Climate change issues in Oil & Gas Sector. A sectoral discussion on Environmental issues, GHG emissions, GHG abatement opportunities, Role of CDM. Contents. Environmental issues for the Indian Oil & Gas Sector GHG Emissions from various industries & sectors
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A sectoral discussion on Environmental issues, GHG emissions, GHG abatement opportunities, Role of CDM
GHG emissions associated with industry (including energy utilization) represent about 21% of world GHG emissions.
The Oil & Gas and Chemical industries are among the major emitters of GHGs.
Source: CAIT, IEA, 2004a, Hendriks
Climate Change Risks for Oil & Gas Sector
Developed Country Govt/ Pvt. Sector
Kyoto protocol - Establishes three mechanisms to supplement national actions to achieve real, long term, measurable and cost effective GHG reductions:
Clean Development Mechanism (‘CDM’)
Developing Country GHG Abatement Project
International Emission Trading (‘IET’)
Joint Implementation (‘JI’)
1CDM Process : Availing Carbon Credits
CDM PROJECT PROMOTER
Validation by DOE
Endorsement by DNA
BUYER OF CER
*PIN: Project Identification Note
*PDD: Project Design Document
ERPA: Emission Reduction Purchase Agreement
DOE: Designated Operational Entity
DNA: Designated National Authority
Certification by DOE
UNFCCC / EB
Oil & Gas Sector
1. Installation of Gas Recovery Facilities to prevent emission of methane/CO2 to the atmosphere
2. Common Grid of Power at Offshore
3. Recovering Vapors from Storage Tanks
4. Carbon Capture & Storage (CCS)
1. Energy efficiency Improvement measures in the existing system
-Enhanced heat utilization through installation of centralized flash steam recovery system to recover steam condensate
-Flash steam utilization in vapour absorption chiller to produce refrigeration effect
-Better steam trap management to reduce heat loss
-Improvement in the cogeneration/ self generation efficiency
In Dry-ejector system vacuum gas oil is used as motive liquid and circulated in the system. This reduces generation of LP steam which is required as motive fluid in conventional steam-jet ejector. An unique technology.
A much lower cooling water temperature can be achieved through ‘mist cooling tower’. This improves heat recovery and reduces cooling water requirement hence lower pumping energy etc. Not a common practice in large-scale hydrocarbon industries.
Energy efficiency improvement through optimization of heat exchanger network in CDU/VDU/pre-heat train of distillation units etc. Optimization of HEN is performed using Pinch Analysis.
Replacement of conventional refractory with ceramic fibre insulation to reduce heat loss in furnace
2. Flare recovery system
3. Fuel switch projects
4. Application of Advanced Processes
5. Alternative Fuels/ Energy
6. Transportation project
Essar Oil Limited
Oil and Natural Gas Corporation (ONGC) Limited
Methodology used: AM0037
Methodology used: AM0037
Methodology used: AMS.II-D
Numaligarh Refinery Limited
Methodology used: ACM0004
Bharat Petroleum Corporation Limited
Indian Oil Corporation Limited
Methodology used: AMS-II.D
Methodology used: AMS-III.P
Methodology used: AMS.III-P
Oil India Limited
Methodology used: AM0009
Allowance based Transactions (EUA)
Combination of ‘Forward’ and ‘Spot’
(say >100,000 p.a.)
Transaction cost finance
PIN = Project Idea Note
PDD = Project Design Document
UNFCCC = United Nations Framework Convention on Climate Change
Expenses incurred in documentation, Consultant’s fee
Fee payable to DOE for validation
For 15k CER/y : Nil
For > 15k CER/y : @ 0.1 USD for first 15k CERs
@ 0.2 USD for balance CERs
Fee payable to DOE for verification (every time)
Charged by UNFCCC every time during issuance of CERs, calculated same way as Regn Fee. Regn fee paid, if any is adjusted
2% CERs deducted by UNFCCC at issuance
Carbon footprint has the power to influence all decisions on climate change strategy
Establishing carbon footprint
Identify key sources of GHG emissions
Identify and decide Organizational and Operational Boundary
Select the GHG emission calculation approach
Developing customized modules and inventory manuals
Provide Training on the implementation of inventory manuals
Demonstrating the use of customized modules
Collecting activity data and emission data
Applying customized calculation tools for estimating GHG emissions
GHG ACCOUNTING & REPORTING PRINCIPLES
-Express the value or achievement of a business divided by its GHG impact.
-Increasing efficiency ratios reflect a positive performance improvement.
-Examples of productivity/efficiency ratios include resource productivity (e.g., sales per GHG) and process eco-efficiency (e.g., production volume per amount of GHG).
-Express GHG impact per unit of physical activity or unit of economic output.
-A physical intensity ratio is suitable when aggregating or comparing across businesses that have similar products. An economic intensity ratio is suitable when aggregating or comparing across businesses that produce different products. A declining intensity ratio reflects a positive performance improvement.
-Many companies historically tracked environmental performance with intensity ratios.
-Examples of intensity ratios include product emission intensity (e.g., tonnes of CO2emissions per electricity generated); service intensity (e.g., GHG emissions per function or per service); and sales intensity (e.g., emissions per sales).
-Ratio between two similar issues (with the same physical unit in the numerator and the denominator).
-Examples of percentages are current GHG emissions expressed as % of base year GHG emissions.
Climate Change and Sustainability Services