Methane Measurement Studies - Gas/Electric Partnership Measurement Studies.pdfXOM CHK APC SWN SWN...
Transcript of Methane Measurement Studies - Gas/Electric Partnership Measurement Studies.pdfXOM CHK APC SWN SWN...
MethaneMeasurement Studies
Doug JordanDirector
Corporate EnvironmentalPrograms
1
All statements, other than historical facts and financial information, may be deemed to be forward-looking statements within the meaning of Section27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements that addressactivities, outcomes and other matters that should or may occur in the future, including, without limitation, statements regarding the financial position,business strategy, production and reserve growth and other plans and objectives for the company’s future operations, are forward-lookingstatements. Although the company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions,such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-lookingstatements. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of newinformation, future events or otherwise. You should not place undue reliance on forward-looking statements. They are subject to known andunknown risks, uncertainties and other factors that may cause the company’s actual results, performance or achievements to be materially differentfrom any future results, performance or achievements expressed or implied by the forward-looking statements. In addition to any assumptions andother factors referred to specifically in connection with forward-looking statements, these risks, uncertainties and factors include, but are not limitedto: the volatility of commodity prices; access to and cost of capital for operations and capital investments; access to and availability of transportation,processing and refining facilities; success in discovering, developing, producing and estimating reserves including timing concerns and the intent tofocus in specific areas or formations; the impact of regulation, including any increase in taxes, legislation relating to hydraulic fracturing, the climate,accounting and other operational matters; the costs and availability of equipment, services, resources and personnel required to complete thecompany’s operating activities; success in property acquisition or divestiture activities; adverse outcomes in material litigation actions; environmentaland weather risks; increased competition; credit risk relating to the financial strength of the company’s counterparties; electronic, cyber or physicalsecurity attacks, including acts of war or terrorism; and any other factors listed in the reports the company has filed and may file with the Securitiesand Exchange Commission (SEC). For additional information with respect to certain of these and other factors, see the reports filed by the companywith the SEC.
The SEC has generally permitted oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company hasdemonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operatingconditions. We use the terms “estimated ultimate recovery,” “EUR,” “probable,” “possible,” and “non-proven” reserves, reserve “potential” or “upside”or other descriptions of volumes of reserves potentially recoverable through additional drilling or recovery techniques that the SEC’s guidelines mayprohibit us from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves andaccordingly are subject to substantially greater risk of being actually realized by the company.
Forward-Looking Statements
The contents of this presentation are current as of January16, 2015.
Sand Wash Basin – Approx. 380,000 net acresDenver Julesburg Basin – Approx. 302,000 net acresBrown Dense – Approx. 350,000 net acresNew Brunswick – Approx. 2.5 million net acresUndisclosed Ventures – Approx. 685,000 net acres
E
ARK-LA-TEX2013 Reserves: 215 Bcf (3%)2013 Production: 18 Bcf (3%)Net Acres: 152,937 (12/31/13)
A
FAYETTEVILLE SHALE2013 Reserves: 4,795 Bcf (69%)2013 Production: 486 Bcf (74%)Net Acres: 905,684 (12/31/13)
BSOUTHWEST APPALACHIAJuly 2014 Reserves: 2.5 TcfeDec 2014 Production: 370 Mmcfe/dNet Acres: 443,000 (Dec 2014)
C
NORTHEAST APPALACHIA2013 Reserves: 1,963 Bcf (28%)2013 Production: 151 Bcf (23%)Net Acres: 292,446 (12/31/13)
D
RESERVES & PRODUCTION2013 Reserves: 6,976 Bcfe2013 Production: 657 Bcfe2014 Estimated Production: 758-764 Bcfe
2
North American Areas of Operation
E
CD
E
E
NEW VENTURES LATX
CO
OK AR
WV
PA
NB
Notes: Ark-La-Tex acreage excludes 124,220 net acres in the conventional Arkoma Basin operating area that are also within thecompany’s Fayetteville Shale focus area. Reserves as of December 31, 2013 except for Southwest Appalachia, which is July 1, 2014.
