownership – This project involves a number of Project Participants. The Responsible Party has clearly established ownership through contractual agreements.

Counted once for compliance purposes – The project credits will be registered with the Alberta Emissions Offset Registry (AEOR). Brightspot Climate is not aware of any other systems or registries where the Project has been registered. The Responsible Party has not disclosed registration of the Project on any other system or registry.


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GHG Report Element

Detection Risk



Project developer must establish the ownership of the emission reduction for each site within the aggregated project

Low Substantive test: Confirm ownership for a sample of subprojects within the aggregated project.

During the site visits, the Verification team confirmed ownership of the sites through observation of posted signage and by interviewing operations personnel.

The Project Developer has contractual agreements in place with each of the Project Participants which define ownership of the emission offsets generated from this project. The Verification Team reviewed these documents for each Project Participant to confirm validity.

No discrepancies were detected in the ownership of the emission reduction for each site within the aggregated project.


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GHG Report Element

Detection Risk



Low Substantive test: Review aggregated project planning and reporting sheets to confirm that subprojects that have been removed from the aggregated project do not claim emission offsets after the date they were removed.

The aggregated project planning and reporting sheets were reviewed and compared to ensure that all projects claiming credits were included on the planning sheet.

A significant number of the subprojects included in this aggregated project have been transferred to another Offset Project on the Alberta Emissions Offset Registry, effective October 1, 2017. Although the reporting period for this verification is the entire 2017 calendar year, these subprojects are only eligible to generate emission offsets under this Project up until September 30, 2017, and have been removed from the Project after that date. The Verification Team confirmed that these subprojects are only claiming credits under this Project and reporting period from January 1 to September 30, 2017.

No discrepancies were detected in the aggregated project planning and reporting sheets, and the emission offsets claimed.

Protocol Flexibility

Changes in the quantity of waste gas or process emissions may be quantified.

N/A Not applicable for this project.

N/A


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GHG Report Element

Detection Risk



Fractional fuel savings data from other engines of the same make and classification may be applied for engine fuel management projects where pre and post audit data is not available.

Low Substantive test: Review instances where pre and post audit data are not available, and evaluate if fractional fuel savings was applied appropriately.

Pre/post audit data are not available for a number of subprojects included in this aggregated project. For these sites, average fractional fuel savings were found to have been applied appropriately, in accordance with Protocol guidelines and requirements.

No discrepancies were detected in the use of average fractional fuel savings data.

Substantive test: Recalculate the emission reduction from original data applying the fractional fuel savings method where appropriate.

The independent recalculation of the emissions reduction confirmed that the average fractional fuel savings method has been applied correctly where appropriate.

No discrepancies were detected in the use of average fractional fuel savings data.

Implementation of vent gas capture at multiple facilities.

Low Substantive test: Evaluate the completeness of the required data and documentation for all project sites included in the aggregated project.

Data and documentation for all subproject sites has been included in the aggregated project.

No discrepancies were detected in the completeness of the data and documentation for the engine fuel management system installations included in this aggregated project.

For engines that operate at constant speed, the simple or advanced approaches may be altered to include measurement at one rpm for each load.

N/A Not applicable for this project (no constant speed engines are included in the aggregated project).

N/A


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GHG Report Element

Detection Risk



Site specific emission factors may be applied

N/A Not applicable for this project.

N/A


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Table 5: Offset Criteria Assessment

Offset Eligibility Criteria

Assessment

Reduction or sequestration occurs in Alberta

The aggregated project includes sub-projects in locations throughout Alberta. The Aggregated Project Reporting Sheet was reviewed to confirm all locations are within the Province of Alberta.

Result from actions not required by Law at the time the action is taken

The project activity is not required by municipal, provincial or federal regulations or directives.

Result from Actions taken on or after January 1, 2002 and occur on or after January 1, 2002

Installation and commissioning of all devices occurred after this date, as confirmed by project documents and inquiries of site operations staff.

Reduction or sequestrations is real and demonstrable

The emission reduction was demonstrated through measurement and estimation of data required for the quantification. The GHG information presented to the verification team included sufficient and appropriate evidence to substantiate conformance with the Protocol Applicability Requirements and to substantiate the quantification data.

Quantifiable and measurable

The emission reduction was demonstrated through measurement and estimation of data required for the quantification. This data was substantiated by sufficient and appropriate evidence. Table 3 of this report presents the findings of the evaluation of each variable required for the emission reduction quantification.

Verified by a third party verifier that meets the requirements in Part 1 for the Standard for Verification.

Brightspot Climate Inc. is an independent third-party verifier that meets the requirements outlined in Section 1 of the Standard for Verification. The Lead Verifier and Designated Signing Authority, Aaron Schroeder, is a Professional Engineer and has extensive experience quantifying and verifying greenhouse gas emissions, satisfying all sixteen subject matter areas defined in the ISO 14064-3 Standard.


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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.

The results of each verification procedure are provided in the preceding three subsections (4.1 – 4.3). Sufficient and appropriate evidence was collected through the verification procedures to reach the verification conclusion at a reasonable level of assurance, which is provided in the Verification Statement.

The data and GHG information provided by the Responsible Party is sufficient to support the GHG assertion.

There were four discrepancies detected through the course of the verification that have not been corrected in the final GHG Assertion. These discrepancies are described in the following section. The aggregated of these discrepancies were within the materiality threshold established at the outset of the verification.

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 6: 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

Understatement / Overstatement

Tonnes CO2e % net

Tonnes CO2e % absolute

17-01 Quantitative Ground level elevation values used in the regression equations could not be verified against a reference source. A sample of values were compared to values extracted from Petroninja and minor discrepancies were noted. The average absolute magnitude of error noted in the sample was extrapolated to the full population of data to estimate the potential impact on the emission reduction claim.

This could potentially result in an overstatement or understatement.

Overstatement or understatement

31.9 tonnes CO2e

0.16%

31.9 tonnes CO2e

0.16%

17-02 Qualitative Some EFM / vent gas capture systems involve the installation of additional pneumatic devices which, if supplied by instrument gas, may result in additional venting in the project condition, or an inflated baseline condition (if they are tied into the VGC system).

The Verification Team was not able to confirm definitively that additional pneumatics have not been installed as a

Overstatement or understatement

N/A N/A


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result of implementing the Project. The impact of incremental venting emissions from additional pneumatic devices would have a very small impact on the total emissions reduction and is noted as an immaterial qualitative discrepancy.

