2013 Coal Seam Gas: Estimation & Reporting of Fugitive Greenhouse Gas Emissions

8/13/2019 2013 Coal Seam Gas: Estimation & Reporting of Fugitive Greenhouse Gas Emissions

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Coal Seam Gas: Enhanced Estimation and Reporting of FugitiveGreenhouse Gas Emissions under the National Greenhouse and EnergyReporting (Measurement) Determination

Technical Discussion Paper, April 2013


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NATIONAL GREENHOUSE AND ENERGY REPORTING (MEASUREMENT) DETERMINATION Coal Seam Gas: Technical Discussion Paper

Commonwealth of Australia 2013.

Published by the The Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education:

http://www.climatechange.gov.au/emissions

ISBN: 978-1-925006-17-9 (online) 978-1-925006-16-2 (print)

Copyright notice: Unless otherwise noted, copyright (and any other intellectual property rights, if any) in this publication

is owned by the Commonwealth of Australia.

Disclaimer: While reasonable efforts have been made to ensure that the contents of this publication are factually correct, the

Commonwealth does not accept responsibility for the accuracy or completeness of the content, and shall not be liable for any

loss or damage that may be occasioned directly or indirectly through the use of, or reliance on, the contents of this publication.

DIICCSRTE has released this Discussion Paper to gather feedback from stakeholders on the National Greenhouse and

Energy Reporting Measurement Determination 2008. It does not necessarily reect the views of the Government, or indicate a

commitment to a particular course of action.

This document is available on the Internet at the following address:

www.climatechange.gov.au/

Submissions on the contents of this document should be sent to:[email protected]

April 2013


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1NATIONAL GREENHOUSE AND ENERGY REPORTING (MEASUREMENT) DETERMINATION Coal Seam Gas: Technical Discussion Paper

CONTENTS

Abbreviations 2

1. Introduction 3

2. Coal Seam Gas Production 6

3. Estimation and Reporting of Fugitive Emissions for Coal Seam Gas 7

Outcomes from Consultation 9

4. Proposals for Enhancing CSG Estimation Methods 10

Renement of Methods for the Direct Measurement of Vented Fugitive Emissions Associated

with CSG Well Completions and Workovers 10

Mandating Use of Direct Measurement for Vented Fugitive Emissions from CSG Well

Completions and Workovers with Fracking 12

Transition to the New Measurement Approaches 13

5. Instruction for Submission of Comments 14

6. Annexes 15

7. References 17


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2 NATIONAL GREENHOUSE AND ENERGY REPORTING (MEASUREMENT) DETERMINATION Coal Seam Gas: Technical Discussion Paper

Abbreviations

API American Petroleum Institute

CSG Coal seam gas

CSIRO Commonwealth Scientic and Industrial Research Organisation

DIICCSRTE Department of Industry, Innovation, Climate Change, Science, Research and

Tertiary Education

EF Emission factor

IPCC Intergovernmental Panel on Climate Change

LNG Liqueed natural gas

MRR Mandatory Reporting Rule

NGER National Greenhouse and Energy Reporting

SEWPaC Department of Sustainability, Environment, Water, Population and Communities

UNFCCC United Nations Framework Convention on Climate Change

US EPA United States Environmental Protection Agency

Gases

CH4

Methane

CO2

Carbon dioxide

CO2-e Carbon dioxide equivalent


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proposals are also designed to enhance the transparency,

efciency and effectiveness of national reporting of fugitive

emissions from CSG exploration, production and processing.

Currently the NGER (Measurement) Determination does not

differentiate between the methods used for the estimation of

emissions from conventional gas and methods used for coal

seam gas (CSG) production. Nonetheless, in practice, there

are signicant operational differences between conventional

natural gas and CSG; most notably CSG production

generally involves a higher density of well heads within a well

eld and CSG production may also involve the subterranean

hydraulic fracturing process known as fracking. This latter

aspect is important as there is overseas evidence to suggest

that use of fracking techniques may generate more emissions

than when conventional CSG extraction techniques are used.

