1. Natural Gas Emission Regulation Current State-of-Art & Future Research Opportunities 04/29/2008 School of Industrial Engineering University of Oklahoma Hank Grant, Binil Starly

2. Outline Introduction Barriers to Natural Gas Emission Regulation Current Government Programs Available Tools and Resources Issues to be addressed

3. Introduction Energy demand to rise 2% annually, supply outstrips demand. Drop in coal fired plants – projected increase in gas fired plants to produce electricity. Lack of Energy Policy – uncertainity in future emission norms. Alternative sources – wind, solar, geo not enough, therefore current trend - turn to Gas Gas expensive than coal - Lack of pipeline infrastructure from proven reserves (Rocky Mountains) – likely to change.

4. Barriers to Deployment of Natural Gas Emission Protocols Perception of environmental technology solutions as a cost as opposed to cost savings Non-competitive returns on investment Industrys reluctance to foot the up-front costs of environmental technology. Time required to implement the technology Regulatory inconsistency and uncertainty Measurement challenges ? PTAC Report, 2005: http://www.ptac.org/eet/eetl.html

5. Organizations and Stakeholders Related to Natural Gas Research and Regulation Gas Research Institute (Research) US Oil and Gas Association DOE: National Energy Technology Lab (Research) DOE: Office of Fossil Energy (Research Management) DOE: Office of Oil and Natural Gas (Regulation) EPA and the State Regulatory Agencies Natural Resources Defense Council Other Associations

6. Current Programs to reduce emissions DOEs LINGO program Integrates technologies and practices to minimize the adverse environmental impact EPAs GAS STAR program Partnership with the industry to implement cost effective technologies to reduce emissions. EPAs E3 & Methane to Markets program Provide in-house cost estimating assistance to researchers; Support EPA's Program and Regional Offices; Undertake fundamental research in areas of interest to the Laboratory

7. EPAs GAS STAR Case Studies UNOCAL – Converted natural gas operated pneumatic devices to compressed air – saved them $208,000 per year for a single facility in Louisiana. Need a database to track emissions and cost savings. Columbia Transmission – Saved close to $20 Million dollars since 1993 in methane emission reduction practices. Used internal employee practices, methane data collection and reduction practices at several pipeline facilities. Kerr-McGee – had internal economic models and regulatory practices to check for leaks and update inventory – saved about $3.2M annually since 1996.

8. Available Tools and Resources EPA - Nodal Analysis Tool (Methane to Markets) The Nodal Analysis tool provides users easy access to information on cost-effective technologies and practices that reduce methane emissions in the oil and gas industry. At each point in the process, EPA gives guidelines on how to reduce emissions of methane and other VOCs

9. Available Tools and Resources EPAs WAR Algorithm EPA has developed a chemical simulation for waste reduction (WAR) and the impact on the environment of various gas flows across in a generic input and output stream. Out PEI/hr to indicate friendliness/unfriendliness of the process. Human Toxicity Potential by Ingestion or HTPI, Human Toxicity Potential by Inhalation or Dermal Exposure or HTPE, Ozone Depletion Potential or ODP, Global Warming Potential or GWP, Photochemical Oxidation Potential or PCOP Acidification Potential or AP, Aquatic Toxicity Potential or ATP, and Terrestrial Toxicity Potential or TTP. Simulation of Hydrolysis of water using Coal and Gas as an energy source

10. Available Tools and Resources NETL: Natural Gas Transmission and Distribution Model (NGTDM) Derive natural gas supply and end-use prices and flow patterns for movements of natural gas through the regional interstate network. Excel based worksheet

11. Commercial Pipeline Simulation Packages Gas Research Institute: HAPCALC Software Estimates emissions of hazardous air pollutants (HAPs) and criteria air pollutants from natural gas industry operations. Software can reduce costs by identifying process units that are significant sources of emissions that may require further study or sampling Energy Solutions Rapid and accurate offline design, planning and hydraulic analysis for natural gas and liquid pipelines FlowDesk by Gregg Engineering Suite of gas pipeline simulation, integration, and automation tools that can be used to quickly create operational and business solutions. Essentials Gas Regulatory Compliance by Advantica Advantica's Essentials is an end-to-end data management solution that coordinates all of your regulatory compliance activities.

12. Issues to be addressed Methods to accurately quantify cost savings from emission reduction. Accurate methods/protocols of linking cost savings from emissions control as opposed to using generic emission factor data from the EPA. A database tool for private industries to track their emissions control/cost savings. A classification scheme for the Natural gas companies present in the US & Canada.

13. Issues to be addressed A web based searchable database tool which displays information on each type of emission reduction procedure, potential impact, implementation protocol, suppliers, cost, past case history etc. An efficient Leak Detection and Repair Management System Scientific/Economic model to assess the impact of emission regulation on natural gas processing.

14. Decision Support Tool Must classify Natural gas Companies based on output, geography, type to identify cost effective workable solutions. Identify a comprehensive list of emission reduction mechanisms for each processing operation. Compile costs involved in implementing and adhering to emission regulation Tool must perform Cost Benefit Analysis for several emission regulation norms set by the EPA Provide What-if analysis to assess among different options.

15. Emission Costing Model (ESM) Model must answer the following questions? How are production/processing costs affected by emission regulation? What type of regulations result in maximum emission reduction at the least cost of implementation? How effectively can regulations on emissions be met with existing facilities without changing their functionality and utilization? Can emission release be used as a design criteria for new gas pipeline layout design?

16. Ongoing and Future Tasks Current status of the regulations Emission Standards Methods of Reduction Emission Emission Monitoring Protocols Evaluate existing Models for costing emissions Evaluate GRIs HAPCalc software – check out its capabilities, features and applicability in the current industry scenario. Use the software as a case study example. Recommendation for future action tasks