Flaring, Venting and Greenhouse GasesBOEMRE WorkshopMarch 30, 2011New OrleansHolly Hopkins, APIPolicy Advisor, Upstream12Topics for DiscussionAPI IntroductionTimelineNew RequirementsThe impact of flaring versus venting on greenhouse gas(GHG) emissionsGHG emissions reductionExisting worldwide best practices that could reduce GHGemissions from flaring and ventingConclusionsAmerican Petroleum InstituteFounded in 1919Covers all segments of the industry:UpstreamDownstreamPipelineMarineService and SupplyOver 470 MembersPrincipal roles – Standard Setting,Certifications, Advocacy and Education34TimelineJuly 2004 GAO issues a reportNatural Gas Flaring and Venting –Opportunities to Improve Data and Reduce EmissionsMarch 6, 2007 MMS publishes a Proposed Rule on proposedrevisions to 30 CFR part 250,subpart K, Oil and Gas ProductionRequirementsApril 19, 2010 MMS/BOEMRE publishes Final Rule amending 30CFR part 250, subpart K, Oil and Gas Production Requirements,effective May 19, 2010October 15, 2010 BOEMRE issues NTL No. 2010-N09 –Guidance on Flare/Vent Meter Installation5New RequirementsRule clarifies limits on the amount of natural gas that maybe flared or vented during certain situationsImproves collection of data on flaring and venting byrequiring operators to report gas flared separately fromgas ventedRequire operators to install flare/vent meters on largeplatformsThese regulatory changes provide more accuratemeasurements of GHG emissions6Venting vs. FlaringWhat is Venting?Controlledreleaseof gases into the atmosphere in the course ofoil and gas production operations.GHG released: CH4, CO2and water vaporsWhat is flaring?Controlledburningof natural gas and other hydrocarbon vapors inthe course of routine oil and gas production operations.This burning occurs at theend of a flare stack or boom.GHG released:CO2 and water vaporsGlobal Warming ImpactCH4in the atmosphere has a higher degree of radiative warmingimpact when compared to CO2One ton of CH4released to the atmosphere is equivalent to theglobal warming impact of the release of 21-25 tons of CO27Global Perspective on Venting and FlaringEIA global energy outlook estimate97 Billion cubic meters (m3) natural gasflared worldwideAbout 2.7% of natural gas productionGAO findings for offshore federal leases,Venting and flaring of natural gas isestimated to be in the range of 0.5 –2.3% of the natural gas producedWorld Bank is leading a Global GasFlaring Reduction PartnershipA catalyst for reducing wasteful andundesirable practices of gas flaring andventing through policy change,stakeholder facilitation and projectimplementationInternational markets2000 2020FlaringDomestic marketsSite-use and re-injection

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# O p t i m i s t i c s c e n a r i oSource: ECON at “Global Gas Flaring Reduction Initiative”Conference, Holmenkollen, Norway 15th April 20028Domestic Venting and Flaring DataGAO Report(GAO-11-34, October 2010)Concludes that current reportingguidance might not account forall sources of natural gaslost by venting and flaringGOADS-2011 monthly activity data (due April 2012)operating hours; total fuel used;processed throughput; volumeflared; volume ventedGOADS-2011 data will be compared to data submitted bycompanies through the Oil & Gas Operations Reports(OGOR)GOADS data will be the basis for reporting to EPA from offshoreoperations under the GHG Reporting Program9Industry Guidelines for GHG EmissionReduction ProjectsPart I – General Project GuidelinesPart II – Carbon Capture and StoragePart III – Flare ReductionGuidelines GoalsIdentify, assess, and develop candidateprojects that would lead to credibleemission reductionsDevelop a framework for emissionsreduction assessment for specificproject “families”Regime neutral for global applicability10Flaring and Venting GHG EmissionsReduction ProjectsBest opportunity for flaring and venting reduction projects are in the oilproduction sectorGHG emission reductions are realized when,CH4emissions are reduced where gas that was previously vented is flaredCH4and CO2emissions are reduced when gas previously vented or flaredis captured for energy use,CH4and CO2are reduced when gas previously vented is captured andinjected underground for long-term storage or for enhanced oil recovery.UN Clean Development Mechanism (CDM)GHG reduction projectsIndividually designed projects tofit site-specific needs and criteriaEmission reduction credits provided by the UN based on adhering tomethodology guidelinesEmission reduction credits incentivize operators to develop and implementprojectsCurrently 8 projects approved at oil production facilities, and 2 projects atrefineries11Natural Gas STAR: CH4Mitigation(USEPA, SPE 126964, April 2010)Gulf of Mexico based example for cost-effective CH4reductionTheoretical platform based on the most common equipment on deepwateroil production platforms in the U.S.63,000 Barrels ofoil with 2 million m3of natural gas per dayVapor recovery system to capturestorage tank venting emissionsCentrifugal compressors with wetseals are used for gas compressionVents from the dehydrator, wet sealdegassing, compressor blowdown, and piglauncher are releasedto the atmospherePlatform has a flare gas system for handling well venting and upsetsMain sources of CH4emissions for this platformCentrifugal compressor wet seal oil degassing, gas emitted from the cold vent, andventing from the glycol dehydratorPrioritization of reduction optionsMarginal abatement costs developed from Natural Gas STAR experienceRanking of cost-effective options for this theoretical platform1. CH4recovery from the glycoldehydrator vent using the existing vapor recovery system2. Implementation of a directedinspection and maintenance program3. Conversion of compressorsfrom wet seals to dry sealsCONCLUSIONSAddressing venting and flaring from oil & gas operationsmay contribute to reducing greenhouse gas emissionsNew systems and requirements to collect more detaileddata for offshore oil and gas production activities throughGOADS 2011New data enables Operators to evaluate their ownoperations and develop plans for implementing methaneemission reduction projects thatare cost-effective for theirspecific operationsRushing to implement projects would not allow properranking of potential actions, sometimes the largestemission sources are not necessarily the ones that aremost cost-effective to control12Flaring, Venting and Greenhouse GasesThank you!Holly HopkinsAmerican Petroleum Institute1220 L Street, NWWashington, DC 20005hopkinsh@api.org202-682-8439 phone202-682-8426 fax13