1. Marine Hydrocarbon Seep Capture
Donald Bren School of Environmental Science & Management
Marine Hydrocarbon Seep Capture
Feasibility and Potential Impacts Santa Barbara, California
1. Seeps title
Welcome!
My name is Misty Gonzales and to my are: {gesture to members} [[members introduce themselves: Ali Ger, Farah Shamszadeh, and Erin Mayberry.]]
On your drive here today, how many of you may have noticed the offshore platforms?
They are out there drilling for oil and gas, or hydrocarbons, in the Santa Barbara Channel.
But what a lot of people don’t realize is that we are located next to the world’s most spectacular natural marine hydrocarbon seeps.

2. What are “Seeps?” 2. finger point
These oil and gas seeps are located just off shore of the UCSB campus in 60 to 300 feet of water.
For thousands of years the seepage has been escaping through fault lines and traveling upward about one half mile from the underground reservoirs.
It then rises in small bubbles through sea-floor vents to the ocean surface as seen in this picture.

3. Seep Environment biogeochemistry & ecology
Seeps release between 80,000 to 200,000 m3 of gas per day
Mostly methane with trace amounts of toxics
Most toxics and hydrocarbons disperse and/or biodegrade
Bacteria metabolize seep hydrocarbons
3. Biogeochem
The Coal Oil Point seeps release between 80,000 to 200, 000 cubic meters of gas per day.
The gas is mostly methane with trace amounts of toxic hydrocarbons.
Because most of the toxics and hydrocarbons disperse and/or biodegrade readily in the water column, the toxicity decreases as you move away from the seeps.
However, the impacts of the seeps on the overall marine environment are not known, but believed to be negligible.
The abundant hydrocarbons at the sea floor also provide organic enrichment.
Bacteria in the sediments metabolize the hydrocarbons and causes a bottom-up increase in biomass through the food chain.

4. Seep Environment air quality
Primary component is methane
Contributes to global warming
Seep gas contains reactive organic gases (ROGs)
Ozone (O3) is a serious health concern
The primary component of the seep gas is methane, which is a greenhouse gas that contributes to global warming.
We estimate that the seepage accounts for between to 0.004% of total methane flux to atmosphere globally.
This equates to about twice the amount of energy currently consumed by the UCSB campus.
Seep gas also contains reactive organic gases, or ROGs.
ROGs react with oxides of nitrogen, or NOx, in the presence of sunlight to form ground-level ozone, which is a main component of smog.
There are many health hazards associated with ozone such as asthma and other respiratory problems.
ROG + NOX hv O3

5. Significance
Capturing natural seep hydrocarbons might reduce local air pollution
Recent CA energy crisis renewed interest in capturing this seepage as a potential “green” source of natural gas
Our two main research motivations are
First, that capturing the seep gas might improve local air quality,
And second, in light of the recent California energy crisis, the natural gas can be sold and used as a ‘green’ source of energy.

6. Seep Tents? 6. seep tent picture
So how exactly could we capture the seep gas?
In 1982 ARCO Oil & Gas Company installed 2 seep tents to capture the oil and gas.
The footprint of the original design was 100 feet by 100 feet, capturing only a small percentage of the total seep flux.
Although we assume that it will have the same footprint area, the new seep tent design concept is not steel and concrete like the old design.
Instead, the structures will be lighter and made of a cloth-like material such as Kevlar,
Sit off of the sea floor, and will be tethered with minimal anchoring.
For the purpose of this study, we assume that new seep tents will only capture gas and not oil.
Source:

7. Research Approach
Interdisciplinary approach to evaluate a potential seep tent project’s
Impacts on water quality and marine ecology
Effects on air quality
Regulatory obstacles and requirements
Economic costs and benefits
7. research approach
In order to analyze the various components, we take an interdisciplinary approach to estimate a potential seep tent project’s:
Impacts on water quality and marine ecology,
Effects on air quality,
Regulatory obstacles and requirements,
And the Economic costs and benefits of installing additional seep tents.

