1. Partner Reported Opportunities for Small and Medium Sized Producers Lessons Learned from Natural Gas STAR Small and Medium Sized Producer Technology Transfer Workshop Bill Barrett Corporation, Evergreen Resources Inc, Southern Gas Association and EPA’s Natural Gas STAR Program June 29, 2004

2. Page 2 Reducing Emissions, Increasing Efficiency, Maximizing Profits Producer PROs: Agenda p Introduction to Partner Reported Opportunities (PROs) and Lessons Learned p Selected PRO Overviews p DI&M p DI&M Industry Experience p Discussion Questions

3. Page 3 Reducing Emissions, Increasing Efficiency, Maximizing Profits Why Are Partner Reported Opportunities Important? p Partner Annual Reports document Program accomplishments u Best Management Practices (BMPs): the consensus best practices u PROs: Partner Reported Opportunities p Simple vehicles for sharing successes and continuing Program’s future u Lessons Learned: expansion on the most advantageous BMPs and PROs u PRO Fact Sheets u Technology Transfer Workshops u Posted on www.epa.gov/gasstar

4. Page 4 Reducing Emissions, Increasing Efficiency, Maximizing Profits Why Are Partner Reported Opportunities Important? p Many production facilities have identified practical, cost effective reduction practices p Production partners report saving 187 Bcf since 1990, 80% from PROs u Vapor recover units (VRUs) account for 30% of PRO emissions reductions u Plunger lift installations account for 16% u Flare installations account for 13%

5. Page 5 Reducing Emissions, Increasing Efficiency, Maximizing Profits Production Best Management Practices p BMP 1: Install and replace high-bleed pneumatics p BMP 2: Install flash tank separators (FTS) on glycol dehydrators p BMP 3: Partner Reported Opportunities

6. Page 6 Reducing Emissions, Increasing Efficiency, Maximizing Profits Lessons Learned p11 applicable to small and medium sized producers u2 focused on operating practices u9 focused on technology pAll 16 Lessons Learned studies on the EPA web site uwww.epa.gov/gasstar/lessons.htm

7. Page 7 Reducing Emissions, Increasing Efficiency, Maximizing Profits Technology Focused Lessons Learned for Small and Medium Producers p Installing Vapor Recovery Units on Crude Oil Storage Tanks p Optimize Glycol Circulation and Installation of Flash Tank Separators in Dehydrators p Options for Reducing Methane Emissions from Pneumatic Devices in the Natural Gas Industry p Convert Gas Pneumatic Controls to Instrument Air p Reducing Methane Emissions from Compressor Rod Packing Systems p Replacing Gas-Assisted Glycol Pumps with Electric Pumps p Installing Plunger Lift Systems in Gas Wells p Composite Wrap for Non-Leaking Pipeline Defects p Replace Glycol Dehydrators with Desiccant Dehydrators

8. Page 8 Reducing Emissions, Increasing Efficiency, Maximizing Profits Gas STAR PRO Fact Sheets p 16 applicable to small and medium sized producers u 38 PROs applicable to production  12 focused on operating practices  26 focused on technology pPRO Fact Sheets from Annual Reports 1994-2002 uTotal 56 posted PROs at epa.gov/gasstar/pro/index.htm

9. Page 9 Reducing Emissions, Increasing Efficiency, Maximizing ProfitsPROs p Replace Gas Starters with Air p Replace Ignition – Reduce False Starts p Install Electric Starters p Rerouting of Glycol Skimmer Gas p Convert Gas-Driven Chemical Pumps to Instrument Air p Pipe Glycol Dehydrator to Vapor Recovery Unit p Convert Pneumatics to Mechanical Controls p Install Electronic Flare Ignition Devices p Use ClockSpring ® Repair

10. Page 10 Reducing Emissions, Increasing Efficiency, Maximizing Profits More PROs p Inspect Flowlines Annually p Install BASO ® Valves p Use Ultrasound to Identify Leaks p Connect casing to VRU p Lower Heater-Treater Temperature p Begin DI&M at Remote Facilities p Install Compressors to Capture Casinghead Gas p Install Pumpjacks on Low Water Production Gas Wells p Replace Glycol Dehydration Units with Methanol Injection

11. Page 11 Reducing Emissions, Increasing Efficiency, Maximizing Profits Examples of PROs Applicable to Small/Medium Producers p PROs enabled by instrument air u Replace Gas Starters with Instrument Air u Convert Gas-Driven Chemical Pumps to Instrument Air p PROs enabled by glycol dehydrators u Reroute Glycol Skimmer Gas u Reroute Glycol Dehydrator to Vapor Recovery p PROs enabled by electric power u Install Electric Starters u Install Compressors to Capture Casinghead Gas

