Opinion ID: 2509156
Heading Depth: 1
Heading Rank: 21

Heading: Williams prepares a new approach to the dehydrator definition

Text: 47. On review of the final issue letter, Williams took particular notice of the DOA's reliance on the first sentence of Wyo. Stat. Ann. ง 39-14-203(b)(iv): The production process for natural gas is completed after extracting from the well, gathering, separating, injecting and any other activity which occurs before the outlet of the initial dehydrator. (emphasis supplied) [Transcript Vol. III, pp. 418-424]. Williams also directed its attention to the definition of dehydrator in Wyo. Stat. Ann. ง 39-14-201(a)(vii): `Dehydrator' means a device which removes water vapor that is commonly associated with raw natural gas. [Transcript Vol. III, pp. 423-424]. Williams reasoned that if the equipment in the CDP were a dehydrator, or the screw compressor were a dehydrator, then the point of valuation would be at or near the custody transfer meter, whether or not Western's equipment constituted a processing facility. [Transcript Vol. III, p. 425]. 48. Williams hired Bret Rhinesmith to determine whether water vapor was removed from the Barrett gas by equipment other than the glycol dehydrator. [Transcript Vol. III, pp. 424, 551-552]. Rhinesmith's testing demonstrated that the function of removing water is ubiquitous in coalbed methane equipment and piping. We find that water removal started in the wellbore itself and continued along the entire sequence of equipment to the outlet of the glycol dehydrator. 49. Unfortunately, Rhinesmith insisted on adding the name, dehydrator, to the equipment he tested. [E.g., Exhibit 112, depicting a piece of equipment identified as Initial dehydrator: stacked vertical type dehydrator]. By doing so, Rhinesmith confused the results of his functional analysis with the application of statutory terms, although he insisted that he had no such intention. [Transcript Vol. II, pp. 207-208]. We therefore make findings that disentangle the functional analysis from the application of statutory terms. 50. Within each central delivery point, or pod, there is a cylindrical vessel, into which gas flows via pipes from individual wells. We find that this vessel is a header, based on a standard dictionary definition [Webster's New World College Dictionary, 4th Edition (2001), p. 655], on the language used in a patent [Exhibit 116, Multiple Well Header System for Collection of Methane Coal Gas], and on Rhinesmith's testimony [Transcript Vol. II, p. 299, a header is a device that .... commingles streams]. 51. The headers in coalbed methane pods are not used in the production of conventional natural gas; they are devices specifically designed for coalbed methane production. [Transcript Vol. I, pp. 99-100; Vol. II, p. 271]. The volume of gas produced from individual coalbed methane wells is relatively low, and the wells are somewhat closely spaced, so it is both useful and efficient to route the production from several wells to a single point. [Transcript Vol. I, p. 99; Transcript Vol. II, p. 283]. The pressure of gas from the individual wells is also low, so it is not necessary for headers to be code stamped pressure vessels, that is, they are not built under the American Society of Mechanical Engineers boiler and pressure vessel code. [Transcript Vol. I, pp. 100, 302]. However, the gas pressure is high enough so that the gas normally flows into and through the header under its own pressure. [Transcript Vol. I, pp. 99-100, 300]. 52. Rhinesmith tested four different types of headers, which he classified as stacked vertical, vertical, slanted, and horizontal. [Transcript Vol. I, p. 98]. These headers were in four different locations [Transcript Vol. I, p. 85], corresponding to operating locations of the principal coalbed methane producers in the Powder River Basin. [Transcript Vol. II, p. 293; Exhibit 107]. 53. Barrett's header was a vertical stacked header. [Transcript Vol. I, p. 118]. The design of this header was explained by a patent that was admitted into evidence. [Exhibit 116; Transcript Vol. I, p. 119]. However, with respect to removing water from the gas stream, all four types of headers functioned in essentially the same way. [Transcript Vol. II, p. 310]. 54. Gas from the individual wells enters the body of the header, then the gas expands due to the larger space. [Transcript Vol. I, p. 120]. With expansion, the pressure of the gas drops, and the gas cools. [Transcript Vol. I, p. 120]. As the gas cools, water vapor in the gas stream condenses and falls to the bottom of the header, where water drains off. [Transcript Vol. I, p. 120]. There is also liquid water that reaches the header through the pipes from individual wells. [Transcript Vol. I, p. 120; Vol. II, p. 300]. 