Alberta Releases Draft Directives for Reducing Methane Emissions From Oil and Gas Operations

The Alberta Energy Regulator (AER) has issued two draft directives that will require upstream oil and gas operators to reduce methane emissions from upstream oil and gas sites by 45% from 2014 levels by 2025. Draft versions of Directive 017: Measurement Requirements for Oil and Gas Operations and Directive 060: Upstream Petroleum Industry Flaring, Incinerating, and Venting, if finalized and brought into force, will address the primary sources of methane emissions from Alberta's upstream oil and gas industry: fugitive methane emissions from leaking or malfunctioning equipment and routine methane venting from pneumatic devices, glycol dehydrators, compressors, vessels, and tanks.

The new requirements include applying emission design standards to new facilities and equipment, increased measurement and reporting, and new leak detection and repair requirements. The new requirements, which are expected to be finalized and brought into force in fall 2018, will apply to upstream oil, gas, and bitumen wells; oil and gas facilities; gas plants; pipeline installations; storage facilities; and tank terminals.

The AER estimates the new requirements will cost industry $780 million over the 2018-to-2025 implementation period.

Fugitive Emissions Management
Fugitive emissions management is based on a systematic program of detecting and repairing leaks and malfunctioning equipment. Operators will be required by 1 June 2018 to document a fugitive emissions management program that includes preventative maintenance practices; procedures for fugitive methane emission surveys and screenings; training programs; and procedures to track, manage and verify the status of equipment repairs.

Operators of gas plants, compressors, batteries, and certain other facilities will have to conduct fugitive emission surveys either at least once every 4 months or annually, depending on the type of facility or equipment. The type of survey equipment and the scope of the surveys is prescribed in Directive 060.

Additionally, operators of oil and gas wells will have to undertake annual fugitive emission screenings at well sites commencing in 2020.

Repairs to equipment with fugitive emissions must be made within 24 hours if the methane emissions are causing an off-site odor, a pilot or ignitor on a flare stack has failed, or if the emissions could cause safety issues. Otherwise, the equipment must be repaired within 30 days unless a major shutdown is required to complete the repair, the emissions have a hydrocarbon concentration of 10,000 ppm or less, or the source is a surface casing vent flow.

Vent Gas Management
Methane is currently vented to atmosphere by pneumatic devices (i.e., meters), compressor seals, glycol dehydrators, and tank venting.

Directive 060 will require operators to document a methane reduction retrofit compliance plan by 1 June 2019. It must contain a schedule to replace and retrofit existing equipment, allocate funding to reduce venting, and be approved by an executive officer of the operator. The plan must be updated annually.

Upon draft Directive 060 coming into force, each operator will have an overall vent gas limit at each existing and future oil and gas site, excluding pneumatic devices, compressor seals, and glycol dehydrators until 1 January 2023. As well, a defined vent gas limit for each new site will be in place when Directive 060 is brought into force. Additionally, effective 1 January 2022, venting limits will be imposed on new and existing crude bitumen batteries and new pneumatic devices and centrifugal compressors. Effective 1 January 2023, venting limits will be extended to existing pneumatic devices, centrifugal and reciprocating compressors, and glycol dehydrators.

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