12. Page 12 Reducing Emissions, Increasing Efficiency, Maximizing Profits Replace Gas Starters with Air p What is the Problem? u Pressurized gas used to start engines is exhausted to atmosphere p Partner Solution u Replace gas with compressed air p Methane Savings u Based on one 3,000 HP reciprocating compressor with 10 start-ups per year p Applicability u Natural gas pneumatic starter motors u Needs electric power to run air compressor Methane Savings 1,356 Mcf/yr Project Economics Project Cost < $1,000 Annual O&M Costs $100 - $1,000 Payback < 1 yr

13. Page 13 Reducing Emissions, Increasing Efficiency, Maximizing Profits Convert Gas-Driven Chemical Pumps to Instrument Air p What is the Problem? u Chemical pumps powered by pressurized natural gas vent methane p Partner Solution u Replace natural gas with instrument air to power pumps p Methane Savings u Based on glycol unit pump p Applicability u Use excess capacity of existing instrument air u Needs electric power to run air compressor Methane Savings 2,500 Mcf/yr Project Economics Project Cost $1,000 - $10,000 Annual O&M Costs $100 - $1,000 Payback < 1 yr

14. Page 14 Reducing Emissions, Increasing Efficiency, Maximizing Profits PROs Enabled by Glycol Dehydrators Dehydrators present an excellent place to reduce emissions p How much methane is emitted? u A 1 MMcf/d dehydrator with vent condenser, no flash tank separator and gas pump can produce 460 Mcf/yr of losses p How can these losses be reduced? u BMP 2: install flash tank separator u Many PROs

15. Page 15 Reducing Emissions, Increasing Efficiency, Maximizing Profits Reroute Glycol Skimmer Gas Methane Savings 7,600 Mcf/yr Project Economics Project Cost <$1,000 Annual O&M Costs $100 - $1,000 Payback < 1 yr p What is the Problem? u Gas from condensate separator vented to atmosphere p Partner Solution u Reroute condensate separator gas for fuel use p Methane Savings u Based on 20 MMcf/d dehydrator w/o FTS, circulating 300 gph p Applicability u All dehydrators with vent condensers u Condensate separator must operate at higher pressure than gas destination

16. Page 16 Reducing Emissions, Increasing Efficiency, Maximizing Profits Pipe Glycol Dehydrator to Vapor Recovery Methane Savings 3,300 Mcf/yr Project Economics Project Cost $1,000 - $10,000 Annual O&M Costs > $1,000 Payback < 1 yr p What is the Problem? u High pressure gas used to drive gas pumps in dehydrators are vented p Partner Solution u Reroute gas vent to VRU p Methane Savings u Based on a 10 MMcf/d gas dehydration unit with FTS and gas assist pump p Applicability u Sufficient spare capacity in existing VRU u Capacity of VRU outlet

17. Page 17 Reducing Emissions, Increasing Efficiency, Maximizing Profits Install Electric Starters p What is the Problem? u Pressurized gas used to start engines is exhausted to atmosphere p Partner Solution u Replacing starter expansion turbine with electric motor starter p Methane Savings u Based on one engine starter, ten start-ups per year and methane leakage through gas shut-off valve p Applicability u All sectors of the gas industry u Requires access to power supply Methane Savings 1,350 Mcf/yr Project Economics Project Cost $1,000 - $10,000 Annual O&M Costs < $100 Payback 1- 3 yrs

18. Page 18 Reducing Emissions, Increasing Efficiency, Maximizing Profits Install Compressors to Capture Casinghead Gas p What is the Problem? u Casinghead gas vented to atmosphere p Partner Solution u Install compressor to capture casinghead gas and pump to sales line p Methane Savings u Based on 180 Mcf/d associated gas containing 50% methane, 30 HP electric rotary compressor, 100 psig sales line p Applicability u Oil wells that produce significant volume of casinghead gas u Access to electricity for compressor Methane Savings 32,850 Mcf/yr Project Economics Project Cost > $10,000 Annual O&M Costs > $1,000 Payback <1 yrs

19. Page 19 Reducing Emissions, Increasing Efficiency, Maximizing Profits Directed Inspection & Maintenance

20. Page 20 Reducing Emissions, Increasing Efficiency, Maximizing Profits What is the Problem? p Gas leaks are invisible, unregulated and go unnoticed p STAR Partners find that valves, connectors, compressor seals and open-ended lines (OELs) are major sources u 27 Bcf methane emitted per year by reciprocating compressor seals and OELs u OELs contribute half these emissions p Fugitive methane emissions depend on operating practices, equipment age and maintenance

