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NARUC. Methane Emissions in Transmission and Distribution: What Can be Done? The Honorable Susan Rabon North Carolina Utilities Commission. Celebrating 125 Years of Public Service. Proposed Gas STAR Gold Partnership Roger Fernandez Natural Gas STAR Program U.S. EPA

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celebrating 125 years of public service

NARUC

Methane Emissions in Transmission and Distribution:

What Can be Done?

The Honorable Susan Rabon

North Carolina Utilities Commission

Celebrating 125 Years of Public Service

slide2
Proposed Gas STAR Gold Partnership

Roger Fernandez

Natural Gas STAR Program

U.S. EPA

NARUC Summer Committee Meeting

July 14, 2014

Dallas, TX

gas star gold considerations
Gas STAR Gold Considerations
  • Methane is a potent greenhouse gas and a clean energy source
    • Reducing methane emissions has important cross-cutting benefits including reducing climate impacts, Volatile Organic Compounds (VOCs) and hazardous air pollutants (HAPs) and thereby improving local air quality, improving industrial efficiency/safety, increasing domestic energy supply, and generating revenue.
  • Oil and gas sector is a key focus of the President’s 2013 Climate Action Plan and the Strategy to Reduce Methane Emissions (March 2014)
    • Interagency methane strategy recognizes oil and gas as a key sector and highlights the opportunity to bolster the Natural Gas STAR Program
  • Significant and diverse stakeholder interest in oil and gas-sector methane emissions
  • Opportunity to leverage existing frameworks
    • EPA NSPS and State regulations have established control technologies and practices that could be used in a voluntary context to address sources at existing facilities.
    • Greenhouse Gas Reporting Program facility-level data is available for verification/tracking purposes.
  • Mature program
    • Gas STAR Program began in 1993 and has never been significantly updated. Program enhancement can provide new opportunities for partners and EPA.
opportunities for future action
Opportunities for Future Action
  • While progress has been made, opportunity remains to further reduce methane emissions.
  • Viable low-cost technologies and practices exist today. Remaining low-cost abatement potential estimated at over 60 million metric tons of CO2e.
  • Opportunity for greater participation beyond current Program flexible framework.

* Post 2012 New Source Performance Standards

Source: Global Non-CO2 Mitigation Report and Global Non-CO2 emissions and projections report

gas star gold program objectives
Gas STAR Gold Program Objectives
  • The existing Gas STAR Program will remain in place with a primary focus on technology transfer.
  • The proposed Gas STAR Gold Program creates a framework under which facilities will be recognized by EPA for implementing, at the facility level, methane reduction activities for all major methane emission sources. Major goals include:
    • Showcase the achievements of U.S. oil and gas operations at the facility-level by offering a standard set of best protocols to be implemented at the facility-level.
    • Achieve greater methane emissions reductions across the entire value chain (production through distribution) by encouraging additional facilities to achieve Gold- level performance.
    • Create a verifiable and transparent mechanism to demonstrate achievements and acknowledge high performers.
    • Complement existing regulatory requirements - such as applying control techniques required for new sources under NSPS Subpart OOOO to existing facilities.
    • Publically recognize participating companies’ emission reduction.
gas star gold program overview
Gas STAR Gold Program Overview
  • Under the proposed Gas STAR Gold Program, companies can achieve Gold status at a facility by implementing all specified reduction protocols for all applicable methane sources at the facility level.
  • To achieve Gold status, companies would:
    • Submit a Letter of Intent outlining list of proposed facilities working toward Gold status.
    • Develop an Implementation Plan for each facility seeking Gold status.
    • Implement all applicable Gold protocols at a minimum of one facility.
    • Submit an Annual Report for each Gold status facility demonstrating achievement of all protocols and plans for maintaining facility-level Gold status.
    • Continue the process of implementing the Gold status protocols at least one new facility each year.
  • To achieve Platinum status, companies would:
    • Achieve Gas STAR Gold status for a high percentage (to be specified) of their facilities. For example, when a company attains Gold status for 90% of its facilities, they would achieve Platinum recognition at the corporate level.
benefits to the oil and gas industry
Benefits to the Oil and Gas Industry
  • EPA recognition of clear, comparable, verifiable and transparent data on a facility’s methane emissions performance.
    • Facility emission data transparency through public disclosure of all relevant data to verify Gold status.
  • EPA recognition of facility performance.
    • EPA will publicize facility progress on our website and through workshops.
    • EPA will give facilities permission to use the EPA Gas STAR Gold logo.
    • EPA will publicly track company progress by listing Gold facilities and indicate percentage of operations that these facilities represent.
  • Facility revenue generation through the sale of reduced methane emissions.
  • Reduced VOC and HAPs emissions in upstream oil and gas sector.
  • Increased safety at the facility level.
  • Better local and state relationships.
gold protocol 6 equipment fugitives above ground
Gold Protocol 6: Equipment Fugitives Above Ground
  • Definition of Fugitive or “Leak”
  • Description and Location of Emissions
    • Can occur through many types of connection points (e.g. flanges, seals, threaded fittings) or through moving parts of valves, pumps, compressors, and other types of process equipment.
    • Due to the high number of equipment components, fugitive leak emissions can become a significant source of emissions.
    • Sector Eligibility: On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D
gold protocol 6 equipment fugitives above ground1
Gold Protocol 6: Equipment Fugitives Above Ground
  • Leak Detection Protocol:
    • Conduct comprehensive leak detection according to the tables below:
  • Leak Repair Protocol:
    • Repair Leak within 5 working days for all identified leaks unless a good cause, or shutdown is required for which leak must be repaired within 15 days of resolving issue or at next shutdown.
gold protocol 13 pipeline inspection and repair
Gold Protocol 13: Pipeline Inspection and Repair
  • Definition of pipeline
    • Pipeline consists of above and below ground pipe and associated connectors.
    • Used to form infrastructure to transport natural gas within a facility boundaries.
  • Description and Location of Emissions
    • Leaks are considered to be any source, such as small openings, gaps, and cracks in a pipeline and/or associated component connectors, allowing an unintentional natural gas release.
    • Sector Eligibility: On P  GB  Pc  T  S  LNG S  LNG I&E  D
  • Gold Protocol

