Oil & Gas Production Protocol Public Workshop Webinar September 22 nd and September 8 th, 2009 1.

Oil & Gas Production Protocol

Public WorkshopWebinarSeptember 22nd and September 8th, 2009

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Overview of agenda and logistics Introduction to The Registry and its reporting

program Oil & Gas Production (O&GP) Protocol—

background and development process Overview of the O&GP Protocol and key

issues for public feedback Questions and comments Wrap-up

Agenda

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Logistics for the Call Presentation & agenda available for download:

http://www.theclimateregistry.org/resources/protocols/oil-and-gas-production-protocol/

All participant lines muted until question and comment period Electronically “raise hand” or use chat feature to

ask question Must enter unique audio pin to “raise hand” and

speak on the call Technical problems: Tel. (866) 523-0764

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OVERVIEW OF THE REGISTRY

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MISSION: To standardize and centralize high quality GHG data into a North American GHG registry to support voluntary and mandatory reporting programs

BOARD: 12 Canadian Provinces/Territories 41 U.S. States and D.C.

6 Mexican states4 Native Sovereign Nations

MEMBERS: 345 Members

The Climate Registry

The Registry: General Overview

The largest climate initiative in North America Voluntary GHG reporting program of best

practices Policy neutral

Policy decisions are left to the provinces, territories, states and Native Sovereign Nations

No lobbying Primary goal is accurate, consistent data

Protocols based on internationally-recognized standards

The Registry coordinates with state/provincial, regional and federal policymakers

Support states and provinces in execution of mandatory programs Primarily infrastructure support

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Voluntary Reporting Benefits1. Prepare for mandatory state/federal reporting

2. Document early actions

3. Education for employees on GHG emissions

4. A cost effective means to track/manage GHG emissions

5. Access to software and technical support

6. Get a seat at the table on policy development

7. Recognition as a global environmental leader

Key Registry Components Participation in The Registry requires all

organizations to report at a minimum: All GHG emissions in North America (Canada, US,

Mexico) Entity-wide emissions at the facility-level All six GHGs (CO2, CH4, N2O, HFCs, PFCs, SF6) All direct (Scope 1), indirect emissions (Scope 2)

and biogenic emissions from stationary combustion Annually

Requirement for annual third party verification General Verification Protocol (GVP)

Climate Registry Information System (CRIS)8

Organizational Boundaries Control (Financial or Operational)

Report 100 percent of the emissions from sources that are under your control, including both wholly owned/operated and partially owned/operated sources

Public companies also disclose equity investments

Equity Share Report all emissions sources in which your entity

has an equity share. If you would like to report according to equity

share, you must also report according to a control methodology (as described above)

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Other Organizational Issues Corporate Reporting

If parent company is a Registry Member, then all subsidiaries must report through parent

All Members are encouraged to report at the highest level possible

Government Agency Reporting All departments must report under governing

entity, if it is a Registry Member (including municipal utility, if applicable)

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Leased Assets

Finance or Capital Lease Must report emissions as if wholly owned

and controlled regardless of organizational boundary approach

Operating Lease Operational Control: must report

emissions Equity Share or Financial Control:

reporting emissions is optional

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Operational Boundaries Direct Emissions (Scope 1)

Direct emissions from stationary combustion Direct emissions from mobile combustion Direct emissions from physical & chemical

processes Direct fugitive emissions

Indirect Emissions (Scope 2) Indirect emissions from electricity use Indirect emissions from imported steam, CHP,

district heating and cooling Biogenic Emissions

Stationary combustion

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Facility-level Reporting GRP Facility Definition

Any stationary installation or establishment located on a single site or on contiguous or adjacent sites that are owned or operated by an entity Including all mobile sources that operate within

the boundary of a single stationary facility Commercial building and special categories of

facilities (T&D systems) can be aggregated Mobile sources aggregated by geographic

location, vehicle-type, existing fleet or individual vehicle

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PROTOCOL DEVELOPMENT PROCESS

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Protocol Development Process Developed in partnership with the Western

Regional Air Partnership (WRAP) Effort has three elements:

