Emissions Management Opportunities

We take waste gas emissions and convert

them into revenue, while keeping you in

compliance.

Wasting resources and most importantly additional revenue!

• 530 tons per year VOC Emissions

• 55 MSCFD x $4 / MSCF x 2000 BTU= $132,000 revenue per year

• Project Cost: $100,000 (VRU, VRT, VCU and install estimate)

• PAYOUT 9 Months!!!!!!

• Knowledge on the Regulations and how it effects you

• Solutions to help get in and stay in front of the Regulation

• Add additional revenue to your companies bottom line? Profit Center

• Where to get Help…..Make this Painless

US oil production hits 25-year high: DEC 04, 2013

• Domestic crude oil production in September hit the highest monthly output since 1998, according to the U.S. Energy Information Administration (EIA).

• Oil production yielded 6.5 million barrels per day in September, EIA said. Daily production increased by 900,000 barrels daily compared with last September.

WHY IT MATTERS THAT WE GET IT RIGHT

October, 2012 the International Energy Agency projects North American oil production to overtake Saudi Arabia by 2020

WHY IT MATTERS THAT WE GET IT RIGHT

Concerns about air impacts in new and existing areas have led to increased monitoring and studies

The question is, what are these studies telling us?

WHY IT MATTERS THAT WE GET IT RIGHT

• Methane leakage rate from natural gas production is unclear, but became clearer very recently!

• EPA 2013 estimates leakage ~ 1.65% of total production; but this is about 204% ↑ from EPA’s pre-2010 estimates

• API/ANGA estimates methane emissions 50% ↓ than EPA 2011 estimates (robust data set)

• Various academic studies - ~3 % to 9%

• REAL WORLD FIELD DATA

Control Requirements:Colorado Statewide

• Tank standards: New and existing condensate tanks emitting 20 tons per year or more of Volatile Organic Compounds (VOC) required to control emissions by 95 percent.

Odors (Rule 805)

General. Oil and gas facilitiesand equipment shall be operated insuch a manner that odors and dustdo not constitute a nuisance orhazard to public welfare.

NSPS OOOO Storage Vessel Update

• Proposal Publication: April 12, 2013

• Draft Final Rule Posted by EPA August 5, 2013

• Direct Final AdoptionSeptember 23, 201378 FR 58416-58448

EPA Amends Definition of Storage Vessel Affected Facility • A single storage vessel located in the oil and

natural gas production segment, natural gas processing segment or natural gas transmission and storage segment and has the potential for VOC emissions equal to or greater than 6 tpy taking into account requirements under a legally and practically enforceable limit in an operating permit or by other mechanism.

Threshold based on potential to emit VOCs - 6 tons per year or more

Daily equivalents could be as low as:– 33 pounds emission– About 1 mcf emission– 1 barrel of condensate produced – 20 barrels of oil produced – 2000 barrels of water with 1% oil carryover processed

Applicability Date

• Same as current rule = August 23, 2011• Replacement storage vessel is considered

a new source and an affected facility if it has PTE* of 6 tpy or more and is put into service after August 23, 2011

Applicability Groups

• 3 Groups based on construction date, modification date, and PTE*: • Not an Affected Facility• Group1 • Group 2

Group 1

Group 2

Not An Affected Facility

Determination of Affected Facility

• Each storage tank or vessel • Date of installation, reconstruction,

modification– Prior to Aug 23, 2011 (not affected)– Aug 23, 2011 to April 12, 2013 (Group 1)– After April 12, 2013 (Group 2)

Affected Facility PTE Determination

• Each liquid type (crude, condensate, intermediate hydrocarbons, produce water)

• Site-specific / representative constituent analysis

• Site-specific actual maximum average daily throughput during the 30-days prior to Group 1 or 2 deadline

Affected Facility PTE Determination

• Accepted emission calculation methods for flash, working, breathing losses

• Capture effectiveness• Control effectiveness• Alternate Operating Scenarios• Planned maintenance, start-ups &

shutdowns

• VRUs are an acceptable method of routing of emissions back to the process. We really consider them part of the process, rather than an add-on control. If the storage vessel's potential to emit (PTE) is less than 6 tpy (and this is considering any enforceable permit the operator may have) then the tank is not subject.

