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Celebrating 125 Years of Public Service NARUC Methane Emissions in Transmission and Distribution: What Can be Done? The Honorable Susan Rabon North Carolina.

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Presentation on theme: "Celebrating 125 Years of Public Service NARUC Methane Emissions in Transmission and Distribution: What Can be Done? The Honorable Susan Rabon North Carolina."— Presentation transcript:

1 Celebrating 125 Years of Public Service NARUC Methane Emissions in Transmission and Distribution: What Can be Done? The Honorable Susan Rabon North Carolina Utilities Commission

2 Proposed Gas STAR Gold Partnership Roger Fernandez Natural Gas STAR Program U.S. EPA NARUC Summer Committee Meeting July 14, 2014 Dallas, TX

3 Gas STAR Gold Considerations ► Methane is a potent greenhouse gas and a clean energy source ► Reducing methane emissions has important cross-cutting benefits including reducing climate impacts, Volatile Organic Compounds (VOCs) and hazardous air pollutants (HAPs) and thereby improving local air quality, improving industrial efficiency/safety, increasing domestic energy supply, and generating revenue. ► Oil and gas sector is a key focus of the President’s 2013 Climate Action Plan and the Strategy to Reduce Methane Emissions (March 2014) ► Interagency methane strategy recognizes oil and gas as a key sector and highlights the opportunity to bolster the Natural Gas STAR Program ► Significant and diverse stakeholder interest in oil and gas-sector methane emissions ► Opportunity to leverage existing frameworks ► EPA NSPS and State regulations have established control technologies and practices that could be used in a voluntary context to address sources at existing facilities. ► Greenhouse Gas Reporting Program facility-level data is available for verification/tracking purposes. ► Mature program ► Gas STAR Program began in 1993 and has never been significantly updated. Program enhancement can provide new opportunities for partners and EPA. 3

4 Opportunities for Future Action ► While progress has been made, opportunity remains to further reduce methane emissions. ► Viable low-cost technologies and practices exist today. Remaining low-cost abatement potential estimated at over 60 million metric tons of CO 2 e. ► Opportunity for greater participation beyond current Program flexible framework. 4 Source: Global Non-CO2 Mitigation Report and Global Non-CO2 emissions and projections report * Post 2012 New Source Performance Standards

5 Gas STAR Gold Program Objectives ► The existing Gas STAR Program will remain in place with a primary focus on technology transfer. ► The proposed Gas STAR Gold Program creates a framework under which facilities will be recognized by EPA for implementing, at the facility level, methane reduction activities for all major methane emission sources. Major goals include: ► Showcase the achievements of U.S. oil and gas operations at the facility-level by offering a standard set of best protocols to be implemented at the facility-level. ► Achieve greater methane emissions reductions across the entire value chain (production through distribution) by encouraging additional facilities to achieve Gold- level performance. ► Create a verifiable and transparent mechanism to demonstrate achievements and acknowledge high performers. ► Complement existing regulatory requirements - such as applying control techniques required for new sources under NSPS Subpart OOOO to existing facilities. ► Publically recognize participating companies’ emission reduction. 5

6 Gas STAR Gold Program Overview ► Under the proposed Gas STAR Gold Program, companies can achieve Gold status at a facility by implementing all specified reduction protocols for all applicable methane sources at the facility level. ► To achieve Gold status, companies would: ► Submit a Letter of Intent outlining list of proposed facilities working toward Gold status. ► Develop an Implementation Plan for each facility seeking Gold status. ► Implement all applicable Gold protocols at a minimum of one facility. ► Submit an Annual Report for each Gold status facility demonstrating achievement of all protocols and plans for maintaining facility-level Gold status. ► Continue the process of implementing the Gold status protocols at least one new facility each year. ► To achieve Platinum status, companies would: ► Achieve Gas STAR Gold status for a high percentage (to be specified) of their facilities. For example, when a company attains Gold status for 90% of its facilities, they would achieve Platinum recognition at the corporate level. 6

7 Benefits to the Oil and Gas Industry ► EPA recognition of clear, comparable, verifiable and transparent data on a facility’s methane emissions performance. ► Facility emission data transparency through public disclosure of all relevant data to verify Gold status. ► EPA recognition of facility performance. ► EPA will publicize facility progress on our website and through workshops. ► EPA will give facilities permission to use the EPA Gas STAR Gold logo. ► EPA will publicly track company progress by listing Gold facilities and indicate percentage of operations that these facilities represent. ► Facility revenue generation through the sale of reduced methane emissions. ► Reduced VOC and HAPs emissions in upstream oil and gas sector. ► Increased safety at the facility level. ► Better local and state relationships. 7

8 Proposed Gold STAR Protocols 8 ProtocolEmission SourceOff POn PGBPcTSLNG S LNG I&E D 1Associated GasYYY 2Casinghead GasY 3Centrifugal Compressors - Wet and Dry SealsYYYYYYYYY 4Compressor BlowdownsYYYYYYYYY 5Compressor StartsYYYYYYYYY 6Equipment Fugitives above GroundYYYYYYYYY 7FlaresYYYYYYYYY 8Gas-driven Pneumatic DevicesYYYYYYYYY 9Glycol DehydratorsYYYYYYYY 10Hydrocarbon Storage TanksYYYYY 11Liquids UnloadingY 12Pipeline Venting and BlowdownsYYYYYYYY 13 Pipeline Inspection and Repair (including low pressure distribution and gathering lines and high pressure pipelines) YYYYY Y 14Pressure Relief Valves - System UpsetsYYYYYYYYY 15Reciprocating Compressors Rod PackingYYYYYYYYY 16Vessel BlowdownsYYYYYYYYY 17Cast Iron Distribution Pipeline and Unprotected Steel Pipeline Y