55. The patent on the header consistently refers to the header's action on water vapor as separation: ....The inclined header receives the raw methane coal gas from the separate pipes and the separation of water vapor from the gas is expected to occur in the inclined head merely due to the force of gravity on the heavier water vapor. Heretofore, water vapor separation has been both inefficient and incomplete in this prior art collection system based on the use of inclined collection heads.... ....gas entrained with water vapor....enters the interior chamber of the header through the inlet pipes where the water vapor being heavier than the gas separates from the gas and falls to and condenses above and within the water collection area of the header whereas the gas rises to the upper end of the header... [Exhibit 116, p. Williams/Barrett 0047](emphasis supplied) 56. In tests on the Barrett header, Rhinesmith found that the header removed 17.66 pounds of water vapor per million standard cubic feet a day of gas. [Transcript Vol. I, p. 123]. The test results on the other headers ranged from 14.24 pounds to 114.34 pounds of water vapor per million standard cubic feet a day of gas. [Transcript Vol. II, p. 304]. Rhinesmith confirmed these results with a computer simulation which showed that 28.67 pounds of water vapor per million standard cubic feet a day of gas would be removed in a header. [Transcript Vol. I, pp. 157-160; Exhibit 129]. 57. From an engineering perspective, the principles at work in the header are not limited by size. [Transcript Vol. II, p. 301]. One could construct and insert a smaller vessel next to the well head, and achieve water removal by condensation. [Transcript Vol. II, p. 302]. Moreover, Rhinesmith testified that water is lost by condensation in the well bore itself. [Transcript Vol. I, p. 252]. 58. Rhinesmith conducted field testing for water vapor content at a screw compressor located in facility unrelated to Barrett. [Transcript Vol. I, pp. 164-165]. Rhinesmith took measurements before the inlet to the screw compressor, and beyond the outlet of a cooling unit just after the screw compressor. [Transcript Vol. I, pp. 164-165]. He found a change in water vapor content of 65.43 pounds of water vapor per million standard cubic feet of gas per day [Transcript Vol. I, pp. 164-165], although the resulting water is removed in downstream processes, not at the location of the screw compressor. [Transcript Vol. I, p. 165; Vol. II, p. 263]. Rhinesmith again confirmed his field results with a computer simulation; his model showed the removal of 118.1 pounds of water vapor per million standard cubic feet of gas per day. [Transcript Vol. I, pp. 165-167; Exhibit 132]. 59. Water was removed from the sequence of equipment at separators located in advance of the booster compressor, and at coolers located after the booster compressors. [Transcript Vol. I, pp. 171-174]. Rhinesmith conducted a computer simulation that, when adjusted to be expressed consistent with the other results, showed 165.52 pounds of water vapor per million cubic feet of gas coming into the booster compressors, which left about 100 pounds of water vapor to be removed by the glycol dehydrator. [Transcript Vol. II, pp. 315-319; Exhibit 134]. 60. We find that removing this last 100 pounds of water vapor per million standard cubic feet a day of gas by glycol dehydrator is crucial to rendering the gas suitable for pipeline transport. [Transcript Vol. I, pp. 179-186]. 61. The triethylene glycol dehydrator employs absorption, not condensation, to remove water. [Transcript Vol. I, p. 108]. It includes a number of pieces of equipment. [Transcript Vol. I, p. 226]. Unlike the header, the TEG contactor vessel is usually code stamped because of the pressures at which it's operating. [Transcript Vol. II, p. 303]. Rhinesmith testified that there is no dehydrator in the computer simulation he uses. Instead, the glycol dehydrator function is simulated by use of a series of component functions. [Transcript Vol. II, p. 322]. These functions include an absorber; a separator to model filtration; a two-part force used to drive the glycol pump; a heat exchanger; a distillation operation, including a reboiler; a pump to return the glycol to the TEG contactor; another heat exchanger, to cool the glycol and warm the dry natural gas; and a recycle function. [Transcript Vol. II, pp. 322-324]. We find that these functions fairly reflect the workings of the glycol dehydrator. 62. The glycol dehydrator reduces the presence of other components of the coalbed methane, such as carbon dioxide. [Transcript Vol. I, p. 186; Exhibit 136]. Speaking generally, coalbed methane does not include volatile organic compounds, so the minor components removed by the glycol dehydrator are vented to the atmosphere. [Transcript Vol. II, pp. 328-329]. In contrast, conventional gas often contains aromatics, such as benzene, toluene, methylbenzene and xylenes, that are subject to regulation if released. [Transcript Vol. II, p. 328]. 