1) Conduct comprehensive leak detection annually and retain records; and

2) Perform leak repair for leaks ≥ 60 grams/hour

gold protocol 17 cast iron distribution pipeline and unprotected steel pipeline
Gold Protocol 17: Cast Iron Distribution Pipeline and Unprotected Steel Pipeline
  • Definition of Cast Iron Distribution Pipeline
    • Iron that is heated to melting point and poured into molds.
    • Applies to gray cast iron, which is a ferrous material.
    • Cannot be welded or screwed.
    • Also includes wrought iron.
  • Definition of Unprotected Steel Pipeline
    • Steel pipeline with no form of corrosion protection.
  • Description and Location of Emissions
    • Manufacturer defects, improper design/installation, and internal/exterior protective coating damage can all lead to natural gas pipeline leaks.
    • Common leakage points in these materials are joints and stress cracking in cast iron pipes and corrosion holes in unprotected steel piping.
    • Sector Eligibility:  D
gold protocol 17 cast iron distribution and unprotected steel pipelines
Gold Protocol 17: Cast Iron Distribution and Unprotected Steel Pipelines
  • All cast iron or unprotected steel pipe being replaced:
    • It is proposed that operators replace, line, or otherwise seal joints in 10% of existing cast iron pipeline, wrought iron pipeline and unprotected steel pipeline per year.
    • Additionally it is proposed that operators perform an annual leak survey as per requirements in this protocol pertaining to pipeline inspection and repair.
  • If 400 feet or more of pipe is being replaced:
    • It is proposed that operators conduct a pressure drop survey on the replaced main line to measure the leakage immediately after all service connections have been transferred over to the new main, and the ends of the replaced pipeline are sealed before the pipeline is abandoned or removed.

Image Source: McWane Cast Iron Pipe Co., http://www.mcwanepipe.com/

gas star gold program request for feedback
Gas STAR Gold Program – Request for Feedback

EPA seeks feedback from stakeholders regarding all aspects of this proposed program, including:

  • For the local distribution sector (LDC), please provide feedback on performance goals for specific sources, such as cast iron pipe replacement and suggestions for how to increase methane emissions reductions from LDCs with limited or no cast iron or exposed steel pipe?
  • For LDCs, are there any specific incentive programs that PUCs or States leverage in order to promote further methane emissions reductions in this sector?
  • How can EPA best engage PUCs to further methane emissions mitigation in LDCs?
  • How, and how frequently, should protocols or other program elements be updated to reflect evolving state of the art?
  • Are appropriate emissions sources targeted in these protocols? Should EPA consider any additional emissions sources and/or associated protocols?
  • Are appropriate best management practices, technologies and/or emission mitigation targets used in the protocols?
contact us
Contact us!

We look forward to working with you and hope that you will consider joining the Gas STAR Gold Program!

For more information about Gas STAR Gold:

www.epa.gov/gasstar/gold/index.html

We welcome your feedback!

www.epa.gov/gasstar/contactus.html

Roger Fernandez

Fernandez.roger@epa.gov

(202) 343-9386

gold protocol 1 associated gas
Gold Protocol 1: Associated Gas
  • Definition of Associated Gas
    • Natural gas produced during the production of crude oil or condensate from an oil well.
    • Does not include natural gas produced during completion flow-back or emitted from equipment leaks. These sources are captured under another protocol.
  • Description and Location of Emissions
    • Associated gas venting or flaring to the atmosphere after gas-liquid separation phase.
    • Facilities without existing infrastructure to transport produced gas to useful outlet.
    • Does not include emissions produced from wildcat/delineation wells or as a result of system failures/emergencies.
    • Sector Eligibility:  On/Off P  GB
  • It is proposed that operators recover all associated gas for beneficial use at a facility
    • Beneficial use does not include flaring.
    • Potential options for use of any recovered gas include natural gas reinjection, electricity generation, natural gas liquefaction, and gas capture for sale.
gold protocol 2 casinghead gas
Gold Protocol 2: Casinghead Gas
  • Definition of Casinghead gas
    • Gas that collects in the annular space between the casing and tubing in oil and gas wells.
  • Description and Location of Emissions
    • Casinghead gas is usually vented to the atmosphere at or near the wellhead.
    • Sector Eligibility: On P
gold protocol 2 casinghead gas1
Gold Protocol 2: Casinghead Gas

Protocol Hierarchy

Route emissions to recovery system for beneficial use. Beneficial use does not include flaring.

1. Facilities with gas capture system.

2. Facilities without gas capture system.

Install gas capture system if possible from an engineering standpoint.

Install flare if CO2 equivalent combustion emissions from flare pilot gas ≤ CO2 equivalent casinghead gas venting emissions.

3. Facilities with no flare.

gold protocol 3 centrifugal compressors wet and dry seals
Gold Protocol 3: Centrifugal Compressors – Wet and Dry Seals
  • Definition of Centrifugal Compressor
    • Raises the pressure of natural gas by means of mechanical rotating vanes or impellers.
    • Uses wet or dry sealing system to prevent compressed gas escape to the atmosphere.
    • Does not include rotary screw, rotary vane, or scroll compressors.
  • Description and Location of Emissions
    • Dry seals utilize a thin gap of high pressure gas between the rings through which little gas can leak.

Gas is released to the atmosphere where the compressor shaft exits the compressor case.

