Running a tight operation in the oil and natural gas industry involves constant improvements. In some cases, it can mean adding devices to capture vented gas, installing energy controls to improve fuel usage, or changing out pumps with high-efficiency models. As well as enhancing reliability, these improvements can often add up to a lot in terms of greenhouse gas (GHG) emission reductions. Until now, operators have found the work to properly track and quantify these reductions daunting, especially those with many small well sites distributed across different regions.
One company that hopes to change this and help companies track these improvements for carbon credits is Cap-Op Energy, a Calgary-based sustainability firm that provides technology solutions to the energy sector.
“Oil and natural gas energy efficiency generally encompasses a very large number of small but repeatable projects,” says Cooper Robinson, managing director at Cap-Op Energy. “Because they are small, these projects need to be executed and tracked very efficiently in an automated and standard manner to meet cost thresholds. This efficiency must include the verification, registration and monitoring of the associated carbon offset credits.”
Since 2012, Cap-Op Energy has offered an automated data management system called the Distributed Energy Efficiency Project Platform (or DEEPP). By leveraging advanced calculation and reporting algorithms, it enables operators to track numerous distributed energy efficiency projects for carbon credits under current and proposed government carbon-taxation schemes. New for 2017, Cap-Op has introduced the Methane Abatement Project Platform (or MAPP), a data collection, validation, planning and project management tool for distributed methane reduction projects such as low-bleed pneumatic controllers and solar electric pumps.
Robinson says that using automated databases such as MAPP and DEEPP to track many, small energy efficiency projects for offset credit helps companies manage operating and compliance costs. It also incentivizes further improvements, encouraging them to continually reinvest in energy efficiency programs.
So, how does the process work?
Operators start by taking an inventory of their different small emissions sources using a handheld smartphone or laptop and the MAPP-Inventory reporting tool. The collected information is automatically synced from the field through cloud computing to a company’s head office. Company staff can then use the data to plan and execute energy efficiency projects using the geospatial project management module called MAPP-Campaign. Once the improvements are completed, field staff again input data and DEEPP automatically calculates the emission reductions. This data can be used to support carbon credits, which are then verified according to government-approved protocols.
In Alberta, for example, if regulated emitters do not meet greenhouse gas emission requirements, they can meet their compliance obligations by either purchasing offset credits from other companies or by paying $30 a tonne of CO2 equivalent to the provincial emissions management fund. Credits must be created using protocols approved by the Alberta government.
“Producers can use DEEPP data and calculations to generate compliance-grade carbon offsets. These offsets can be sold to other companies, or used toward the cost of meeting their own emission reduction obligations,” Robinson says. According to Robinson, the inspiration behind the technology started about six years ago when executives at Cap-Op Energy realized the scale of the many small emission reduction projects that were often not being documented and claimed for credit by operators.
“With DEEPP, we’ve designed a very effective approach to guide organizations in quantifying their emission reductions and generating credits. We’ve shown companies that they can save money by doing the right thing.”Cooper Robinson, Cap-Op Energy
“In one case, a producer calculated that they had left millions on the table as a result of not being able to properly claim emissions reductions for possible offsets. That got us asking whether we could bring together best practices from upstream emission reductions and best practices from data management to create a solution.”
Robinson says that since then Petroleum Technology Alliance Canada (PTAC), an industry-funded innovation incubator that supports market-driven technologies and cross-industry collaboration, has been involved at every step of DEEPP’s development. “They’ve not only helped us to bootstrap the development of the software platform, but they’ve been crucial in connecting us to industry.”
In 2012, Cap-Op Energy launched DEEPP, by verifying 20,000 tonnes of carbon credits with project support from PTAC and the National Research Council’s Industrial Research Assistance Program. Later, through PTAC meetings, Cap-Op Energy executives engaged a group of companies, including ConocoPhillips Canada, Cenovus Energy and Husky Energy, to become early adopters of the technology.
Since then, Robinson says the system has been used successfully by operators to track over 1,000 methane abatement and energy efficiency projects across Alberta. And by measuring and documenting the associated GHG benefits, they’ve been able to quantify and register more than 250,000 tonnes of carbon offset credits. With the current carbon levy on large emitters standing at $30 per tonne, under Alberta’s offset system, the value to companies in compliance savings is over $7 million.
Robinson predicts that, with federal government plans to further reduce methane emissions in the energy sector, industry interest in DEEPP will rapidly increase over the next several years.
“With DEEPP, we’ve designed a very effective approach to guide organizations in quantifying their emission reductions and generating credits. We’ve shown companies that they can save money by doing the right thing.”