A
EXPLORATION
BE
D
Forward-Looking Statement
About Southwestern Energy
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
XOM
CH
KAP
CSW
NSW
ND
VNSW
N BPC
OP
SWN
CO
GBH
PEQ
TC
VXSW
NEC
AR
DS/
AEO
G ARR
RC
SWN
WPX
OXY
CN
XU
PLLI
NE
SWN
TLM
APA
NBL
XEC
QEP SM NFX
PXD
CLR
XCO
MR
OC
XO SD
US Lower 48 Gas Production Sorted by 3Q14 (MMcf/d)
SWN is 4th overall as of 3Q14
3Q13
3Q103Q113Q12
3Q14
3Q093Q08
SWN
SWN
SWN
SWN
SWN
SWN
SWN
• 2013: 6,976 Bcfe of ReservesProduction – 657 BcfeReserve Life – 10.6 Years
• 2014: 70%+ of Capex Allocated toDrilling
• 2008 – 2013:28% Annual Production Growth26% Annual Reserve Growth370% Reserve Replacement(1)
$1.11 per Mcfe F&D Cost(1)
• Strategy built on the Formula: The Right People doing the Right Things, wisely investing the cash flow from theunderlying Assets will create Value +.
(1) Reserve replacement ratio and finding and development costs exclude reserve revisions and capital investments in our sand facility, drilling rig related and ancillary equipment.3
Why the Study’s
• “Greater focus needed onmethane leakage fromnatural gasinfrastructure”,Proceedings of NaturalAcademy of Sciences,“EDF” April 2012
• Other Studies
• GHGRR – Subpart W
4
05
101520
7.9 5.23
17
4 1.31
SWN Methane Measurement StudyParticipation
• Need for more accurate andfactual methane emissionsdata– Limited or no methane
emissions measurements forindustry
– Outdated emissions factors(GRI 1996).
– EPA and NEI estimates varyin order of magnitude due tochanges in assumptions
• Better understanding ofmethane emissions andsources
• Demonstrate that natural gasis natural fuel of choice
02468
1012141618
7.95.23
17
4
1.31
5
Methane Leak/Loss %
Why EDF?
Environmental Defense Fund’s mission is topreserve the natural systems on which all lifedepends. Guided by science and economics,we find practical and lasting solutions to themost serious environmental problems.
OUR GOAL: REDUCE METHANE EMISSIONSacross the entire natural gas supply chain to1% OR LESS of total gas produced by 2020
6
Methane Research – The 16 Studies Series
• Better understand from where and how muchmethane is lost across today’s U.S. natural gassupply chain.
• Collaborative effort involves partnerships with about100 universities, research institutions andcompanies.
• 16 distinct projects that range in their scope fromestimating methane emissions in a givengeographical area or from specific pieces ofequipment across the country.– Bottom up, Top Down and Mobile Monitoring
Measurements– Target to complete reports….2015
7
The Natural Gas Value Chain –Well to Wheels
8
Bottom Up, Mobile, and Top DownMeasurements
9
16 Study Status
Production Sector Studies• (1) Phase 1 Study – University of Texas
– “Measurements of methane emissions at natural gas productionsites in the United States”, Proceedings of National Academy ofScience, September 2013
• (2) Phase 2 Study – University of Texas– “Methane Emissions from Process Equipment at Natural Gas
Production Sites in the United States: Pneumatic Controllers”,Environmental Science & Technology, December 2014
– “Methane Emissions from Process Equipment at Natural GasProduction Sites in the United States: Liquid Unloadings”,Environmental Science & Technology, December 2014
• (3) Production Data Analysis – HARC/EPA– “Assessment of Methane Emissions from Oil and Gas
Production Pads using Mobile Measurements”, EnvironmentalScience & Technology, November 2014
10
16 Study Status
Midstream Sector Studies• (4) Gathering and Processing Sector Study- Colorado State
University– “Measurements of Methane Emissions from Natural Gas
Gathering Facilities and Processing Plants: MeasurementResults”, Environmental Science & Technology, February2014
• (5) Transmission and Storage – Colorado State University– “Methane Emissions from Natural Gas Compressor
Stations in the Transmission and Storage Sector:Measurements and Comparisons with the EPAGreenhouse Gas Reporting Program Protocol “,Environmental Science & Technology, February 2014
• “Model Reports” for Gathering & Processing andTransmission & Storage…..pending
11
16 Studies Status
Local Distribution Studies• (6) Multi-city Local Distribution Study - Washington State University
– Report pending
• (7) Boston Study - Harvard, Boston and Duke universities withAerodyne Research and Atmospheric and Environmental Research– “Methane emissions from natural gas infrastructure and use in the urban
region of Boston, Massachusetts”, PNAS, January 2015• The study found Boston’s methane emissions are more than two times higher than
inventory data suggests, with a yearly average loss rate between 2.1 and 3.3- percent
• (8) Indianapolis Study - Washington State University– Report pending
• (9) Methane Mapping - Colorado State University and Google EarthOutreach
12
16 Study Status
Basin Specific Studies• (10) Flyover study: Denver-Julesburg Basin -
National Oceanic Atmospheric Administration andUniversity of Colorado at Boulder– “A new look at methane and non-methane hydrocarbon
emissions from oil and natural gas operations in theColorado Denver-Julesburg Basin”, Journal ofGeographical Research: Atmospheres, May 2014.