    • Wet seals use oil under pressure to prevent gas from escaping along a compressor shaft. Seal oil is degassed to the atmosphere.
    • Sector Eligibility:  On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D
gold protocol 3 centrifugal compressors wet and dry seals1
Gold Protocol 3: Centrifugal Compressors – Wet and Dry Seals

Compressor

turbine fuel

Boiler

OPTIONS

Atmospheric seal oil degassing drum

Less gas vented to atmosphere

Fuel pressure seal oil degassing drum and demister (“seal oil trap”)

Low Pressure Fuel Gas

Vapor Recovery Unit (VRU)

Seal oil circulation pump

  • Dry Seal Systems: It is proposed that operators maintain venting emissions from dry seals within 10% of the initial design vent rate.
    • Obtain initial design vent rate from the seal manufacturer or measure initial design vent rate when the compressor commences operation.
  • Wet Seal Systems: It is proposed that operators achieve 95% recovery of uncontrolled methane emissions for all compressors, without using flaring.

Compressor Suction/Recycle

gold protocol 4 compressor blowdowns
Gold Protocol 4: Compressor Blowdowns
  • Definition of Compressor Blowdown
    • When a compressor is taken offline, the high pressure gas within the compressor is vented to the atmosphere.
  • Description and Location of Emissions
    • Emptying gas from compressor and connected piping and vessels between closed isolation valves and venting it to the atmosphere.
    • Sector Eligibility: On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D
gold protocol 4 compressor blowdowns1
Gold Protocol 4: Compressor Blowdowns

PROTOCOL HIERARCHY

Vapor Recovery Unit (VRU)

Low Pressure Fuel Gas or Parallel Operating Compressor

  • Protocol application hierarchy for a reciprocating compressor are displayed below.

1st

» Recover gas for beneficial use. Beneficial use does not include flaring.

2nd

» If both systems are present, route emissions to lower pressure system of the two, to max engineering potential.

Retain blowdown gas in compressor

3rd

» Relevant only to reciprocating compressors with positive rod packing sealing systems.

Route to Flare

4th

» Viable option if facility is not eligible for other reduction opportunities.

gold protocol 5 compressor starts
Gold Protocol 5: Compressor Starts
  • Definition of Compressor Start
    • Compressors driven by internal combustion engines are often equipped with gas expansion starters.
    • Pressurized gas expands across the starter turbine that initiates engine startup.
  • Description and Location of Emissions
    • The pressurized starter gas used to drive the turbine motor starter is vented to the atmosphere.
    • Sector Eligibility: On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D
gold protocol 5 compressor starts1
Gold Protocol 5: Compressor Starts
  • Protocol hierarchy is outlined in the gas starter schematic below.

Protocol Hierarchy

1st - Replace gas starters.

»Replacement options include instrument air, electric, or nitrogen

2nd - Route vent gas to gas capture systemfor beneficial use.

» Beneficial use does not include flaring.

3rd - Route starter vent gas to flare.

»Applicable to sites with existing flares or flares being installed for another protocol.

EPA/GRI Methane Emissions from the Natural Gas Industry Volume 7: Blow and Purge

gold protocol 6 equipment fugitives above ground2
Gold Protocol 6: Equipment Fugitives Above Ground
  • Definition of Fugitive or “Leak”
  • Description and Location of Emissions
    • Can occur through many types of connection points (e.g. flanges, seals, threaded fittings) or through moving parts of valves, pumps, compressors, and other types of process equipment.
    • Due to the high number of equipment components, fugitive leak emissions can become a significant source of emissions.
    • Sector Eligibility: On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D
gold protocol 6 equipment fugitives above ground3
Gold Protocol 6: Equipment Fugitives Above Ground
  • Leak Detection Protocol:
    • Conduct comprehensive leak detection according to the tables below:
  • Leak Repair Protocol:
    • Repair Leak within 5 working days for all identified leaks unless a good cause, or shutdown is required for which leak must be repaired within 15 days of resolving issue or at next shutdown.
gold protocol 7 flares
Gold Protocol 7: Flares
  • Definition of a Flare
    • Combustion device that uses an open flame to burn combustible gas.
  • Description and Location of Emissions
    • Direct emissions from gas combusted in pilot flame.
    • Combination of low flowing lesser BTU gas with a high cross wind (flare out).
    • Sector Eligibility: On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D
  • It is proposed that operators install reliable and continuous ignition systems for all flaring existing within or adjacent to the facility.
gold protocol 8 gas driven pneumatics
Gold Protocol 8: Gas-Driven Pneumatics
  • Definition of Pneumatic Device
    • Automated or manual instruments and pumps used for flow regulation to maintain a process condition.
    • Pressurized natural gas is used as the source of power.
  • Description and Location of Emissions
    • Devices are designed to vent gas as part of normal operation.
    • Three basic configurations:
        • Continuous-bleed
        • Intermittent bleed
        • Self-contained devices
    • Sector Eligibility: On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D
gold protocol 8 gas driven pneumatic devices
Gold Protocol 8: Gas-Driven Pneumatic Devices

Protocol Hierarchy

1st - Instrument Air, Nitrogen, or Electricity

2nd - Leak Rate Reduction

» Where instrument air or nitrogen are available, install devices powered by these.

» Where electricity is available, replace pneumatic pumps with electric pumps

» For devices used in processing facilities, reduce leak rate to zero

» For devices used outside of processing facilities, reduce leak rate below 6 standard cubic feet per hour (scfh).

gold protocol 9 glycol dehydrators
Gold Protocol 9: Glycol Dehydrators
  • Definition of a Glycol Dehydrator
    • Device in which a liquid absorbent (glycol, diethylene glycol, or triethylene glycol) directly contacts a natural gas stream to absorb water vapor.
  • Description and Location of Emissions
    • Liquid absorbent (e.g. glycol) removes water as well as methane, VOCs, and HAPs from natural gas.
    • Saturated or “rich” absorbent is routed to a reboiler where these compounds evaporate along with water, resulting in emissions.
    • Methane emissions are directly proportional to a dehydrator’s glycol circulation rate.
    • Sector Eligibility: On/Off P  GB  Pc  T  S  LNG S  LNG I&E
  • Emission Reduction Options:
      • Route Emissions to Gas Capture
      • Route Emissions to Low Pressure Gas System
      • Route Emissions to Flare
      • Glycol Circulation Rate Optimization

Requirement 1, 2, 3 apply to dehydrators with emissions ≥ 7,080 g/hr and annual avg. daily throughput ≥ 0.4 MMSCFD

Requirement 4 applies to dehydrators with emissions ≥ 7,080 g/hr and annual avg. daily throughput < 0.4 MMSCFD

gold protocol 9 glycol dehydrators1
Gold Protocol 9: Glycol Dehydrators

PROTOCOL HIERARCHY

2nd - Low Pressure Gas System

3rd - Route to Flare

  • Protocol hierarchy for an example device is displayed below.