9 Gold Protocol 6: Equipment Fugitives Above Ground ► Definition of Fugitive or “Leak” 9 ► Approved Instrument Monitoring MethodInfra-red Camera and Audio/Visual/Olfactory (AVO) monitoring SectorsExisting FacilityNew FacilityNew and Existing Facilities Off P, Pc, T, S, LNG S, LNG I & E, D any concentration of hydrocarbon above 2,000 parts per million (ppm) not associated with normal equipment operation any concentration of hydrocarbon above 500 ppm not associated with normal equipment operation a leak is any detectable emissions not associated with normal equipment operation On P, GB any concentration of hydrocarbon above 500 parts per million (ppm) not associated with normal equipment operation ► Description and Location of Emissions ► Can occur through many types of connection points (e.g. flanges, seals, threaded fittings) or through moving parts of valves, pumps, compressors, and other types of process equipment. ► Due to the high number of equipment components, fugitive leak emissions can become a significant source of emissions. ► Sector Eligibility:  On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D

10 Gold Protocol 6: Equipment Fugitives Above Ground ► Leak Detection Protocol: ► Conduct comprehensive leak detection according to the tables below: ► Leak Repair Protocol: ► Repair Leak within 5 working days for all identified leaks unless a good cause, or shutdown is required for which leak must be repaired within 15 days of resolving issue or at next shutdown. 10 Table A: Production and Gathering and Boosting Inspection Frequency Chart Potential Fugitive Natural Gas Emissions (Tonnes per Year of Natural Gas) Approved Instrument Monitoring Method Inspection Frequency AVO Inspection Frequency Time First Inspection Should be Completed after Submission of Implementation Plan for New Facilities Time First Inspection Should be Completed after Submission of Implementation Plan for Existing Facilities >0 and ≤ 400AnnuallyMonthlyNo sooner than 15 days and no later than 30 days after facility commences operation Within 90 days > 400Bi-AnnuallyMonthly Table B: Offshore Production, Processing, Transmission, Underground Storage, LNG Storage, LNG Export and Import, and Distribution Inspection Frequency Chart 2 Potential Fugitive Natural Gas Emissions (Tonnes per Year Natural Gas) Approved Instrument Monitoring Method Inspection Frequency Time First Inspection Should be Completed for New Facilities Time First Inspection Should be Completed for Existing Facilities >0 and ≤ 12AnnuallyWithin 30 days of commencing operation Within 30 days from submission of implementation plan > 12 and ≤ 50Quarterly > 50Monthly

11 Gold Protocol 13: Pipeline Inspection and Repair Definition of pipeline −Pipeline consists of above and below ground pipe and associated connectors. −Used to form infrastructure to transport natural gas within a facility boundaries. Description and Location of Emissions −Leaks are considered to be any source, such as small openings, gaps, and cracks in a pipeline and/or associated component connectors, allowing an unintentional natural gas release. Sector Eligibility:  On P  GB  Pc  T  S  LNG S  LNG I&E  D Gold Protocol 1) Conduct comprehensive leak detection annually and retain records; and 2) Perform leak repair for leaks ≥ 60 grams/hour

12 Gold Protocol 17: Cast Iron Distribution Pipeline and Unprotected Steel Pipeline ► Definition of Cast Iron Distribution Pipeline ► Iron that is heated to melting point and poured into molds. ► Applies to gray cast iron, which is a ferrous material. ► Cannot be welded or screwed. ► Also includes wrought iron. ► Definition of Unprotected Steel Pipeline ► Steel pipeline with no form of corrosion protection. ► Description and Location of Emissions ► Manufacturer defects, improper design/installation, and internal/exterior protective coating damage can all lead to natural gas pipeline leaks. ► Common leakage points in these materials are joints and stress cracking in cast iron pipes and corrosion holes in unprotected steel piping. ► Sector Eligibility:  D

13 Gold Protocol 17: Cast Iron Distribution and Unprotected Steel Pipelines ► All cast iron or unprotected steel pipe being replaced: ► It is proposed that operators replace, line, or otherwise seal joints in 10% of existing cast iron pipeline, wrought iron pipeline and unprotected steel pipeline per year. ► Additionally it is proposed that operators perform an annual leak survey as per requirements in this protocol pertaining to pipeline inspection and repair. ► If 400 feet or more of pipe is being replaced: ► It is proposed that operators conduct a pressure drop survey on the replaced main line to measure the leakage immediately after all service connections have been transferred over to the new main, and the ends of the replaced pipeline are sealed before the pipeline is abandoned or removed. 13 Image Source: McWane Cast Iron Pipe Co.,

14 Gas STAR Gold Program – Request for Feedback EPA seeks feedback from stakeholders regarding all aspects of this proposed program, including: ► For the local distribution sector (LDC), please provide feedback on performance goals for specific sources, such as cast iron pipe replacement and suggestions for how to increase methane emissions reductions from LDCs with limited or no cast iron or exposed steel pipe? ► For LDCs, are there any specific incentive programs that PUCs or States leverage in order to promote further methane emissions reductions in this sector? ► How can EPA best engage PUCs to further methane emissions mitigation in LDCs? ► How, and how frequently, should protocols or other program elements be updated to reflect evolving state of the art? ► Are appropriate emissions sources targeted in these protocols? Should EPA consider any additional emissions sources and/or associated protocols? ► Are appropriate best management practices, technologies and/or emission mitigation targets used in the protocols? 14

15 Contact us! We look forward to working with you and hope that you will consider joining the Gas STAR Gold Program! For more information about Gas STAR Gold: We welcome your feedback! Roger Fernandez (202)

16 Detailed Protocol Appendix 16

17 Gold Protocol 1: Associated Gas ► Definition of Associated Gas ► Natural gas produced during the production of crude oil or condensate from an oil well. ► Does not include natural gas produced during completion flow-back or emitted from equipment leaks. These sources are captured under another protocol. ► Description and Location of Emissions ► Associated gas venting or flaring to the atmosphere after gas-liquid separation phase. ► Facilities without existing infrastructure to transport produced gas to useful outlet. ► Does not include emissions produced from wildcat/delineation wells or as a result of system failures/emergencies. ► Sector Eligibility:  On/Off P  GB ► It is proposed that operators recover all associated gas for beneficial use at a facility ► Beneficial use does not include flaring. ► Potential options for use of any recovered gas include natural gas reinjection, electricity generation, natural gas liquefaction, and gas capture for sale.

