They disagree on Kyoto, but the Alberta and federal governments and the petroleum industry are working together on a new project that promises to save millions of dollars in energy costs while cutting greenhouse gases.
The $5-million initiative is aimed at improving energy efficiency and operational processes in Alberta’s upstream petroleum industry – the producers of oil, gas, heavy oil and oilsands.
Oil and gas companies are participating voluntarily regardless of what happens with the Kyoto treaty on climate change, says Joe Lukacs, president and CEO of CETAC-WEST, which is leading the initiative.
“It makes good business sense to do this,” he said. “The driving force is higher (production) capacity, lower operating costs and lower energy costs.”
CETAC, or the Canadian Environmental Technology Advancement Corp., is a not-for-profit organization with a Western Canadian office in Calgary. Its mandate is to bring new technologies to industry to address environmental problems.
Provincial and federal government agencies have committed about $2 million to kick-start the new initiative, with another $3 million expected to come from the oil and gas industry.
The first stage involves doing pilot audits of energy and operational efficiencies at some of Alberta’s more than 600 natural gas-processing plants, to determine the potential for improvements.
Results of the first audit, done at a typical mid-sized sour-gas plant, are very encouraging, Lukacs said. “Early indications are that the improvements are very significant, and that there is a lot of opportunity.”
The audit, of BP Canada Energy’s West Pembina sour-gas plant near Drayton Valley, identified more than 25 different opportunities for improving the facility’s energy use, equipment and processing operations.
BP does periodic energy and operating efficiency surveys of all its global facilities, says Skip Desaulniers, the company’s upstream energy performance consultant.
However, these surveys aren’t as wide-ranging as the week-long audit by five specialized companies carried out under the CETAC-led initiative, he said.
“To bring experts like this in and do detailed investigations is value-added and beneficial.”
Lukacs said the auditing procedure is key to the project, because the audit is systematic and integrated. This means each major component in the gas plant is tested for energy efficiency and operational performance, and each component is compared with another to produce the best possible performance for the overall facility.
For BP’s gas plant, if all 25 improvement opportunities were acted on, the facility could save up to nine megawatts of energy, including fuel-gas usage and electricity. That amounts to 23 per cent of the total energy the plant currently uses in processing all of its natural gas.
At the same time, the plant could also reduce its annual greenhouse gas emissions by one-third, or up to 33,000 tonnes a year.
Desaulniers said that BP has already implemented some of the energy-saving and performance-enhancing ideas, such as running the boiler system more efficiently to use less natural gas.
This improvement alone could potentially save $600,000 a year in reduced fuel-gas usage, while cutting annual greenhouse gas emissions by 6,500 tonnes, according to the audit.
Desaulniers said that based on running the boiler system the new way, BP expects its actual savings on fuel-gas will amount to about 60 per cent of the potential savings identified by the audit.
However, the money saved will easily pay back the approximate $100,000 cost of the audit by the end of this year, he noted. And upgrading the boiler system’s controls would likely achieve the rest of the savings, he added.
BP intends to move quickly on implementing seven to nine of the 25 improvement opportunities in the plant, especially where costs are relatively low and benefits high.
Other opportunities will require more study of costs versus the benefits and whether the modifications can be incorporated into the 18-year-old plant.
BP is participating in the initiative because one of the company’s major objectives is to reduce greenhouse gas emissions, Desaulniers said.
BP has already surpassed the target required under the Kyoto Accord, by reducing emissions in its global operations to 10 per cent below 1990 levels. The company has pledged to keep its emissions at this level while still increasing its oil and gas production.
Lukacs said two more pilot audits are under way, one at Nexen’s Balzac gas plant north of Calgary and the other at Husky Energy’s Ram River gas plant south of Rocky Mountain House.
Don Colley, an associate at CETAC-WEST, says pilot audits at six to 10 different facilities will be done over 12 to 24 months.
The initiative includes coming up with standard tools for measuring a facility’s energy and operational efficiencies, Colley said.
This would allow operators to compare reliable information on each plant’s energy consumption, sulphur dioxide emissions, amount of flaring, water usage and other performance indicators.
Another part of the initiative will be to demonstrate the use of at least 10 new technologies in audited plants between mid-2003 and the end of 2005.
The ultimate plan is to involve all players and facilities in the upstream petroleum industry, including gas-gathering pipeline networks, small to large gas plants, and massive oilsands and heavy oil operations. “I have no doubt in my mind that once we have the pilot audits done and demonstrate the results . . . this will go through the industry in a big way,” Lukacs said.