HIERARCHY 1

1st - Gas Capture System

» Recover gas from dehydrator vents for beneficial use. Beneficial use does not include flaring.

HIERARCHY 2

» For dehydrator equipped with flash tank separators

» Viable opportunity when separator vent gas volume is greater than or equal to on-site fuel requirements

HIERARCHY 3

» Viable opportunity only once gas capture and low pressure gas system recovery have been considered.

Optimize Glycol Circulation Rate

» Glycol circulation rate maintained at or below 110% of the optimal circulation rate based on current production

gold protocol 10 storage tanks
Gold Protocol 10: Storage Tanks
  • Definition of a Storage Tank
    • Vessel designed to contain an accumulation of crude oil, condensate, intermediate hydrocarbon liquids, or produced water that is constructed of non-earthen materials.
  • Description and Location of Emissions
    • Sources of emissions include tank vents, designed tank openings, and any tank defects .
    • Increased flashing emissions due to leaking or stuck open gas/oil separator liquid level control valves as well as vortexing when separator liquid level is low (and no vortex breaker is installed).
    • Sector Eligibility: On/Off P  GB  Pc  T
  • Emission Reduction Hierarchy:
      • Route Emissions to Gas Capture
      • Route Emissions to Flare

Tanks with average annual hydrocarbon emissions ≥ 60 g/h of natural gas are eligible for reduction opportunities.

gold protocol 10 storage tanks1
Gold Protocol 10: Storage Tanks

PROTOCOL HIERARCHY

2nd - Route to Flare

» Viable opportunity for sites w/o gathering or sales line(s) in place or existing gas capture system(s)

» Recover gas from storage tanks for beneficial use. Beneficial use does not include flaring.

1st - Vapor Recovery Unit (VRU)

gold protocol 11 liquids unloading
Gold Protocol 11: Liquids Unloading
  • Definition of Liquids Unloading
    • Removal of fluids required to maintain production in mature wells when accumulated liquids slow or halt gas production (liquids loading).
  • Description and Location of Emissions
    • Liquids unloading can be performed through manual or automated techniques.
    • Atmospheric emissions from liquids unloading can occur from direct gas venting or flaring.
    • Sector Eligibility: Onshore Production
gold protocol 11 liquids unloading1
Gold Protocol 11: Liquids Unloading

Foaming Agents

Velocity Tubing

  • It is proposed that operators maintain a closed loop liquids unloading system that eliminates all methane emissions.
    • Control of emissions during system failures or emergency situations is not proposed.
  • Emission reduction options for liquids unloading while maintaining a closed loop system are described below (image shows a well installed with a plunger lift).

REDUCTION OPTIONS

» Soaps or surfactants which aid in phase separation and reduce critical velocity required to lift/remove fluids from a well.

Plunger Lift Systems

» Equipment which uses well’s gas pressure to drive accumulated liquids to the surface.

» Well gas should be directed to a separator that routes to a sales line or other beneficial use (not including flaring) during plunger lift cycling.

» Smaller diameter production tubing which increases gas production velocity without venting emissions.

Downhole Reciprocating or Rotating Pumps

» Pumps used to propel accumulated well liquids to the surface.

gold protocol 12 pipeline venting and blowdowns
Gold Protocol 12: Pipeline Venting and Blowdowns
  • Definition of pipeline venting
    • Planned or unplanned release of gas to the atmosphere from pipelines to reduce line pressure.
  • Description and Location of Emissions
    • Vented sections of pipe to ensure safe working conditions during planned repairs and maintenance, installation of new parallel pipe, or an emergency repair.
    • Done by blocking the smallest possible linear section of the pipeline and depressurizing it through venting natural gas to the atmosphere.
    • Sector Eligibility: On P  GB  Pc  T  S  LNG S  LNG I&E  D
gold protocol 12 pipeline venting and blowdowns1
Gold Protocol 12: Pipeline Venting and Blowdowns
  • An image of portable compression to reduce pipeline blowdown emissions is shown below.

REDUCTION HIERARCHY

1st - Use inline compression to max engineering potential

»Applicable if facility has ownership or operatorship of the compressor downstream from pipeline venting and blowdown operations.

» Recover gas amount comparable or higher to fuel used during inline compression (CO2 eq. basis).