18 Gold Protocol 2: Casinghead Gas ► Definition of Casinghead gas ► Gas that collects in the annular space between the casing and tubing in oil and gas wells. ► Description and Location of Emissions ► Casinghead gas is usually vented to the atmosphere at or near the wellhead. ► Sector Eligibility :  On P

19 Gold Protocol 2: Casinghead Gas Protocol Hierarchy Facilities with gas capture system. 2. Facilities without gas capture system. 3. Facilities with no flare. Route emissions to recovery system for beneficial use. Beneficial use does not include flaring. Install gas capture system if possible from an engineering standpoint. Install flare if CO 2 equivalent combustion emissions from flare pilot gas ≤ CO 2 equivalent casinghead gas venting emissions.

20 Gold Protocol 3: Centrifugal Compressors – Wet and Dry Seals ► Definition of Centrifugal Compressor ► Raises the pressure of natural gas by means of mechanical rotating vanes or impellers. ► Uses wet or dry sealing system to prevent compressed gas escape to the atmosphere. ► Does not include rotary screw, rotary vane, or scroll compressors. ► Description and Location of Emissions ► Dry seals utilize a thin gap of high pressure gas between the rings through which little gas can leak. Gas is released to the atmosphere where the compressor shaft exits the compressor case. ► Wet seals use oil under pressure to prevent gas from escaping along a compressor shaft. Seal oil is degassed to the atmosphere. ► Sector Eligibility:  On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D

21 ► Dry Seal Systems: It is proposed that operators maintain venting emissions from dry seals within 10% of the initial design vent rate. ► Obtain initial design vent rate from the seal manufacturer or measure initial design vent rate when the compressor commences operation. ► Wet Seal Systems: It is proposed that operators achieve 95% recovery of uncontrolled methane emissions for all compressors, without using flaring. 21 OPTIONS Vapor Recovery Unit (VRU) Boiler Low Pressure Fuel Gas Compressor turbine fuel Seal oil circulation pump Fuel pressure seal oil degassing drum and demister (“seal oil trap”) Less gas vented to atmosphere Atmospheric seal oil degassing drum Compressor Suction/Recycle Gold Protocol 3: Centrifugal Compressors – Wet and Dry Seals

22 Gold Protocol 4: Compressor Blowdowns ► Definition of Compressor Blowdown ► When a compressor is taken offline, the high pressure gas within the compressor is vented to the atmosphere. ► Description and Location of Emissions ► Emptying gas from compressor and connected piping and vessels between closed isolation valves and venting it to the atmosphere. ► Sector Eligibility:  On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D

23 Gold Protocol 4: Compressor Blowdowns ► Protocol application hierarchy for a reciprocating compressor are displayed below. 23 PROTOCOL HIERARCHY Vapor Recovery Unit (VRU) Low Pressure Fuel Gas or Parallel Operating Compressor Retain blowdown gas in compressor Route to Flare » Relevant only to reciprocating compressors with positive rod packing sealing systems. » If both systems are present, route emissions to lower pressure system of the two, to max engineering potential. » Recover gas for beneficial use. Beneficial use does not include flaring. » Viable option if facility is not eligible for other reduction opportunities. 1 st 2 nd 3 rd 4 th

24 Gold Protocol 5: Compressor Starts ► Definition of Compressor Start ► Compressors driven by internal combustion engines are often equipped with gas expansion starters. ► Pressurized gas expands across the starter turbine that initiates engine startup. ► Description and Location of Emissions ► The pressurized starter gas used to drive the turbine motor starter is vented to the atmosphere. ► Sector Eligibility:  On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D

25 Gold Protocol 5: Compressor Starts ► Protocol hierarchy is outlined in the gas starter schematic below st - Replace gas starters. »Replacement options include instrument air, electric, or nitrogen EPA/GRI Methane Emissions from the Natural Gas Industry Volume 7: Blow and Purge 2 nd - Route vent gas to gas capture system for beneficial use. » Beneficial use does not include flaring. 3 rd - Route starter vent gas to flare. »Applicable to sites with existing flares or flares being installed for another protocol. Protocol Hierarchy

26 Gold Protocol 6: Equipment Fugitives Above Ground ► Definition of Fugitive or “Leak” 26 ► Approved Instrument Monitoring MethodInfra-red Camera and Audio/Visual/Olfactory (AVO) monitoring SectorsExisting FacilityNew FacilityNew and Existing Facilities Off P, Pc, T, S, LNG S, LNG I & E, D any concentration of hydrocarbon above 2,000 parts per million (ppm) not associated with normal equipment operation any concentration of hydrocarbon above 500 ppm not associated with normal equipment operation a leak is any detectable emissions not associated with normal equipment operation On P, GB any concentration of hydrocarbon above 500 parts per million (ppm) not associated with normal equipment operation ► Description and Location of Emissions ► Can occur through many types of connection points (e.g. flanges, seals, threaded fittings) or through moving parts of valves, pumps, compressors, and other types of process equipment. ► Due to the high number of equipment components, fugitive leak emissions can become a significant source of emissions. ► Sector Eligibility:  On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D

27 Gold Protocol 6: Equipment Fugitives Above Ground ► Leak Detection Protocol: ► Conduct comprehensive leak detection according to the tables below: ► Leak Repair Protocol: ► Repair Leak within 5 working days for all identified leaks unless a good cause, or shutdown is required for which leak must be repaired within 15 days of resolving issue or at next shutdown. 27 Table A: Production and Gathering and Boosting Inspection Frequency Chart Potential Fugitive Natural Gas Emissions (Tonnes per Year of Natural Gas) Approved Instrument Monitoring Method Inspection Frequency AVO Inspection Frequency Time First Inspection Should be Completed after Submission of Implementation Plan for New Facilities Time First Inspection Should be Completed after Submission of Implementation Plan for Existing Facilities >0 and ≤ 400AnnuallyMonthlyNo sooner than 15 days and no later than 30 days after facility commences operation Within 90 days > 400Bi-AnnuallyMonthly Table B: Offshore Production, Processing, Transmission, Underground Storage, LNG Storage, LNG Export and Import, and Distribution Inspection Frequency Chart 2 Potential Fugitive Natural Gas Emissions (Tonnes per Year Natural Gas) Approved Instrument Monitoring Method Inspection Frequency Time First Inspection Should be Completed for New Facilities Time First Inspection Should be Completed for Existing Facilities >0 and ≤ 12AnnuallyWithin 30 days of commencing operation Within 30 days from submission of implementation plan > 12 and ≤ 50Quarterly > 50Monthly

28 Gold Protocol 7: Flares ► Definition of a Flare ► Combustion device that uses an open flame to burn combustible gas. ► Description and Location of Emissions ► Direct emissions from gas combusted in pilot flame. ► Combination of low flowing lesser BTU gas with a high cross wind (flare out). ► Sector Eligibility:  On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D ► It is proposed that operators install reliable and continuous ignition systems for all flaring existing within or adjacent to the facility.

