3. Oil & Gas Environmental Program Program Review David R. Alleman, Environmental Technology Manger National Energy Technology Laboratory Presentation by David Alleman

4. National Petroleum Technology Office Environmental Team  David Alleman  Nancy Comstock  John Ford  Jesse Garcia  Kathy Stirling

5. National Petroleum Technology Office  Enable  Enable industry to reduce compliance costs and improve environmental performance  Expand  Expand capabilities of State and Federal government to make more cost effective, risk-based regulatory decisions  Improve  Improve communication and technology transfer among industry, government, and the public Goals Mission: Mission: Promote Cost-Effective Environmental Protection and Enhance Environmental Performance to Encourage Maximum Recovery of U.S. Oil and Gas Resources Upstream Oil and Gas Environmental Program 5

6. National Petroleum Technology Office Upstream Environmental Research & Analysis  Regulatory Impact Analysis  Regulatory Streamlining  Online expert environmental compliance systems  Industry/government dialogue  Risk Assessment  Risk-based decision making  Science-based regulations  Technology Development  Drilling and production waste  Air emissions  Remediation R&D  Natural Gas and Oil Technology Partnership 6

7. National Petroleum Technology Office Air Emissions/Air Quality Methane Leak Detection Methane Leak Detection - Refinery Test - Shoulder mounted unit - Gas Distribution System - Line Scanner Air Tracers Air Tracers - California Oil Fields - Dirigible Detection Platform Air Quality in Wyoming Air Quality in Wyoming - BLM Monitoring Station - Visibility Modeling and Data Analysis - Basin/Regional Assessments - Uncertainty Analysis Indoor PM2.5 Indoor PM2.5 Air Emissions Detection and Control Air Emissions Detection and Control 10

8. National Petroleum Technology Office Remediation Cooperation with Petroleum Environmental Research Forum Cooperation with Petroleum Environmental Research Forum Enhanced Remediation Methods Enhanced Remediation Methods - Organic soil amendments - Chemical treatments - Using water as a reagent - Microbial barrier for BTEX How Clean is Clean? How Clean is Clean? - Bioavailability of contaminants - Early exit criteria Monitoring, Data Collection, and Analysis Monitoring, Data Collection, and Analysis - Tall Grass Prairie - OERB - Characterization of Commercial Waste Sites 11

9. National Petroleum Technology Office NGOTP Research Current Projects: Continuous particulate monitoring from stationary sources (SNL) Emissions control using plasma-assisted catalysis (LLNL) Centrifuge for down-hole oil-water separation (ORNL) Reducing chemical use and toxicity in produced water systems (ANL) Sulfide removal in produced brines by microbial oxidation (INEEL) Characterization of soluble organics in produced water for predicting toxicity (ORNL) Partnership Concept: The national laboratories, DOE’s National Petroleum Technology Office and the nation’s petroleum industry working together to develop advanced technologies for natural gas and oil recovery

10. National Petroleum Technology Office Upstream Environmental Program Budget 0 2 4 6 8 10 12 93 94 94 95 96979899 $ in Millions 7 $9.17 M 0001

11. National Petroleum Technology Office FY 2001 Program Budget Risk Assessment Streamlining Technology Development Impact Analysis Technology Transfer

12. National Petroleum Technology Office FY01 Environmental Budget by Performer

13. National Petroleum Technology Office Number of Active Projects by Performer TOTAL 50 PROJECTS

14. National Petroleum Technology Office Federal Lands Public Lands Technology Partnership with BLM Public Lands Technology Partnership with BLM - Air quality monitoring - Coal bed methane monitoring - Brine contamination - Wildlife stipulations - Noise analysis and mitigation - Cultural resources model Air Quality Research in Wyoming Air Quality Research in Wyoming National Petroleum Council Gas Study National Petroleum Council Gas Study - Federal lands access analysis Federal Leadership Forum Core Group Federal Leadership Forum Core Group Alaska Alaska - NPR-A Research and Monitoring Team - Technology and best practices workshop 14 REDUCING THE FOOTPRINT

15. National Petroleum Technology Office Industry Input Panel  Majors, Independents, Associations  Input on Industry Issues and Priorities  Gateway to Local/Regional Associations

16. National Petroleum Technology Office Sweat Equity  Toxic Release Inventory  NPDES Permitting  Federal Lands Streamlining  Federal Lands NEPA  State Reviews in Support of the RCRA Exemption  Synthetic Muds

17. National Petroleum Technology Office Program Benefits Detailed Benefits Analysis Detailed Benefits Analysis - With and without the DOE program - Metrics approach has external validation from: GRI NPC Congress Estimated Program Benefits through 2010 Estimated Program Benefits through 2010 15 –- Cumulative industry cost savings of $16 Billion – Cumulative additional gas production of 4 tcf – Cumulative additional oil production of 800 million barrels

18. National Petroleum Technology Office Future Direction  Double both Oil and Gas Budgets  Federal Lands  Arctic  Air Emissions

20. OIL PROCESSING PROGRAM Team Members Kathy Stirling Nancy Comstock Betty Felber Dan Gurney National Petroleum Technology Office

21. U.S. ECONOMY RUNS ON OIL Total U.S. Energy Consumption Transportation Sector

22. National Petroleum Technology Office U.S. Supply and Demand October 2000, (Thousands Barrels per Day) Supply Vol US Production 9,566 Crude5,786 NGL’s 1,930 Other1,847 Imports11,285 Crude8,984 Products2,301 Total Supply20,851 Source API Demand Vol Domestic 20,532 Gasoline8,632 Distillates3,918 Residual Fuel1,038 Jet Fuel1,773 Other5,362 Exports976 Total Demand 21,508 Crude Runs15,276 % Capacity93.6