17-03 Quantitative By default, the Responsible Party’s DEEPP software sets Slipstream Yesterday Mass to zero for the very first reading of the year. The program calculates daily fuel mass by subtracting a value from the previous day so setting the first reading to zero prevents calculation errors as in most cases the start of the file is January 1, however it also means that these volumes are excluded from the quantification..

Excluding the slipstream volumes for the first day of the year results in an immaterial quantitative understatement.

Understatement -4.1 tonnes CO2e

-0.02%

4.1 tonnes CO2e

0.02%

17-04 Quantitative A programming error in DEEPP appears to select the average fractional change value on certain occasions when a calculated value should be used. This issue only applies to engines with one audit point and was found to impact only two engines in the full population of Pool A. This error resulted in an immaterial quantitative understatement.

Understatement -41.9 tonnes CO2e

-0.21%

41.9 tonnes CO2e

0.21%

Total Error -14.1 tonnes CO2e

-0.07%

77.9 tonnes CO2e

0.39%


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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.

Overall, the GHG information was orderly and thoroughly presented.

The quantification spreadsheets were satisfactorily organized and sufficiently transparent to conduct the verification procedures.

Sufficient and appropriate evidence was provided by the Responsible Party to conduct each of the verification procedures.

The Offset Project Plan and Offset Project Report thoroughly document the emission sources, quantification approach, equations, data collection and information controls.

A number of Opportunities for Improvement were identified through the course of this verification:

As noted in Table 3, Calibration reports were provided for the third subproject participant’s meters, but are not linked to a specific location. Although it is not possible to review a specific report linked to each site, the Verification Team reviewed all of the reports along with an explanation of the subproject participant’s meter swap-out procedure and these were deemed to be acceptable.

• As noted in Table 3, calibration reports for one of the subproject participant’s meters could not be linked to a specific site location. As these meters cannot be calibrated in place, and must be removed and sent off site for calibration, the subproject participant has implemented a swap-out method. In other words, when due for calibration a given meter is removed from an engine and replaced with a different meter. The removed meter is sent away for calibration and when calibration is complete, it is then installed on a new location to replace another meter that is due for calibration. The set of calibration records for this inventory of meters was provided but it was not possible to confirm which meter had been installed on which site. The Verification Team recommends that a system be implemented to allow for more accurate tracking of where and when each meter is installed as part of this preventative maintenance program.

• Reference information is not provided in the OPP or OPR for a number of parameters used in the quantification (e.g. densities, lower heating values, ambient temperatures, ground level elevations). The reference sources for these parameters should be cited as part of the quantification methodology.

• Appendix B of the OPP provides an explanation of how DEEPP interprets and handles abnormal or erroneous data. For example, an explanation is provided for handling duplicate dates in the raw data from the GHG data logger files (i.e. if there is more than one line of data for a specific date). Another example of an erroneous data scenario is where more than 24 hours are included in the raw data for a single date. Although an appropriate methodology for addressing this scenario has been implemented in the DEEPP software, it is not described in the OPP or OPR. The Verification Team


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recommends that explanations for handling all abnormal or erroneous data be described in the OPP and/or OPR.

• For engines with no audit data or invalid audit data, the quantification methodology uses average fractional change values and associated adjustment factors, OR a pre audit BSFC value calculated from a regression equation. However, these values and equations are only provided in the OPP for three engine makes and classifications and are missing for others that are used in the quantification. The Responsible Party should consider including this additional information in the OPP / OPR.

• A different reference source and approach to compiling ambient temperature data (required for regression equation calculations) was used for one subproject participant’s sites versus the other two subproject participants’ sites. A consistent approach should be adopted for this data parameter.

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.

5.3 Confirmations Document information confirmed, including any discrepancies or inconsistencies, as per the Confirmations section in the Standard for Greenhouse Gas Verification.

Section 5.1.3 of the Standard for Verification document lists seven activities that are beyond the scope of a typical greenhouse gas verification.


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Table 7: Confirmation Findings

Confirmation Confirmation Finding

Correct entry of administrative fields such as facility codes and legal locations

The Offset Project Report was reviewed for completeness and accuracy. All project and legal location information is complete and accurate.

Quantification Methodology document is provided and consists of the required components

The Responsible Party has documented all relevant methodologies, procedures and controls in the Offset Project Plan and the Offset Project Report.

Simplified process flow diagrams and energy diagrams

The Responsible Party’s Offset Project Plan and Offset Project report provide process flow diagrams, which were reviewed and found to accurately represent the Project.

Fuel usage This requirement is not applicable to Offset Projects.

Additional request items/forms are complete and reasonable justification provided where needed

The Statutory Declaration was reviewed and found to be complete.

The Aggregated Project Reporting Sheet was reviewed. Sub-projects listed on this sheet were included in the Aggregated Project Planning Sheet and accurately describe the sub-projects included in the Project.

N/A is checked on pages in the reporting form that do not apply

This requirement is not applicable to Offset Projects.

For forecasting facilities, the fund to credit ratio was met for all four reporting periods


For oil sands facilities, the area fugitive calculations are accounted for, as required


Project report information details as required The Responsible Party has prepared an Offset Project Report that meets all the requirements specified in the Standard for Greenhouse Gas Emission Offset Project Developers, Version 2.0, July 2018

6.0 References Author. Year. Title. (no hyperlinks)

None

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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

+1 (604) 353-0264 • www.brightspot.co • [email protected]

Cap-Op Energy Inc.

Engine Fuel Management and Vent Gas Capture Aggregated Projects

Verification Plan

October 12, 2018

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Brightspot Climate Inc. – Verification Plan Cap-Op Energy Engine Fuel Management and Vent Gas Capture Aggregated Projects

i

Terminology

ISO 14064-2 defines the following terms used in the context of a GHG verification:

GHG Assertion: a declaration or factual and objective statement made by the Responsible

Party.

The Alberta Climate Change Office Standard for Validation, Verification and Audit1 extends this

definition to include the document that identifies the greenhouse gas emission reduction and/or

removals and emissions offsets being claimed by the offset project over a defined period of

time.

Project: activity or activities that alter the conditions identified in the baseline scenario which

cause greenhouse gas emission reductions or greenhouse gas removal enhancements.