29 Gold Protocol 8: Gas-Driven Pneumatics ► Definition of Pneumatic Device ► Automated or manual instruments and pumps used for flow regulation to maintain a process condition. ► Pressurized natural gas is used as the source of power. ► Description and Location of Emissions ► Devices are designed to vent gas as part of normal operation. ► Three basic configurations: – Continuous-bleed – Intermittent bleed – Self-contained devices ► Sector Eligibility:  On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D

30 Gold Protocol 8: Gas-Driven Pneumatic Devices 30 Protocol Hierarchy 1 st - Instrument Air, Nitrogen, or Electricity 2 nd - Leak Rate Reduction » For devices used in processing facilities, reduce leak rate to zero » Where electricity is available, replace pneumatic pumps with electric pumps » Where instrument air or nitrogen are available, install devices powered by these. » For devices used outside of processing facilities, reduce leak rate below 6 standard cubic feet per hour (scfh).

31 Gold Protocol 9: Glycol Dehydrators ► Definition of a Glycol Dehydrator ► Device in which a liquid absorbent (glycol, diethylene glycol, or triethylene glycol) directly contacts a natural gas stream to absorb water vapor. ► Description and Location of Emissions ► Liquid absorbent (e.g. glycol) removes water as well as methane, VOCs, and HAPs from natural gas. ► Saturated or “rich” absorbent is routed to a reboiler where these compounds evaporate along with water, resulting in emissions. ► Methane emissions are directly proportional to a dehydrator’s glycol circulation rate. ► Sector Eligibility:  On/Off P  GB  Pc  T  S  LNG S  LNG I&E ► Emission Reduction Options: 1. Route Emissions to Gas Capture 2. Route Emissions to Low Pressure Gas System 3. Route Emissions to Flare 4. Glycol Circulation Rate Optimization Requirement 1, 2, 3 apply to dehydrators with emissions ≥ 7,080 g/hr and annual avg. daily throughput ≥ 0.4 MMSCFD Requirement 4 applies to dehydrators with emissions ≥ 7,080 g/hr and annual avg. daily throughput < 0.4 MMSCFD

32 Gold Protocol 9: Glycol Dehydrators ► Protocol hierarchy for an example device is displayed below. 32 PROTOCOL HIERARCHY 2 nd - Low Pressure Gas System 3 rd - Route to Flare » Viable opportunity only once gas capture and low pressure gas system recovery have been considered. » For dehydrator equipped with flash tank separators 1 st - Gas Capture System » Recover gas from dehydrator vents for beneficial use. Beneficial use does not include flaring. Optimize Glycol Circulation Rate » Viable opportunity when separator vent gas volume is greater than or equal to on-site fuel requirements » Glycol circulation rate maintained at or below 110% of the optimal circulation rate based on current production HIERARCHY 1 HIERARCHY 2 HIERARCHY 3

33 Gold Protocol 10: Storage Tanks ► Definition of a Storage Tank ► Vessel designed to contain an accumulation of crude oil, condensate, intermediate hydrocarbon liquids, or produced water that is constructed of non-earthen materials. ► Description and Location of Emissions ► Sources of emissions include tank vents, designed tank openings, and any tank defects. ► Increased flashing emissions due to leaking or stuck open gas/oil separator liquid level control valves as well as vortexing when separator liquid level is low (and no vortex breaker is installed). ► Sector Eligibility:  On/Off P  GB  Pc  T ► Emission Reduction Hierarchy: 1. Route Emissions to Gas Capture 2. Route Emissions to Flare Tanks with average annual hydrocarbon emissions ≥ 60 g/h of natural gas are eligible for reduction opportunities.

34 Gold Protocol 10: Storage Tanks 34 PROTOCOL HIERARCHY 2 nd - Route to Flare » Viable opportunity for sites w/o gathering or sales line(s) in place or existing gas capture system(s) 1 st - Vapor Recovery Unit (VRU) » Recover gas from storage tanks for beneficial use. Beneficial use does not include flaring.

35 Gold Protocol 11: Liquids Unloading ► Definition of Liquids Unloading ► Removal of fluids required to maintain production in mature wells when accumulated liquids slow or halt gas production (liquids loading). ► Description and Location of Emissions ► Liquids unloading can be performed through manual or automated techniques. ► Atmospheric emissions from liquids unloading can occur from direct gas venting or flaring. ► Sector Eligibility:  Onshore Production

36 Gold Protocol 11: Liquids Unloading ► It is proposed that operators maintain a closed loop liquids unloading system that eliminates all methane emissions. ► Control of emissions during system failures or emergency situations is not proposed. ► Emission reduction options for liquids unloading while maintaining a closed loop system are described below (image shows a well installed with a plunger lift). 36 Velocity Tubing Foaming Agents » Soaps or surfactants which aid in phase separation and reduce critical velocity required to lift/remove fluids from a well. » Smaller diameter production tubing which increases gas production velocity without venting emissions. Plunger Lift Systems » Equipment which uses well’s gas pressure to drive accumulated liquids to the surface. » Well gas should be directed to a separator that routes to a sales line or other beneficial use (not including flaring) during plunger lift cycling. Downhole Reciprocating or Rotating Pumps » Pumps used to propel accumulated well liquids to the surface. REDUCTION OPTIONS