2nd - Use portable compression

» Breakeven or higher value of gas should be recovered in comparison to cost of using portable compression.

gold protocol 13 pipeline inspection and repair1
Gold Protocol 13: Pipeline Inspection and Repair
  • Definition of pipeline
    • Pipeline consists of above and below ground pipe and associated connectors.
    • Used to form infrastructure to transport natural gas within a facility boundaries.
  • Description and Location of Emissions
    • Leaks are considered to be any source, such as small openings, gaps, and cracks in a pipeline and/or associated component connectors, allowing an unintentional natural gas release.
    • Sector Eligibility: On P  GB  Pc  T  S  LNG S  LNG I&E  D
  • Gold Protocol

1) Conduct comprehensive leak detection annually and retain records; and

2) Perform leak repair for leaks ≥ 60 grams/hour

gold protocol 14 pressure relief valves prvs system upsets
Gold Protocol 14: Pressure Relief Valves (PRVs) – System Upsets
  • Definition of pressure relief valves
    • Self-regulating safety devices used to ensure normal equipment/pipeline operating pressure and prevent any pressure increases above the maximum allowable working pressure of process equipment.
  • Description and Location of Emissions
    • During system upsets, PRVs vent process gas to maintain a set pressure value.
    • Sector Eligibility: On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D
gold protocol 14 pressure relief valves prvs system upsets1
Gold Protocol 14: Pressure Relief Valves (PRVs) – System Upsets
  • It is proposed that operators install rupture disks on all gas pressure relief valves (PRVs)
    • One–time use calibrated metal membranes which break at excessive gar pressures, allowing system stabilization.
    • Does not apply to PRVs in closed systems connected to flare headers

Pressure Relief Valve

Rupture Disk Installation

gold protocol 15 reciprocating compressor rod packing
Gold Protocol 15: Reciprocating Compressor Rod Packing
  • Definition of Reciprocating Compressor Rod Packing
    • A series of flexible rings in machined metal cups that fit around the reciprocating compressor piston rod.
    • The rings create a seal, limiting the amount of compressed natural gas that escapes to the atmosphere.
  • Description and Location of Emissions
    • Emissions from packing systems originate from mainly four components; the nose gasket, between the packing cups, around the rings and between the rings and the shaft.
    • A set of two to three flexible, segmented rings in a packing cup are pressed against the rod to and oscillate back and forth in the cup with the rod’s reciprocal movement, sealing against the cup faces to present leakage round the rings, but a little gas slips around the rings with each stroke.
    • Rod packing emits a small amount of gas into the distance piece and/or through a vent line connected to the packing box.
  • Emission Reduction Hierarchy

1) Gas Capture

2) Economical Rod Packing Replacement

3) Route rod packing emissions to flare

    • Sector Eligibility: On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D
gold protocol 16 vessel blowdowns
Gold Protocol 16: Vessel Blowdowns
  • Definition of Vessel Blowdown
    • The act of emptying or depressurizing a vessel of natural gas.
  • Description and Location of Emissions
    • Intentional vents usually from elevated vent stacks controlled by a manual or pneumatic actuated valve connected to the vessel.
    • Blowdowns can be from planned maintenance, operational needs, or due to an emergency.
    • Sector Eligibility:  On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D
  • Emission Reduction Hierarchy:
      • Route Emissions to Gas Capture
      • Route Emissions to Low Pressure Gas System
      • Route Emissions to Flare
gold protocol 17 cast iron distribution pipeline and unprotected steel pipeline1
Gold Protocol 17: Cast Iron Distribution Pipeline and Unprotected Steel Pipeline
  • Definition of Cast Iron Distribution Pipeline
    • Iron that is heated to melting point and poured into molds.
    • Applies to gray cast iron, which is a ferrous material.
    • Cannot be welded or screwed.
    • Also includes wrought iron.
  • Definition of Unprotected Steel Pipeline
    • Steel pipeline with no form of corrosion protection.
  • Description and Location of Emissions
    • Manufacturer defects, improper design/installation, and internal/exterior protective coating damage can all lead to natural gas pipeline leaks.
    • Common leakage points in these materials are joints and stress cracking in cast iron pipes and corrosion holes in unprotected steel piping.
    • Sector Eligibility:  D
gold protocol 17 cast iron distribution and unprotected steel pipelines1
Gold Protocol 17: Cast Iron Distribution and Unprotected Steel Pipelines
  • All cast iron or unprotected steel pipe being replaced:
    • It is proposed that operators replace, line, or otherwise seal joints in 10% of existing cast iron pipeline, wrought iron pipeline and unprotected steel pipeline per year.
    • Additionally it is proposed that operators perform an annual leak survey as per requirements in this protocol pertaining to pipeline inspection and repair.
  • If 400 feet or more of pipe is being replaced:
    • It is proposed that operators conduct a pressure drop survey on the replaced main line to measure the leakage immediately after all service connections have been transferred over to the new main, and the ends of the replaced pipeline are sealed before the pipeline is abandoned or removed.

Image Source: McWane Cast Iron Pipe Co., http://www.mcwanepipe.com/

celebrating 125 years of public service1

NARUC

Methane Emissions in Transmission and Distribution:

What Can be Done?

The Honorable Susan Rabon

North Carolina Utilities Commission

Celebrating 125 Years of Public Service

slide47
Methane Emissions in Transmission and Distribution: What Can be Done? Example of Methane Management for Oil and Gas

July 14, 2014

cautionary language
Cautionary Language

Regarding Forward-Looking Statements and Other Matters

This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Anadarko believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results, or other expectations expressed in this presentation, including court approval of the settlement agreement related to the Tronox Adversary Proceeding, issuance of the injunction and dismissal with prejudice of the claims asserted in the Tronox Adversary Proceeding, as well as Anadarko’s ability meet financial and operating guidance, achieve its production targets, consummate the transactions described in this presentation, successfully manage its capital expenditures, timely complete and commercially operate the projects and drilling prospects identified in this presentation, achieve production and budget expectations on its mega projects, and successfully plan, secure necessary government approvals, finance, build, and operate the necessary infrastructure and LNG park. See “Risk Factors” in the company’s 2013 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases. Anadarko undertakes no obligation to publicly update or revise any forward-looking statements.

Please also see our website at www.anadarko.com under “Investor Relations” for reconciliations of the differences between any non-GAAP measure used in this presentation and the most directly comparable GAAP financial measures. Also on our website at www.anadarko.com is a glossary of terms.