Group 1• Storage vessels constructed or modified

between August 23, 2011 and April 12, 2013• PTE of 6 tpy or greater • Initial determination by October 15, 2013• Initial notification by

January 15, 2014• Control required by

April 15, 2015

Group 2

• Constructed or modified after April 12, 2013• PTE of 6 tpy or greater • Applicability determination and control

by April 15, 2014 or 60 days after startup, whichever is later

Emission Limitations

• Proper capture • 95% control

– 40 CFR 60.18 (flares)– Vapor combustors– Vapor recovery units (Process unit…not

a control device)

Once In – Always In

• Storage vessel affected facilities that have decreased emissions below the 6 tpy threshold remain affected facilities

Alternative Compliance

• Sustained uncontrolled emissions less than 4 tpy for 12-mo (confirm every month)

• Option to remove controls• Remain affected facilities (records,

monitoring, etc.)• If increase emissions to 4 tpy or more,

must achieve 95% control– 30 days or– Immediately on handling liquids if re-frack well

More Changes to Come

• Reconsidering monitoring and testing requirements by end of 2014.

• Temporary monitoring and testing while reconsideration is ongoing

• EPA is considering requiring a more robust compliance certification process for enclosed combustors

• EPA guidance –auto-ignite flares

Drivers:

FLIR GasFinder camera/ FlyoversRealization that existing inventories understated

Vent gas controversy in the Barnett Shale (Benzene)

Public more aware than ever

Not always the AnswerIF YOU CAN MAKE MONEY

• We agree that it is better to recover resources than to burn them. (However, by law, if someone meets the 95 percent control requirement, we cannot specify how they must meet it. In other cases, where we cannot set a numerical limit, we can set work practice or equipment standards, but there are specific criteria we must meet in order to do so.)

Welcome to Mordor, North Dakota

A Barrel of Crude Oil is Worth $164,000 – The Human Labor Equivalent of a Barrel of Oil

A single barrel of oil there is the energy equivalent of 23,000 human labor hours. This amounts to 12 years (40 hours per week)

WHAT GETS SEEN, GETS MEASURED

WHAT GETS MEASURED, GETS CONTROLLED

WHAT GETS CONTROLLED, CAN MAKE YOU MONEY

Site wide emissionsFailure to Control

Emissions

GAS COMING OUT OF SOLUTION

Division now issuing Immediate Notice of Violation for visible emissions from a flare and/or open thief hatch.

“The Division has determined that improperly secured thief hatches, visible emissions from a flare, and audible emissions from a thief hatch or PRV are violations of Regulation No. 7. The Division has determined that the minimum fine for an open thief hatch, visible emissions from a flare or audible emissions from a thief hatch or PRV will be $15,000 per day. The duration of each such violation will be at least one day, unless evidence gathered by the Division and/or provided by the source proves otherwise.” (emphasis in original).

DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENTAir Quality Control Commission; REGULATION NUMBER 7 ; CONTROL OF OZONE VIA OZONE PRECURSORS

4 Key Elements

• IQR Site (Emission) Surveys• Vapor Recovery Unit, Vapor Recovery Tower and Vapor Combustor Unit Designs

• Tank Battery Evaluation & Repairs• Aftermarket Support

• 3 Phase separation – as pressure is reduced on the liquid, heavier hydrocarbon gases are released.

• Methane versus ethane, butane & propane• Higher levels of benzene & H2S• Heavier than air, so exposure to

employees and community is higher• Higher BTU, so more valuable

• 2,000 to 3,000 BTU vs. 1,000 BTU typical pipeline gas

• Sells for 2.5X normal NYMEX gas prices

• Analogy is compressing steam versus air• Heavier, wetter gas stream to compress• Liquids fall out in piping from tanks• Dew point can cause the gas to return to

liquid form at higher discharge pressures (based on compression ratios)

• H2S and CO2 (often with water vapor) cause higher levels of corrosion

• Volume of gas spikes & drops during separator dumps; and over life of battery

• Low pressure system must NEVER pull in oxygen into the pipeline

Lessons LearnedVAPOR RECOVERY SYSTEMS MUST

HAVE:

• VOLUME MEASUREMENT

• EXTENDED GAS ANALYSIS

• ENGINEERED DESIGN

Site Survey (IQR)IdentifyQuantifyRectify

Infrared Cameras (FLIR GF-Series) areused for gas leak detection and site surveys.

GasFind Infrared Camera

The cameras image can berecorded and stored, aiding inenvironmental and regulatorycompliance.