37 Gold Protocol 12: Pipeline Venting and Blowdowns Definition of pipeline venting −Planned or unplanned release of gas to the atmosphere from pipelines to reduce line pressure. Description and Location of Emissions −Vented sections of pipe to ensure safe working conditions during planned repairs and maintenance, installation of new parallel pipe, or an emergency repair. −Done by blocking the smallest possible linear section of the pipeline and depressurizing it through venting natural gas to the atmosphere. Sector Eligibility:  On P  GB  Pc  T  S  LNG S  LNG I&E  D

38 Gold Protocol 12: Pipeline Venting and Blowdowns ► An image of portable compression to reduce pipeline blowdown emissions is shown below st - Use inline compression to max engineering potential 2 nd - Use portable compression » Breakeven or higher value of gas should be recovered in comparison to cost of using portable compression. »Applicable if facility has ownership or operatorship of the compressor downstream from pipeline venting and blowdown operations. » Recover gas amount comparable or higher to fuel used during inline compression (CO 2 eq. basis). REDUCTION HIERARCHY

39 Gold Protocol 13: Pipeline Inspection and Repair Definition of pipeline −Pipeline consists of above and below ground pipe and associated connectors. −Used to form infrastructure to transport natural gas within a facility boundaries. Description and Location of Emissions −Leaks are considered to be any source, such as small openings, gaps, and cracks in a pipeline and/or associated component connectors, allowing an unintentional natural gas release. Sector Eligibility:  On P  GB  Pc  T  S  LNG S  LNG I&E  D Gold Protocol 1) Conduct comprehensive leak detection annually and retain records; and 2) Perform leak repair for leaks ≥ 60 grams/hour

40 Gold Protocol 14: Pressure Relief Valves (PRVs) – System Upsets ► Definition of pressure relief valves ► Self-regulating safety devices used to ensure normal equipment/pipeline operating pressure and prevent any pressure increases above the maximum allowable working pressure of process equipment. ► Description and Location of Emissions ► During system upsets, PRVs vent process gas to maintain a set pressure value. ► Sector Eligibility:  On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D

41 Gold Protocol 14: Pressure Relief Valves (PRVs) – System Upsets ► It is proposed that operators install rupture disks on all gas pressure relief valves (PRVs) ► One–time use calibrated metal membranes which break at excessive gar pressures, allowing system stabilization. ► Does not apply to PRVs in closed systems connected to flare headers 41 Pressure Relief Valve Rupture Disk Installation

42 Gold Protocol 15: Reciprocating Compressor Rod Packing ► Definition of Reciprocating Compressor Rod Packing ► A series of flexible rings in machined metal cups that fit around the reciprocating compressor piston rod. ► The rings create a seal, limiting the amount of compressed natural gas that escapes to the atmosphere. ► Description and Location of Emissions ► Emissions from packing systems originate from mainly four components; the nose gasket, between the packing cups, around the rings and between the rings and the shaft. ► A set of two to three flexible, segmented rings in a packing cup are pressed against the rod to and oscillate back and forth in the cup with the rod’s reciprocal movement, sealing against the cup faces to present leakage round the rings, but a little gas slips around the rings with each stroke. ► Rod packing emits a small amount of gas into the distance piece and/or through a vent line connected to the packing box. ► Emission Reduction Hierarchy 1) Gas Capture 2) Economical Rod Packing Replacement 3) Route rod packing emissions to flare ► Sector Eligibility:  On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D

43 Gold Protocol 16: Vessel Blowdowns ► Definition of Vessel Blowdown ► The act of emptying or depressurizing a vessel of natural gas. ► Description and Location of Emissions ► Intentional vents usually from elevated vent stacks controlled by a manual or pneumatic actuated valve connected to the vessel. ► Blowdowns can be from planned maintenance, operational needs, or due to an emergency. ► Sector Eligibility:  On/Off P  GB  Pc  T  S  LNG S  LNG I&E  D ► Emission Reduction Hierarchy: 1. Route Emissions to Gas Capture 2. Route Emissions to Low Pressure Gas System 3. Route Emissions to Flare

44 Gold Protocol 17: Cast Iron Distribution Pipeline and Unprotected Steel Pipeline ► Definition of Cast Iron Distribution Pipeline ► Iron that is heated to melting point and poured into molds. ► Applies to gray cast iron, which is a ferrous material. ► Cannot be welded or screwed. ► Also includes wrought iron. ► Definition of Unprotected Steel Pipeline ► Steel pipeline with no form of corrosion protection. ► Description and Location of Emissions ► Manufacturer defects, improper design/installation, and internal/exterior protective coating damage can all lead to natural gas pipeline leaks. ► Common leakage points in these materials are joints and stress cracking in cast iron pipes and corrosion holes in unprotected steel piping. ► Sector Eligibility:  D

45 Gold Protocol 17: Cast Iron Distribution and Unprotected Steel Pipelines ► All cast iron or unprotected steel pipe being replaced: ► It is proposed that operators replace, line, or otherwise seal joints in 10% of existing cast iron pipeline, wrought iron pipeline and unprotected steel pipeline per year. ► Additionally it is proposed that operators perform an annual leak survey as per requirements in this protocol pertaining to pipeline inspection and repair. ► If 400 feet or more of pipe is being replaced: ► It is proposed that operators conduct a pressure drop survey on the replaced main line to measure the leakage immediately after all service connections have been transferred over to the new main, and the ends of the replaced pipeline are sealed before the pipeline is abandoned or removed. 45 Image Source: McWane Cast Iron Pipe Co.,

46 Celebrating 125 Years of Public Service NARUC Methane Emissions in Transmission and Distribution: What Can be Done? The Honorable Susan Rabon North Carolina Utilities Commission