The new proposals will seek to address the implications of

the differences between conventional gas and CSG and

to elaborate CSG-specic proposals for the estimation of

fugitive emissions for the rst time.

1. INTRODUCTION

This Discussion Paper presents proposals for the

enhancement of methods used by companies for the

estimation of greenhouse gas emissions during the

exploration and production of coal seam gas.

These proposals will have implications for the estimation of

greenhouse gas emissions reported by companies under

the National Greenhouse and Energy Reporting (NGER) Act

2007(the NGER Act) as well as the determination of their

potential liabilities under carbon pricing arrangements.

Rules for the estimation of emissions by companies are

specied in the NGER (Measurement) Determination 2008

(the NGER (Measurement) Determination). The proposalsin this Discussion Paper effectively represent proposals to

amend this Determination.

Data collected under the proposed enhancements to

the estimation methods of the NGER (Measurement)

Determination will ow through to estimates prepared for the

National Greenhouse Accounts as NGER is a major source

of data for the national accounts. Consequently, the new


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Regulation of CSG for non-greenhouse gas purposesIn addition to regulatory requirements for emissions estimation and reporting through NGER, the extraction and

processing of CSG is subject to a range of Commonwealth, state and local government regulation.

State and territory governments are primarily responsible for land use and natural resource management issues.

Issues concerning land access by mining operations are primarily a matter for state and local governments and are

considered at the project approval stage.

State governments also have primary responsibility for licensing CSG extraction during exploration and production.

Licensing applications are, in general, regulated under a combination of the relevant state water, environment, mining

and petroleum legislation.

State government policies or guidelines relating to the regulation of CSG are in place in Queensland, New South

Wales, Western Australia, Victoria and South Australia.

The Australian Government Minister for the Environment, through the Department of Sustainability, Environment,

Water, Population and Communities (SEWPaC), is responsible for assessing and making decisions on CSG proposals

if those proposals are likely to impact on matters protected under national environment law the Environment

Protection and Biodiversity Conservation Act 1999(EPBC Act). In making decisions under national environment law,

the Minister may take other matters into account, including impacts on water, agricultural land, and economic and

social matters. However, the regulation of these matters is a state responsibility.

SEWPaC has established a dedicated enforcement and compliance unit to ensure Commonwealth conditions are

implemented. In addition to its regulatory role, the SEWPaC is introducing a new science-based framework to provide

certainty for regional communities on CSG and large coal mining developments, jobs and investment, as well as better

protection for water resources.

In December 2011, Commonwealth and state energy and resources Ministers agreed to develop a national

harmonised framework for state regulation of the CSG industry, and announced a work program to deliver this

framework. The work program will address community concern around water management and monitoring, well

integrity and aquifer protection, hydraulic fracturing and chemical use. The work program and public consultation

information has been publicly released and is available on the Standing Council on Energy and Resources website:

http://www.scer.gov.au/meetings/.

On 12th March 2013, the Government announced that amendments to the EPBC Act will be introduced to parliament.

These proposed amendments require federal assessment and approval of CSG and large coal mining developments

which have a signicant impact on a water resource.


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Figure 1:

Potential sources of emissions from CSG activities (Red box lled with cross hatching denotes fugitive emission sources within

scope of Discussion Paper)

In addition, in response to feedback received during the rst

round of the consultation process, the paper also:

3. reports on a DIICCSRTE/CSIRO collaborative project to

collect empirical data from Australian CSG wells tounderpin the development of Australian-specic emission

factors for fugitive leakages from well casings and for

general leaks from production and processing facilities;

and

4. identies fugitive emissions from decommissioned wells

as a source for which methods will be developed over the

next twelve months.

Other emission sub-sources in the production chain of

CSG are not subject to new proposals. This includes the

estimation of fugitive emissions that result from the pipeline

transmission and distribution of CSG; the emissions that

arise from combustion of CSG as a fuel and the liquefaction

of CSG in LNG production. In these instances there are no

CSG-specic attributes to the emission source that would

warrant a method differentiated from methods applied to

emissions from conventional natural gas.