Task 1: Scoping Paper for the Oil and Gas Industry

Task 2: Report on Significant Source Categories and Technical Review of Estimation Methodologies

Task 3: The Climate Registry’s Voluntary Reporting Protocol for the Oil and Gas Exploration and Production Sector (O&GP Protocol)

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Protocol Development Process Inclusive, transparent, multi-stakeholder

approach Outputs subject to comprehensive review Development process involves four key

groups:1. O&GP Workgroup2. Public Stakeholders3. Protocol Committee4. Registry Board of Directors

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Protocol Development Process O&GP Workgroup

Approximately 25 GHG reporting experts representing government, business and environmental organizations

Supported by WRAP, Registry staff and expert contractors

Responsible for identifying key reporting and quantification issues, proposing protocol options, providing detailed review of all drafts of protocol, and discussing stakeholder feedback

Public Stakeholders Provide feedback during public comment period

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Protocol Development Process Registry Board of Directors

Final decision on adoption of protocol at January 2010 meeting

Protocol Committee Subcommittee of Board of Directors Approves release of public comment draft,

recommends adoption of final protocol to full Board of Directors

Final decision making authority on policy issues

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Workgroup Organizations Alberta Environment Ministry American Petroleum Institute BP Petroleum British Columbia, Ministry of

Environment California Air Resources Board California Department of

Conservation California Independent

Petroleum Association Canadian Association of

Petroleum Producers Chevron – Texaco El Paso Exploration &

Production

Environmental Defense U.S. EPA – Natural Gas STAR Mexico: SEMARNAT Air Quality Natural Resource Defense

Council New Mexico Air Quality

Bureau New Mexico Oil Conservation

Commission Santa Barbara County APCD Shell Oil Company Williams Production World Resources Institute Yates Petroleum

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Major Milestones

Complete protocol outline 4/29 Complete initial draft of 6/22

O&GP Protocol Workgroup review of initial draft 6/22

- 7/10 Complete public comment draft 8/21 Public comment period 8/24 –

9/25

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Overview of the Oil and Gas Production Protocol

Overview of the Oil and Gas Production Protocol

ForWestern Regional Air Partnership

Oral PresentationAugust 13, 2009Presented by: Science Applications International Corporation

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Presentation OverviewPresentation Overview

Overview:• Applicability of the O&GP Protocol• General structure/organization of the Protocol

Major issues addressed in O&GP Protocol:• Facility definitions• Alternative calculation methods for stationary combustion emissions

Additional issues raised in cover memo:• Required reporting of Scope 3 emissions from drilling, completions

and workovers• Completeness of the O&GP Protocol

Clarifications provided on application of GRP rules to O&GP sector

Additional estimation methodologies provided for O&GP emission sources

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Applicability of the ProtocolApplicability of the Protocol

The O&GP Protocol covers all emissions sources in the exploration and production (E&P) of oil and natural gas

In addition, the O&GP Protocol covers all emission sources for:• Natural Gas Processing Plants• Crude Oil Transportation (including pipelines, trains, trucks, and

marine vessels) The O&GP Protocol does not cover:

• Oil refining and the downstream distribution of petroleum products• The transmission, storage and distribution of natural gas

downstream of the processing plant The O&GP Protocol is addressed to all companies involved in

any way in E&P, natural gas processing, and/or crude oil transportation, including:• Oil and Gas leaseholders• Support services contractors (e.g., drilling contractors)

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Applicability of the Protocol (Cont.)


Oil Industry Sector

The O&GP Protocol does not address oil industry operations shown in the shaded area.

Gathering Separation & Distribution

Gas Treating Facilities

Gas Exporting Facilities

Oil & GasDistributionOil Refineries Oil Exporting

Facilities

Pumpjack

Production TransmissionStorage

& Distribution

ProcessingDrilling & Completion

Injection (Water, Steam, Gas)

Water HandlingIncluding Steam

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Natural Gas Industry Sector

The O&GP Protocol does not address natural gas operations shown in the shaded area.

