The pressure faced by oil and gas companies from Environmental, Social, and Governance (ESG) movements is increasing and is inarguably being felt across all sectors of the energy value chain. A significant portion of the pressure is aimed at addressing emissions. While there are a variety of sources of emissions, approximately 47% come from fugitive emissions and venting.
So, what are fugitive emissions? Fugitive emissions are emissions that aren’t caught by a capture system, which can be susceptible to equipment leaks, process venting, evaporation losses, disposal of waste gas streams (e.g., by venting or flaring), and accidents and equipment failures. These emissions contribute to the industry’s release of greenhouse gasses which has been linked as the primary driver of climate change. With increasing regulation around emissions, industry players are being forced to be conscious of the environmental impact of their operations.
While these are a large source of the energy industry’s emissions, there are a variety of preventative measures and technologies that can be applied to minimize the release of these fugitive gases. We discuss three strategies below.
1) Installation, Preventative Maintenance & Repair
Appropriately installing equipment, maintaining its integrity, and repairing or replacing faulty equipment are critical to eliminating fugitive emissions. Fugitive emissions occur at all stages in the hydrocarbon value chain. At the well, gases can escape via the casing during operations or even after a well has been completed through the soil. During transportation, gases can escape at valve fittings or even small leaks in pipes.
Similarly, processing facilities contain various pipes, valves, and infrastructure that could house various sources of emissions. Upon installation, the operator should always perform thorough inspection procedures to ensure a proper “leak-free” installation. Even if new valves contain the most up-to-date technologies, nothing can stop fugitive emissions from a faulty installation. Furthermore, implementing a preventative maintenance and monitoring program can help to prevent older infrastructure from leaking.
2) Optical Gas Imaging, Light Detection & Ranging Techniques
Monitoring for leaks can help identify small leaks before they become more problematic, and several technologies have enabled companies to do this more effectively. An optical gas imaging camera is considered a highly specialized version of an infrared or thermal imaging camera, which allows the user to see various industrial gases that would otherwise be invisible to the naked eye. In the event gases begin to leak from the operators’ systems, the user will be able to identify and fix the source of the emission, thus helping to meet regulatory requirements and reduce product loss.
Similarly, light detection and ranging (“LiDAR”) technologies allow users to visualize the presence of gas leaks. Alternatively, these LiDAR technologies use lasers to create topographic or atmospheric imagery, as opposed to infrared or thermal imaging.
3) Vapor Removal Technologies
A Vapor Recovery Unit (VRU) is a device designed to remove unwanted and harmful vapors and fluid contaminants in crude oil or distillate tanks. Utilizing VRUs allow operators to comply with prevailing emission regulations to prevent the release of toxic pollutants into the environment and to improve the purity of their product. Its primary function is to remove the vapors that collect inside the sealed hydrocarbon tanks. Ultimately, this can reduce emissions as the VRUs recover vent gas that would otherwise be released to the atmosphere unintentionally or flared.
From an energy industry perspective, fugitive emissions are a large concern, especially amid stricter environmental regulations coming from both local, state and federal levels. The aforementioned strategies and technologies can help companies prevent unintentional leaks, and if leaks occur, to discover and remedy them as quickly as possible, thus enabling them to be more profitable and compliant.
About the Author:
Phillip Madden is a consultant in Opportune LLP’s corporate finance group based in Houston. Madden graduated from Texas A&M University with a B.B.A. in accounting with business honors and a Master’s degree in financial management. Also, he has passed the Uniform CPA and expects to be licensed by the summer of 2021.
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