GasFind Infrared Camera

Normal Photo of TankPhoto taken at the same

time with the GasFindInfrared Camera

GasFind Infrared Camera

Turbine Meter technologyis used to accuratelymeasure tank vapors.Vent stacks from 2” to 12”in diameter have beenaccurately measured.

The IQR team will provide a complete report documenting all emission sources.

Report includes: • Direct 24 hour measurement of tank

emissions • Component count and documentation • VOC, GHG, HAP calculations • VRU, VCU or VRT design • Engineering solutions defining cost, best gas

capture method and pay back economics

Vapor Recovery Units (NG or Electric VRU)

Vapor Recovery Towers (VRT)Vapor Combustor Units (VCU)

HY-BON / EDI’s Vent Gas Management Program is the industry’s first TOTAL SOLUTIONS APPROACH to address vented emissions from oil, condensate and tank produced water batteries.

• IQR – real design data• Best in class equipment – designed for vapor recovery, highest DRE

combustors• Engineering expertise to assist in optimum battery design to insure no

oxygen ingress (VRT) and optimum gas capture or destruction• Directed inspection and maintenance program to repair thief hatches and

relief valves• Supervision/provision of roustabout crews for installation available in some

regions• Start-up / commissioning – ongoing field and after market support / service

Bio-Filters for Oil Production Tanks and Waste Water Storage Tanks

The Bio-Filter works on the same absorption principle as the smaller plunger pump and compressor counter parts.

These filters are much larger and are filled with the same stripping agent to reduce VOC’s and GHG Emissions

Bio-Filters for Oil Production Tanks and Waste Water Storage Tanks

The Bio-Filter installed as shown here does not compromise the integrity or safety of the storage tanks.

The Bio-Filter canister can be a 4 inch thread connection ,Victaulic or Flanged connection . Installation of the filter will be installed or supervised by HY-BON personnel.

Connection

Safety

Vent gas will follow the least path of resistance and we are using this theory to flow the gas through the Bio-Filter.

In order for an applicant to claim 95% capture efficiency for a VRU the applicant must satisfy

the following basic design requirements:

• Is the VRU designed to capture vapor?• Is the compressor selected suitable for wet gas?• Is the system capable of handling swings in flow rate?• Is the system capable of handling swings in inlet pressure?• Is there sensing equipment which enables the applicant to know

that the VRU is capturing vapor(s) at peak intervals?• Can the system handle sour gas?

Vapor Recovery is NOT standard compression

• Atmospheric pressure at suction• Very wet, high BTU gas• Large variation in flow volumes

• VRUs are an acceptable method of routing of emissions back to the process. We really consider them part of the process, rather than an add-on control. If the storage vessel's potential to emit (PTE) is less than 4 tpy (and this is considering any enforceable permit the operator may have) then the tank is not subject.

From EPA

VRU's are engineered and designed for versatility,reliability and maximum run times. The VRU'sdesigns incorporate a combined 175 years of VRUexperience, resulting in rugged and proven vaporcapture.

Vapor Recovery Units (VRU’s)

Vapor Recovery Towers

Benefits:• Captures flash vapors without

contaminating the captured gas with air.

• Opportunity to maximize vapor capture, while reducing flash in storage tanks.

• Vapor Recovery Tower could potentially remove storage tanks from Quad “O” reporting.

Vapor Recovery Tower (VRT)

Pressure vessels designed to operate in excess of 30 PSIG and without emissions to the atmosphere ARE EXEMPT from Quad O Reporting

Vapor Recovery Tower

Instead of breaking out and venting from the storage tanks.

Storage Tank

Benefits:• 99% DRE (Destruction Removal

Efficiency)• Quad “O” tested and certified• Stainless steel design• Completely Enclosed Combustion• Eliminate Pilot Gas operates on Process

Gas ONLY

Vapor Combustor Unit (VCU)

• AB-20 rated for 20MCFD (based on a BTU value of 2200)

• AB-100 rated for 100MCFD (based on BTU value of 2200)

• Custom designs for higher flow rates (Emergency Combustors etc.)

• Electric or Solar Powered• Electronic ignition • Data logging

Direct Inspection & Maintenance (DI&M)

DI&M Production Facility Service

Our DI&M teams are OEM certified to repair Enardo & Jaycothief hatches and relief valves

On a program basis, we can also offer roustabout services for tank and piping repair, installation or modification

Use of the FLIR technology helps to identify issues and insure quality data.