DistributionEngine

CompressorStations

Separator Gas Plant

Liquids Liquids to DistributionLNG

Underground Storage

Well

CompressorStations

Gas

Production ProcessingTransmission, Storage

& Distribution

Drilling & Completion

Exploration

C

C

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General Structure/Organization of Protocol

General Structure/Organization of Protocol

Parallels the organization of The Registry’s Electric Power Sector (EPS) Protocol (and the upcoming version of the GRP):

– Each Part/Chapter/Section in the upcoming GRP is represented in the O&GP Protocol

– Reader is referred back to GRP when GRP’s generic guidance suffices– New guidance is provided where needed for unique O&GP reporting

requirements and situations

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Major Issues Addressed in Protocol


Definition of a facility/Aggregation of emissions:– The Issue: O&GP sector is characterized by numerous dispersed

sources that do not readily fit the standard definition of a “facility”:– Oil and gas wells (currently can be aggregated to state/province level according to

GRP)– Compressor stations– Pipelines

– Currently the GRP provides Members with the option of aggregating emissions from oil and gas wells, and pipelines, to the state/province level, recognizing that:

– Separate reporting of these geographically dispersed sources would represent an unparalleled reporting burden (there may be hundreds of them in a single producing field)

– The transparency gained by separate reporting of each source would be counterbalanced by a level of detail potentially overwhelming to the data user

– But it was judged desirable to define one or more aggregation options in between an individual well and an entire state/province, to obtain a more useful level of detail

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Definition of a facility/Aggregation of emissions (continued):– Proposed Solution: O&GP Protocol calls for dispersed

emission sources to be aggregated, at a minimum, to “production field” level:

– Production field is a well understood, broadly accepted concept within the industry

– Production fields are precisely defined by state, province, or country

– Members are given the option of aggregating multiple fields together (particularly useful, e.g., for infrastructure common to more than one field)

– Emissions from sources corresponding to standard definition of a facility (e.g., natural gas processing plants) must be reported by facility

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Definition of a facility/Aggregation of emissions (continued):•Public feedback requested on two issues:

Are there other options, besides state/province/territory, for placing an upper bound on the aggregation of multiple production fields (e.g., oil and gas basins)? Or should the aggregation option be made unbounded?

Should The Registry require Members to list the emission source types covered in each reported production field(s)? If so, is it feasible for The Registry to define the source types to be listed (if yes, please provide suggested list of source types)?

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Major Issues Addressed in ProtocolMajor Issues Addressed in Protocol

Direct emissions from Stationary Combustion:– The Issue: All of the GRP methods for calculating emissions

from stationary combustion devices require, at a minimum, fuel consumption data

– But the O&GP sector is characterized by numerous small combustion devices that lack fuel consumption meters, e.g.:

– Internal combustion engines– Small natural gas turbines– Drill rig and workover rig engines– Heaters and boilers

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Direct emissions from Stationary Combustion (continued):– Proposed Solution: The O&GP Protocol provides alternative

methodologies for calculating stationary combustion emissions based on load factors and time of use:– The alternatives are to be used only when fuel consumption data are

lacking and– Time of use is metered or the unit runs continuously

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Direct emissions from Stationary Combustion (continued):– Public feedback requested on two issues:

– Do the alternative methodologies provide sufficient guidance to allow for the reporting of all stationary combustion emissions for the O&GP sector?

– If the data required to use the alternative methods (e.g., time of use, load factors, and capacity data) are not available, where could The Registry find published information that could serve as default factors?

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Additional Issues Raised in Cover Memo


Required reporting of Scope 3 emissions from drilling, completions, and workovers:– The Issue: Drilling, completions and workovers are activities

that have been seen as integral and central to the oil and gas production process, but

– These activities are generally outsourced by oil and gas leaseholders, and the contractors have shown little interest in joining The Registry and reporting their emissions

– Hence the following questions are being raised:– Should The Registry require that Scope 3 emissions from drilling,

completions and workovers be reported by O&GP leaseholders?– When Members cannot obtain activity data from their contractors,

what default methodologies should they use to estimate these Scope 3 emissions (include a description of the data available to O&GP companies to support the proposed methodologies)?