63. Taking all of Rhinesmith's findings together, and using his modeling for the sake of simplicity, we find that water is removed throughout the sequence of equipment, beginning with the annulus of the well. There are 1000 pounds of water vapor per million cubic feet of gas when the gas rises from the coal seam. [Transcript Vol. I, p. 77]. Most of this water must be removed to meet a pipeline requirement 5 pounds of water at the outlet of the glycol dehydrator. [Transcript Vol. II, pp. 295-296]. 64. Subtracting 28.67 pounds for the header, 118.1 pounds for the screw compressor and its cooling unit, and about 160 pounds for the booster compressors through the glycol dehydrator outlet, Rhinesmith's calculations showed that two-thirds of the water vapor was removed at points other than the header, the screw compressor, and the booster compressor/dehydrator. Rhinesmith says that rest of the vapor is removed in the pipeline systems connecting the equipment. [Transcript Vol. II, p. 320]. 65. Water in the pipelines between the screw compressor and the booster compressor is removed by a device known as a pig. Rhinesmith stated that a pig is a device that is put into a pipe and is used like a squeegee to push those liquids to downstream systems... [Transcript Vol. I, p. 172]. He further stated that a pig is the device that flows through the pipeline to push any liquids from one point in the pipeline system to another point in the system. [Transcript Vol. II, p. 249]. The pig is inserted in the pipeline by a pig launcher located downstream of the screw compressor. The pig pushes water that has condensed in the pipeline to an initial separator located upstream from the booster compressors. [Transcript Vol. II, pp. 320-322]. We find that Rhinesmith is correct in his explanation of the pig and its use. Rhinesmith did not characterize the pig as a dehydrator, and Craig Grenvik affirmed that the Department did not view the pig as a dehydrator. [Transcript Vol. V, p. 1032]. 66. If we contrast the 1000 pounds with the 100 pounds of water associated with conventional gas [Transcript Vol. I, pp. 76-77], and use Rhinesmith's estimate of about 100 pounds of water removed by the glycol dehydrator [Transcript Vol. II, p. 317], it is easy to see that all 100 pounds of water in conventional gas could be removed by a glycol dehydrator. Our observation is consistent with Rhinesmith's explanation of the function of a dehydrator in his account of his prior gas processing experience in the Mobile Bay field. [Transcript Vol. I, pp. 50-51; Vol. II, pp. 288-289]. 67. Dehydrators are commonly associated with the processing and transport of conventional natural gas. In the record made in this case, these included field dehydrators [Transcript Vol. II, p. 213], and dehydrators associated with improving the quality of gas for transport in downstream pipelines. [Transcript Vol. II, p. 297]. If more carbon dioxide must be removed to meet the specifications of downstream pipelines, the gas can be treated with amine. In doing so, the gas will become resaturated, and a triethylene glycol dehydrator is typically used downstream of those amine systems to remove the water essentially a second time. [Transcript Vol. II, p. 297]. We therefore find that it is meaningful to distinguish between an initial dehydrator and other dehydrators in the context of conventional natural gas. 68. We find that Rhinesmith's functional orientation results in an extremely broad view of the purposes that any piece of equipment might serve, and would affect distinctions that are made in the statute. For example, Rhinesmith stated that a screw compressor is also a dehydrator. [Transcript Vol. II, p. 263]. Beyond that, Rhinesmith stated that a pipeline is a dehydrator, because it removes water. [Transcript Vol. II, p. 258]. 69. Further, Rhinesmith testified that almost any piece of equipment has one or more functions that can be characterized as processing, based on the functions identified in the statutory definition of processing. [Transcript Vol. II, pp. 223-230, 224-236]. Following this logic, the CDP could be characterized as a processing facility. [Transcript Vol. II, p. 236]. 70. Storts took a slightly different position than Rhinesmith. Like Rhinesmith, Storts stated that one statutory definition does not preclude others. [Transcript Vol. III, p. 594]. According to Storts, a header can be both a separator and a dehydrator. [Transcript Vol. III, p. 593]. However, Storts drew the line at a pipeline, on the premise that a pipeline is not a device. [Transcript Vol. III, p. 595].