Exxon Launches Multi-Pronged Approach to Reducing Methane Emissions

ExxonMobil is taking fugitive methane emissions seriously with a program designed to lower the volume of the greenhouse gas that is released from the company’s production and midstream sites across the US.

The program, launched in September, prioritizes actions at US sites operated by the company’s shale-focused subsidiary XTO Energy. The effort includes phasing out high-bleed pneumatic devices, research into new technologies designed to detect and reduce facility emissions, staff training, and a leak detection and repair program.

“We are implementing an enhanced leak detection and repair program across our production and midstream sites to continually reduce methane emissions, and are also evaluating opportunities to upgrade facilities and improve efficiency at both current and future sites,” XTO President Sara Ortwein said in a press release.

The program goes beyond measures required by federal and state laws and represents a substantial move by Exxon — the largest natural gas producer in the US — to set a higher bar for the entire industry.

Plan Details

The multi-pronged approach to reducing methane emissions begins with a focus on the wellhead and associated midstream infrastructure; The leak detection and repair program requirse every XTO division to survey production and midstream sites with optical gas imaging camera technology for leaks. Data collected by these surveys will then analyzed for frequency, trends and patterns with facilities and equipment that are found to be more prone to leaking becoming top repair priorities.

XTO is also starting a three-year plan to phase out the use of 1,250 high-bleed pneumatic devices across its US operations. The valves, which are typically found at older sites, are designed to periodically vent pressure buildup to maintain safety, system integrity and efficient operations. The ones considered ‘high bleed’ vent more often and at higher volume

The practice of addressing the most leak-prone equipment and high-bleed pneumatic devices first suggests that XTO’s program could yield notable improvements early on. That’s because the largest portion of methane emissions appears to come from a small number of sources, in much the same way that a small percentage of older cars is responsible for the largest share of automotive-exhaust pollution, according to a 2014 study published by the University of Texas and the Environmental Defense Fund, with participation from Exxon.

The new program also calls for managing planned events in ways that are designed to reduce the release of methane emissions into the atmosphere. For instance, field personal will now monitor and remain nearby during the manual liquid unloading process at well sites to close off all wellhead vents to the atmosphere. Liquid unloading is a process that involves removing liquid that has collected in equipment tubing and prevents natural gas from flowing up through the well.

In addition, a training effort focused on management approaches to overall fugitive emissions is being launched and will consider topics like pneumatic device integrity, leak detection and repair practices, and the sharing of best practices across the company.

XTO will also continue its practice of using green completions to minimize methane emissions at wells during the completion process by capturing or burning off flowback emissions instead of venting them into the atmosphere. It is also working to minimize the need to burn off or flare this gas by maximizing gas capture via pipeline, although some flaring will still happen at new developments where infrastructure investments are contingent on successful hydrocarbon development.

West Texas and New Mexico

XTO has already begun putting some of these practices to use in prolific fields in West Texas and New Mexico. Last year, the company completed a pilot project in the Midland Basin that tested new low-emission designs that use compressed air instead of natural gas to operate the pneumatic equipment that helps to regulate conditions such as level, flow, pressure and temperature. It said the results demonstrated the feasibility of using similar designs for new and existing central tank batteries to further eliminate methane emissions.

The company is also collaborating with ExxonMobil Upstream Research Company and third-party equipment manufacturers to develop state-of-the-art, low-cost, minimum-emissions equipment that could be used for future developments, particularly in the Delaware Basin. Parent company Exxon is also participating in a methane measurement reconciliation study with the Department of Energy’s National Renewable Energy Laboratory, and supporting research underway at Harvard, the University of Texas Energy Initiative, and Stanford University’s Natural Gas Initiative.

Legal Battles

Exxon’s expanded commitment to the environment comes as the company is facing an environmental legal battle in California. In July 2017, seven coastal communities filed suits in their local Superior Court systems alleging greenhouse gas emissions caused by Exxon and 17 other energy companies contributed to a warming planet, leading to coastal flooding, beach erosion and rising infrastructure costs. New York City followed California’s lead in January by filing its own lawsuit against the oil major and four other fossil fuel companies that seeks billions in damages to fund “climate change resiliency measures that the city needs to implement.”

Exxon’s Vice President of Public and Government Affairs for Suzanne McCarron addressed these global warming concerns in a January post on the company’s Energy Factor blog, saying “We believe the risk of climate change is real and we are committed to being part of the solution. That is why we have invested $8 billion since 2000 on energy efficiency and emissions reduction.”

