Upstream crude oil analysis

with OPGEE

Chris Malins, Sebastian Galarza

European Commission Workshop, 15 April

Introduction

Several studies have looked at comparative upstream fossil fuel emissions, e.g.:

JRC Well-to-Wheels GREET

GHGenius McCann & Associates (2001)

ER/ICCT (2010) Jacobs (2009, 2012)

Tiax (2009) NETL (2009)

IHS CERA (2010) (review)

These have been based on reported data or on proprietary models

Studies show a significant difference in GHG intensity for different pathways

Stanford University has developed an open source upstream model for California Air Resources Board (CARB)

CARB has introduced reporting by MCON of upstream GHG intensity under the LCFS

Slide 2

Jacobs results (2009)

Slide 3

Coverage: limited number of crudes/pathways

Inputs: clearly referenced

Modelling equations: proprietary

Energy Redefined results (2010)

Slide 4

Coverage: large number of fields (~3000)

Inputs: proprietary

Modelling equations: proprietary

Previous results by country

Slide 5

The need for a new model (OPGEE)

For regulatory purposes, a new model is required More transparency is needed compared to

previous private models

More rigor is needed compared to previous public models

Want to be able to calculate emissions for all crudes of interest

Aim is to generate reliable estimates using a relatively small number of data inputs Lessen effort required while still providing

accurate measurement

6

Oil production greenhouse gas emissions

estimator (OPGEE)

An open-source fully public LCA tool for the estimation of GHG emissions from oil production operations

Engineering-based bottom-up modeling of production, processing, storage and transport

Flaring or venting emissions based on measured rates or NOAA averages (satellite data)

Natural bitumen (oil sands) production module based on GHGenius – less engineering-based detail than the description of conventional production

Kerogen (oil shale) not yet modeled

7

What does an “estimator” mean?

OPGEE has been purposely called an

“estimator”

The question OPGEE aims to answer:

“Given available information, what is the best

estimate of GHG emissions from a given oil and gas

project?”

The question OPGEE (or any modeling

approach) cannot answer:

“What are the exact emissions from this crude?”

8

Modeling goals for OPGEE

Improve the state of the art in crude oil GHG modeling in 5 ways:

1. Build a rigorous, engineering-based model of GHG emissions from oil production operations

2. Use modular construction to provide maximum accuracy and flexibility

3. Use public data where possible

4. Document sources for every equation, parameter, and input assumption

5. Ensure that model is free to access, use, and modify by any interested party

9

Model scope

Includes all oil operations upstream of refinery gate Exploration, drilling and development Production and lifting Separation and surface processing Waste treatment and disposal Maintenance Shipping and transport

Generally, only model emissions sources > 0.01 g/MJ Major emissions sources include:

10

Lifting

Flaring

Venting

Fugitives

Steam injection

Gas injection

Water treatment

Gas treatment

Transport to refinery

OPGEE Relevant LCFS Timeline

Legend

PublicMeetings PresentationstoCARBBoard PublicWorkshops OPGEERelatedMeetings/Workshops LCFSMilestones AdvisoryPanelMeetings

LCFSExpertAdvisoryPanel(April-Oct2011)

1stPublicConsulta ononLCFS(Sept.13)

CARBBoardPresenta ons

onLCFSRegula on(April23)

LCFSSustainabilityWorkgrouptodiscussthedevelopmentofsustainabilityprovisionsfortheLCFSasdirectedbytheBoard

Resolu on09-31.(March2010-July2012)

CrudeOilScreeningWorkgroupMee ngs(March-Sept.2010)

PublicWorkshoptopresentthebeta-versionofOPGEEandsolicitinputfromstakeholders

ontheoilproduc onmethods

(March19)

PublicWorkshoptopresentforpublicreviewv1.0Dra VersionAoftheOPGEE,

suppor ngdocumenta onforthemodel,and

preliminaryes matesofcarbonintensityvaluesforcrudesuppliedtoCalifornia

refineriesin2010(July12)

1stLCFSRegulatoryAmendmentsWorkshopto

DiscussProposedLowCarbonFuel

Standard(LCFS)Regulatory

RevisionsandOPGEEModelRevisions(March5)

2ndLCFSRegulatory

AmendmentsWorkshop(Sept.14)

3rdLCFSRegulatory

AmendmentsWorkshop(Oct.14)

Execu veOrderS-1-07enactstheLCFSonJan.192007

Preliminaryinjunc ononLCFSenforcementisissuedbytheUSDistrictCourtfor

theEasternDistrictofCaliforniaonDec.292011

Preliminaryinjunc ononLCFS

enforcementisli edon

April232012

1stLCFSRegulatory

AmendmentsWorkshop(July22)

LCFSBoardMee ngstoadoptCaliforniaAverageApproach(Dec15&162011)

2007 2008 2009 2010 2011 2012 2013

OPGEEScopingPlanRelease(Nov.15)

Slide 11

Use of OPGEE in California LCFS

From 2013, companies required to report carbon intensity by

‘Marketable Crude Oil Name’ based on lookup tables

Reporting will be used to determine average emissions of

California crude slate in the ‘California average’ approach to

accounting for crude oil

Slide 12

California average methodology

Slide 13

California example draft values (March

2013)

Slide 14

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Ang Aze Brazil Canada Iraq Kuw Nigeria Russia Saudi Arabia UAE Cal ND Venezuela

Constructing a baseline

Slide 15

Collecting data

Slide 16

Using OPGEE in EU regulation?

Could be used in a California-like approach Minimal regulatory burden

Limited impetus for emissions savings

Could be used in full reporting and accounting scheme Requires extensive data reporting

Including monitoring and reporting of flaring and venting

May require additional modules Full engineering module for bitumen

Module for kerogen

Module for fracking

Other important processes?

Incentives for emissions savings, but also opportunities to shuffle

Slide 17

Conclusions

OPGEE: possibility of much higher

resolution on upstream emissions

California: using OPGEE for reporting

in the ‘California average’ approach

Significant data challenges

Slide 18