The Department is seeking the views of stakeholders on

the enhancements proposed in this Discussion Paper. It

should be noted that proposals contained in this paper do

not necessarily reect the views of the Government or the

Department, or indicate a commitment to a particular course

of action.

Purpose

This Discussion Paper is part of an ongoing consultation

process that is aimed at improving measurement and

estimation of fugitive emissions those greenhouse gasemissions which concern the release of greenhouse gases

through venting, leakages and aring during the pre-

production, production and processing and transmission and

distribution, of CSG (see Figure 1).

The rst round of public consultation on CSG emissions

estimation methods was held between April and October

2012. Seventeen submissions were received which can be

found at:

www.climatechange.gov.au/government/submissions/closed-

consultations/coal-seam-gas

For this second round of consultations, the proposals

contained in this paper concern:

1. Renements to the direct measurement methodology for

the estimation of vented fugitive emissions from

CSG wells that vent gas during a well workover or well

completion1; and

2. Proposals to make the use of direct measurement

methods for the estimation of these vented emissions

mandatory when fracking techniques have been used.

1 Denitions of well completions and workovers are provided in Annex A.

Preproduction

Exploration

Production and

ProcessingPostproduction

Transmission and

DistributionEnd use

Production

Processing

(including

LNG

liquefaction)

Decommissioned

wells and legacy

emissions

High

pressure gas

pipeline

transmission

Low

pressure gas

distribution

Final consumption

Fugitive

emissions

Fuel

combustion

emissions

Fugitive

emissions

Sources of emissions from coal seam gas activities

Fugitive

emissions

Fuel

combustion

emissions Fugitive

emissions

Fuel

combustion

emissionsFuel

combustion

emissions


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Coal seam gas

CSG refers to methane that is trapped within pores and

fractures in underground coal deposits. Due to high

underground pressures, the gas is usually found in a semi-

liquid state, lining the inside surfaces of the coal matrix. CSG

is chemically similar to conventional natural gas methane

is the main component of both. Other common names for

CSG include coal seam methane, coal bed gas and coal

bed methane. Methane gas can also be released from coal

deposits by coal mining activity, which is known as coal mine

waste gas.

CSG is extracted through wells drilled directly into coalseams. This became possible on a commercial scale since

about the 1990s as a result of advances in drilling technology.

Following extraction, CSG can be provided to residential

and industrial customers through natural gas pipelines or

exported via LNG terminals.

Fracking

Hydraulic fracturing, or fracking, is a technique used to

boost the ow of gas from a new well. Fracking can be used

for CSG. Large quantities of water and sand, together with

certain chemicals, are pumped into a newly drilled well athigh pressure, to create fractures in the underground rock

layers. Gas can then migrate through the fractures, reaching

the well much faster than it would otherwise.

There is some overseas evidence to suggest that fracking

may generate more emissions (with different emissions

proles) than those from conventional CSG extraction and

production due to the high pressure applied during the

fracking process.

Emissions from CSG

Fugitive emissions occur at several stages during the

pre-production, production, supply and use of CSG. Pre-

production fugitive emissions include methane released from

exploration drilling, production testing and well completion.

CSG production activities that result in fugitive emissions

include processing, venting and aring.

Methane is a potent greenhouse gas, with a global warming

potential more than 20 times that of carbon dioxide.

In 2010-11, fugitive emissions from the Australian natural

gas sector, which includes CSG as well as conventional gas,

were estimated to be 10.5 million tonnes of CO2-e, or around

1.9% of Australias National Greenhouse Gas Accounts.

Recent developments in the United States

In 2011, the US Environmental Protection Agency (US EPA)

concluded a review of the reporting rule methodologies

for natural gas systems in the US Mandatory Greenhouse

Gas Reporting Program. This led to the introduction of

new methods for the estimation of fugitive emissions from

gas extraction, including requirements for additional direct

sampling and measurement from wells where hydraulicfracturing is used.

