Vent Versus Flare inGOM OCS 

# A Perspective of the Offshore Operators CommitteeMarch 30, 2011 BOEMRE OfficesNew Orleans, LATopics of Discussion•Offshore Operators Committee (OOC)–Who are we & What do we do? Historical Role we Play–Past Collaborative Efforts–Addressing Changes in Venting and Flaring–Current Regulatory Requirements•Vent vs. Flare Considerations–Current Industry Practices–What Drives the Decisions–Environmental Considerations and Design Goals•New vs. Existing Infrastructure–Changes that might be Necessary–Costs and Scheduling Estimates–Comments, Suggestions and Recommendations2Offshore Operators Committee



# Who are we? Who are we?•Non Profit Trade Organization•Focused on GOM Operational Issues•Our GOM Member Companies represent:–96% of Oil and Gas Production–90% of Leases Operated–85% of Wells Drilled–84% of Facilities Operated•69 Member Companies•71 Associate Members3Offshore Operators Committee 

# What do we do? What do we do?Work with Industry, Government Agencies, e.g.,BOEMRE, USCG, EPA, and other trade organizationson issues affecting operations on the OCS, incl:• Participate in the development of OperationalStandards and Recommended Practices;• Perform Technical Studies;• Comment on Agency Rulemakings;• Sponsor / participate in workshops and conferences;• Conduct Industry surveys• Host Stakeholder events on OCS issues• Work with other trades to address operational concerns4OOC/API-BOEMPast Collaborative Efforts• Joint sponsorship of key workshops:–SEMP, Crane Safety, Subpart J and K, Hurricane Preparedness,Incident Reporting, Surface Preparation and Coatings• Development of significant Industry API RPs:–Security - RP 70, Mooring/Site Evaluation 95 J & F, 2SK, Met OceanCriteria Development, Facilities Assessment, Management ofSustained Casing pressure - RP 90, Surface Preparation & Painting –TB 91, Helidecks - RP 2L• Scientific studies to support offshore activity:–Deep Spill Research – fate and effect of deepwater releases,Explosive removal of structures, Marine mammal sound issues,Synthetic based mud sea-bed survey, Hypoxia Study, Mercury in themarine environment, Mooring JIP, BOP Reliability Study5OOC/API-BOEMCurrent Efforts•Rigs to Reef Workshops•MARPOL – Transport of SBM•Cooling Water Intake Structures•BOP Reliability Testing•Security Regulations (CFATS, TWIC)•Oil Spill Worst Case Discharge•Idle Iron Issues•API RP 2D Update6•Let the data drive further Agency action–Significant new regulations have recently been put intoeffect by both BOEMRE and EPA•Responsive to the GAO Report findings•Will enhance reporting of facility GHG emissions–New data should be studiedto identify the most costeffective means to reduce overall emissions.7OOC Recommendations/Comments•The Agency focus on existing facilities should bedirected at the application of best managementpractices to reduce overall emissions–Significant amount of engineering, capital and timerequired to convert facilities to flare–Added costs could make some fields uneconomicresulting in recoverable reserves being left in the ground–Significant number of shelf facilities are satellite/wellheadplatforms with minimal venting.–Conversion to flare could actually result in higher GHGemissions.8OOC Recommendations/Comments•The Agency should consider establishing a technologypreference forward affecting the design of newfacilities, with effective date certain, similar to otherregulatory schemes affecting the design of offshorefacilities.9OOC Recommendations/Comments