The GHG Assertion subject of this verification is for the following, which will be referred to

throughout this document as “the Projects”

• Cap-Op Energy Engine Fuel Management and Vent Gas Capture Program

• Cap-Op Energy Engine Fuel Management and Vent Gas Capture Aggregated Project

(Pool B)


(Pool C)


(Pool D)

ISO 14064-2 defines the following parties associated with the verification:

Responsible Party: person or persons responsible for the provision of the greenhouse gas

assertion and supporting GHG information.

The Responsible Party for this verification is Cap-Op Energy Inc. (Cap-Op).

Intended User: individual or organization identified by those reporting GHG-related information

as being the one who relies on that information to make decisions.

The Intended User for this verification is the Alberta Climate Change Office (ACCO).

Verifier: competent and independent person, or persons, with the responsibility of performing

and reporting on the verification process.

The Verifier for this verification is Brightspot Climate Inc. (Brightspot Climate). The members of

the verification team are provided in section 2 of this document.

1 Standard for Validation, Verification and Audit, Version 2.0, June 2018, Alberta Climate Change Office.


1

Introduction

This document serves to communicate information between the parties associated with the

independent verification of the Offset Project Reports for the Cap-Op Energy Engine Fuel Management

and Vent Gas Capture Aggregated Projects.

This document contains six sections:

1. The Introduction, which defines the principles by which this verification will be conducted;

2. The Verification, which defines the verification parameters and the GHG inventory principles that

will be tested by the verification. This section also provides information regarding the verification

team and site visit;

3. The Responsible Party Data Management and Controls, which describes the data management

system and control environment implemented by the Responsible Party;

4. Previous GHG Assertions, which describes any modifications to the original project that have

been made since the original Offset Project Plan was developed and any findings from previous

verifications for this Project;

5. The Verification Risk Assessment and Verification Procedures, which describes the risks of

potential errors, omissions or misrepresentations to the overall GHG assertion and the

verification procedures that have been developed to reduce the overall verification risk; and

6. The Sampling Plan, which lists the verification procedures that could apply sampling of the

project data, along with the sampling size, the sampling methodology and justification.

The Responsible Party developed the Project in accordance with the requirements of the Quantification

Protocol for Engine Fuel Management and Vent Gas Capture, Version 1.0, October 2009 (the Protocol).

GHG Quantification Principles

ISO 14064-2 defines six principles that are fundamental to the fair accounting and reporting of GHG

information. The verification procedures will test that these principles have been upheld through the

Responsible Party’s inventory, accounting and reporting processes.

Section 3.2 – 3.6 of ISO 14064-1 defines these principles as follows:

Accuracy: reduce bias and uncertainty as far as practical

Completeness: include all relevant emission sources

Conservativeness: use conservative assumptions, values and procedures to ensure that GHG

emission reductions or removal enhancements are not over-estimated

Consistency: enable meaningful comparisons of reported emissions (from year to year or

between facilities or between companies)

Relevance: select GHG sources, sinks and reservoirs, data and quantification methodologies

appropriate to the needs of the intended user

Transparency: disclose sufficient and appropriate GHG information to facilitate verification and

to allow intended users to make decisions with relative confidence


2

Verification

Verification Principles

ISO 14064-3 defines four fundamental principles to conducting a greenhouse gas verification, namely

independence, ethical conduct, fair presentation and due professional care.

Brightspot Climate has implemented processes, including mandatory training for all verification team

members, to ensure the application of these principles for this verification.

Regarding the principle of independence, Brightspot Climate conducted an assessment of threats to

independence prior to initiating this verification. No real or perceived threats to independence were

identified. Brightspot Climate will continue to monitor for threats to independence throughout the

course of this verification. A final “Conflict of Interests Checklist” will be appended to the Verification

Statement.

Verification Parameters

The verification will be conducted according to the parameters defined in the following table:

Table 1: Verification Parameters

Level of Assurance Reasonable assurance

Objectives

• Issue a verification statement on whether the GHG assertion is without

material discrepancy;

• Issue a verification report that provides details of the verification

activities; and

• Complete the “confirmations” activities defined in the Alberta Climate

Change Office Guidance Document2, Section 5.1.3

Criteria

• Climate Change and Emissions Management Act

• Carbon Competitiveness Incentive Regulation 255/2017 with

amendments up to and including Regulation 96/2018

• Standard for Validation, Verification and Audit, Version 2.0, June 2018

• Standard for Greenhouse Gas Emission Offset Project Developers,

Version 2.0, July 2018

• Quantification Protocol for Engine Fuel Management and Vent Gas

Capture, Version 1.0, October 2009

2 Standard for Validation, Verification and Audit, Version 2.0, June 2018. Alberta Climate Change Office.


3

Scope

Project Name: Cap-Op Energy Engine Fuel Management and

Vent Gas Capture Program

Cap-Op Energy Engine Fuel Management and

Vent Gas Capture Aggregated Project (Pool B)


Vent Gas Capture Aggregated Project (Pool C)


Vent Gas Capture Aggregated Project (Pool D)

Geographic Boundary: All subprojects are located within Alberta’s

provincial boundary.

Physical Operations: Natural gas processing and compression:

• Reciprocating engines

• Pneumatic devices and controllers

Emission Sources: Engine Fuel Management and Vent Gas Capture

• B1: Fuel Extraction and Processing

• P1: Fuel Extraction and Processing

• B4: Unit Operation

• P4: Unit Operation

• B5b: Venting of Emissions Captured in Project

• P5b: Capture of Vent Gases

IPCC GHGs Emitted: Carbon Dioxide (CO2)

Methane (CH4)

Nitrous Oxide (N2O)

Reporting Period: January 1, 2017 – December 31, 2017

Materiality Quantitative materiality threshold is 5% of asserted greenhouse gas

emission reduction.

Preliminary Verification

Schedule

Verification Kickoff Meeting August 1, 2018

Draft Verification Plan August 3, 2018

Site Visit August 16, 2018 and October 30, 2018

Draft Verification Report November 15, 2018

Final Verification Report November 30, 2018

Verification Team

Aaron Schroeder, P.Eng., will be the Lead Verifier and Designated Signing Authority for this verification.

His extensive experience quantifying and verifying greenhouse gas emissions satisfies all sixteen subject

matter areas defined in the ISO 14064-3.