In the meantime, the effort by these governmental bodies to wring money from the oil supermajor may ultimately be distracting from the bigger, overarching challenge we all face — that of securing energy to power a hungry world while coming up with technological solutions to reduce the risks posed by climate change.

The methane emissions reduction effort represents a step in the right direction for Exxon and serves as the latest indication that momentum to develop more sustainable oilfield practices is building across the industry.

Managing Oilfield Safety Culture for a Growing Workforce

It was not too long ago that layoffs were rampant in the oil patch; however, we are now in the middle of an upturn and the need for additional labor continues to increase. After your company has become accustomed to working with a small force, you may suddenly find yourself bursting at the seams with new (and returning) employees. This is not a time to send them all back to the field. Instead, it’s important to verify that their training is current to support your culture of safety.

Managing oilfield safety in your growing workforce requires a commitment to providing training to team members as needed, as well as ensuring that your policies and procedures are optimized for the sudden increase in demand. Taking the time to strengthen your existing policies and manuals, as well as improving the necessary tracking for safety training which may not be able to support the expanded workforce, are both key to preventing safety disasters. Here are some additional tips to help you manage safety when your employee numbers increase:

Oilfield Safety Culture

Have strong safety goals and values: Make sure your company’s commitment to safety is institutionalized in messaging. Everything you say and represent should communicate that your priorities are: nobody gets hurt, we protect the environment, and safety is our top concern.

Model basic principles: Make sure that you express, in writing and in attitude, the following beliefs:

  • Incidents are preventable;

  • Everyone is responsible for oilfield safety;

  • HSE performance is measured and managed;

  • Management is committed to safety;

  • The company always complies with rules and regulations.

Leadership: Prepare your management team to lead by example, and teach them to monitor their team’s performance, establish best practices for their division (which support those of the company), and emphasize the importance of open communication. Their team members need to know that they can ask any questions and should report any hazard or risk they encounter. Make reporting of any violations, risks, and hazards an expected part of a leader’s job.

SOPs: Provide SOPs to new employees, as well as revised SOPs to current employees. Periodic inspections of company locations help to ensure procedures are followed, and site visits help to create open communication and a culture of accepting changes and suggestions for SOPs by individuals working at the job sites.

Oilfield Safety Skills

Training: Adequate training is perhaps the best way to manage oilfield safety, especially in preventing incidents. Develop a plan to train employees based on job description and working conditions. Provide thorough certification requirements, and provide ample opportunities for team members to add additional certifications. A fully trained workforce is a safer workforce. To maintain a skilled staff, provide for on-site continued training and coaching to improve performance, and be sure to ask for training feedback. It is also essential to have a program in place to automatically notify safety managers on a regular basis of upcoming safety training expirations. This prevents employees with expired safety training from slipping through the cracks and allows for proactive planning of training and coaching.

Equipment: In an industry where large, dangerous, and extensive equipment is used regularly, safety standards must include proper handling of equipment. The following are important parts of an equipment safety plan:

  • A clear maintenance program to prevent breakdowns and accidents;

  • Procedures on dangerous equipment;

  • A quality control program;

  • A tracking system to monitor repairs, replacements and expirations.

Documentation: In this heavily-regulated industry, it is imperative that you record everything; from policy and procedure changes, violations, and training processes, this ensures that not only does your team have access to all crucial information to perform their best, but risk is reduced and improvements can be made based on the data collected. Safety software like Phoenix’s Safety module allows for quick and accurate documentation, as all information is stored on the cloud, providing access to forms and results from any device. Exported reports provide management with evidence of the company’s commitment to oilfield safety success.

Oilfield Safety Reviews

Audits/Reviews: Audits are an important part of a successful safety plan. To tackle the list of audits and reviews important to your team, create a schedule. This provides for adequate time to review assessments, create an improvement plan, and review conditions or employee actions which could be dangerous to health or to the environment. Further, scheduling meetings with department and team managers allows them the opportunity to bring their own assessments for a complete safety picture within each department and enables them to participate in improvements.

Emergency Procedures: Emergencies happen and it is crucial in a growing company to have a written response plan, including identifying team members qualified to respond to incidences (roles, responsibilities, authority). Especially important in a business covering a large geographic area, it is important to indicate available local resources. Finally, to strengthen your company’s culture of safety, have policies and procedure for reporting emergencies to regulatory agencies.

