USA Offshore Flaring and Venting Richie D. Baud

Transcription

1 USA Offshore Flaring and Venting Richie D. Baud Deputy Regional Supervisor Production and Development MMS, Gulf of Mexico OCS Region U.S. Dept. of Interior

2 Outline Introduction History of Regulations Current Regulations Compliance Challenges and Future (Definitions and Acronyms)

3 Gulf of Mexico US Federal Waters ~6,600 Active Leases ~1.7 million bbls oil/day ~6.5 billion ft 3 gas/day

4 Pipeline Infrastructure

5 Oil-well Gas Production 100, ,000 80,000 Produced Katrina/Rita Gustav/Ike Million Cubic Feet per Day 70,000 60,000 50,000 40, Percent 30,000 20,000 Percentage ,000 Flared + vented Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 - < 1% of OWG flared + vented < 0.5% of total gas flared + vented

6 Offshore Oil + Gas Greenhouse Gas Emissions (2005 Survey) ~ 0.3 % of US greenhouse gas emissions are from federal offshore oil + gas activities Million Tons CO2e Supply Boats, Helicopters, etc. Platform Equipment Fugitive Emissions* Venting Flaring * Estimated using EPA criteria

7 Flare/vent Approvals (Fiscal Year 2009) Non-Hurricane 43% 57% Hurricane 1000 Mcf 800 New facilities online Deepwater pipeline repaired Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09

8 Oversight Branches of USA Government Executive (Enforce Laws) Legislative (Write Laws) Judicial (Interpret Laws) Office of Inspector General (OIG) Oil companies Minerals Management Service (MMS) Government Accountability Office (GAO) Federal Courts

10 USA Flare + Vent Regulations Branches of USA Government Executive (Enforce Laws) MMS & most other government agencies Legislative (Write Laws) Congress, GAO Judicial (Interpret Laws) Court system President signs OCSLA into law Congress writes bill (OCSLA) Oil companies follow regulations & NTLs MMS writes regulations (more detailed) MMS issues NTL if needed (very detailed) Law change very rare (Congress) Regulation change takes years (MMS) 1. Publish proposed regulation 2. Receive public comments 3. Publish final regulation NTL quick, but only guidance (MMS)

11 Regulatory History 1953 Outer Continental Shelf Lands Act (OCSLA) No flare/vent language Mid 1970 s OCS Orders (preceded regulations) Initially vague flaring/venting restrictions Issued NTL s Focused on OWG MMS approval beyond 72 hrs Max 144 cumulative hrs/month No GWG flaring allowed MMS may approve flaring <1 yr if Uneconomic or Positive plan of action 1947

12 Regulatory History 1978 OCSLA amended to include flare/vent restrictions (No lessee)... shall be permitted to flare natural gas from any well unless the Secretary finds that there is no practicable way to complete production of such gas, or that such flaring is necessary to alleviate a temporary emergency situation or to conduct testing or work-over operations. Prohibited continuous flaring + venting Issued NTL As before, MMS may approve flaring <1 yr if Uneconomic or Positive plan of action Uneconomic must consider all gas and oil at platform Companies complained Took 4-5 yrs for companies to factor into planning

13 Regulatory History 1981 No royalties on flared or vented gas 1988 Flare/vent regulations 1 published Need MMS approval except under certain conditions Most conditions based on time (not volume) 2 Field records Did not yet include: Burning liquid hydrocarbons H 2 S flaring 2007 Published proposed changes 3 to flare/vent regulations Separate flare from vent reporting Meters Technology now safe (no flow restriction) Dynamic range/turndown now possible Later became issue with large deepwater facilities 3.

14 Policy History Percentage of OWG Production Focused on OWG Increased flare record inspections From twice/month to daily MMS flare approvals Limited repair time Limited GOR Limited volume Limited $ during flaring led to: Redundant systems Faster repairs Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Month

16 Current Regulations Sales Pipeline To Shore Large Compressor Medium Compressor VRU HP Gas IP Gas LP Gas Atmos.-press. Gas Equipment working Continuous generally not allowed Small & uneconomic (50 MCF/day) 1 Lease use allowed Equipment failures OWG 48 hours continuous GWG 2 hours continuous Total 144 cumulative hours/month Unloading / Testing 48 hrs cumulative Everything else Need MMS approval All recorded on daily field records + monthly production reports 1. If >50 MCF/day must show VRU cost > value of gas it would recover over platform life

17 Record Keeping Daily Flare/Vent Field Records On platform 2 yrs (office 6 yrs) Volume flared/vented & liquids burned # Hours Reasons Wells contributing + GOR s Monthly Production Reports Submit to MMS accounting office Disposition of all oil & gas produced Sales, lease use, flared/vented, injected,