4

Jeanna Brown, P.Eng., will provide analytical support to the verification team through the completion of

the verification procedures and the development of the Verification Report.

Rodrigo Cubedo, E.I.T. will provide analytical support to the verification team through the completion of

the verification procedures and the development of the Verification Report.

Chris Caners, P.Eng., will conduct an independent peer review of the verification.

Additional information regarding the qualifications of the verification team will be provided in a

Statement of Qualifications, which will be appended to the Statement of Verification.

Site Visit Safety Requirements

Personnel conducting site visits are required to wear personal protective equipment including steel-toed

boots, Nomex coveralls, hard hat, safety glasses with side shields and gloves. A site orientation must

be completed before entering the site.

Some of the operators participating in this aggregated project require visitors to have a valid H2S Alive

certificate, in addition to operator-specific online orientations.


5

Responsible Party Data Management and Controls

Data Management Systems

The Senior Sustainability Engineer from Cap-Op Energy Inc, as the project aggregator, has the primary

responsibility for collecting GHG information, quantifying the emission reduction and completing

required documentation.

The Responsible Party has developed a fit for purpose electronic data management and calculation

software system, called “Distributed Energy Efficiency Project Platform” (DEEPP), that is used to

manage GHG information and quantify the emission reduction. Table 2, below, describes the data

measurement, estimation and data storage locations for all GHG information used by the Responsible

Party to produce the GHG inventory. The final column in this table describes the data storage location

and the path (intermediate data transfer) prior to use in the GHG inventory.

Table 2: GHG Information Data Management

Activity Data Description Measurement Type Data Storage Location / Path

Mass of fuel gas

consumed in the engine Metered

Metered quantity

>> Inventory Template

>> Cap-Op GHG calculation (DEEPP)

Average engine load Continuous monitoring;

averaged monthly

Measured quantity



RPM Continuous monitoring;

averaged monthly

Measured quantity



Fuel gas analysis (density,

LHV)

Third party laboratory analysis;

Annual fuel gas sampling

Laboratory report

>> Manual transfer


Mass of vent gas

consumed in the engine Metered

Metered quantity



Vent gas analysis (density,

% CnHm, LHV)

Third party laboratory analysis;

Annual or semiannual vent gas

sampling

Laboratory report

>> Manual transfer


Control Environment

The Responsible Party’s Offset Project Plan (OPP) describes the processes, procedures and systems

that have been designed and implemented within their quality assurance/quality control framework. The

accuracy and completeness of the documentation of the Responsible Party’s controls will be reviewed

through the course of the verification.


6

The following processes, procedures and systems have been employed by the Responsible Party:

• Quantification is based on direct metering and measurement.

• The Responsible Party has implemented a management system for leak detection and repair.

• Meters used to measure parameters required for the quantification are calibrated in accordance

with manufacturer guidelines.

• A fit for purpose electronic data management and calculation system has been developed by

the Responsible Party, called “Distributed Energy Efficiency Project Platform” (DEEPP). This

system is used to store all of the data parameters and perform the calculations to support the

quantification.

• Data is transferred electronically between systems to reduce transcription errors.

• Gas composition analysis is performed by an independent, third-party laboratory.

• All quantification data is stored in the Responsible Party’s central database which is hosted on

a third party server with full redundancy in two locations. All information stored in the database

is secured and backed up through database management functions built into the daily

operation of the system.

• The Responsible Party has implemented a record retention system that meets the requirements

of the Regulation.

• The Offset Project Plan (OPP) is reviewed annually for accuracy, completeness, consistency,

relevance and transparency. The OPP documents:

• Project boundary

• Project processes

• Emission sources

• Changes made to the project since the baseline condition was established

• Activity data used to quantify emissions

• Emission quantification equations and other methods for deriving values required for the

quantification of emissions and production

• Emission factors and references

• Meter maintenance processes

• Data management

• Data quality controls and procedures


7

Previous GHG Assertions

Changes to Operations and Boundaries

This is the first year that Brightspot Climate has provided verification services for the Project.

The following modifications to the original project have been made since the original Offset Project Plan

was developed:

• Data parsing methods have been modified to interpret data files from the engine fuel

management log files to improve the accuracy of data interpretation.

• In the original approach to the emission reduction quantification, on-site running data was used

to calculate fuel savings. An updated method, which uses a combination of audit data and

running data, allows for greater accuracy:

o Two point audits are interpolated if the percent change on load is within 5%

o One point audits are used directly if the percent change on load and RPM is within 5%

• In the absence of a post audit, an engine uses the average fractional change observed at other

engine fuel management sites of the same make, model and adjustment factor. If no average

fractional change value is available, the engine will not generate credits for the reporting period.

• Waukesha F3521GSI and White Superior 8GTL-825 engine types have regression models and

average fractional change values available for estimating the Brake Specific Fuel Consumption

in the absence of a pre-audit. Waukesha L7042GSI has an average fractional change value in

addition to the regression model described in the OPP. These models and values are based on

onsite data and protocol requirements for quantification in absence of audit data and allow for

improved accuracy in the assertion.

• A modification to the quantification methodology has been implemented to address scenarios

where the percent change on load is greater than 25% for a pre-audit. In these cases, a

regression model is used to predict the brake specific fuel consumption, otherwise credits are

not available for the reporting period.

• New GHG data loggers have been installed at most sites which improve data quality and data

validation.

Further details of each of these items are provided in the Offset Project Report.

Findings from Previous Verifications

There were no unresolved material findings identified in the previous verification report. The previous

verification report noted one immaterial qualitative discrepancy related to the method applied for one

point audit using regression.

This previous discrepancy will be reviewed through the course of this verification to determine if the

underlying issues have been addressed.


8

Verification Risk Assessment and Verification Procedures

Verification risk is defined as the risk of an incorrect verification conclusion. It can be calculated as the

product of

• The Project’s inherent risks;

• The Responsible Party’s control risks; and

• The detection risks associated with the verifier’s verification procedures.

Inherent Risk × Control Risk × Detection Risk = Verification Risk

The verifier cannot affect the inherent risk or the control risk. Therefore, to reduce the overall verification

risk and reach the agreed level of assurance (defined in the verification scope), the verifier must design

verification procedures that reduce the detection risk.