Risk Assessment: Regular assessment of risks helps to identify vulnerabilities, as well as to correct them quickly. Identify and document all risks and potential hazards, and implement procedures with tools to reduce them quickly. A SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) is a proven method to tackle this. Create measures necessary to reduce accident incidences. By monitoring on a continual basis, patterns can be identified and adjustments made to manage (and improve) oilfield safety.

Incident Notification and Investigation procedures: As mentioned above, this is a regulated industry, with multiple agencies requiring a variety of notifications. Having standards for notification and investigations prevents a lack of accurate notifications, and means less scrambling if an investigation is necessary. Recording near-miss incidents also helps to improve compliance.

These steps will help you prepare for the increase of employees you may be experiencing, or are expecting. The sooner you strengthen your oilfield safety processes and procedures, the safer and more productive your team will be. Online safety management software can not only improve your training program, but electronic records (certifications of people and equipment, records of violations, and fillable forms for reporting) reduce human error. It also serves to minimize the time needed to complete reporting and assessments. Once a thorough plan is in place, an annual review of your plan may be all that is necessary to ensure your safety procedures are followed and reliable.

This article is reprinted with permission from Oildex.

Case Study: Learn how M&M Pipeline Services improved compliance with safety testing and management using Phoenix DAS modules.

Environmental Concerns Hinder Plans to Increase Development of US Offshore

The Trump administration’s early January announcement that it planned to open up 90 percent of federal waters to offshore oil and gas development was met by much fanfare, but what ultimately winds up on the final leasing block is likely to be far less than what is on the ambitious draft plan.

“By proposing to open up nearly the entire OCS for potential oil and gas exploration, the United States can advance the goal of moving from aspiring for energy independence to attaining energy dominance,” Vincent DeVito, Counselor for Energy Policy at the US Department of the Interior said in a press release announcing the new draft plan.

But barely a week after the announcement, the plan hit the first in a series of snags when Interior Secretary Ryan Zinke announced the removal of Florida from proposed list of planned lease sales following a conversation with Republican Governor Rick Scott.  Since then, legislators from more states along the eastern and western seaboards have lined up to request exemptions citing concerns about the environment and tourism.

Among the states asking to be left off the draft five-year offshore leasing plan are California, Oregon, Washington, New York, New Jersey and South Carolina. (source) So far, only Alaska and Maine have applauded the plan.

Henry McMaster, the Republican governor of South Carolina, told the press “we cannot afford to take a chance with the beauty, the majesty and the economic value and vitality of our wonderful coastline,” the Post and Courier newspaper reported.

The draft National Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2019-2024 proposed the largest number of lease sales in US history. It called for including 47 potential lease sales – 19 sales off the coast of Alaska, 7 in the Pacific Region, 12 in the Gulf of Mexico, and 9 in the Atlantic Region.

If implemented in its draft form, it would bring unprecedented access to US offshore oil and gas resources at a time when the OCS is already a substantial contributor to US production. The US Energy Information Administration reported that the Gulf of Mexico alone was expected to produce a record 1.7 million barrels per day in 2017.

The blowback to this plan highlights a broader public anxiety about the extraction of oil and gas resources that are essential to powering modern life. It creates a complex conundrum for the oil and gas industry; The public wants affordable energy and the economic stimulus generated by oil and gas production, but it balks at the prospect of drilling for these resources in their own back yards.

This atmosphere of concern highlights the need for the oil and gas industry to emphasize the use of ecologically conscious practices wherever possible. Several majors and independent producers are already heeding this call with the adoption of sustainability practices. Among the companies leading the way are BHP, Chevron, Shell, Statoil and Hess  which each release their own annual sustainability reports.

Adopting safe and environmentally conscious practices are an important part of maintaining the industry’s social license to operate. The ongoing kerfuffle over the draft OCS lease plan shows that even the most industry-friendly White House in recent memory cannot ease public anxieties about the potential for accidents and spills in ecologically sensitive areas. Only the industry can do this by demonstrating a good faith effort to promote sustainable practices.

History Can’t Repeat Itself

Memories of the 2010 Deepwater Horizon oil spill still linger on the minds of many coastal residents. The spill was kicked off by a cascading chain of missteps and equipment malfunctions that led to a blowout at the BP-operated Macondo field in the deepwater Gulf of Mexico. The ensuing explosion caused 11 fatalities and set into motion the largest oil spill in US history.

In response to the spill, the Obama administration overhauled the federal agency responsible for overseeing offshore production and implemented a host of new rules aimed at reducing the potential for another accident.

