When it comes to tackling the greenhouse gas challenge in Canada’s oil and natural gas sector, reducing methane emissions may not generate the media headlines the same as mega-project undertakings like hydrogen or carbon capture. Yet it’s just as critical.
Cutting Methane Emissions
About 44 per cent of the country’s methane emissions come from upstream oil and gas facilities. Cutting these industry emissions not only improves environmental performance: it saves operating costs. And this opportunity has never been as important as in today’s economy, with added pressure on producers to invest capital dollars strategically. Not to mention the fact the clock is ticking as operators work to meet federal and Alberta government regulations to reduce methane emissions by 45 per cent by 2025.
How to Reduce Methane Emissions?
Experts like Soheil Asgarpour, who studies technology developments in the oilpatch, say the industry is making solid progress and steadily closing in on the 2025 target.
“Things are moving in the right direction. Already, just through technologies developed through PTAC, the industry has built enough technology capacity to reduce methane emissions by more than 35 per cent, and that’s improving,” says Asgarpour, who heads up Petroleum Technology Alliance Canada (PTAC), a Calgary-based non-profit focused on hydrocarbon cleantech and innovation. In this case, Asgarpour is referring to PTAC’s latest estimate of collective capacity to reduce methane based on an increasing number of proven, field-tested technologies developed through PTAC’s consortia.
Research and Development
To create this capacity, Asgarpour says the industry has invested substantially in research and development (R&D), just through PTAC’s own planned activities. Much of this effort is focused on finding technologies that will enable operators to reduce methane emissions better and cheaper.
“Industry wants to not only reduce methane emissions but find technologies to reduce operating costs,” Asgarpour explains.
Helping industry do this is a growing number of tech startups offering improvements to processes, equipment and technology. A directory, published in February this year by PTAC and Global Affairs Canada, lists nearly 60 Western Canadian companies providing a variety of methane detection and reduction products and services to oil and gas producers whose aim is to penetrate global markets.
Reducing Methane Emissions and Staying Profitable
“These are Canadian entrepreneurs that have developed innovative solutions to address methane emissions in the local market. They are exporting technologies and services to improve profitability in oil and gas production while reducing methane emissions,” Asgarpour says.
One of those is Calgary-based LCO Technologies. The company has invented a high-efficiency drive system that requires a fraction of traditional solar power and allows companies to eliminate methane emissions from chemical injection pumps and pneumatic instruments.
Another Calgary company, Questor Technology, offers an innovative combustor that collects and converts methane gas into less intensive impacts like carbon dioxide (CO2), water vapor and heat.
NEXT Compression in Rocky View County, Alberta, has developed a vapor recovery compression technology to help gas plants and refineries reduce or eliminate fugitive methane emissions.
And other companies are working on solutions at earlier stages of development.
Innovation to Reduce Methane Emissions
Calgary-based Linear Motion Technologies, for instance, has created a zero-emission electric valve actuator to replace pneumatic devices (natural gas-powered equipment used to control valves and pumps). The actuator uses an expandable metal alloy to duplicate the action of pneumatic equipment, while eliminating all associated methane releases. Front-end design of the device is complete, and the technology is moving to commercialization.
Helping to support this innovation is PTAC, which acts as a gathering place for producers, technology providers, regulators, policy makers and other partners to collaborate and advance new technologies. PTAC’s goal is to increase industry’s technology capacity to reduce methane emissions by 45 per cent at a cost of less than $5 per tonne of CO2 equivalent, significantly below current CO2 reduction costs.
“Our vision is that by next year the industry will have enough collective technology capacity to reach the 2025 target, in time to give operators several years to implement different methodologies,” Asgarpour says.
With this in mind, PTAC is working hard to keep the innovation ball rolling.
Sharing Technologies to Reduce Emissions
It’s actively sharing learnings and best practices through industry-led groups like the Clean Resource Innovation Network (CRIN). Together they’ve created an innovation ecosystem—the Methane Emissions Reduction Network—to connect technology developers, organizations and investors to support new market-related R&D projects to reduce methane emissions.
In partnership with Energy Efficiency Alberta, Alberta Innovates, CRIN and others, it’s also facilitating the Methane Consortium and third-party validation programs to help technology developers demonstrate equipment capabilities. With the help of government funding, the program covers up to 75 per cent of the cost of installation and equipment, enabling demonstration projects that give producers first-hand experience with the technologies.
“By giving producers first-hand experience, our goal is to increase uptake of this equipment in the industry,” Asgarpour says.
And two years ago, PTAC established the Canadian Emissions Reduction Innovation Consortium (CanERIC), a methane testing facility group that tests near-commercial tech solutions. Through CanERIC, 14 large Canadian producers and 16 universities and research centres have dedicated testing facilities worth more than $1 billion to conduct lab and field tests on new technologies. Already 18 technologies to detect and reduce methane have been approved or in process of being field tested and commercialized.
Thanks to these and other industry initiatives, Asgarpour says the sector’s overall technology capacity is steadily improving and on pace to meet the 2025 target. It’s an effort that’s being backed by recent government commitments.
Methane Reduction Investments
In April 2020, the federal government announced a $750 million emissions reduction fund aimed at helping industry to continue progress toward reducing methane emissions. In 2020, PTAC received more than $10 million from industry and public funding agencies to support technology development, demonstration and deployment to improve methane emission management.
These investments are certain to generate new innovations, new solutions and new opportunities as the industry maintains its drive to reduce methane emissions cost-effectively.
According to International Energy Agency (IEA) estimates and analysis by PTAC, 11 BCF a day of methane is lost from global oil and gas operations. This equates to approximately $30 billion in lost product each year. New technologies, such as those being developed here in Canada, could be used to reduce these emissions or turn them into saleable product.
Canada is the Global Leader in Methane Detection
“Canada is the global leader in methane detection and mitigation technologies. Many of these home-grown technologies can be used globally to reduce methane emissions,” Asgarpour says.
This potential is likely to grow even further as PTAC sets its sights on the next milestone—ultimately helping Canada’s oil and gas sector to increase its technology capacity to reduce methane emissions by 90 per cent by 2030. Asgarpour is optimistic this, too, can be reached.
“Producers are committed to addressing methane. Government has acted like a partner providing financial incentives. And Canadian technology providers are global leaders. When we put all these things together—intention, commitment and capability—we are there. The key is to push to reduce the technology costs even further for more industry action to happen.”