47 ANADARKO PETROLEUM CORPORATION | NYSE: APC ANADARKO PETROLEUM CORPORATION July 14, 2014

48 ANADARKO NYSE: APC 48 | NYSE: APC Cautionary Language Regarding Forward-Looking Statements and Other Matters This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of Anadarko believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results, or other expectations expressed in this presentation, including court approval of the settlement agreement related to the Tronox Adversary Proceeding, issuance of the injunction and dismissal with prejudice of the claims asserted in the Tronox Adversary Proceeding, as well as Anadarko’s ability meet financial and operating guidance, achieve its production targets, consummate the transactions described in this presentation, successfully manage its capital expenditures, timely complete and commercially operate the projects and drilling prospects identified in this presentation, achieve production and budget expectations on its mega projects, and successfully plan, secure necessary government approvals, finance, build, and operate the necessary infrastructure and LNG park. See “Risk Factors” in the company’s 2013 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases. Anadarko undertakes no obligation to publicly update or revise any forward-looking statements. Please also see our website at under “Investor Relations” for reconciliations of the differences between any non-GAAP measure used in this presentation and the most directly comparable GAAP financial measures. Also on our website at is a glossary of terms.www.anadarko.com Cautionary Note to Investors - The U.S. Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC’s definitions for such terms. We may use terms in this presentation, such as “resources,” “net resources,” “net discovered resources,” “gross resource,” “gross recoverable resources,” “gross resource opportunity,” “estimated net resources,” “recoverable natural gas,” “net opportunity,” and similar terms that the SEC’s guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the oil and gas disclosures in our Form 10- K for the year ended December 31, 2013, File No , available from us at or by writing us at: Anadarko Petroleum Corporation, 1201 Lake Robbins Drive, The Woodlands, Texas Attn: Investor Relations. You can also obtain this form from the SEC by calling SEC-0330.

49 ANADARKO NYSE: APC 49 | NYSE: APC ANGA Members – Driving Demand for Natural Gas

50 ANADARKO NYSE: APC 50 | NYSE: APC Anadarko is … Production Exploration Among the World’s Largest Independent Oil and Natural Gas E&P Companies Included in the S&P 100 Index with ~6,000 Employees Worldwide Headquartered in The Woodlands, TX with Operations in 15+ Countries Producing Enough Energy to Meet Daily Demands of ~25 Million Avg. American Homes.

51 ANADARKO NYSE: APC 51 | NYSE: APC Anadarko’s Mission and Values 51 Anadarko’s mission is to provide a competitive and sustainable rate of return to shareholders by exploring for, acquiring and developing oil and natural gas resources vital to the world’s health and welfare.  Integrity and Trust  Servant Leadership  People and Passion  Commercial Focus  Open Communication

52 ANADARKO NYSE: APC 52 | NYSE: APC 2009 U.S. Onshore: Our Mission  Deliver Short-Cycle, Capital-Efficient Liquids Growth  Build Enabling Infrastructure  Increase Efficiencies and EURs  Explore for and Accelerate the Next Resource Play  Maintain Natural Gas Option Value Key Growth Contributors Marcellus Eagleford Delaware Basin E TX / N LA Wattenberg HZ U.S. Onshore Reported Net Sales Volumes (MBOE/d) Q14 Total Sales Volumes Liquids (MBbl/d)

53 ANADARKO NYSE: APC 53 | NYSE: APC Horizontal Drilling + Hydraulic Fracturing = Energy Reboot  Horizontal Drilling Multiple layers of Protective steel & cement Hydraulic Fracturing

54 ANADARKO NYSE: APC 54 | NYSE: APC Anadarko is Committed to Reducing Emissions Anadarko is awarded a 2013 Environmental Protection Award by the COGCC for the third consecutive year. Anadarko, EDF, Governor John Hickenlooper and 2 Other Operators Collaborate on New Air-Quality Rules in Colorado.  Reducing Impacts Collaborative Air-Quality Rules in Colorado with Governor, Regulators and EDF Expanding Infrastructure to Reduce Truck Traffic Water Pipeline and Management  Leading Industry Initiatives FracFocus.org University of Texas Emissions Study Expanding CNG Fleet and Infrastructure  Actively Engaging Stakeholders  Recognized for Best Practices

55 ANADARKO NYSE: APC 55 | NYSE: APC U.S. Methane Emissions By Source Source: US EPA GHG Inventory

56 ANADARKO NYSE: APC 56 | NYSE: APC U.S. Methane Emissions From Natural Gas Systems (Tg CO2 Eq.) Source: US EPA GHG Inventory

57 ANADARKO NYSE: APC 57 | NYSE: APC Long Term Methane Management What motivates a company to design and implement a comprehensive voluntary methane program to minimize methane emissions with transparency?  Evaluate risk, cost and liability to determine level of priority  Methane emissions are a priority for upstream natural gas industry Methane program benefits include: reducing methane and VOC emissions, preparing for potential regulatory changes and increasing the benefit of fuel switching Focus on leak detection and repair for existing operations Leverage with VOC emission related goals  Public attention on life-cycle emissions of natural gas

58 ANADARKO NYSE: APC 58 | NYSE: APC White House: Strategy to Reduce Methane Emissions (3/14)  Attributes 28% of methane emissions to oil and gas sector 31% emissions from production 15% emissions from processing 34% emissions from transmission and storage 20% emissions from distribution  Upstream Oil and Gas Assess potential sources of methane and other emissions – White Papers Evaluate regulatory programs – permitting, control regulations, reporting Expand voluntary efforts - National GasSTAR (Gold Star Certification) Department of Interior: Bureau of Land Management Leak and Flaring  Measurement and Monitoring New measurement technologies Address uncertainty with bottom-up inventories Enhance top-down modeling and monitoring 58

59 ANADARKO NYSE: APC 59 | NYSE: APC White House: Strategy to Reduce Methane Emissions (3/14)  Department of Energy Methane Roundtables for “downstream” opportunities Accelerate best practices Promote common understanding of methane emissions Develop cost-effective strategies to reduce methane emissions Use voluntary programs to catalyze action  Existing downstream efforts specifically recognized Safety is a top priority for distribution 38 states have an accelerated infrastructure replacement cost recovery program Natural Gas Downstream Initiative Environmental Defense Fund and 13 American Gas Association project  Recognizes the value of state regulatory efforts Colorado example California and Northeast trading programs