18 Current Regulations + Policy Deepwater facilities Volume limits Lower GOR cutoffs Now have spare VRU on many facilities Now have extra compressor capacity on many facilities Focus on records Upsets + Routine Report all gas (sales, lease use, flare/vent, injected ) Goal = accurate reporting, not punishment Hurricanes Volume limits Lower GOR cutoffs No flaring before repair schedule No flaring until repairs near completion

20 Compliance 60 inspectors fly daily / 14 helicopters ~3,400 GOM facilities - goal to inspect at least once/year Inspectors check field records Flare/vent approvals MMS approvals Flare/vent records Raw production data Production reports (oil & gas disposition) MMS database

21 Field Inspections Check flare/vent records to determine if they are reasonable Compare upsets with approvals (when required) If see flare or vent from helicopter, note time & return another day to check records Ask about all possible vent locations & make sure all sources being recorded Make sure field records include routine flaring/venting, not just upsets Investigate economics if routine averages over 50 MCF/day

22 How to Minimize Continuous Flaring & Venting Flaring + Venting of All Gas? Prohibit permanent flaring/venting of associated gas OR Include gas and oil in economics Flaring + Venting of Low Pressure Gas? Economic review of facilities that continuously flare/vent over threshold Require capture of gas if equipment is cost neutral over life of facility

23 How to Minimize Intermittent Flaring & Venting Properly maintain equipment Install spare compressor capacity Spare VRU on large platforms Only low GOR wells during incidents Shut-in facilities when necessary Monitor compliance

25 Challenges Up to 87% of gas may be vented instead of flared can t see it Deepwater facilities can flare/vent huge volumes in short time period Cannot inspect as many facilities in deepwater due to long flight times Hurricanes damaged platforms + pipelines

26 Challenges - Hurricanes Percentage of Total Gas Production Katrina + Rita Gustav + Ike Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Month

27 Considerations Short Term Less oil to market Temporary - Still in ground, not lost Less cash flow to company $ to install/fix equipment (Courtesy of Christopher Richter) Long Term Reduced losses to atmosphere = more oil + gas to market in long run Less GHG into atmosphere Companies prepare better + minimize downtime Facility design (spare compressor capacity, multiple compressors, ) Repairs (better maintenance, spare equipment + personnel ready)

28 Outside Reactions 2004 GAO Report Overall MMS complimented Closely regulate flaring/venting Track volumes at every location Good database Recommendations Meters Separate flare vs. vent reporting Flaring instead of venting 2007 Proposed Regulation Change Published Mostly oil industry comments Liked clearer language Did not like meters or separate flare from vent reporting

29 Infrared Video Camera Infrared Video Camera Naked Eye

30 Satellites (Image courtesy of Goddard Space Flight Center) Data from European Space Agency World Fire Atlas

31 Future MMS Strives to Continuously Improve Updated Regulations (2010) Clearer language Meters Approve each meter Inspect meters Set accuracy + calibration requirements Separate flare from vent reporting (Courtesy of Christopher Richter) Compare Production Reports to Field Records Possibly Require Flaring Instead of Venting (workshop) Continue Infrared Video Camera + Satellites

32 Thank You Gracias Richie D. Baud Deputy Regional Supervisor Production and Development MMS, Gulf of Mexico OCS Region U.S. Dept. of Interior

33 Definitions Flaring Controlled combustion of natural gas at the end of a pipe, especially during emergencies, process upsets and equipment failures. Venting Controlled release of natural gas into the atmosphere at the end of a pipe, without combustion. Oil-well Gas (OWG) Natural gas produced as a byproduct of oil production; also called Associated Gas or Casinghead Gas. Gas-well Gas (GWG) Natural gas produced from a gas well. Mcf Thousand cubic feet of gas. 1 Mcf = cubic meters. Gas-oil Ratio (GOR) The volume of natural gas (in standard cubic feet) produced divided by the amount of oil (in stock tank barrels) produced. Vapor Recovery Unit (VRU) A system designed to recover atmospheric pressure gas such as vapors from storage tanks. Recovered gas is pressurized so the gas can be sold or used as fuel onsite.

34 Other Acronyms EPA Environmental Protection Agency = USA federal agency responsible for regulating most environmental issues. GAO Government Accountability Office GOM Gulf of Mexico HP High pressure IP Intermediate pressure LP Low pressure MMS Minerals Management Service = USA federal agency responsible for regulating most offshore oil and gas activities. NTL Notice to Lessees and Operators = Brief document that MMS issues to clarify regulations, state policies,... OCSLA Outer Continental Shelf Lands Act = USA law governing offshore oil and gas activities.