# OCS Facilities Vary a Great DealBuilding Blocks10

# OCS Facilities Have Evolved11

# OCS Floating Facilities Vary12

# Floating or Fixed13Vent Vs FlareCurrent State•GOM Facilities utilize both cold venting and flaring in itsoperations-specific to design premise for the facility.–Mature shelf facilities utilize cold venting in most cases.–DW facilities are utilizing flaring to a greater extent,driven by reservoir and production rates.•Both systems are in place today and are being utilized on theOCS, within the limits of design.•Drivers for system choices vary and include operational,maintenance, safety and reliability considerations.•Flaring will not eliminate all venting14Vent Vs Flare:Source of Most Emissions•Data from an OCS platform study indicates majority ofGHG emissions results from–85-95% from combustion: power generation, oilpumping, gas compression, and possibly heatgeneration–5-15% from lease use, flare, vent & fugitives•Typically OCS-GOM platforms utilize both natural gas andor diesel power for generation, gas compression, oilpumping, heat generation, and other lease uses (flarepilot/purge, blanket gas, etc.)15Vent Vs FlareOpportunities for Reduction•Typical areas of focus for emission reduction couldinclude:–Utilizing More Energy Efficient Combustion Equipment–Utilizing Produced (Own) Gas for Power & Optimizing PowerGeneration (Load Sharing/Shedding) & Compression–Utilizing & Optimizing Waste Heat for Process–Utilizing Vapor Recovery to Capture Otherwise Vented/FlaredNatural Gas–Eliminating ContinuousVenting and Flaring–Improving Equipment & ProductionReliability and InvestigatingFailures to Reduce Intermittent Flaring & Venting Events–Implementing a Leak Detection and Repair (LDAR) Program16Vent Vs FlareBOEMRE RegulationsBOEMRE Regulations Currently In Place to AddressEmissions•May 2010 - 30 CFR250.1163 effective date Nov 28, 2010–Flare/Vent meters on all location processing more than 2000BOPD–You must report the amount of gas flared and the amount ofgas vented separately•October 2010 - NTL 2010-N10 issued–Further clarification to 30CFR250.1163 (a)17Vent Vs FlareOOC recommendations•Prior to taking decisive actions involving newregulations OOC recommends the agency allowregulations and guidance’s currently in place todetermine the most prudent path forward–Current regulations and guidance should producemore reliable data with respect to both:•Flaring vs. venting &•Recoverable volumes18Vent Vs FlareWhat drives the Process Decision?Where is it not practical to flare as opposed to vent?•Cases that require replacementof existing vent boom because ofinsufficient length due to heatradiation criteria per API 521.•Existing platform is not suitablefor replacement/addition of a flareboom/tower due to structural design limitations. Addition of separate flarejacket structure would not be practical.•Cost impact of converting vent toflare could make it uneconomical tocontinue to produce, hence leaving production/reserves behind.•Production reliability could be impacted due to increased complexity andmaintenance requirements of flare systems as opposed to vent systems19Vent Vs Flare•Pilot and purge gas for flare systems will increase lease use gasrequirements and may require gas "buyback" to meet the demand orresult in net increase of GHG’s.–Gas transmission companies are reluctant to provide this service toproducers .–Impractical for low GOR oil production where excess lease use gasmay not be available due to gas lift requirements.•Some platforms may require redesignof control systems, vent systems,i.e. headers and scrubbers, inorder to accommodate flaring–Converting from vent toflare is not as simple as merely adding a flaretip to a vent boom20Flaring May Result in HigherGHG Than Venting At LowEmission Facilities•Smaller throughput facilities withminimal process venting (below1-7 MSCFD) may increase GHG emissions if flaring is requireddue to pilot and purge gas requirements•Assume flare requires 5-30 MSCFD natural gas for pilot and purgeoperation–At 5 MSCFD pilot + purge gas•Venting 1 MSCF =0.35 tonnes CO2e•Flaring 6 MSCF (1 + 5) = 0.41 tonnes CO2e–At 16.5 MSCFD pilot + purge gas•Venting 4 MSCF =1.40 tonnes CO2e•Flaring 20.5 MSCF = 1.41 tonnes CO2e(Continued)21Flaring