• The study estimated methane emissions that were three timeshigher than estimates derived from EPA data
• (11) Barnett study - Coordinated campaign• (12) Study: Barnett Shale – National Oceanic and
Atmospheric Administration, University of Coloradoat Boulder, University of Michigan
13
16 Study Status
Other Studies• (13) Pump-to-wheels Study - West Virginia
University• (14) Pilot Projects:
– University of Texas-Arlington mobile methane-sensingtechnology (Studies 1, 11, and 12)
– Harvard, Duke and Boston University tower-based sensingsystems (Study 7)
– University of Colorado-Boulder elevated levels of methaneand hydrogen sulfide that provided insights for subsequentoverflight work (No. 10 & No. 11).
• (15) Filling Gaps, Including Super Emitters• (16) Project Synthesis
14
15
“Studies suggest that emissions are dominated by a small fraction of ‘superemitter’ sources at well sites, gas-processing plants, coproduced liquids storage tanks, transmission compressor stations, and distributionsystems.”(Brandt et al, 2014)
(Brandt et al, 2014)
(Allen et al, 2014)
“The emissions from these well pads, representing ∼1% of the total number of wells, account for 4–30% of theobserved regional flux.”(Caulton et al, 2014)
“…the 9% FER scenario appears unlikely high given previous top-down studies…”(Schwietzke et al, 2014)
“…evidence suggests that high leakage rates found in recent studies are unlikely to be representativeof the entire NG industry…”(Brandt et al, 2014)
“Fat-tails” account for the majority of emissions and “high leakage” rates areunrepresentative of national profile.
Study Observation/Results
Production Sector Methane Measurements
16
Phase 1 Completion Flowbacks
• 27 Completion Flowbacks– 18 Reduced Emissions
Completions– 9 “Vented” completions (33%
of total)
• UT Measurements Summary– Range 2 to 800 MCF/event– Average 90 MCF/event
• EPA “factor”– 7,870 MCF/event
17
Phase 1 Chemical Pumps
• 62 Chemical Pumps– Gulf Coast
• 21 measurements• Region Average 28.56 scf/hour
– Midcontinent• 41 measurements• Region Average 2.82 scf/hour
EPA factor and UT average within 10%EPA 13.3 scf/hrUT average 12.2 scf/hr
18
Phase 1 Pneumatic Controllers
• Pneumatic ControllersMeasured:– 305 low and intermittent bleed
devices– 0 high bleed devices
• Measurement Results– Low bleed 270% > EPA
• UT 5.1 scf/hr vs EPA 1.39 scf/hr
– Intermittent 29% > EPA• UT 17.4 scf/hr vs EPA 13.5 scf/hr
Significant geographicalvariability• 1.26 scf/hr to 17.4 scf/hr
19
Phase 1 Equipment Leaks
• Equipment leaks include valves, flanges, connectors,open ended lines and other vented sources.– UT Study Sites
• 489 wells at 146 well sites.• 97 sites with at least one equipment leak• Range 2.1 scf/hr/well to 5.88 scf/hr/well• Average 3.84 scf/hr/well
EPA “factor”• 2.5 scf/hr/well (estimate)
20
Phase 1 – Need for more studies
• Pneumatic Controllers– Significant difference
between EPA factors andUT study observations.