Each inherent and control risk was provided with the risk score (high/medium/low). The risk analysis of

inherent and control risks considers both the magnitude of the activity data or inventory component on

the overall GHG assertion as well as the probability that the risk will result in a discrepancy, as assessed

by the verifier.

The Verification Risk Assessment Summary on the following pages describes the following information:

• Activity Data / Inventory Component: The boundary, eligibility requirement, data component or

reporting activity being evaluated.

• Inherent Risk: The verifier’s evaluation of inherent risk. Inherent risks have been categorized

according to the ISO 14064-1 principles (accuracy, completeness, consistency, relevance,

transparency).

• Control Risk: A description of the Responsible Party’s controls (if any controls are applicable)

and the verifier’s evaluation of control risks.

• Max Detection Risk: The maximum detection risk that can be applied and still result in an overall

verification risk that meets the agreed level of assurance.

• Designed Detection Risk: The detection risk of the verification procedure that the verifier intends

to complete. Note that the designed detection risk must always be equal to or lower than the

maximum detection risk.

• Verification risk: the product of the inherent, control and (designed) detection risk, as defined in

the equation above.

Important note: The verification strategy for this verification is to use substantive tests instead of control

tests wherever possible. Substantive tests are designed to focus on directly testing activity data or

inventory components and their associated inherent risks. Control tests are designed to focus on

testing the Responsible Party’s controls and if the test is successful, relying on the Responsible Party’s

control. Therefore, control tests indirectly test activity data or inventory components.

Each verification procedure listed in the following table denotes if the procedure is a substantive or

control test.


9

Table 3: Verification Risk Assessment Summary

Activity Data /

Inventory

Component

Inherent Risk Control Risk Max

Detection

Risk

Designed

Detection

Risk

Description of Verification

Procedure

Verification

Risk

PROTOCOL APPLICABILITY REQUIREMENTS

Determination of

BSFC and fractional

change in fuel

consumption must

be completed

according to

Protocol guidelines

Accuracy (low)

Equipment

modifications could

impact the

measured BSFC

and therefore the

validity of the

calculated fuel

savings.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

High Medium Substantive test: Observe

operations and interview

operations staff during site visit

to determine if any modifications

have been made to equipment

that may impact the measured

BSFC.

Low

Functional

equivalence must be

demonstrated;

engine performance

must not be

impaired because of

the project

Relevance (high)

Level of service may

have changed

between the

baseline and project

conditions.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

Low Low Substantive test: Observe

operations and interview

operations staff during site visit

to determine level of service

provided by project

implementation.

Low


10

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Capture of vent gas

must not be

required by

regulation

Relevance (high)

Vent gas capture

may be required by

Directive 60, Section

2.8.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

Low Low Substantive test: Review the

daily gas volume captured for

each site and compare against

the Directive 60 requirements. If

necessary, review the economic

analysis defined in Directive 60

for each site.

Low

The project must

comply with all air

emission regulations

in Alberta

Relevance (high)

Vent gas capture

may be required to

be flared or

captured.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

Low Low Substantive test: Review the

daily gas volume captured for

each site and compare against

the Directive 60 requirements.

Low

Substantive test: Determine if

vent gas is captured from glycol

dehydrators and if the

requirements of Directive 60,

Section 8.3 apply, which may

disqualify the site.

Low


11

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Projects must use

“flaring” as the

baseline condition if

flaring is required by

any regulation

Relevance (high)

The appropriate

baseline condition

may not have been

applied.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

Low Low See “Capture of vent gas must

not be required by regulation”,

above.

Low

The project must

not occur within the

boundary of a site

that is regulated by

the Specified Gas

Emitters Regulation.

Relevance (high)

The project site may

be regulated by the

Specified Gas

Emitters Regulation

and therefore, be

ineligible.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

Low Low Substantive test: Compare the

project locations to the list of

facilities regulated by the

Specified Gas Emitters

Regulation.

Low

Quantification must

be based on actual

measurements and

monitoring.

Relevance (high)

Estimates may have

been applied,

particularly for

missing data.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

Low Low Substantive test: Review

quantification data for anomalies

or missing data.

Low


12

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

The project must

meet the

requirements of the

Alberta Offset

System

Relevance (high)

The project may not

have met the

requirements of the

Alberta Offset

System.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

Low Low Substantive test: Evaluate the

project developer’s evidence

regarding the general

requirements of the Alberta

Offset System.

Low

Project developer

must establish the

ownership of the

emission reduction

for each site within

the aggregated

project

Completeness (high)

Ownership may not

be established with

documentation for

all sites within the

aggregated project.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.


ownership documents for each

project site within the

aggregated project.

Low

Accuracy (high)

Emission offsets

may be claimed for

subprojects that

have been removed

from this

aggregated project.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.


aggregated project planning and

reporting sheets to confirm that

subprojects that have been

removed from the aggregated

project do not claim emission

offsets after the date they were

removed.

Low


13

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

PROTOCOL FLEXIBLITY

Changes in the

quantity of waste

gas or process

emissions may be

quantified.

N/A N/A N/A N/A Not applicable for this project. N/A

Fractional fuel

savings data from

other engines of the

same make and

classification may

be applied for

engine fuel

management

projects where pre

and post audit data

is not available.

Accuracy (medium);

Relevance (medium)

Available data may

not be sufficient or

may be applied

incorrectly.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.


instances where pre and post

audit data are not available, and

evaluate if fractional fuel savings

was applied appropriately.

Low

Substantive test: Recalculate the

emission reduction from original

data applying the fractional fuel

savings method where

appropriate.

Low


14

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Implementation of

vent gas capture at

multiple facilities.

Completeness

(medium)

The project

aggregates

installations at

multiple project

sites. The data and

documentation may

not be complete for

all sites.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

Low Low Substantive test: Evaluate the

completeness of the required

data and documentation for all

project sites included in the

aggregated project.

Low

For engines that

operate at constant

speed, the simple or

advanced

approaches may be

altered to include

measurement at

one rpm for each

load.

N/A N/A N/A N/A Not applicable for this project (no

constant speed engines are

included in the aggregated

project).

N/A

Site specific

emission factors

may be applied

N/A N/A N/A N/A Not applicable for this project. N/A


15

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

QUANTIFICATION DATA

Mass of fuel gas

consumed in the

engine

Accuracy (high)

The metered

captured vent gas

may be incorrect if

meters are not

properly maintained.