May Result in HigherGHG Than Venting At LowEmission Facilities–At 30 MSCFD pilot + purge gas•Venting 7 MSCF =2.45 tonnes CO2e•Flaring 37 MSCF (7 + 30) = 2.53 tonnes CO2e–Utilize flaring GHG emissionscalculations provided by EPA98.233(n)–Assume natural gas composition of approximately 84% CH4and 3% CO2–Assume flare efficiency = 98%–Changing gas compositions, flare efficiency and methodology,and pilot/purge needs can significantly impact thesecalculations.22(Continued)Vent Vs FlareShelf vs. Deepwater: Considerations for Shelf Platforms•Shelf platforms are typically less complex than deep water platformsand the vast majorities are unmanned.–A significant number of OCSG facilitiesare satellite/wellhead type platforms withno capability to vent or flare.•Vent systems are simpler indesign than flare systems; and areideally suited for most shelf platforms.•Advantages of venting over flaring–Does not always require large boom,e.g. emergency vent systems on unmannedgas facilities.–Simplest versions (emergency relief)are long piece of open-ended pipe with nopurge, pilot, ignition orsnuffing requirements–Less expensive in CAPEX and OPEX–Inherently more reliable and less maintenance requirements23Vent Vs FlareConsiderations Continued...–Ideal for unmanned/satellite platforms–Practical for open atmosphericsystems where inbreathing is aconcern(i.e. no gas blanketing)–Pilot & purge gas not required•Advantages of flaring over venting–Flaring required on facilities that produce H2S–Better suited to disposing of large volumes of gas to preventvapor cloud formation and uncontrolled ignition–Typically reduces GHG emissionson facilities that may need torelease large volumes of gas–Poses less of a potential hazard to aviation activities aroundfacilities24Vent Vs FlareConsiderations in Vent to Flare ConversionDesigns•Engineering–Flare System Design•Develop technical specifications for flare system equipmentand instrumentation–Relief System Study•Review backpressure effects of flare tip on all associatedrelief devices•Confirm vent scrubber sizingfor use as flare scrubber•Review purge gas systems to prevent flashback•Establish thrust loads if applicable25Vent Vs Flare•Engineering (continued)–Radiant Heat Study•Review effects of personnel exposure to continuous andpeak radiant heat levels–Civil/Structural Review•Review structural loading on boom and deck with additionof flare equipment•Review associated risks to helicopters and boats•Review administrative controlsto limit access to affectedareas and to ensure escape paths26Vent Vs Flare•Structural–Modify or replace boom as necessary•Boom may need to be modified due to radiant heat or structuralloading requirements•Facilities–Install purge and pilot gas source•Piping and instrumentation required for purge and pilot gas supplyfrom facility fuel gas source–Install ignition source•Electrical supply required for ignition source from facility powersource•Wiring for ignition failure alarm recommended for facility controlpanel27Vent Vs Flare•Facilities (Continued)–Install flare tip•Installation may require lift boat, derrick barge, or helicopteras necessary•Install flare control panel on deck location–Modify relief system as required by findings of ReliefSystem Study which may include:•Relief devices•Relief headers•Modify or replace scrubber•Modify or replace boom or tower28Vent Vs FlareSchedule• Flare system analysis, design, procurement, andinstallation will be a lengthy project•Facility downtime will inherently add to thecomplexity and cost of the retrofit29Flare Boom Design Issues•Flare Booms must be equipped with atip that is appropriate for burning gas.Existing vent tips are not designed forburning gas and will need to bereplaced•If existing Vent Boom does not meetthe following requirements it will needto be replaced.‒Boom must be long enough to minimizeflare heat exposure to personnel perAPI Standard 521.‒Boom should have walkway to tip toallow for maintenance of the flareignition equipmentBoomWalkwayFlare TipAdequateBoomLength30Vent Vs Flare•Replacing the boom will require significantstructural modifications.–Older platforms may not be able to support anappropriately sized flare boom.–New Structure with bridge back to original platformmay be needed to support larger boom.