21. Page 21 Reducing Emissions, Increasing Efficiency, Maximizing Profits How Can These Losses Be Reduced? p Implementing a Directed Inspection and Maintenance (DI&M) Program Source: CLEARSTONE ENGINEERING LTD

22. Page 22 Reducing Emissions, Increasing Efficiency, Maximizing Profits What is a DI&M Program? p Implementing a Directed Inspection and Maintenance Program u Voluntaryprogram to identify and fix leaks that are cost-effective to repair u Voluntary program to identify and fix leaks that are cost-effective to repair u Outside of mandatory Leak Detection and Repair (LDAR) u Survey cost will pay out in the first year u Provides valuable data on leakers

23. Page 23 Reducing Emissions, Increasing Efficiency, Maximizing Profits How Do You Implement A DI&M Program? SCREEN and MEASURE leaks ESTIMATE repair cost, fix to a payback criteria PLAN for future DI&M Record savings/REPORT to Gas Star CONDUCT Baseline survey FIX on the spot leaks

24. Page 24 Reducing Emissions, Increasing Efficiency, Maximizing Profits One of the New PROs p Begin Directed Inspection and Maintenance at Remote Facilities u SAVES: 362 Mcf/yr u PAYOUT: < 1 yr p Enables several PROs u Inspect and Repair Compressor Station Blowdown Valve u Use Ultrasound to Identify Leaks u Test and Repair Pressure Safety Valves Bubble test on leaking valve Source: CLEARSTONE ENGINEERING LTD

25. Page 25 Reducing Emissions, Increasing Efficiency, Maximizing Profits Combustion Equipment 9.9% Amine Vents 0.5% Flare Systems 24.4% Non-leaking Components 0.1% NRU Vents 0.3% Storage Tanks 11.8% Leaking Components 53.1% Source: Clearstone Engineering, 2002 Natural Gas Losses by Source

26. Page 26 Reducing Emissions, Increasing Efficiency, Maximizing Profits Control Valves 4.0% Open-Ended Lines 11.1% Other Flow Meters 0.2% Orifice Meters 0.1% Pressure Relief Valves 3.5% Valves 26.0% Blowdowns 0.8% Connectors 24.4% Compressor Seals 23.4% Crankcase Vents 4.2% Pump Seals 1.9% Pressure Regulators 0.4% Source: Clearstone Engineering, 2002 Natural Gas Losses by Equipment Type

27. Page 27 Reducing Emissions, Increasing Efficiency, Maximizing Profits How Much Methane is Emitted?

28. Page 28 Reducing Emissions, Increasing Efficiency, Maximizing Profits How Much Methane is Emitted?

29. Page 29 Reducing Emissions, Increasing Efficiency, Maximizing Profits Screening and Measurement

30. Page 30 Reducing Emissions, Increasing Efficiency, Maximizing Profits Cost-Effective Repairs

31. Page 31 Reducing Emissions, Increasing Efficiency, Maximizing Profits DI&M - Partner Experience p Partner A: leaking cylinder head tightened, which reduced methane emissions from almost 64,000 Mcf/yr to 3,300 Mcf/yr u Repair required 9 man-hours labor and annualized gas savings were approximately 60,700 Mcf/yr. At $3/Mcf, the estimated value of gas saved was $182,100/yr p Partner B: one-inch pressure relief valve emitted almost 36,774 Mcf/yr u Five man-hours labor and $125 materials eliminated leak. The annualized value of gas saved was more than $110,300 at $3/Mcf

32. Page 32 Reducing Emissions, Increasing Efficiency, Maximizing Profits DI&M - Partner Experience p Partner C: blowdown valve leaked almost 14,500 Mcf/yr u Rather than replace expensive valve, the Partner spent just $720 on labor and materials to reduce emissions to ~100 Mcf/yr u Gas saved was approximately 14,400 Mcf/yr, worth $43,200 at $3/Mcf p Partner D: tube fitting leaked 4,121 Mcf/yr u Very quick repair requiring only five minutes reduced leak rate to 10 Mcf/yr u Annualized value of gas saved was ~ $12,300 at $3/Mcf

33. Page 33 Reducing Emissions, Increasing Efficiency, Maximizing Profits Discussion Questions p To what extent are you implementing these opportunities? p Can you suggest other opportunities? p How could these opportunities be improved upon or altered for use in your operation? p What are the barriers (technological, economic, lack of information, regulatory, etc.) that are preventing you from implementing these practices?