Control: The

Responsible Party

has implemented a

meter

maintenance

program that

includes periodic

meter calibration.

Control Risk: The

maintenance

program may not

be operating

effectively (low).

Low Low Controls test: Review meter

calibration reports to determine if

the meter maintenance program

is operating effectively.

Low


16

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Fuel gas analysis

(density of vent gas,

% CnHm, LHV)

Accuracy (low)

Reported gas

compositions may

not accurately

represent the gas

composition or may

be incorrectly

transcribed into the

emission reduction

calculation.

Control: Gas

analysis is

conducted by an

independent lab.

An internal

process is used to

validate results.

Control Risk:

Validation process

may not be

properly

implemented or

transcription errors

may be introduced

(low).

High Low Substantive test: Analyze gas

compositions for significant

fluctuations or abnormal gas

concentrations. Confirm the

accurate transcription of the gas

analysis into the emission

reduction calculation.

Low

Completeness (low)

The gas

compositions may

not include a valid

gas composition for

each period at the

required frequency.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

High Medium Substantive test: Review

completeness of gas

composition data.

Low


17

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Mass of vent gas

consumed in the

engine

Accuracy (high)

The metered

captured vent gas

may be incorrect if

meters are not

properly maintained.

Control: The

Responsible Party

has implemented a

meter

maintenance

program that

includes periodic

meter calibration.

Control Risk: The

maintenance

program may not

be operating

effectively (low).

Low Low Controls test: Review meter


the meter maintenance program

is operating effectively.

Low


18

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Vent gas analysis

(density of vent gas,

% CnHm, LHV)

Accuracy (low)

Reported gas

compositions may

not accurately

represent the gas

composition or may

be incorrectly

transcribed into the

emission reduction

calculation.

Control: Gas

analysis is

conducted by an

independent lab.

An internal

process is used to

validate results.

Control Risk:

Validation process

may not be

properly

implemented or

transcription errors

may be introduced

(low).

High Low Substantive test: Analyze gas





analysis into the emission

reduction calculation.

Low

Completeness (low)

The gas

compositions may

not include a valid

gas composition for

each period at the

required frequency.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

High Medium Substantive test: Review

completeness of gas

composition data.

Low


19

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Average Engine

Load

Completeness (low)

The fractional

change in fuel

consumption

calculation may not

include a valid

average engine load

value for each

period at the

required frequency.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

High Low Substantive test: Review the

monthly average engine load

values for completeness.

Low

RPM Completeness (low)

The fractional

change in fuel

consumption

calculation may not

include a valid RPM

value for each

period at the

required frequency.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.


monthly RPM values for

completeness.

Low


20

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Ambient

temperature data

Completeness,

Accuracy (low)

The regression

equations used to

calculate brake

specific fuel

consumption in the

absence of valid

pre/post audit data

use site specific

monthly average

ambient

temperature data.

The temperature

data may be

incomplete or

inaccurate for the

specific site.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.


monthly average ambient

temperature data used in the

regression calculations.

Low


21

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Ground elevation

data

Completeness,

Accuracy (low)

The regression

equations used to

calculate brake

specific fuel

consumption in the

absence of valid

pre/post audit data

use site specific

ground elevation

data. The ground

elevation data may

be incomplete or

inaccurate for the

specific site.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.


ground elevation value for each

site used in the regression

calculations.

Low


22

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

EMISSION REDUCTION QUANTIFICATION

Inclusion of

applicable emission

sources

Completeness,

Relevance (low)

Emission sources

may be excluded

from the Project.

Control: OPP is

used to document

emission sources

that are included in

the Project.

Control Risk: OPP

may be inaccurate

or out of date

(medium).

High Low Substantive test: Observe

emission sources during site tour

and review against included SSs

in the Protocol.

Low


23

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Application of

approved

quantification

protocol

Accuracy (high)

The project

developer may not

have implemented

approved

quantification

methodologies or

applied additional

methodologies.

Control:

Responsible Party

has developed an

Offset Project Plan

that is intended to

conform to the

requirements of

the approved

quantification

protocol.

Control Risk: The

protocol

requirements may

not have been

implemented

correctly (medium)


methodologies described in the

Responsible Party’s Offset

Project Plan to the

methodologies described in the

approved quantification protocol.

Low


complete emission reduction

using original data and methods

described in the approved

quantification protocol.

Low


24

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Quantification of

emission reduction

Accuracy (high)

Emission reduction

calculation may

contain arithmetic

errors.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

Low Low Substantive test: Recalculate the


using original data.

Low

DATA INTEGRITY

Activity data and

emission factor data

integrity

Accuracy (high)

Data may not have

been accurately

transferred between

electronic systems

and calculation

sheets.

Control: The

Responsible Party

uses electronic

data transfers

whenever possible

to maintain data

integrity.

Control Risk:

Electronic data

transfers may

result in errors or

may not be

available for all

data (medium).

Low Low Controls test: Analyze all

metered data for abnormal data

(zeros, missing data, values

outside range).

Low


25

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk



using original data.

Low

Transcription of final

emission reduction

into Offset Project

Report

Accuracy (high)

Final emission

reduction may not

have been

transcribed

accurately from

calculation

spreadsheets into

the Offset Project

Report.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.


final emission reduction quantity

reported by the Responsible

Party to the quantity reported in

the Offset Project Report. Also,

compare these quantities to the

recalculated quantity in previous

verification procedures.

Low


26

Sampling Plan

The verification procedures that could apply sampling of the project data are listed in the following table.

The sampling size, the sampling methodology and their respective justifications are also described in the following table.

Table 4: Sampling Plan

Activity Data /

Inventory

Component

Detection

Risk

Design


Procedure

Sample Size Sampling Methodology and

Justification

Mass of fuel gas

consumed in the

engine

Low Controls test: Review meter


the meter maintenance program is

operating effectively.

46 records in aggregated assertion

(85% confidence level, 92.5%

confidence interval; appropriate for

the defined detection risk)

Sample is stratified across the four

projects (pools) and across the

subproject participants to ensure

proportionate sample from each

pool and representation of each

operator company.

Stratification of project pools and

subproject participants; random

sampling; discrepancies are

normally distributed

If error rate is greater than 5%,

sample size will be expanded.