Cautionary Note to Investors - The U.S. Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC’s definitions for such terms. We may use terms in this presentation, such as “resources,” “net resources,” “net discovered resources,” “gross resource,” “gross recoverable resources,” “gross resource opportunity,” “estimated net resources,” “recoverable natural gas,” “net opportunity,” and similar terms that the SEC’s guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the oil and gas disclosures in our Form 10-K for the year ended December 31, 2013, File No. 001-08968, available from us at www.anadarko.com or by writing us at: Anadarko Petroleum Corporation, 1201 Lake Robbins Drive, The Woodlands, Texas 77380 Attn: Investor Relations. You can also obtain this form from the SEC by calling 1-800-SEC-0330.

anadarko is
Anadarko is …
  • Among the World’s Largest Independent Oil and Natural Gas E&P Companies
  • Included in the S&P 100 Index with ~6,000 Employees Worldwide
  • Headquartered in The Woodlands, TX with Operations in 15+ Countries
  • Producing Enough Energy to Meet Daily Demands of ~25 Million Avg. American Homes.

Production

Exploration

anadarko s mission and values
Anadarko’s Mission and Values

Anadarko’s mission is to provide a competitive and sustainable rate of return to shareholders by exploring for, acquiring and developing oil and natural gas resources vital to the world’s health and welfare.

  • Integrity and Trust
  • Servant Leadership
  • People and Passion
  • Commercial Focus
  • Open Communication
u s onshore our mission
U.S. Onshore: Our Mission

2009

  • Deliver Short-Cycle, Capital-Efficient Liquids Growth
  • Build Enabling Infrastructure
  • Increase Efficiencies and EURs
  • Explore for and Accelerate the Next Resource Play
  • Maintain Natural Gas Option Value

Key Growth Contributors

Wattenberg HZ

Delaware Basin

E TX / N LA

Eagleford

Marcellus

horizontal drilling hydraulic fracturing energy reboot
Horizontal Drilling + Hydraulic Fracturing = Energy Reboot
  • Horizontal Drilling
  • Hydraulic Fracturing

Multiple layers of

Protective steel &

cement

anadarko is committed to reducing emissions
Anadarko is Committed to Reducing Emissions
  • Reducing Impacts
    • Collaborative Air-Quality Rules in Colorado with Governor, Regulators and EDF
    • Expanding Infrastructure to Reduce Truck Traffic
    • Water Pipeline and Management
  • Leading Industry Initiatives
    • FracFocus.org
    • University of Texas Emissions Study
    • Expanding CNG Fleet and Infrastructure
  • Actively Engaging Stakeholders
  • Recognized for Best Practices

Anadarko, EDF, Governor John Hickenlooper and 2 Other Operators Collaborate on New Air-Quality Rules in Colorado.

Anadarko is awarded a 2013 Environmental Protection Award by the COGCC for the third consecutive year.

u s methane emissions by source
U.S. Methane Emissions By Source

Source: US EPA GHG Inventory http://epa.gov/climatechange/ghgemissions/gases/ch4.html

long term methane management
Long Term Methane Management

What motivates a company to design and implement a comprehensive voluntary methane program to minimize methane emissions with transparency?

  • Evaluate risk, cost and liability to determine level of priority
  • Methane emissions are a priority for upstream natural gas industry
    • Methane program benefits include: reducing methane and VOC emissions, preparing for potential regulatory changes and increasing the benefit of fuel switching
    • Focus on leak detection and repair for existing operations
    • Leverage with VOC emission related goals
  • Public attention on life-cycle emissions of natural gas
white house strategy to reduce methane emissions 3 14
White House: Strategy to Reduce Methane Emissions (3/14)
  • Attributes 28% of methane emissions to oil and gas sector
    • 31% emissions from production
    • 15% emissions from processing
    • 34% emissions from transmission and storage
    • 20% emissions from distribution
  • Upstream Oil and Gas
    • Assess potential sources of methane and other emissions – White Papers
    • Evaluate regulatory programs – permitting, control regulations, reporting
    • Expand voluntary efforts - National GasSTAR (Gold Star Certification)
    • Department of Interior: Bureau of Land Management Leak and Flaring
  • Measurement and Monitoring
    • New measurement technologies
    • Address uncertainty with bottom-up inventories
    • Enhance top-down modeling and monitoring
white house strategy to reduce methane emissions 3 141
White House: Strategy to Reduce Methane Emissions (3/14)
  • Department of Energy Methane Roundtables for “downstream” opportunities
    • Accelerate best practices
    • Promote common understanding of methane emissions
    • Develop cost-effective strategies to reduce methane emissions
    • Use voluntary programs to catalyze action
  • Existing downstream efforts specifically recognized
    • Safety is a top priority for distribution
    • 38 states have an accelerated infrastructure replacement cost recovery program
    • Natural Gas Downstream Initiative
    • Environmental Defense Fund and 13 American Gas Association project
  • Recognizes the value of state regulatory efforts
    • Colorado example
    • California and Northeast trading programs
industry upstream methane strategies next steps
Industry Upstream Methane Strategies: Next Steps

The oil and gas industry may consider the following moving forward:

  • Gather and evaluate data
    • What gets measured gets managed
    • Decide type of measurements: direct, estimates, leak detection
    • Develop accurate carbon emission inventory
    • Understand accuracy of emission factors
    • Assess data for priority sources
  • Develop strategies that:
    • Meet regulatory requirements
    • Leverage with VOC emission reductions
    • Reduce emissions from tanks, pneumatics, completions, equipment leaks
    • Develop technologies to reduce potential of emissions: tankless operations, centralizing facilities, vapor recovery units
  • Measure results and develop next strategies
    • Continue to measure and reassess priorities
    • The emissions per unit type changes over time
industry upstream methane strategies next steps1
Industry Upstream Methane Strategies: Next Steps
  • Methane reduction strategies are usually developed considering:
    • Largest emission sources
    • Cost effectiveness
    • Ability to capture product
    • Strategies to obtain the greatest methane reductions
    • Regulatory requirements
    • Design and construction new locations
    • Community priorities
    • Equipment effectiveness
    • Reliability of control equipment
  • Purposes of voluntary GHG reporting program are often to:
    • Enhance business value
    • Reduce risk and cost
    • Find opportunities to improve operations
    • Strengthen stakeholder relationships
    • Enhance reputation, trust and credibility
industry upstream methane strategies lessons learned
Industry Upstream Methane Strategies: Lessons Learned