60 ANADARKO NYSE: APC 60 | NYSE: APC Industry Upstream Methane Strategies: Next Steps The oil and gas industry may consider the following moving forward:  Gather and evaluate data What gets measured gets managed Decide type of measurements: direct, estimates, leak detection Develop accurate carbon emission inventory Understand accuracy of emission factors Assess data for priority sources  Develop strategies that: Meet regulatory requirements Leverage with VOC emission reductions Reduce emissions from tanks, pneumatics, completions, equipment leaks Develop technologies to reduce potential of emissions: tankless operations, centralizing facilities, vapor recovery units  Measure results and develop next strategies Continue to measure and reassess priorities The emissions per unit type changes over time

61 ANADARKO NYSE: APC 61 | NYSE: APC Industry Upstream Methane Strategies: Next Steps  Methane reduction strategies are usually developed considering: Largest emission sources Cost effectiveness Ability to capture product Strategies to obtain the greatest methane reductions Regulatory requirements Design and construction new locations Community priorities Equipment effectiveness Reliability of control equipment  Purposes of voluntary GHG reporting program are often to: Enhance business value Reduce risk and cost Find opportunities to improve operations Strengthen stakeholder relationships Enhance reputation, trust and credibility

62 ANADARKO NYSE: APC 62 | NYSE: APC Industry Upstream Methane Strategies: Lessons Learned Lessons learned by the upstream industry:  Flexibility is key Priorities may vary by locale and new versus existing operations Overly prescriptive regulations can stifle innovation and reductions Leveraging with other priorities is key to a successful strategy Leak detection and repair strategies have greater short term versus long term benefits  Voluntary strategies can obtain greater reductions Sharing best practices across the industry is valuable Field and engineering staff are key to any environmental strategy –seeking more efficient ways to do business Value in linking a methane program to continually finding strategies to reduce risk, costs, and liabilities  Understanding data is important Strong knowledge of data is important – including data gaps Measuring continuous improvement can be challenging

63 ANADARKO NYSE: APC 63 | NYSE: APC Natural Gas Distribution Sector  Natural gas distribution segment reduced methane emissions by over 20% since 1990 through implementation of industry best practices and pipeline replacement activities  Many utilities participated in EPA’s Gas STAR program  Approximately 38 states have various programs or enabling regulatory structures in place today to accelerate LDC pipeline replacement and modernization efforts  Natural gas local distribution companies (LDCs) and the American Gas Association (AGA) are collaborating with EDF to quantify methane emissions from distribution networks and update emission factors  Leadership and collaboration across federal, state, and local government is necessary to further accelerate infrastructure replacement and modernization, Source: MJ Bradley and Downstream Natural Gas Initiative

64 ANADARKO NYSE: APC 64 | NYSE: APC Evaluate Priority to LDCs  LDCs may have different risk-based priorities Methane may not be the priority driver Safety may be a greater priority Co-benefit of replacing pipelines for safety, is the reduction of methane emissions Once safety issues addressed, re-evaluate remaining emissions for further action  Gather and evaluate data Various methodologies can be used Evaluate value of improving reliability of data set  Develop strategies Leverage with safety goals Consider lower price of gas and lower interest rates Timing may be just right to invest maximum funds possible to replace systems  Measure results and develop next strategies Continue to measure and reassess priorities Emissions per unit type changes over time

65 ANADARKO NYSE: APC 65 | NYSE: APC Downstream Natural Gas Initiative (DNGI)  Five natural gas utilities and MJ Bradley formed the Downstream Natural Gas Initiative to address key technical, regulatory, and workforce challenges affecting methane emission reductions  Focus on opportunities to substantially reduce methane emissions and support safe, reliable, and cost-effective service  Members are 13% of total installed distribution main mileage and deliver ~20% of total natural gas Consolidated Edison Company of New York, Inc. National Grid Pacific Gas & Electric Public Service Electric & Gas Xcel Energy Source: MJ Bradley and Downstream Natural Gas Initiative

66 ANADARKO NYSE: APC 66 | NYSE: APC Downstream Natural Gas Initiative (DNGI)  Downstream Natural Gas Initiative states that: Pipeline replacement and modernization programs offer the most meaningful opportunities to reduce methane emissions from the distribution segment Maintain focus on safety and effectively managing resources Natural gas utilities are working with state PUCs to put in place accelerated pipeline replacement and modernization programs Leadership and collaboration across federal, state, and local government will be necessary to further accelerate infrastructure replacement and modernization  Annual and total program investment will be dictated by the acceptable level of customer rate impacts  The impact of pipeline replacement projects on customer rates is largely a function of the scale and speed of replacement programs Source: MJ Bradley and Downstream Natural Gas Initiative

67 ANADARKO NYSE: APC 67 | NYSE: APC How Can State Regulators Help? Regulatory Considerations  Can the state work to develop a predicable regulatory framework to enable and guide utility investments?  Can the state support pipe replacement programs?  Do existing programs provide for timely cost recovery?  Are there clear objectives for utilities?  Do regulations support the use of new technologies and processes to increase efficiencies, reduce risk and costs, and improve safety?

68 ANADARKO NYSE: APC 68 | NYSE: APC Thank You

69 Celebrating 125 Years of Public Service NARUC Methane Emissions in Transmission and Distribution: What Can be Done? The Honorable Susan Rabon North Carolina Utilities Commission

70 ANADARKO NYSE: APC 70 | NYSE: APC Celebrating 125 Years of Public Service NARUC Mark Brownstein Associate Vice President and Chief Counsel of the U.S. Climate and Energy Program

71 Celebrating 125 Years of Public Service NARUC Methane Emissions in Transmission and Distribution: What Can be Done? The Honorable Susan Rabon North Carolina Utilities Commission

72 NW Natural’s Approach to Raising the Bar on Pipeline Safety Improving Natural Gas Safety and Reducing Emissions Presented to the National Association of Regulatory Utility Commissioners Summer Committee Meetings Dallas, Texas July 13-16, 2014 Bruce Paskett Principal Compliance Engineer NW Natural

