Disclaimer
This publication was prepared for the Canadian Association of Petroleum Producers, the Gas
Processing Association Canada, the Alberta Department of Energy, the Alberta Energy
Resources and Conservation Board, Small Explorers and Producers Association of Canada and
Natural Resources Canada. by CETAC-West. While it is believed that the information contained
herein is reliable under the conditions and subject to the limitations set out, CETAC-West and the
funding organizations do not guarantee its accuracy. The use of this report or any information
contained will be at the user’s sole risk, regardless of any fault or negligence of CETAC-West or
the sponsors.
Acknowledgements
This Fuel Gas Efficiency Best Management Practice Series was developed by CETAC WEST
with contributions from:
•
Accurata Inc.
•
Clearstone Engineering Ltd.
•
RCL Environmental
•
REM Technology Inc.
•
Sensor Environmental Services Ltd.
•
Sirius Products Inc.
•
Sulphur Experts Inc.
•
Amine Experts Inc.
•
Tartan Engineering
CETAC-WEST is a private sector, not-for-profit corporation with a mandate to encourage
advancements in environmental and economic performance in Western Canada. The corporation
has formed linkages between technology producers, industry experts, and industry associates to
facilitate this process. Since 2000, CETAC-WEST has sponsored a highly successful ecoefficiency program aimed at reducing energy consumption in the Upstream Oil and Gas Industry.
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Table of Contents
1. Background
1
2. Who Developed the BMPs?
1
3. Why Were the BMPs Created?
2
4. How to Use the BMPs
4
5. Available Training and Resources
5
6. How to Measure Success
5
7. Appendix A
7
Efficiency Committee Membership
1.
Best Management Practices (BMP) Background
Does your company know the dollar value of how much fuel gas it uses in
upstream processing? This question will become increasingly critical as the
costs relating to the production of natural gas will continue to increase and
greater focus is placed on industry to employ environmentally sound practices in
all aspects of its operations.
Total fuel gas consumption, which may be defined as the part of the produced
natural gas consumed by operations in the production, transportation and
processing of natural gas from the wellhead to the sales line, is increasing. Even
a moderate reduction in fuel gas consumption could translate in savings of
millions of dollars. The amount of total fuel gas consumption in 2006 from the
Upstream Oil and Gas Industry (oil and gas batteries, gas gathering systems and
gas processing plants – excluding bitumen batteries and straddle plants) was
more than 10.5 billion cubic metres. A ten percent reduction in fuel gas
consumption could result in an estimated savings of more than $300 million per
year at $7.5/GJ (or enough to heat more than 300,000 homes) and a reduction
in greenhouse gas emissions of over 2.1 million tonnes of CO2 equivalent per
year.
Reducing fuel consumption at a facility reduces operating costs, air emissions
and makes a facility more competitive so it can operate for a longer period of
time. More efficient use of energy resources will extend both the life of the
facilities and the oil and gas industry in Alberta.
Currently, fuel gas optimization by industry is not a regulatory or legislative
requirement. While there is a strong interest by regulators in Alberta in improving
efficiencies, doing so without additional regulation is the preferred approach,
provided it is successful. These BMPs are a first step to assist industry in
identifying and implementing opportunities for greater fuel gas efficiencies. The
success of this initiative will determine whether industry can proactively use
these BMPs to improve efficiencies or whether regulatory initiatives are
necessary.
2.
Who Developed the BMPs?
In order to further examine this issue and explore ways, other than by regulation,
to encourage industry to become more efficient in fuel gas usage, a
government/industry working committee was established in April 2006. The
committee included industry representatives from the Canadian Association of
Petroleum Producers (CAPP), the Small Explorers and Producers Association of
Canada, the Gas Producing Association Canada, several other large industry
players and government representatives from the Department of Energy (DoE),
the Energy Resources Conservation Board and Natural Resources Canada.
-1-
3.
Why were the BMPs Created?
The Terms of Reference mission statement is “to set direction and provide
leadership to improve the upstream industry’s petroleum energy efficiency per
unit of production and reduction of fuel gas use in oil and gas production, pipeline
and gas processing facilities regulated by the EUB. (now the ERCB)”
Generally, there has been an increase in the amount of fuel gas use in the
upstream sector. The following chart shows total fuel use in the upstream sector:
Source: ERCB
Of this fuel gas approximately 43 percent of the fuel gas consumption can be
attributed to gas processing plants, 35 percent to gas gathering systems and 22
percent to gas and oil batteries.
Source: ERCB
-2-
While information is available on how to efficiently run and maintain equipment in
upstream gas processing, this information is not always available from a single
source. Making such information more accessible would facilitate industry’s
efforts to maximize the effectiveness of their operations.