Lessons learned by the upstream industry:

  • Flexibility is key
    • Priorities may vary by locale and new versus existing operations
    • Overly prescriptive regulations can stifle innovation and reductions
    • Leveraging with other priorities is key to a successful strategy
    • Leak detection and repair strategies have greater short term versus long term benefits
  • Voluntary strategies can obtain greater reductions
    • Sharing best practices across the industry is valuable
    • Field and engineering staff are key to any environmental strategy –seeking more efficient ways to do business
    • Value in linking a methane program to continually finding strategies to reduce risk, costs, and liabilities
  • Understanding data is important
    • Strong knowledge of data is important – including data gaps
    • Measuring continuous improvement can be challenging
natural gas distribution sector
Natural Gas Distribution Sector
  • Natural gas distribution segment reduced methane emissions by over 20% since 1990 through implementation of industry best practices and pipeline replacement activities
  • Many utilities participated in EPA’s Gas STAR program
  • Approximately 38 states have various programs or enabling regulatory structures in place today to accelerate LDC pipeline replacement and modernization efforts
  • Natural gas local distribution companies (LDCs) and the American Gas Association (AGA) are collaborating with EDF to quantify methane emissions from distribution networks and update emission factors
  • Leadership and collaboration across federal, state, and local government is necessary to further accelerate infrastructure replacement and modernization,

Source: MJ Bradley and Downstream Natural Gas Initiative

evaluate priority to ldcs
Evaluate Priority to LDCs
  • LDCs may have different risk-based priorities
    • Methane may not be the priority driver
    • Safety may be a greater priority
    • Co-benefit of replacing pipelines for safety, is the reduction of methane emissions
    • Once safety issues addressed, re-evaluate remaining emissions for further action
  • Gather and evaluate data
    • Various methodologies can be used
    • Evaluate value of improving reliability of data set
  • Develop strategies
    • Leverage with safety goals
    • Consider lower price of gas and lower interest rates
    • Timing may be just right to invest maximum funds possible to replace systems
  • Measure results and develop next strategies
    • Continue to measure and reassess priorities
    • Emissions per unit type changes over time
downstream natural gas initiative dngi
Downstream Natural Gas Initiative (DNGI)
  • Five natural gas utilities and MJ Bradley formed the Downstream Natural Gas Initiative to address key technical, regulatory, and workforce challenges affecting methane emission reductions
  • Focus on opportunities to substantially reduce methane emissions and support safe, reliable, and cost-effective service
  • Members are 13% of total installed distribution main mileage and deliver ~20% of total natural gas
    • Consolidated Edison Company of New York, Inc.
    • National Grid
    • Pacific Gas & Electric
    • Public Service Electric & Gas
    • Xcel Energy

Source: MJ Bradley and Downstream Natural Gas Initiative

downstream natural gas initiative dngi1
Downstream Natural Gas Initiative (DNGI)
  • Downstream Natural Gas Initiative states that:
    • Pipeline replacement and modernization programs offer the most meaningful opportunities to reduce methane emissions from the distribution segment
    • Maintain focus on safety and effectively managing resources
    • Natural gas utilities are working with state PUCs to put in place accelerated pipeline replacement and modernization programs
    • Leadership and collaboration across federal, state, and local government will be necessary to further accelerate infrastructure replacement and modernization
  • Annual and total program investment will be dictated by the acceptable level of customer rate impacts
  • The impact of pipeline replacement projects on customer rates is largely a function of the scale and speed of replacement programs

Source: MJ Bradley and Downstream Natural Gas Initiative

how can state regulators help
How Can State Regulators Help?

Regulatory Considerations

  • Can the state work to develop a predicable regulatory framework to enable and guide utility investments?
  • Can the state support pipe replacement programs?
  • Do existing programs provide for timely cost recovery?
  • Are there clear objectives for utilities?
  • Do regulations support the use of new technologies and processes to increase efficiencies, reduce risk and costs, and improve safety?
celebrating 125 years of public service2

NARUC

Methane Emissions in Transmission and Distribution:

What Can be Done?

The Honorable Susan Rabon

North Carolina Utilities Commission

Celebrating 125 Years of Public Service

celebrating 125 years of public service3

NARUC

Mark Brownstein

Associate Vice President and Chief Counsel of the

U.S. Climate and Energy Program

Celebrating 125 Years of Public Service

celebrating 125 years of public service4

NARUC

Methane Emissions in Transmission and Distribution:

What Can be Done?

The Honorable Susan Rabon

North Carolina Utilities Commission

Celebrating 125 Years of Public Service

slide72

NW Natural’s Approach to Raising the Bar on Pipeline Safety Improving Natural Gas Safety and Reducing EmissionsPresented to the National Association of Regulatory Utility CommissionersSummer Committee MeetingsDallas, TexasJuly 13-16, 2014

Bruce Paskett

Principal Compliance Engineer

NW Natural

slide73

Agenda

  • NW Natural Company Background
  • NWN’s Enhanced Pipeline Safety Programs
  • Lost and Unaccounted For Gas- Not a Valid Measure of Emissions
  • Rate Treatment Mechanisms
  • Added Benefit of Reduced Natural Gas Emissions
  • State Excavation Damage Prevention Laws
  • Summary
slide74

NW Natural Company Background

  • Company founded in 1859
  • Operate in Oregon and SW Washington
  • Serve approximately 698,000 residential, commercial and industrial customers
  • Designed, constructed, own and operate 643 miles of transmission main, 13,400 miles of distribution main and 680,000 services
slide76