The US national inventory also included new emission factors

for exploration and production gas well activities relating

to shale gas for the rst time in 2011. Additionally, several

assessments of fugitive emissions from shale gas production

have been published recently in the peer-reviewed literature,

with a range of ndings2.

2 More information can be found in DCCEE (2012) and Day et al. (2012).

2. COAL SEAM GAS PRODUCTION


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Operators of CSG wells are required to estimate various

individual sub-sources of fugitive greenhouse gas emissions

specied in the NGER (Measurement) Determination and

as set out in Table 1. These individual sub-sources are

designed to be consistent with the sources identied by the

2006 Intergovernmental Panel on Climate Change (IPCC)

Guidelines3for the preparation of national inventories.

The principle types of fugitive emissions relate to vented

emissions, gas leakages and aring of gas.

The Determination provides a range of possible methods

for use to estimate emissions depending on the sub-source

and reecting the current state of knowledge, measurement

costs and the feasibility of estimation methods. In the case of

vented fugitive emissions, CSG reporters may choose to use

either a specied Method 1 or Method 4 where:

l Method 1 refers to an emission factor approach

based on factors applied for the national inventory; and

l Method 4 refers to the generic direct measurement

approach specied in Part 1.3 of the Determination.

3 The IPCC is the recognised world authority for setting international reporting

and accounting rules for greenhouse gas emissions.

3. ESTIMATION AND REPORTINGOF FUGITIVE EMISSIONS FOR

COAL SEAM GAS

Table 1:

Current NGER (Measurement) Determination activity categories for fugitive emissions for ares, leaks and vents.

Operation

phase

Source

categorySub-category

Venting Flaring Leakage

Method 1 Method 4 Method 1 Method 2 Method 3 Method 1 Method 2

Pre-production Exploration

Well drillingWell testing

Well completions

Section

3.46Part 1.3

Section

3.44

Section

3.45

Section

3.46

Production

and

Processing

Production

and

Processing

Gas well

heads to tie-in

points on gas

transmission

systems,

including:

Gas processing

plants

Well servicing

Gas gathering

Gas processingand associated

waste water

disposal

and acid

gas disposal

activities

Section3.84

Part 1.3Section

3.85Section

3.86Section

3.87Section

3.72Section

3.72

Transportation Natural Gas

TransmissionOutside scope of Discussion Paper

Natural Gas

Distribution


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For the estimation of emissions from gas leaks the

Determination provides Methods 1 and 2, where Method

1 is as above and Method 2 provides equipment-specic

emission factors for use when more detailed equipment

inventories are available for a facility. For the estimation of

emissions from aring, there are three methods available

for the estimation of emissions where the various methods

reect varying amounts of information on the mix of elements

in the gas that has been ared.

Techniques and methods for the estimation of fugitive

emissions have been evolving internationally underpinning

continuous improvement in the methods used in the

NGER (Measurement) Determination. In particular, the

NGER Measurement Determinations treatment of fugitive

emissions was amended in June 2012 to update references

to the American Petroleum Institute (API) Compendium of

Greenhouse Gas Emissions Methodologies for the Oil and

Gas Industryto the 2009 edition.

This update improved methods and emission factors,

including:

l updated emission factors for gas well completions and

workovers for both onshore and offshore wells; and

l the introduction of emission factors for estimating

emissions from drilling mud degassing.

The amendments of July 2012 made available for the rst

time the option for the use of a generic Method 4 for vented

emissions from coal seam gas exploration. The proposals in

this paper build on the July 2012 update.

Figure 2:

Layout of specic methods in the NGER (Measurement) Determination for aring, leakage and venting, with linkages to

sections of API (2009).