A quality maintenance program will reduce cost and reduce emissions.

Tank Hatches• For best results, we typically set the pressure springs at 6 oz and the vacuum springs

at .4 oz– Should be set 2 to 3 ounces higher than the relief valves– Insure gasket integrity and proper sealing (Enardo / Jayco / Chinese mfgrs) – Refer to individual manufacturers recommendations

Relief Valves• For best results, we typically set at 4 ounces

– Only come with 1 oz off the shelf; must purchase the 3 ounce weights separately and install – Can be set 8 to 10 ounces depending on location– Refer to individual manufacturers recommendations

Gas Blanket• Use the cleanest, driest gas on location

– Typically off fuel gas line (preferred) or separator – Can be pulled from discharge line of VRU (past the check valve)– 1” line with regulating valve (typically 5 psig to 25 psig) with a motor valve (on/off set at

approximately 2.5 ounces – determined by location)

Well Produ

ction

1 to 2 PSIG

HY‐BON VCU

Direct Measure or E&P Tanks 

Resulting Emissions:

HY‐BON VRT

HY‐BON VRU

25 to 45 PSIG

HY‐BON Engineering ‐ GOLD Standard Solution

Sales LineGas To Sales

Economic Payback

6.65Months

Operational Data Qty Project Installed Cost $145,400.00Flow Volume MSCFD 100 IQR Field Survey Cost $1,600Operating Days 350 UNIT SELECTION Op Range PSIBTU of GAS  2100 1 HB‐NK100‐40‐36D 60‐120 200 41,900Gas Price $3.57 1 HY‐BON(VRT) 5 ‐ 75 1 ‐ 2 20,500

1 HY‐BON  Combustor (SM) .7MTF 4 oz 9,500Annualized Revenue $262,395.00 0 NONE 0 0 0

Install Cost % 100% Installation Cost 71,900

XYZ Energy Vent Gas Management Recommendations

Program Approach on 30 Sites

**Est Total Survey Total # of Total Gas $ per day Instal Installed Cost Avg Program

Sites mcfd @ $4 per mcf Gas $ per year Solution Cost Qty Total Cost Costs Costs$1,550 ea Cost

Tier 3 Sites 6 460 $1,840 $671,600 VRU - NK 100 $41,097 6 $246,582 $86,304 $332,886 $9,300 $342,186

Tier 4 Sites 20 469 $1,876 $684,740 VRU - NK 60 $33,255 20 $665,100 $232,785 $897,885 $31,000 $928,885

Tier 5 Sites 3 11 $0 $0 BioFilters* $6,600 3 $19,800 $19,800 $4,650 $24,450

Under 25 tons 1 1 $1,550 $1,550

Totals 30 929 mcfd $1,356,340 per year 29 $931,482 $319,089 $1,250,571 $46,500 $1,297,071 (Captured Gas)

$113,028 per month Tier 1 Site Over 300 mCase  by Case  des ignTier 2 Site 120-300 mQ225 VRUTier 3 Site 60-120 mNK100 VRU Payback Analysis: < 12 monthsTier 4 Site 5-60 mcfdNK60 VRUTier 5 Site 2 - 5 mcfdBioFilter (Not including OPEX)

• Carpenters Rule – measure twice, cut once– Fully understand your gas volumes, pressures & design options /

minimum 24 hours tank tests– Good, accurate gas analysis FROM the TANKS– Insure the packager and the package are suitable for capturing

extremely low pressure, wet gas streams from that field / basin• Involve the field in the overall system design, from piping to tank

configurations & requirements• Insure a system is in place for ongoing monitoring of gas volumes

being captured, and a documented maintenance program • Review field and mgmt incentive programs to insure goals are

aligned with desired outcomes

Keys to Success

“TOTAL SOLUTIONS APPROACH”

Using Standardized VRU Designs Engineered to cost effectively capture the gas analysis from your field or basin with maximum run times with the RIGHT PARTNER

WHAT GETS SEEN, GETS MEASURED

WHAT GETS MEASURED, GETS CONTROLLED

WHAT GETS CONTROLLED, CAN MAKE YOU MONEY

2404 Commerce DriveMidland, TX 79703Phone: (432) 697-2292Fax: (432) 697-2310www.hy-bon.com

100 Ayers Blvd.Belpre, OH 45714Phone: (740) 401-4000Fax: (740) 401-4005www.ediplungerlift.com