NW Natural Commitment to PL Safety

  • Company is committed to the safe, reliable and cost-effective delivery of natural gas in a manner that recognizes impacts to utility ratepayers
  • Since the early 1980’s, company has worked closely w/ OPUC Safety Staff to implement enhanced pipeline safety programs that have significantly improved safety
slide77

NW Natural Transmission and Distribution Piping Characteristics

  • As a direct benefit of NW Natural’s Enhanced Pipeline Safety Programs, nearly 100% of NW Natural’s underground infrastructure is constructed of modern day materials (coated, cathodically protected steel and state-of-art polyethylene plastic)
slide78
NW Natural’s Enhanced Pipeline Safety Programs

Key Driver was Improving Pipeline Safety

Added Benefit: Reduced Natural Gas Emissions

NW Natural Raising the Bar on

Pipeline Safety

slide79

NW Natural’s Enhanced PL Safety Programs

  • Distribution Integrity Management Program (DIMP)-1983
  • Accelerated Cast Iron (CI) Repl. Program- 1983 to 2000
  • Accelerated Bare Steel Repl. Program- 2001 to 2015
  • Natural Forces (Geo-Hazard) Program- 2001
  • Transmission Integrity Management Program (TIMP)- 2002
  • System Integrity Program (SIP- Bare Steel Replacement, TIMP & DIMP)- 2009
  • Formal DIMP Program- 2009
slide80
Risk-based analysis of piping infrastructure

Smart modernization- Focus replacement efforts on highest risk pipe

Maximize efficiency, benefits and completion by focusing resources on accelerated infrastructure replacement vs. repairs of insignificant emissions

NW Natural Raising the Bar

on Pipeline Safety-

Fundamental Principals of Programs

slide81
NW Natural initiated “model” DIMP Program in 1983

Worked with Oregon PUC Staff, using DIMP risk-based principles, to initiate CI Replacement Program

Program included rate treatment mechanism in early years

Annual update meetings with OPUC Staff

Program Performance Metrics showed significant improvement in safety with additional benefit of reduced emissions

CI Replacement Program completed in 2000

NW Natural Raising the Bar

on Pipeline Safety

slide82
CI Performance Metrics- Grade B Emissions, Portland District

NW Natural Raising the Bar

on Pipeline Safety

slide83
LUAF is comparison between gas measured coming into system and gas going out of system- Not a measure of gas emissions

There are many factors that affect a company’s LUAF;

Gate station metering accuracy

Customer metering accuracy

Timing of meter reading / billing cycle

Time of year- winter (cold) / summer (warm)

Major temperature variations within time period (month)

Line pack

Storage injection/ withdrawals

Theft & system emissions

Lost and Unaccounted For Gas (LUAF)-

Not a Valid Measure of Natural Gas Emissions

slide84
NW Natural’s Enhanced Pipeline Safety Program

Developed in concert with OPUC Safety Staff

Approved in 2001

Key Elements

Accelerated Bare Steel Replacement Program

Natural Forces (Geo-Hazard) Program

Rate Treatment Mechanism rolled in capital costs with Purchased Gas Adjustment (PGA) each year

NW Natural Raising the Bar

on Pipeline Safety

slide85
NW Natural’s Enhanced Pipeline Safety Program

Accelerated Bare Steel Replacement Program:

Accelerated the replacement of bare steel mains and services from 40 years to 20 years

Completion date accelerated from 2041 to 2021

NW Natural Raising the Bar

on Pipeline Safety

slide86
NW Natural’s Enhanced Pipeline Safety Program

Natural Forces (Geo-hazard Program):

Identification, assessment, monitoring and mitigation of threats from landslides, earthquakes and washouts at river and stream crossings

NW Natural Raising the Bar

on Pipeline Safety

slide87

NW Natural Raising the Bar

on Pipeline Safety

slide88

NW Natural Raising the Bar

on Pipeline Safety

NW Natural’s System Integrity Program (SIP) - March 1, 2009

  • Consolidated key Enhanced Pipeline Safety Programs under a single umbrella. Key Elements;
    • Accelerated Bare Steel Replacement Program
    • TIMP
    • DIMP
  • Rate Treatment Mechanism rolls in capital costs with PGA each year
slide89
SIP Capital Cost Rate Treatment Mechanism-

Threshold of $ 3.25 million on steel replace. costs/ fiscal year

$12 million “soft cap/ fiscal year

Project costs included in rates when completed each year

“Tracker year” November 1- October 31

States with Accelerated Infrastructure Replacement Programs

slide90
Bare Steel Miles of Main- Oregon

NW Natural Raising the Bar

on Pipeline Safety- Benefits

slide91
Grade B Emissions- System

NW Natural Raising the Bar

on Pipeline Safety- Benefits

slide92

NW Natural Raising the Bar on

PL Safety- Reducing Natural Gas Emissions

slide93
Excavation damage presents the single greatest threat to PL safety

Many States do not have effective damage prevention laws so normalized excavation damage rate (damages/1000 locate requests) is much higher than States w/ effective programs

Reducing excavation damages improves PL safety w/ added benefit of reducing natural gas emissions

State Excavation Damage Prevention Laws-

Another Tool to Improve PL Safety

slide95
NW Natural worked with OPUC to develop risk-based Programs that significantly improved PL safety. Key elements-Accelerated replacement of CI and Bare Steel

System will be 100% modern materials by end of 2015

Key driver was PL Safety. Reduction in emissions is added benefit. LUAF NOT valid measure of gas emissions

Early entry allowed NWN to spread costs over time, eliminating “rate shock” for ratepayers. Minimal rate impact

Rate treatment mechanisms that provide timely recovery of PL Safety Program costs facilitate operator action

Current low commodity costs- excellent time to accelerate infrastructure replacement programs

Effective State Excavation Damage Prevention Laws improve PL safety w/ added benefit of reduced emissions

Summary