• >29% for intermittent• >270% for low bleed
– Significant geographicalvariability
• 1.26 scfhr to 17.34 scfhr
– Obtain better componentand operations information
• Liquids Unloading– 9 events not adequate to
establish industry estimate
21
Production Phase 1 – UT Results
Source National Inventory Study Observations
CompletionFlowbacks
654 Gg CH4/yr 18 Gg CH4/yr
Chemical Pumps 34 Gg CH4/yr 68 Gg CH4/yrPneumaticControllers
355 Gg CH4/yr 580 Gg CH4/yr
Equipment Leaks 172-211 Gg CH4/yr 291 Gg CH4/yrMeasured Sources 1215-1254 Gg
CH4/yr957 +/- 200 GgCH4/yr
Total Estimate 2,545 Gg CH4/yr 2,300 Gg CH4/yr
Production Sector – Phase 2 - Pneumatics
• 377 unique devices (hi, low, intermittent)• ~400 measurements (what was on site)• Measured both unconventional and
conventional well sites• Modified sampling from Phase 1
– Use of inline flow meter– Modify HiFlow for continuous sampling
23
Production Sector – Phase 2 – LiquidsUnloadings
• Direct measurement of gas volume discharged
24
WellType
Wells with unloadings sampled
USTotal
Appalachia Rockies Gulf Coast Midcontinent
Plunger Auto 25 0 20 1 4
Manual 50 7 29 1 13
Non-Plunger
Manual 32 4 2 14 12
Total 107 11 51 16 29
Production Sector – Phase 2 - Observations
• Pneumatic Controllers• Super Emitters• 20% of controllers account for 96% of the emissions• Study average = 4.9 scfhr ~ EPA Average
EPA underestimates # controllers NEI estimate 355 Gg Methane Study estimate 958 Gg Methane
• Emphasis on controller maintenance
• Liquids Unloadings• Measured emissions per well per year depend most strongly on the number of
venting events that occur per year• For plunger and non-plunger wells, a small subset of wells dominate emissions• 20% of wells account for 72% of emissions• EPA = 270 Gg/year (total)• Study = 270 Gg/year
Gathering and Processing MethaneMeasurement
• Tracer Flux Measurements– 16 Gas Processing Plants– 114 Compressor Stations
• Facility Level Emissions Rateor FLER
– Compressor/Dehydration Facilities• Range 1 scfm to 605 scfm• 85 facilities < 1% leak/loss rate• 19 facilities <0.1% leak/loss rate
– Processing Plants• Range 3 scfm to 524 scfm• Each < 1% leak/loss rate
Storage Tanks Equipment Leaks
– 30% of Gathering facilitiescontribute 80% of totalemissions
– Low emissions and lowthroughput = high leak/lossrate
Transmission & Storage Sector Observations
• Transmission & Storage– Tracer Flux, HiFlow/FLIR, Subpart W Measurements– 37 Transmission Facilities– 8 Storage Facilities– 2 scfm – 880 scfm– Highest emitting 10% of sites (including two superemitters) contributed
50% of the aggregate methane emissions.– Lowest emitting 50% of sites contributed less than 10% of the
aggregate emissions.– Excluding the two super emitters, study-average methane emissions
from compressor housings and non-compressor sources arecomparable to or lower than the corresponding effective emissionfactors used in the EPA greenhouse gas inventory
27
Other Study Observations
• Distribution– Boston Study
• Tower study• The study found Boston’s methane emissions are more than two
times higher than inventory data suggests, with a yearly averageloss rate between 2.1 and 3.3- percent.
• Old lines….leaks• Basin Studies
– Flyover study: Denver-Julesburg Basin• The study estimated methane emissions that were three times
higher than estimates derived from EPA data
28
Common “Theme”
29
“Studies suggest that emissions are dominated by a small fraction of ‘superemitter’sources at well sites, gas-processing plants, coproduced liquids storage tanks,transmission compressor stations, and distribution systems.”(Brandt et al, 2014)
“The emissions from these well pads, representing ∼1% of the total number of wells,account for 4–30% of the observed regional flux.”(Caulton et al, 2014)
“…the 9% FER scenario appears unlikely high given previous top-down studies…”(Schwietzke et al, 2014)
“…evidence suggests that high leakage rates found in recent studies are unlikely tobe representative of the entire NG industry…”(Brandt et al, 2014)
Brandt et al (2014)Em
issi
ons
mag
nitu
de (g
CH
4/yea
r)
103
106
109
1012
1015
0.01 0.1 1.0 10 100 1000Ratio: measured/inventory or measured/EF (unitless)
Less CH4 measuredThan expected
More CH4 measuredThan expected
RATIO < 1 RATIO > 1
Cum
ulat
ive
Perc
enta
ge o
f Met
hane
Allen et al (2013) UT Phase 1Pneumatic Measurements:
“The Fat-Tail”
0%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0% 9% 17% 26% 34% 43% 51% 60% 69% 77% 86% 94%
80% of methaneEmissions from about27% of the sources
Percentage of Pneumatic Devices Measured
% Methane