Fugitive emissions from CSGPre-production Production/processing

Exploration Production &

processing

Flaring

Vents Vents

Leakage

Flaring

Method 1

Reference to the following sections of API (2009)

Gas treatment processes Section 5.1

Cold process vents Section 5.3

Natural gas blanketed tank emissions Section 5.4.4

Other venting sources gas driven pneumatic devices

Section 5.6.1

Other venting sources gas driven chemical injection

pump Section 5.6.2

Other venting sources Coal seam exploratory drilling,

well testing and mud degassing Section 5.6.3 and 5.6.6

Non-routine activities production related non-routine

emissions Sections 5.7.1 or 5.7.2

Non-routine activities gas processing related non-

routine emissions Sections 5.7.1 or 5.7.3

Method 1

A default EF of 1.2 x 10-3 tonnes CO2-e per

tonne of natural gas production throughput

Method 2

Reference to the following sections of API

(2009)

Crude flashing losses - 5.4.1

Tanks Working/standing losses - 5.4.2

Produced water tank emissions - 5.4.3

Heavy oil & bitumen casing gas vents

5.6.4

Low-pressure gas well casing vents - 5.6.5

Equipment leaks - 6.1.2

Method 1

Uses default emission factors

Method 2

Uses facility CO2 emission factor

Method 3

Uses facility CO2 emission factor usingrelevant standards

Method 4

Direct emission measurement under Part 1.3 of the

Determination

Continuous emission monitoring Division 1.3.2

Periodic emissions monitoring Division 1.3.3


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Outcomes from consultation

The rst round of public consultation on emission estimation

methods for CSG production was held between April and

October 2012.

Common themes to emerge from the public submissions are:

l the need for improved reporting of CSG fugitive

emissions;

l the need to develop Australian specic methods and

emission factors based on measurement approaches

(Method 4) rather than using international or US based

emission factor approaches (Method 1);

l the need to ensure that the NGER (Measurement)

Determination is comprehensive with respect to all steps

in the CSG production process (including post-production,

i.e. well decommissioning);

l the desirability of baseline studies in CSG production

precincts in order to identify emissions associated with

CSG activity separately from emissions from other

sources; and

l interest in a research program involving long term

monitoring.

To help inform the public consultation process, the

Department engaged consulting rm Pitt and Sherry Pty

Ltd to examine international best practice for estimating

greenhouse gas emissions from CSG production in May

2012.

Table 2:

Breakdown of the Vent emission source under Method 1 for the exploration and production and processing phases (as

currently included in the NGER (Measurement) Determination).

Emission Source Activity Type 2009 API Compendium Section

Gas treatment processes Glycol dehydrator emissions

Glycol pumps

Desiccant dehydrators

Other glycol dehydrator alternatives

Acid gas removal/sulf recovery units

CO2venting from sour gas processing

5.1.1

5.1.2

5.1.3

5.1.4

5.1.5

5.1.5

Cold process vents 5.3

Natural gas blanketed tank 5.4.4

Gas driven pneumatic devices Covers large range of equipment EFs 5.6.1

Gas driven chemical injection pumps Covers large range of equipment EFs 5.6.2

Mud degassing Gas entrained and vented from drilling mud while drilling 5.6.3

Coal seam exploratory drilling and

well testing

Gas used in drilling operations. Material balance method only 5.6.6

Non-routine activities, production or

gas processing related

Maintenance and turnaround activities, e.g. blowdowns,

compressor starts, well completions and workovers. Pressure

relief valve releases, mishaps, blowouts, offshore emergency

shutdowns

5.7.1, 5.7.2 and 5.7.3

This review was commissioned in response to recent

developments in the US that prompted debate on appropriate

fugitive emission estimation methods for Australias CSG

production.

The reports key message was the need for enhanced fugitive

emission measurement data for Australian CSG production.

The report noted that strong in-principle arguments can be

advanced for why Australian conditions and practices are

different to the United States and why this might lead to

lower emissions compared to the United States. The report

further noted that actual observations and measurements are

required to test this proposition.

To address one aspect of the issues raised through the

public consultation, the Department is collaborating with

CSIRO Division of Energy Technology (Advanced Coal

Technology) on a joint project to provide data based on eld

measurements, and modelling of methane emissions from a

sample of CSG production facilities in Queensland and New

South Wales. Research ndings are expected to be available

by December 2013.