Today, the Trump administration is quietly working to roll back some of those regulations to bring new investment into the US offshore.

In December, the Bureau of Safety and Environmental Enforcement begin moving forward with a proposal to adjust some of these rules as part of a wider Trump administration effort to reduce undue burden on industry. This signal from regulators indicates that the US government is willing to make compromises in exchange for promises of investment and eventual production royalties.

Regardless, the resistance to new offshore exploration by many coastal states highlights the fact that the public mood has not changed and demonstrating concern for the environment remains a prudent business practice. Doing so will help to ensure that areas that are already open to development stay open and states that favor like more exploration, like Alaska, will be able to see more leasing within their borders.

Offshore, oil, gas, drilling

Petroleum Engineers Play an Important Role in Sustainability

Some people balk at the idea that oil and gas has a role to play in a sustainable future, but the reality on the ground suggests otherwise.

“Supplying energy for the world is a monumental task. There continue to be improvements in renewable energy sources; however, reasonable forecasts of growth in renewables suggest fossil fuels will remain the primary source of the world’s energy for decades to come,” Nathan Meehan, president of the Society of Petroleum Engineers, wrote in an article published by SPE in March 2016.

Even with the increasing adoption of renewable energy resources, Meehan notes that fossil fuels still play an important role in meeting today’s energy needs and using them prudently is the best way to make sure that our generation does not compromise the ability of future generations to meet their own needs.

The drive toward renewables is evident in the US where last year nearly half of utility-scale capacity additions on the power grid came from renewable sources like solar and wind, according to the US Energy Information Administration.

But even with the recent gains, renewables only account for a minority of total US power production and their intermittent nature creates the need for energy storage or backup generation that can be brought online quickly – like natural gas fired power plants – to stabilize the grid. The bulk of heavy lifting in the US power generation sector is still done by natural gas (34%), coal (30%) and nuclear (20%), according to EIA data.

This data suggests that fossil fuels will still be needed for decades to come in the power generation sector, and that’s only the tip of the iceberg. A myriad of other industries count on energy and products derived from oil and natural gas.

Considering this, SPE takes seriously the need to extract these resources sustainably.

Though many people may not realize it, there are many things that petroleum engineers can do to help ensure that oil and gas is part of a sustainable energy solution. Meehan says these areas include:

  • Minimizing methane emissions
  • Reducing or eliminating flaring
  • Supporting energy efficiency and conservation
  • Ensuring wellbore integrity
  • Reducing the surface footprint of wells
  • Eliminating spills
  • Optimizing field development and management

SPE offers its members opportunities to train, share knowledge and advance practices to further these goals.

SPE’s efforts supplement work being done by a number of producers, several of which voluntarily release sustainability reports that highlight their unique measures – like Statoil, Shell, and Hess. To learn more about what petroleum engineers can do, visit SPE’s website or read Meehan’s full article on the subject here.

Meet the First Generation of Nigerian Deepwater Oil Engineers

The deepwater Bonga oil field offshore Nigeria is opening up a unique opportunity to train Nigeria’s first generation of deepwater oil engineers.

One of the skilled Nigerian workers that keeps this complex offshore development running is Dare Famuyide, shift supervisor for Shell Nigeria Exploration Production Company (SNEPCo). When the Bonga field first came online, it was a novel project, Famuyide said.  “We were possibly the first deepwater offshore asset in the Gulf of Guinea.”

Shell’s deepwater Bonga production facility uses one of the world’s largest floating, production, storage and offloading (FPSO) vessels in more than 1,000 meters of water offshore Nigeria. It is 300 meters long and as tall as 12-story building with a deck that spans an area the size of three football fields.

In addition to being a significant revenue earner for the Nigerian economy, the Bonga field has also contributed immensely in developing the deepwater skills of the local workforce, while aiding in the Nigerian government’s aspirations to build truly Nigerian companies that can stand on their own.

Today, 95 percent of Bonga’s core offshore staff is Nigerian.

That workforce also include Prince Nwocha, the first engineer in his family and operations supervisor for SNEPCo at Bonga. Nwocha spends nearly six months of the year deployed at the FPSO, a profession that helps him support his family and also opens up opportunities for his son.

“My son, Justin, likes computation, mathematics, playing with things. And I can see that engineering streak coming out in him,” Nwocha said.

To learn more about the Bonga field, view the video above.