73 Agenda NW Natural Company Background NWN’s Enhanced Pipeline Safety Programs Lost and Unaccounted For Gas- Not a Valid Measure of Emissions Rate Treatment Mechanisms Added Benefit of Reduced Natural Gas Emissions State Excavation Damage Prevention Laws Summary

74 NW Natural Company Background Company founded in 1859 Operate in Oregon and SW Washington Serve approximately 698,000 residential, commercial and industrial customers Designed, constructed, own and operate 643 miles of transmission main, 13,400 miles of distribution main and 680,000 services

75

76 NW Natural Commitment to PL Safety Company is committed to the safe, reliable and cost-effective delivery of natural gas in a manner that recognizes impacts to utility ratepayers Since the early 1980’s, company has worked closely w/ OPUC Safety Staff to implement enhanced pipeline safety programs that have significantly improved safety

77 NW Natural Transmission and Distribution Piping Characteristics As a direct benefit of NW Natural’s Enhanced Pipeline Safety Programs, nearly 100% of NW Natural’s underground infrastructure is constructed of modern day materials (coated, cathodically protected steel and state-of-art polyethylene plastic)

78 NW Natural’s Enhanced Pipeline Safety Programs  Key Driver was Improving Pipeline Safety  Added Benefit: Reduced Natural Gas Emissions NW Natural Raising the Bar on Pipeline Safety

79 NW Natural’s Enhanced PL Safety Programs Distribution Integrity Management Program (DIMP)-1983 Accelerated Cast Iron (CI) Repl. Program to 2000 Accelerated Bare Steel Repl. Program to 2015 Natural Forces (Geo-Hazard) Program Transmission Integrity Management Program (TIMP) System Integrity Program (SIP- Bare Steel Replacement, TIMP & DIMP) Formal DIMP Program- 2009

80 Risk-based analysis of piping infrastructure Smart modernization- Focus replacement efforts on highest risk pipe Maximize efficiency, benefits and completion by focusing resources on accelerated infrastructure replacement vs. repairs of insignificant emissions NW Natural Raising the Bar on Pipeline Safety- Fundamental Principals of Programs

81 NW Natural initiated “model” DIMP Program in 1983 Worked with Oregon PUC Staff, using DIMP risk-based principles, to initiate CI Replacement Program Program included rate treatment mechanism in early years Annual update meetings with OPUC Staff Program Performance Metrics showed significant improvement in safety with additional benefit of reduced emissions CI Replacement Program completed in 2000 NW Natural Raising the Bar on Pipeline Safety

82 CI Performance Metrics- Grade B Emissions, Portland District NW Natural Raising the Bar on Pipeline Safety

83 LUAF is comparison between gas measured coming into system and gas going out of system- Not a measure of gas emissions There are many factors that affect a company’s LUAF; Gate station metering accuracy Customer metering accuracy Timing of meter reading / billing cycle Time of year- winter (cold) / summer (warm) Major temperature variations within time period (month) Line pack Storage injection/ withdrawals Theft & system emissions Lost and Unaccounted For Gas (LUAF)- Not a Valid Measure of Natural Gas Emissions

84 NW Natural’s Enhanced Pipeline Safety Program Developed in concert with OPUC Safety Staff Approved in 2001 Key Elements Accelerated Bare Steel Replacement Program Natural Forces (Geo-Hazard) Program Rate Treatment Mechanism rolled in capital costs with Purchased Gas Adjustment (PGA) each year NW Natural Raising the Bar on Pipeline Safety

85 NW Natural’s Enhanced Pipeline Safety Program Accelerated Bare Steel Replacement Program: Accelerated the replacement of bare steel mains and services from 40 years to 20 years Completion date accelerated from 2041 to 2021 NW Natural Raising the Bar on Pipeline Safety

86 NW Natural’s Enhanced Pipeline Safety Program Natural Forces (Geo-hazard Program): Identification, assessment, monitoring and mitigation of threats from landslides, earthquakes and washouts at river and stream crossings NW Natural Raising the Bar on Pipeline Safety

87 NW Natural Raising the Bar on Pipeline Safety

88 NW Natural Raising the Bar on Pipeline Safety NW Natural’s System Integrity Program (SIP) - March 1, 2009 Consolidated key Enhanced Pipeline Safety Programs under a single umbrella. Key Elements; Accelerated Bare Steel Replacement Program TIMP DIMP Rate Treatment Mechanism rolls in capital costs with PGA each year

89 SIP Capital Cost Rate Treatment Mechanism- Threshold of $ 3.25 million on steel replace. costs/ fiscal year $12 million “soft cap/ fiscal year Project costs included in rates when completed each year “Tracker year” November 1- October 31 States with Accelerated Infrastructure Replacement Programs

90 Bare Steel Miles of Main- Oregon NW Natural Raising the Bar on Pipeline Safety- Benefits

91 Grade B Emissions- System NW Natural Raising the Bar on Pipeline Safety- Benefits

92 NW Natural Raising the Bar on PL Safety- Reducing Natural Gas Emissions

93 Excavation damage presents the single greatest threat to PL safety Many States do not have effective damage prevention laws so normalized excavation damage rate (damages/1000 locate requests) is much higher than States w/ effective programs Reducing excavation damages improves PL safety w/ added benefit of reducing natural gas emissions State Excavation Damage Prevention Laws- Another Tool to Improve PL Safety

94 State Excavation Damage Prevention Laws- PHMSA Serious Incident Data

95 NW Natural worked with OPUC to develop risk-based Programs that significantly improved PL safety. Key elements- Accelerated replacement of CI and Bare Steel System will be 100% modern materials by end of 2015 Key driver was PL Safety. Reduction in emissions is added benefit. LUAF NOT valid measure of gas emissions Early entry allowed NWN to spread costs over time, eliminating “rate shock” for ratepayers. Minimal rate impact Rate treatment mechanisms that provide timely recovery of PL Safety Program costs facilitate operator action Current low commodity costs- excellent time to accelerate infrastructure replacement programs Effective State Excavation Damage Prevention Laws improve PL safety w/ added benefit of reduced emissions Summary

96 Thank You! Bruce Paskett Principal Compliance Engineer


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