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A Techno-Economic Analysis of Methane Mitigation Potential from Reported Venting at Oil Production Sites in Alberta David R. Tyner and Matthew R. Johnson* Energy & Emissions Research Laboratory, Department of Mechanical and Aerospace Engineering, Carleton University, Ottawa, Ontario Canada, K1S 5B6
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ABSTRACT: The technical and economic potential for reducing methane emissions from reported venting and flaring volumes in 2015 at 9422 upstream oil production sites in Alberta, Canada was evaluated in a comprehensive site-by-site analysis. For each site, up to six different technologies for mitigation were considered, based on conserving gas into pipelines, combusting gas on site, or using gas for on-site fuel. Economic viability of mitigation was calculated using current economic parameters and gas price projections on a net present cost basis. Monte Carlo simulations suggest that a 45% reduction in methane emissions (consistent with current federal and provincial targets) from reported flaring and venting is technically and economically feasible at overall average costs ranging from $−2.98 CAD/tCO2e (i.e., a profit) to $2.51 CAD/tCO2e with no one site paying more than $11.02 CAD/tCO2e. If the reported baseline emissions are augmented to reflect results of recent airborne measurements, overall economics of mitigation generally improve due to larger available gas volumes at many sites. Considering federal carbon price targets of $50 CAD/tCO2e by 2022, there are relevant economic opportunities for mitigating methane from reported venting and flaring volumes well beyond a 45% reduction. This could partially offset the challenge in addressing the additional methane emissions from fugitive and unreported venting sources.
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INTRODUCTION The Government of Canada has recently released regulations to reduce methane emissions in the oil and gas sector by 40% to 45% below 2012 emissions by 2025.1 This follows through on matching commitments made by Mexico, United States, and Canada in June 2016 as part of the North American Climate, Clean Energy, and Environment Partnership Action Plan.2 Within Canada, the Province of Alberta has announced its own 45% methane reduction target from oil and gas operations, to be implemented by the Alberta Energy Regulator (AER) through improved measurement and reporting, regulated standards for existing facilities, and new design standards.3 Alberta is the largest producer of oil and gas resources in Canada,4,5 and also the largest source of oil and gas methane emissions. National greenhouse gas (GHG) inventory estimates6 from Environment and Climate Change Canada (ECCC) suggest that the Canadian oil and gas sector released 1823 kt of methane in 2015, with two-thirds (1200 kt) emitted in Alberta. An additional quarter of the federal total is released at oil and gas operations in neighboring Saskatchewan, with the remaining 9% coming from other provinces. Within Alberta, the majority (>86% in 2015) of sector methane emissions are from upstream oil and gas production, with the remainder coming from oil sands mining and upgrading (13%) and downstream refining and distribution (800 000 m3/y) of gas through tie-in that would be otherwise flared. For 7816 sites with NPCs between $0 CAD and $180,000 CAD, the least costly option was to destroy the gas currently reported as vented. Within this range, the reference case suggests that 58% of volumes would be burned in vapor combustors, 33% in catalytic converters, and 1% in flares, although the costs of these options are sufficiently close that slight changes (