23. National Petroleum Technology Office What is 20 Million Barrels per Day ?  Fills and Empties the New Orleans Superdome Twice a Week  Dome Volume 125,000,000 Cubic Feet 71,000,000 Barrels  At $30/B = $600,000,000 / Day

24. National Petroleum Technology Office Average Capacity and Number of U.S. Operating Refineries Source: API Basic Petroleum Data Book and EIA Data

25. Transportation Emissions Remain a National Concern, Especially In Urban Areas  Automobile manufacturers have made substantial progress in reducing emissions per vehicle, but in the U.S.:  Transportation produces: 3 77% of carbon monoxide, 3 49% of nitrogen oxides, 3 40% of volatile organics, and 3 32% of carbon dioxide emissions  Population and miles traveled continue to increase  In 1998, over 113 million people live in areas not meeting National Ambient Air Quality Standards (EPA, August, 1999) Source: Transportation Energy Data Book: Edition 18, DOE/ORNL-6941, September 1998, and EIA Annual Energy Outlook 1999, DOE/EIA-0383(99), December 1998

26. National Petroleum Technology Office ONE REFINERS VIEW OF THE RESULT OF A 15 PPM SULFUR CAP ON DIESEL

27. National Petroleum Technology Office Program Drivers  Stricter Environmental Regulations  Processing Efficiency  Energy Security  Western Hemisphere has immense volume of low API gravity crude but is heavy and has high sulfur  U.S. Oil production costs are high compared to the Middle East  Without deep conversion, heavy oil refining capacity, U.S. becomes increasingly dependent on Middle East as supply source

28. National Petroleum Technology Office Oil Processing Program

29. National Petroleum Technology Office Oil Processing Program Budget for FY2001

30. National Petroleum Technology Office Emerging Process Technologies Goals  Advanced fuel making technologies  Cleaner transportation fuels  Strengthen U.S. competitive position

31. National Petroleum Technology Office Western Hemisphere Crude Oil Resources (Billion of Barrels OOIP)

32. National Petroleum Technology Office Petro Star Valdez Refinery

33. National Petroleum Technology Office Emerging Process Technologies

34. National Petroleum Technology Office Emerging Process Technologies Solicitation  Joint Solicitation between oil, coal and gas fuel programs for fundamental hydrocarbon chemistry  Solicitation No. DE-PS26-01NT41048  Issued December 1, 2000  Unique physical and chemical processes for upgrading heavy crudes and bottoms  Fundamental research on heavy crudes

35. National Petroleum Technology Office Downstream Environmental Goals  Data and technologies for science-based information for:  Implementing and promulgating environmental regulation  Process improvements  Pollution prevention by process/unit modification  Processing projects  Fundamental data  Increase yields of fuels and petrochemical from high boiling fractions while reducing low-value by-products

36. National Petroleum Technology Office Downstream Environmental

37. National Petroleum Technology Office Downstream Environmental Public/Private Partnership  Petroleum Environmental Research Forum (PERF)  How clean is clean?  Natural Gas and Oil Technology Partnership (NGOTP)  Roadmapping sessions  Industry evaluated and rated  Bioprocessing $1 million  Particulate matter $0.5 million

38. National Petroleum Technology Office Downstream Environmental (cont’d)  Joint Industry Project on Coking  University of Tulsa with 12 industrial sponsors  Design Institute for Physical Property Data (DIPPR)  Physical property measurement at Oak Ridge National Laboratory All projects have at least 20% industrial cost-share

39. National Petroleum Technology Office Ultra-Clean Fuels Goals Joint Effort Fuels Program at NETL (oil, gas & coal)  Produce ultra-clean fuels  Reduce greenhouse gases from transportation sector  Available and affordable transportation fuels for the 21st century  Energy security through resource diversification

40. National Petroleum Technology Office Ultra-Clean Fuels Round 1 and FY2001 NGOTP Results  Petroleum Projects  3 Industrial Projects  4 NGOTP  Gas to Liquids Projects  3 Industrial Teams  2 NGOTP  General  1 Industrial Team  2 NGOTP

41. National Petroleum Technology Office Ultra-Clean Fuels Program Participants

42. National Petroleum Technology Office Oil Processing Program Anticipated Outcome  Energy Security  Heavy Oil Upgrading  Supply of Clean Transportation Fuel  Environmental Benefits  Pollution Prevention  Sound Science for Regulations  Improved Process Options  Ultra-Clean Fuels  Reduced Greenhouse Gases  Affordable Fuels for 21st Century  Use Heavy Oils (lower cost)  Sound Science for Process Improvement  Ultra-Clean Fuels

43. National Petroleum Technology Office Measuring Our Success  Refinery Model to Evaluate Program Impact  National Research Council Review  Industry Roadmapping Workshops for Planning  CRIPS (Change Resource Implementation Probability System)  Outside Review by Consultants

44. National Petroleum Technology Office Communicating Our Success  Downstream Details Newsletter  Website – downloads  Crude Oil Databank  Newsletter  Publications by DOE and by Contractors  Presentations at Industry Meetings  Roadmapping Workshops  Focused Workshops on Select Topics

45. National Petroleum Technology Office Oil Processing Program in 3 Years (FY 2004)  Ultra-Clean Transportation Fuels Program  Natural Gas and Oil Technology Partnership Increase Funding  Increase Participation by Industry & Other Government Agencies (Co-funding)  More Fundamental Research - Data  More than one project manager