Fuel gas analysis

(density of vent

gas, % CnHm, LHV)

Low Substantive test: Analyze gas





analysis into the emission reduction

calculation.










operator company.








27

Activity Data /

Inventory

Component

Detection

Risk

Design


Procedure


Justification

Medium Substantive test: Review

completeness of gas composition

data.

Annual samples for each of the

sites.

There is only one sample per site.

Review of full dataset has lower

detection risk than sampling.

Mass of vent gas

consumed in the

engine

Low Controls test: Review meter


the meter maintenance program is

operating effectively.

Annual calibration for each of the

sites.



Vent gas analysis

(density of vent

gas, % CnHm, LHV)

Low Substantive test: Analyze gas





analysis into the emission reduction

calculation.










operator company.







Medium Substantive test: Review

completeness of gas composition

data.

Annual samples for each of the

sites.

There is only one sample per site.




28

Activity Data /

Inventory

Component

Detection

Risk

Design


Procedure


Justification

Average Engine

Load

Low Substantive test: Recalculate the

fractional change in fuel

consumption applied in the

quantification, using the recorded

monthly engine load values.

Monthly calculation for each of the

sites.



Low Substantive test: Review the

monthly average engine load

values for completeness.

Monthly values are required for

each of the sites.



RPM Low Substantive test: Recalculate the

fractional change in fuel

consumption applied in the

quantification, using the recorded

monthly RPM values.

Monthly calculation for each of the

sites.




monthly RPM values for

completeness.

Monthly values are required for

each of the sites.




29

Activity Data /

Inventory

Component

Detection

Risk

Design


Procedure


Justification

Ambient

temperature data


monthly average ambient

temperature data used in the

regression calculations.

39 records of 66 subproject sites in

aggregated assertion (85%

confidence level, 92.5%


the defined detection risk).






operator company.







Ground elevation

data


ground elevation value for each site

used in the regression calculations.

39 records of 66 subproject sites in

aggregated assertion (85%

confidence level, 92.5%








operator company.







of 105

Appendix B: Statement of Qualifications

of 105

Statement of Qualifications

Offset Report Project Name Offset Project ID

Cap-Op Energy Engine Fuel Management and Vent Gas Capture Program #8237-6623

Reporting Company Legal Name Report Type Reporting Period

Cap-Op Energy Inc. Offset Report from January 1, 2017 - December 31, 2017

to

Signature of Third Party Verifier

I, Aaron Schroeder (Third Party Verifier), meet or exceed the qualifications of third-party verifiers described in Section 29 of the Carbon Competitiveness Incentive Regulation.

Verifying Company Name

Brightspot Climate Inc. Per: Aaron Schroeder

Signature of Third Party Verifier Date:

Training Received Under ISO 14064 Part 3

• Greenhouse Gas Verification – ISO 14064-3, Canadian Standards Association, 2012 • Instructor – Greenhouse Gas Verification – ISO 14064-3, University of Toronto, 2015 – 2018

First Name Last Name

Aaron Schroeder

Professional Designation E-mail Address Phone Number

Professional Engineer [email protected] (604) 353-0264

Lead Verifier

� Same as third party verifier??

First Name Last Name Professional Designation E-mail Address Phone Number Training Received Under ISO 14064 Part 3

Feb. 13, 2019

of 105

Peer Reviewer First Name Last Name Hector Sanchez E-mail Address Phone Number [email protected] (416) 300-2661 Training Received Under ISO 14064 Part 3

• Greenhouse Gas Verification – ISO 14064-3, Canadian Standards Association, 2012

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Appendix C: Findings and Issues

of 105

Table 8: 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 Responsible Party

Resolution Conclusion

17-01 The reference source for the ground elevation values used in the quantification was not available from the Responsible Party.

Ground level elevation values were sourced for a sample of sites from Petroninja and compared to the values used in the quantification. Minor discrepancies were noted in each site in the sample. The average absolute magnitude of error noted in the sample was extrapolated to the full population of data to estimate the potential impact on the emission reduction claim.

The estimated discrepancy represents a conservative approximation of the potential error given the available data.

This could potentially result in an overstatement or understatement.

The potential error in ground level elevation values used in the regression equations results in an immaterial quantitative discrepancy.

Unresolved Immaterial quantitative discrepancy

17-02 Some EFM / vent gas capture systems involve the installation of additional pneumatic devices which, if supplied

The Verification Team was not able to confirm definitively that additional pneumatics have not been installed as a

Unresolved Immaterial qualitative discrepancy

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by instrument gas, may result in additional venting in the project condition, or an inflated baseline condition (if they are tied into the VGC system).

result of implementing the Project. We acknowledge that the impact of incremental venting emissions from additional pneumatic devices would have a very small, immaterial impact on the total emissions reduction.

17-03 By default, the Responsible Party’s DEEPP software sets Slipstream Yesterday Mass to zero for the very first reading of the year. The program calculates daily fuel mass by subtracting a value from the previous day.

Setting the first reading to zero prevents calculation errors as in most cases the start of the file is January 1, however it also means that these volumes are excluded from the quantification. Excluding the slipstream volumes for the first day of the year results in an immaterial quantitative understatement.


17-04 A programming error in DEEPP appears to select the average fractional change value on certain occasions when a calculated value should be used.

This issue only applies to engines with one audit point and was found to impact only two engines in the full population of the Pool A project. This error resulted in an immaterial quantitative understatement.


17-05 The Responsible Party has developed an alternative quantification approach to the recommended method in the Protocol, for engines with a single point audit, where % load change is between 5 and 25%.

The Verification Team determined that the Responsible Party’s method, which is based on multiple measured data points rather than a single point taken under different operating conditions, is more representative of actual operating conditions, and is expected to improve accuracy. The Verification Team concluded that the methodology developed by the Responsible Party is appropriate; no discrepancy.

Resolved No discrepancy

17-06 Two discrepancies were detected in the ambient temperature data used in the regression calculations, which were corrected by the Responsible Party.

An expanded sample was reviewed and no further discrepancies were identified.

A different reference source and approach to compiling ambient temperature data was used for one

Resolved Immaterial quantitative discrepancy

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subproject participant’s sites versus the other two subproject participants’ sites. Adopting a consistent approach for compiling this data was identified as an opportunity for improvement.

17-07 One discrepancy was detected in the gas composition data used in the quantification.