8. Seep Flux Varies in Space & Time
8. Flux map/graph
The larger map image represents the Coal Oil Point Seeps and shows the trend for increased seepage along the fault lines as shown here in red and orange.
We assume that areas of higher seepage, are optimal tent locations.
However, the seep flux varies over both space and time.
We statically determined a function, shown in this smaller graphic illustration, to account for the spatial variability of the seepage.
Our results suggest that each seep tent will capture less gas on the margin.
In addition, to account for the decrease in seepage over time, we used historical seep capture data to statically calculate an average rate of decline of 7.4% per year.

9. Environmental Impact marine impacts
Impacts on soft bottom sediments
Recovery from disturbance is quick
Tent installation
Short-term: One-time impacts to seafloor communities
Long-term: Undetectable impacts
Pipeline
Short/Long-term: Possible ecosystem level impacts if piping is not placed sufficiently far from critical habitats (kelp beds)
9. marine impacts
In looking at the impacts to the marine environment caused by installing new seep tents, our results suggest that because the seeps are found on soft bottom sediments with relatively low biomass and species diversity, the effects will be minimal because recovery from disturbance is quick.
Given the new tent design concepts, our results also indicate that seep tent installation will have:
One-time short-term impacts on the seafloor communities with undetectable long-term water quality and ecosystem effects.
In addition, our results indicate that the pipeline would have a greater marine impact than the seep tents, causing possible ecosystem-level effects if the piping is placed too close to critical habitats such as kelp beds.
Overall, the impact on the marine ecology is not well characterized due to a lack of ecosystem-level studies to better understand marine interactions.
Therefore, these Impacts may be underestimated.

10. Environmental Impact ozone production
Magnitude of seep contribution to ozone formation varies depending on:
Climate
Levels of ROGs & NOx
10. ozone production
In order for us to determine the impact of the project on air quality, it is important to understand the possible atmospheric conditions that create ozone.
The amount of ozone produced in Santa Barbara is a function of: the climatic conditions, the levels of ROGs and NOx, and the large spatial and temporal variability of these components.
We consider 3 different atmospheric regimes:
The first is an ROG-limited regime in which ozone production is regulated by ROGs. In this environment, capturing seep ROGs will reduce the amount of ozone produced.
The second is a NOx-limited regime in which ozone production is regulated by NOx. In this environment, ozone is not produced by additional ROGs. Therefore, ROGs released from the seeps will not contribute to ozone formation.
Finally, the third regime is co-limited, where both NOx and ROGs regulate ozone production. Thus capturing seep ROGs will have some impact on ozone reduction.

11. Environmental Impact ozone production model
Relates seep gas emissions to ozone formation (reactivity)
Estimates the change in ozone associated with seep gas capture
 11. ozone production model
We use a simple ozone production model that relates ROGs to the amount of ozone that will be produced by each different reactive organic gas.
We then use this model to estimate the change in ozone associated with seep gas capture.
The ozone production model assumes an ROG –limited environment, which maximizes the amount of ozone produced in an ROG-limited regime, and assumes that additional ozone will NOT be produced in a NOx-limited regime.
In order to estimate a co-limited regime, we assume that it produces half of that in an ROG-limited regime.

12. Seep Gas Composition & Contribution to Ozone Production
Volume (%)
12. Seep gas emission and ozone production
This graph illustrates the different gases emitted from the seep field and their reactivity in producing ozone.
The volume of each gas is graphed in white and the reactivity of each gas is graphed in purple.
We see in white that most of the seep gas is composed of methane and ethane. Due to their low reactivity (almost zero for methane), they are no longer considered reactive organic gases by the EPA. However, because of their magnitude in the seep gas composition, we include them in determining ozone production for the purpose of this study.
We also see that although there is only a very small percent of the other ROGs coming from the seeps, they are much more reactive.
For comparison, the reactivity of urban sources is .28, over twice the highest reactivity of seep gas.
Other sources of ROGs range to a reactivity of 0.7
The overall contribution of seep gases to ozone formation is a function of both the volume and reactivity of each gas.