Statoil Makes First Solar Investment, Highlights a Growing Trend

Norwegian oil major Statoil has purchased its very first stake in a solar project, agreeing to pay $25 million to acquire 40% of the 162 MW Apodi solar asset in Brazil. The deal is the latest example of a growing trend of major oil and gas companies taking stakes in renewable energy projects.

“The Apodi asset is a sensible first step into the solar industry and can demonstrate how solar can provide Statoil with scale-able and profitable growth opportunities,” Irene Rummelhoff, executive vice president of New Energy Solutions at Statoil, said in a press release.

Statoil agreed to purchase the project stake from Norwegian independent solar power producer Scatec Solar in October. The purchase price also included a 50% share in the project execution company, which will enable Statoil to participate and the building and operation of more Brazilian solar projects in the future.

“The potential for solar energy in Brazil is substantial and together with Statoil we are increasing our ambitions further in this market. We are bringing into the partnership a strong track record as an integrated independent solar power producer, while Statoil has a strong engagement and experience from Brazil through its other energy activities,” said Scatec Solar Chief Executive Officer Raymond Carlsen.

About the Adopi Solar Project

The Apodi solar project is set to provide electricity for about 160,000 households. Construction of Apodi was set to start in October 2017, with completion expected by the end of 2018. The total capital expenditure budget for the development is estimated at $215 million. Funding for the project is comprised of 65% project financing and a 35% equity contribution. Statoil’s portion of the equity share is estimated at $30 million.

The Apodi solar project is in the Quixeré municipality of the state of Ceará in northeast Brazil. It is fully-permitted with a grid connection and has a 20-year power purchase agreement (PPA) awarded in 2015 at an auction organized by the Brazilian government. The PPA had an inflation adjusted offtake price equivalent to $104 per MWh in 2017.

In recent years, Statoil estimates about 3GW of solar projects have been awarded in Brazil in three consecutive utility scale solar auctions. Another 7GW is planned to be awarded by 2024.

Following the transaction, Statoil will hold a 40% share in the project alongside Scatec Solar (40%) and ApodiPar (20%).

Statoil’s Green Energy Ambitions

Though the Apodi project is Statoil’s first solar venture, it is not the company’s first foray into renewable energy. Since 2012, Statoil has amassed a sizable wind portfolio that includes three UK wind farms, one of which is the world’s first floating offshore wind farm, Hywind Scotland. In 2016, the company also purchased a 50% stake in the Arkona offshore wind farm planned in Germany, which is set to come online in 2019.

Statoil’s wind portfolio is capable of providing power to more than 1 million homes.

“As part of Statoil’s strategy to actively complement our oil and gas portfolio with profitable renewable energy sources, we have so far focused on offshore wind where we have a unique competitive advantage building on over 40 years with oil and gas activities, “Rummelhoff said.

More Supermajors are Investing in Renewables

Statoil is just one of several major oil and gas companies that are making moves into the renewables business. In December 2017 alone, several notable investment in the sector were inked by BP, Royal Dutch Shell and Saudi Aramco.

That month, Saudi Aramco Energy Ventures (SAVE) led a financing round that raised $8 million euros (US$9.6 million) for a German company that is commercializing a new technology for the fabrication of silicon wafers for photovoltaics called NexWafe.

Shell Technology Ventures B.V., the corporate venture capital arm of Royal Dutch Shell, was likewise part of a group of investors that invested a combined $9 million in a Series B equity round for SolarNow, a Dutch company that installs off-grid solar energy systems in East Africa.

Meanwhile, BP paid $200 million for a 43% equity stake in Lightsource, the largest solar development company in Europe that is focused on acquiring, developing and managing large-scale solar projects.

Like Statoil, BP’s move is also part of a concerted effort to invest in renewables. BP has an Alternative Energy Business with interests in onshore wind energy across the US capable of generating 2.3GW, and as well as stakes in Brazilian biofuels plants that produce around 800 million liters of ethanol equivalent per year.

Green Energy is Gaining Steam

These deals comes as technological improvements and lower costs are transforming solar into an attractive power source that can compete with traditional sources of energy in important markets. BP’s Statistical Review of World Energy notes that global installed solar generating capacity more than tripled from 2013 to 2016, rising by more than 30% in 2016 alone.

The growing viability of renewable energy sources is evident across the globe, and the appetite for these projects is increasing globally as countries work to meet commitments made during the Paris Agreement in 2015 amid growing concern about climate change.

Now, the building momentum for these installations has even caught the eye of supermajors like Statoil, indicating that an undeniable wave of change is underway in the way the world thinks about energy.

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