•Flare Boom will need to be retrofitted with pilotgas and ignition systems.•Flares will require a purge gas system toprevent explosive mixtures from propagatinginto flare piping.31Flare Boom InstallationIssues•Flare tips and Flare Booms cannot be installed with Platformcranes–Lift Boat Needed in Shallow Water (< 150’ Water Depth)–Derrick Barge Needed in Deeper Water–GHG emissions from Installation and Fabrication equipmentshould be considered when assessing overall GHG Impact•4 to7 Days of Facility Downtime Required to Replace Flare Tip•7 to 14 Days of Facility Downtime Required to Replace andTie-in Entire Flare Boom32Vent to Flare ConversionCost Study on OCS PlatformsThe capital burden associated with convertingvents to flares may not be justified byexisting production rates in some fields. Operators may choose to abandon wellsleaving otherwise producible reserves in theground. (Informationsupplied by Chevron)FacilityTypeNumberofFacilitiesAverageCosttoConverttoFlareTotalCosttoConverttoFlareShut‐InHydrocarbonRevenuetoConvertToFlareAverageAnnualVentVolumePerFacility(MSCF)AnnualCO2EquivalentofVentedGas(MetricTons)AnnualCO2EquivalentofFlaredGas(MetricTons)AnnualCO2Reduction(MetricTons)UnitCostofCO2Reduction($/MetricTon/Yr)GasAlreadyFlared 6 N/A N/A N/A N/A N/A N/A N/A N/ASatelliteFacilitieswithNoSignificantVenting 366 N/A N/A N/A N/A N/A N/A N/A N/AVentingFacilitieswithAdequateVentBoom 28 $1,629,000$45,612,000$44,444,44417,117223,34332,111191,231$471VentingFacilitieswithInadequateVentBoomButStructureCanSupportLongerBoom 30 $2,639,000$79,170,000$47,619,0484,84467,7199,73657,983$2,187VentingFacilitieswithInadequateVentBoom‐StructureCannotSupportLongerBoom 5 $6,664,000$33,320,000$7,936,50817,56940,9365,88635,050$1,177Totals 435 $158,102,000$100,000,000331,99847,734284,264$90833Vent to Flare ConversionSchedule For Cost StudyYear123456Quarter12 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24EngineeringProcurementPermittingInstallation34Vent to Flare ConversionCost Study OCS Facilities35ScenarioNumber ofFacilitiesAverageConversionCost perFacilityTotalConversionCostAnnualVentVolumeMCFAnnualCO2e ofVentedGas(tonnes)AnnualCO2e ofFlaredGas(tonnes)AnnualCO2eReduction(tonnes)AverageReductionCost($/tonne)Convert all ventingfacilities to flare.Facility hasadequate vent boomor is structurallycapable ofsupporting longerone.156 $2.0 MM $312 MM 1,551,300 563,800 103,900 459,900 $678Capital cost of $312 millionto reduce emissionsby <0.5 million tonnesCO2e cannot beeconomically justified. Nopayback mechanism for converting vents to flareswith no gasrecovery.(Information supplied by Apache)Vent to Flare ConversionSchedule OCS Facilities36Year1234567Quarter1234123412341234123412341234EngineeringPermittingProcurementInstallationNOTE: Schedule based on performing engineering on approximately 30 platforms per year.Gas that Cannot be Routedto Header and Must beVented Locally•Atmospheric Tank Vents(oil storage and water treating)•Instrumentation Bleeds•Engine Fuel Gas Blow Down Valves•Compressor Packing / Seal Vents•Relief Valves and Blow Down Valves thatwould cause excessive back pressure in VentHeader37OOC Recommendations /Comments•Let data collected as a result of new BOEM and EPAemission monitoring regulations drive OCS GHGpolicy.–New regulations in placeaffecting GHG reporting•Existing facilities should be allowed to continue ventinggas–Significant amount of engineering,capital and time required toconvert facilities to flare–Added costs make some fields uneconomic resulting inotherwise recoverable reserves being left in the ground•Significant number of shelf facilities aresatellite/wellhead platforms with minimal venting–Conversion to flare could result in higher GHG emissions38OOC Recommendations /Comments•Reductions should be sought through theapplication of BMP practices•BOEMRE stated technology preference wouldbe appropriate for future facilities39Vent Vs FlareSome final thoughts:•With improved emissions monitoring and reportingthrough BOEM and EPA regulations, we will have a betteridea of where the most value is in reducing andeliminating GHG emissions, and where to focusregulations and industry guidelines with improvementprojects.40