13. Environmental Impact ozone production model
Estimates the change in ozone associated with seep gas capture
Results
Seeps account for 5.1% of SB ozone
1st seep tent reduces 0.8 to 0.4% of County ozone annually
13. ozone production model results
We used the ozone production model to estimate the reduction in ozone associated with seep gas capture.
In an ROG-limited environment, the model estimates that the Seeps account for about 5% of ozone produced annually. In contrast, vegetation produces about 50 % and urban sources about 40 %.
We our results also estimate that the installation of 1 seep tent will reduce ozone production 0 .8% annually in an ROG-limited environment and 0.4% annually in a co-limited environment, when averaged over 20 years.
These results are used to value the health benefits from reduced ozone.
Erin Mayberry will now present the regulatory obstacles & requirements and the economic costs & benefits of a potential seep tent project.

14. Regulatory Requirements processing facility
Current regulatory obstacles limit development or use of onshore gas processing facility
Measure A96 requires county voter approval of onshore infrastructure for offshore projects
Coastal Act: new facilities not developed unless existing facilities used at maximum capacity
Existing facility: Ellwood Oil and Gas Processing Facility currently under-utilized, but designated as non-conforming land use
Thank you, Misty!
The next component of our research is determining the regulatory requirements for a seep tents project. A primary concern is the need for an onshore facility to process the captured seep gas.
Currently, several regulatory obstacles limit development or use of onshore gas processing facility
A county measure requires voter approval on onshore infrastructure for offshore development projects and would make the project dependent on the voters’ approval of processing facility
The Coastal Act mandates that new facilities will not be developed unless existing facilities are used at their maximum capacity
Most likely existing facility would be the Ellwood Oil and Gas Processing Facility because
The gas from the ARCO tents is processed there, and
It is the closest onshore support facility to the seep field
The Ellwood facility is currently under-utilized, but designated as non-conforming land use, making it unlikely that the facility would accept additional gas for processing
Overall, finding a gas processing facility proves to be a major regulatory obstacle to installing new seep tents.

15. Regulatory Requirements emission reduction credits
Credit worth $4,000/ton ROGs reduced
Unlikely for 2 reasons:
Difficult to prove tents would permanently reduce ROGs
Seeps are natural source of ROGs
Credits for seep tents would be an exception
Another important regulatory issue is whether federally issued emission reduction credits would be acquired.
The 1982 ARCO project received similar credits, and used them to offset future oil drilling. It was said that the ARCO tents would not have been profitable from gas sales alone, and that the credits were an important factor in the project’s success.
Today credits would be worth $5,000 per 1.2 tons ROGs reduced, but it is unlikely that they would be issued for 2 reasons:
First, it would be difficult to prove that the tents would permanently reduce ROGs due to the seeps’ spatial and temporal variability mentioned by Misty
Second, the seeps are natural source of ROGs and therefore, an exception would have to be made to issue credits for a project that reduced seep emissions

16. Cost-Benefit Analysis approach
Compare costs of seep tents to gas sales revenue and health benefits
Integrated model:
Gas price forecast
Project cost estimates
Ozone reduction
Health benefit or emission reduction credits
The final component of our research question is determining the costs and benefits of installing new seep tents
The purpose of this research is to guide regulators in project decisions, thus our approach is to compare the costs of seep tents to the revenue from gas sales and the estimated health benefits.
To make this comparison we design an integrated analytical model that includes
forecasted natural gas prices
Estimated project costs
The value of reduced ozone in terms of either the health benefit or emission reduction credits
Importantly, we take 2 views in evaluating a seep tents project: that of an entrepreneur and that of a policymaker
The Entrepreneur needs to know project’s financial feasibility
while the Policymaker also considers value of improved air quality
The light blue box shows the calculation of these values. Both include the revenues from gas sales less the project costs, but the social value adds the value of health benefits while the profit includes emission reduction credits.
A key point is that the Credits internalize, or represent, the same external benefit of better health from improved air quality. Thus only the health benefit OR the credits can be included in each value since adding both would double-count the same benefit.
Profit = Gas Sales Revenue - Costs + Credits
Social Value = Gas Sales Revenue - Costs + Health Benefit