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Required Reporting of Scope 3 emissions from drilling, completions, and workovers:– Pros:

– Emissions from drilling, completions and workovers can be significant (up to 10% of emissions from O&GP operations)

– Understanding these emissions will help O&GP leaseholders understand their full GHG risk exposure (as these emissions may be required under mandatory reporting programs)

– While O&GP leaseholders do not directly control their contractors’ emissions, they have the ability to select more efficient contractors and/or require that their contractors use lower-emitting technologies/fuels

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Required Reporting of Scope 3 emissions from drilling, completions, and workovers:– Cons:

– It may be difficult to obtain the data needed to report Scope 3 emissions from the contractors

– The Registry will therefore need to provide default methods for use when activity data is unavailable– Such methods may lead to very rough conservative emissions

estimates

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Completeness of the Protocol:– The Issue: The O&GP sector has many unique

emissions sources– The O&GP must provide calculation methods for all

of these sources to enable O&GP Members across Canada, the U.s. and Mexico to report comprehensively

– Hence the public is asked to comment if:– Any emission sources for this sector have been omitted– There are additional calculation methods not covered in the

O&GP Protocol– There are additional emission factors that should be included in

the protocol

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Clarifications Provided on Application of GRP Rules to O&GP

Clarifications Provided on Application of GRP Rules to O&GP

Reporting of offshore sources by nation or state/provinceNumerous examples on application of organizational

boundaries to O&GP providedDescription/examples of Scope 1, Scope 2, and Scope 3

sources covered by the protocol providedRules for aggregating mobile sources clarified

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Additional Estimation Methodologies

Additional Estimation Methodologies

Direct fugitive emissions– Methodologies are from API Compendium 2009 (Draft), API

Compendium (2004), Task 2 report, U.S. EPA Mandatory Reporting Rule, and Oil Sands / Heavy Oil Upgrader Industry Report (May 2004)

– Specific methodologies provided for: Flashing losses from tanks Working/Breathing losses from tanks Pneumatic devices Natural gas driven chemical injection pumps Wellhead and facilities fugitive losses Surface collection ponds Hydrogen units Flue gas desulphurization Oil sands mine and ponds emissions Transportation sector - Oil pump stations

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Additional Estimation Methodologies (Continued)

Additional Estimation Methodologies (Continued)

Direct Process Emissions– Methodologies are from API Compendium 2009 (Draft), API

Compendium (2004), Task 2 report, and EPA Climate Leaders-Natural Gas STAR Program

– Specific methodologies provided for: Amine plants Dehydrators Well completions Underbalanced drilling Drilling mud degassing Well blowdowns Vessel and facility upsets/blowdowns Compressor engine start-ups and shutdowns Transportation sector - Truck, tanker, rail loading Transportation sector - Ballasting and transit loss emissions Transportation sector - Pipeline blowdowns and pigging

COMMENTS & QUESTIONS

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Comments and Questions

If you have entered your unique audio pin: Raise hand electronically The moderator will un-mute your line and ask

you to raise your question or comment If you did not enter your audio pin:

Submit your question via chat box function The moderator will read your question to the

group so that it can be addressed on the call.

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WRAP-UP

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Protocol Finalization Schedule Public comment period Public webinar #1 Public webinar #2 Review and consolidate comments Workgroup meeting Prepare draft final protocol Protocol and Executive Committee

Review Board adoption

8/24– 9/259/29/89/28 – 10/8Early November11/6 – 12/11Late December

Late January

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Public Comment Process Use of comments

Comments to be assessed by workgroup, reflected in final draft

Protocol Committee to make final determinations Comment mechanics

Review in conjunction with Cover Memo Comments should be submitted using provided

template All materials can be downloaded from our website:

http://www.theclimateregistry.org/resources/protocols/oil-and-gas-production-protocol/

Submit comments by September 25th, 2009, 5:00 PM Pacific to [email protected].

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For More Information on the O&GP Protocol:Peggy Foran

[email protected] (213) 542-0291

www.TheClimateRegistry.org

For information on the WRAP Project:Tom Moore

[email protected]

Oil & Gas Production Protocol Public Workshop Webinar September 22 nd and September 8 th, 2009 1.

Documents

Transcript of Oil & Gas Production Protocol Public Workshop Webinar September 22 nd and September 8 th, 2009 1.