To this end, the committee’s first action was to support the development of a
BMP which identifies fuel gas efficiency opportunities. The BMP will assist
industry in identifying opportunities to reduce fuel gas usage in upstream gas
processing, often with minimal or no capital investment; providing information to
industry on how equipment should be operated for maximum efficiency; and
reducing fugitive emissions, thereby contributing to the reduction of greenhouse
gases.
4.
How to Use the BMPs
To effectively use these BMPs a company needs the support of senior
executives who can track and reward the business units for improving
efficiencies and reducing costs. This is critical to ensure improvements in
efficiencies become a lasting success for the companies. These improvements
need to become part of the company’s operating policy; this will be facilitated if
there are individuals who are truly committed to improving efficiencies and
successes are advertised, shared and promoted across the company.
The type of equipment being operated by the company and how much fuel being
consumed are two factors which will help determine how the BMPs will be used.
Before implementing changes, a company should examine which modules will be
applicable to their facilities. In Alberta, fuel gas measurement is required when
site fuel gas use becomes significant (greater than 500 m3/d). For the purpose of
the BMPs, it is recommended that, as a minimum, companies should carefully
examine opportunities for improvement in fuel gas efficiencies when site use
exceeds this number. Furthermore, companies should be aware of which
equipment accounts for larger fuel use and the reasons behind why energy
consumption on a site is increasing or decreasing.
-3-
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locations for the processing equipment: in the field; at a sweet gas plant or; at a
sour gas plant. The following example is from Module 6 – Fired Heaters
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SWEET GAS PLANTS
SOUR GAS PLANTS
Different modules will provide the most appropriate information depending on the
location of the equipment. For each module the flow chart highlights where it
best fits amongst the three locations.
Each BMP module:
• identifies the typical impediments to achieving high levels of operating
efficiency with respect to fuel gas consumption;
• presents strategies for achieving cost effective improvements through
inspection, maintenance, operating practices and the replacement of
underperforming components; and
• identifies technical considerations and limitations.
-4-
5. Available Training and Resources
Many industries have started to change how they operate their business to
include more efficient and environmentally friendly practices. This reflects
increasing demands from the public who are becoming more educated and
aware of the potential impact of fossil fuel development on the land, air, water
and other resources. There is also increased pressure for industry to reduce the
levels of greenhouse gases (GHG) emitted during processing, with financial
incentives for reductions in GHG emissions and increasing penalties for those
who fail to comply.
To respond to this increased need for information, some companies, especially
the larger ones, have in-house resources available to assist with staff training
and to identify opportunities for greater efficiencies. In addition, there are a
number of external resources available for training to help staff develop and
incorporate efficient practices into their business practices. There are also
companies who can provide a range of services including undertaking on-site
energy efficiency audits, establishing benchmarking of equipment as well as
providing more energy efficient equipment.
6.
How to Measure Success
“What you do not measure, you cannot control.”
-
Tom Peters
A first step is to determine the amount of fuel gas being used by your company in
upstream processing. Some companies already track this information but it isn’t
always at a sufficiently detailed level. More importantly, attaching a dollar value
to the fuel gas used provides tangible support as to the ‘size of the prize.’ Having
such information will also assist in determining where the process would most
greatly benefit from application of the BMPs. Benchmarking can be completed
internally; there are also resources available externally who can undertake an
efficiency audit of the process.
Once benchmarks have been established, data needs to be collected on an
ongoing basis to determine the effectiveness of the BMP and areas where
application was effective as well as areas for enhancement or improvement. A
number of steps can be taken to improve efficiency with minimal associated cost
or time. A decrease in overall fuel gas usage or a better ratio between amount of
fuel gas used and amount of gas processed will be a sign of success.
Industry is starting to voluntarily identify opportunities to operate in a more
efficient, environmentally responsible manner. This makes economic sense but
can also contribute to a more positive image of industry by landowners and other
stakeholders. If industry can demonstrate that it can successfully manage or
reduced fuel gas use by undertaking voluntary measures, there will be less
-5-
incentive for government to mandate such reductions through regulations or
legislation which can be more costly and time consuming for industry.
The Fuel Gas Committee is continuing its work on how to facilitate identifying
appropriate benchmarks and tracking changes in fuel gas use. Additional
information will be added to this module as it becomes available.
-6-
Appendix A
Fuel Gas Efficiency Committee Membership
2007/08
The attached list identifies committee members who contributed towards the
development of the Fuel Gas Efficiencies Best Management Practices manual.
Members no longer participating on the committee by March 31, 2008 have been
identified in italics.
Alberta Department of Energy
Alberta Energy Resources Conservation Board
AltaGas Ltd.
BP Canada
Canadian Association of Petroleum Producers
ConocoPhillips
Dillon Consulting
Gas Processing Association Canada
Husky Oil Operations Ltd.
Natural Resources Canada
Small Explorers and Producers Association of Canada
Suncor Energy
Vantage Engineering Inc.
Gas Processing Association of Canada
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