17. Cost-Benefit Analysis natural gas price forecast
Predict natural gas prices to determine project revenues
Best forecast is $2.45 per 1000 cubic feet (MCF)
The first component in the integrated model is a forecast of future natural gas prices for the 20-year life of the project so we are able to calculate project revenues
This graph shows
the historical gas prices, shown in dark blue – note the high spike in
An optimistic forecast in pink
A scarcity driven forecast in the purple, upward-sloping line, and
A conservative prediction in yellow
This conservative forecast is our best estimate, at an average annual price of $2.45 per thousand cubic feet, or MCF

18. Cost-Benefit Analysis project costs
Capital & design
Piping
Maintenance
The second component in the cost-benefit analysis is the project’s costs.
We assumed Capital and design costs, shown in this figure, that are:
For 1-10 tents an average cost scale of $3-$1.5 million per tent, and
For tents, a constant marginal cost $1.5 million
We also assume that Piping will cost $1 million per mile to Ellwood (approx. 4 miles)
With an additional 100 ft of piping for each add’l tent
Maintenance costs for the tents will be $100,000 per tent per year for the 20 year life of the project

19. Cost-Benefit Analysis health benefit valuation
Monetary value of improved health from ozone reduction
Benefits-transfer approach
Best estimate = $2.1 million
Large effect on project decision
Uncertainty in ozone reduction amount, health improvement, valuation theory
The second component of the cost benefit analysis is the value of ozone reduction in terms of either health benefits or emission reduction credits.
To determine the health benefit value we calculate the Monetary value of improved health from ozone reduction
We use a benefits transfer approach, Based on the EPA’s cost-benefit analysis of the Clean Air Act standards
This means that we use S.B. ozone and population data along with hospital data from other cities to estimate benefit values for S.B.
Our best estimate of the health benefits is $2.1 million for the 1st tent averaged over the 20 year life of the project.
This parameter has a large effect on the final project decision, yet
there is uncertainty in each step of the benefit valuation
As misty mentioned, it is difficult to measure changes in ozone production
As well, the health improvement associated with that small reduction is hard to quantify
Finally, there is some uncertainty in the valuation theory
As mentioned earlier, emission reduction credits can also be included in the model, though it is unlikely they would be issued

20. Cost-Benefit Analysis Model most likely scenario
In the cost benefit analysis model, we define a Most likely project scenario, which is based on the best available data
This table shows several important parameters of the many included in the model.
The Gas Sales Scenario is Conservative, at $2.45/MCF, generated from an ARIMA Time Series Model
The Health Benefit Scenario is an Intermediate valuation from a Benefits-Transfer Approach
The Air Regime is Co-limited, determined from an Ozone Production Model
Emission Reduction Credits are Not included, based on the judgment of the air pollution control district

21. Cost-Benefit Analysis Model most likely scenario
This graph depicts the Most likely scenario,
Showing the health benefits in yellow—note that they are always positive
The project’s social value in dark blue, and
The profit in pink
Note that both of these values are negative for any number of tents, meaning that it is not practical to install seep tents