This discrepancy was corrected by the Responsible Party. No further errors were identified.


17-08 A number of display errors were found in the DEEPP program, where the equations or calculations shown did not match the actual calculations being performed.

These discrepancies did not affect the calculation result; they were display errors only. These instances were fixed by the Responsible Party.

Resolved Immaterial qualitative discrepancy

17-09 Regression equations and supporting analysis are provided in the OPP for some of the engines in the quantification. Supporting evidence was requested for two of the engine types that were not available in the OPP.

The Responsible Party discovered that the regression equation applied for these two engine types was erroneous. The Responsible Party corrected the regression equations in DEEPP and provided the supporting analysis to the Verifier.


17-10 Three discrepancies were detected in the pre and post audit data in DEEPP when compared against the audit reports.

These discrepancies were corrected by the Responsible Party. An expanded sample was reviewed and no further discrepancies were identified.


17-11 One engine in a different project pool was identified as a Waukesha GL (lean burn) engine that has been rebuilt to become a GSI. No pre or post audit data is available, and no documentation or evidence is available to verify that the GSI pre and post audit data is representative of this engine conversion.

This subproject was removed from its Project. Although this issue was detected in another project pool, records for conversion for a sample of engines in this pool were reviewed and no engine rebuilds or discrepancies in engine types were detected.

Resolved No discrepancy

of 105

Appendix D: Statement of Verification


of 105

Statement of Verification Associated SGER Submission

Offset Project Protocol Project ID #


Quantification Protocol for Engine Fuel Management and Vent Gas Capture, Version 1.0, October 2009 8237-6623

Project Developer Serial Range Start Report Period

Cap-Op Energy Inc. TBD

January 1, 2017 – December 31, 2017

Serial Range End

TBD

Statement of Verification

GHG Assertion

Value Units

Total Baseline Emissions 534,872 tonnes CO2e

Total Project Emissions 514,846 tonnes CO2e

Other 0 tonnes CO2e

Net Reductions 20,026 tonnes CO2e

Statement of Assertion

The Responsible Party’s GHG Assertion is comprised of the Offset Project Plan, Offset Project Report and supporting documentation.

The GHG Assertion covers the reporting period January 1, 2017 to December 31, 2017 and states an emission reduction and removal claim of 20,026 tonnes CO2e over this period.


of 105

The emission reduction and removal claim consists of 2017 vintage credits.

Responsibilities of Project Developer and Third Party Verifier

Our responsibility as the Verifier is to express an opinion as to whether the GHG Assertion is materially correct, in accordance with approved Protocol, the Carbon Competitiveness Incentive Regulation (the “Regulation”), and the Alberta Climate Change Office – Standard for Greenhouse Gas Emission Offset Project Developers, Version 2.0, July 2018.

We completed our review in accordance with the ISO 14064 Part 3: Greenhouse Gases: Specification with Guidance for the Validation and Verification of Greenhouse Gas Assertions (ISO, 2006). As such, we planned and performed our work in order to provide positive, but not absolute assurance with respect to the GHG Assertion.

The verification procedures that were performed through the course of the verification were developed based on the results of a risk assessment that was completed during the verification planning stage. These verification procedures are described in the Verification Plan. Certain verification procedures included data sampling. The sampling type, sample size and the justification for the planned sampling type and size are detailed in a Sampling Plan, which is included in the Verification Plan.

Conclusion

I believe our work provides a reasonable basis for my conclusion.

There were no unresolved misstatements in the final GHG Assertion.

Based on our review, it is my opinion at a reasonable level of assurance that the GHG Assertion is materially correct and presented fairly in accordance with the relevant criteria.





Date:

First Name Last Name

Aaron S Schroeder

Professional Designation E-mail Address Phone Number

Professional Engineer [email protected] (604) 353-0264

Feb. 13, 2019

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Appendix E: Conflict of Interest Checklist


of 105

Conflict of Interest Checklist Associated SGER Submission Offset Project Protocol


Quantification Protocol for Engine Fuel Management and Vent Gas Capture, Version 1.0, October 2009

Project Developer Report Type Report Period

Cap-Op Energy Inc. Offset Report

January 1, 2017 – December 31, 2017

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

1.

The relationship between my firm and this reporting company poses unacceptable threat to or compromises the impartiality of my firm.

False

2.

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

False

3.

The personnel my firm has scheduled to participate in the verification may have an actual or potential conflict of interest.

False

4.

My firm participated in some manner in the development or completion of the associated offset submission for this reporting company.

False

5.

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

False

6.

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

False

7.

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

False

8.

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

False

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.


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I , Aaron Schroeder (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.



Signature of Third Party Verifier Date:

First Name Last Name Aaron Schroeder Professional Designation E-mail Address Phone Number Professional Engineer [email protected] (604) 353-0264

Feb. 13, 2019

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Appendix F: Supplemental Diagrams/Tables/Figures

of 105

Table 9: Supporting Documentation Reviewed

File Name Description

8237-6623_GHGReport_20110101_20121231.pdf

Cap-Op Energy Engine Fuel Management and Vent Gas Capture Program - Offset Project Plan, Cap-Op Energy, Version 2.0, September 2012

Cap-Op EFM Pool A 2017 OPR - final draft for peer review.docx

Cap-Op Energy Engine Fuel Management and Vent Gas Capture Program - Offset Project Plan - Offset Project Report Form

02-xxxx_AFR-ALL_INV_2017-P1.xlsx

03-xxxx_AFR-ALL_INV_2017-P1.xlsx

Inventory Spreadsheets

Gas composition reports, various Gas analysis reports for each subproject site

AFR system installation invoices, various Records of conversion for each subproject

Pre/Post Audit Reports, various Audit reports for pre and post installation of the EFM system for each subproject

GHG data logger files, various Raw data files from the GHG data logger unit installed on each subproject

Calibration reports, various Fuel gas and vent gas meter calibration reports for each subproject

7044-9390GSI_regression.xlsx Regression equation supporting data and analysis

Limitation of Liability

This report is intended for the responsible party and the intended user as defined in the attached verification report. The sole intention of the report is to verify the GHG assertion made by the responsible party named in the report and is not intended to provide assurance of any kind for any purpose other than for reporting under the GHG program as defined in the scope of the attached report.

Brightspot Climate disclaims liability for use by any other party and for any other purpose.