22. Cost-Benefit Analysis Model scenarios
Beyond the most likely scenario, we would also like to show you 3 alternate scenarios as examples of the model’s important parameters.
This table lists
a description of each scenario,
the number of seep tents that would be optimal under that scenario,
Both from a private, or entrepreneur’s viewpoint, and
a social or policy viewpoint
The revenues less costs from this scenario
The value of emission reduction credits, if included
The resulting project profit
The value of health benefits
The resulting social value of the project
Note that the net revenues plus credits sums to the project profit, and the net revenues plus health benefits sums to the social value, as described earlier in this presentation
In the 1st scenario, gas pricing is set to be high instead of conservative, at a price of approximately $6 dollars per MCF.
Under this scenario the optimal number of tents to install is one from both viewpoints with a profit of $100,000 and social value of $2.2 million
In the 2nd scenario, the same health benefit is valued 10 times more highly, at $20 million dollars
As all parameters are held at their most likely values except for the health benefits, so the profit is still negative, as it was in the most likely scenario
The social decision is much different, now, though. With a higher valuation of the health benefits, it is optimal to install 2 tents because the $20 million in benefits outweighs the project losses of $7.5 million
Notice that the value is positive to society, but negative to a private entrepreneur
The 3rd scenario models the issuance of emission reduction credits for a project. This case gives the opposite result than the one I just described in that the value to the private entrepreneur is positive while the value to society is a loss.
Again all parameters are held at their most likely values other than the inclusion of emission reduction credits.
For the amount of ROGs reduced by the most likely project, the credits have a value of $40 million dollars. This means that even though net revenues are almost a loss of $10 million dollars, the project still earns $30 million in profit.
Note that, as I mentioned earlier, the credits capture the same benefit of the health valuation, and therefore they should be about the same value, right?
Well, if you compare the 2 in this example, the credits are worth $40 million, while the health benefits are valued at $2.6 million. This is a very large difference, and points out that the credits could be over-valuing the benefit that they represent. This is a very important finding of our research.
Profit = Gas Sales Revenue - Costs + Credits
Social Value = Gas Sales Revenue - Costs + Health Benefit

23. Cost-Benefit Analysis Results
Under likely project conditions, installing new seep tents NOT practical from social or entrepreneurial viewpoint
Following that analysis, the results of our cost benefit analysis are that Under likely project conditions, installing new seep tents is NOT practical from either a social or entrepreneurial viewpoint
This is because from a Business’ point of view the project is not attractive, unless the unlikely conditions occur where either
Emission reduction credits are issued, or
High natural gas prices are sustained
From Society’s point of view the costs to private firm outweigh society’s benefit, unless
The health benefits are valued higher than we consider appropriate
and so overall the project is not worth doing.

24. Recommendations further research
More precise and complete research into
Chemistry of the Santa Barbara airshed
Marine ecology of the seep field
Use of Santa Barbara County hospital data to derive the exact relationship between illness and ozone
Based on these results, we have several recommendations, the first of which are for further research.
We recommend More precise and complete research into
The Chemistry of the Santa Barbara airshed to determine the relationship between the seep ROGs and the amount of ozone produced, and
The Marine ecology of the seep field because no ecosystem-level studies have been conducted
We also suggest the
Use of Santa Barbara County hospital data to derive the exact relationship between illness and ozone in place of data from other cites to make the health valuation more accurate for Santa Barbara

25. Recommendations policy
Verify precise amount of ozone reduced by seep tents
Revise permit and credit conditions
Institute a socially responsible value for credits
Compare cost effectiveness
We also recommend four points for a policymaker to consider
First, he or she should Verify the precise amount of ozone reduced by seep tents to accurately determine health benefits and credits
Second, Revise the permit and credit conditions to account for the seeps’ spatial and temporal variability, as described earlier by Misty
Third, Institute a socially responsible value for credits that reflects the health benefits (in other words avoid the “double counting” of credits and health benefits that I explained)
And finally, Compare the cost effectiveness of seep tents to other methods of abating ground-level ozone to reach a cost-effective decision

26. Acknowledgements Advisors: Christopher Costello and Natalie Mahowald
Mel Willis (Ph.D. student advisor)
Peter Cantle (SBCAPCD)
Bruce Luyendyk, Jordan Clark, Libe Washburn, James Boles (UCSB Hydrocarbon Seeps Research Group)
Tom Murphy, Doug Allard, Patricia Holden, Mike Edwards, Steve Sterner, Michelle Pasini, Jim Fredrickson, Sally Holbrook
This project would not have been possible without help from the agencies and individuals listed on this slide. We would especially like to thank our advisors Christopher Costello and Natalie Mahowald.
We would now be happy to answer questions regarding our presentation.