The primary aims of the project are to:

l make measurements at selected CSG operations to

quantify fugitive emission uxes from various parts of

the production process (e.g. wells, surface infrastructure),

including:

- measurements using ux chambers around wellheads to determine leakage arising from gas

migration around the outside of a well casing or

through a well casing; and


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- measurements using ux chambers around well heads

to determine leakage arising from gas migration around

the outside of a well casing or through a well casing;

and

- measurement of emission rates from equipment

components at CSG production facilities; and

l develop wide-eld atmospheric methodology as a top-

down method for monitoring and quantifying methane

uxes from CSG production facilities.

The Department/CSIRO joint collaborative project will sample

around 30 wells. The wells will be sampled multiple times

during the project. Wells will be selected to encompass the

range of factors potentially inuencing the variance of well

head emissions. In addition to the production locality (basin)

and well type (i.e. vertical or horizontal), other factors to be

considered include:

l extraction technology - whether or not the well has been

fracked;

l age of the well;

l gas production rate; and

l type of surface equipment installed at the well.

The eld data collected during this project will inform

development of Australian-specic emission factors for use in

Method 1 estimation of CSG fugitive emissions arising from

well casing and general infrastructure leaks. This information

will be used to supplement and update existing general

factors sourced from the national inventory.

The public consultation process also highlighted several

issues requiring longer-term research and development

(R&D). The Department intends to facilitate development of

a longer-term CSG fugitive emissions R&D agenda, which

will include consideration of baseline data and appropriate

sampling methodologies. Due to the blue sky nature of these

R&D areas, investing in this R&D agenda now will lead to the

development of more advanced and effective methodologies

in the future. As a rst step, the Department plans to let a

tender for a scoping study to inform the development of eld

methodologies for estimating diffuse emissions.

Fugitive emissions from the post-production phase i.e. CSG

well decommissioning - are not currently included within the

NGER (Measurement) Determination. The Department plans

to examine the NGER (Measurement) Determination Method

1 for estimation of fugitive emissions from underground coal

mining and consider whether this Method can be suitably

adapted to decommissioned CSG wells.

4. PROPOSALS FOR ENHANCINGCSG ESTIMATION METHODS

Two enhancements to emissions estimation methods

described in the NGER Measurement Determination are

being proposed in this Discussion paper:

1. Renement of methods for the direct measurement

of vented fugitive emissions associated with CSG

well completions and workovers; and

2. Mandating the use of direct measurement for vented

fugitive emissions from CSG well completions and

workovers where fracking technologies have been

used.

Renement of methods for the directmeasurement of vented fugitive emissionsassociated with CSG well completions andworkovers

The rst proposed enhancement is the renement of the

Method 4 methodology to apply to vented fugitive emissions

from well completions and workovers.

Currently, the NGER Measurement Determination does not

contain an industry-specic method for estimating vented

emissions from well completions and workovers from CSG

but rather relies on the general provisions of Part 1.3 ofthe Determination. It is proposed to rene the Method 4

methodology drawing on the experience of the United

States where the US EPA Mandatory Reporting Rule (MRR)

provides a direct measurement method for fugitive emissions

arising from well completions and workovers (US EPA

Mandatory Greenhouse Reporting Rule Part 98 Subpart W

Petroleum and Natural Gas Systems- http://www.epa.gov/

ghgreporting/reporters/subpart/w.html).

The specic paragraph of the US EPA MRR, paragraph

98.233 (g) Gas well venting during completions and

workovers from hydraulic fracturing, has two components.The various elements of this approach are illustrated in

Figure 3.


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1. Flow measurement: this refers to the continuous

measurement of owback volume using recording ow

meters on the vent line. Requirements for measurement

instrumentation and calibration are set out in Part 98.234

(b) of the US EPA MRR. Recording ow meters or pressure

meters (digital or analog) must be operated according to

appropriate standards or industry practice. Calibration

for accuracy and frequency likewise require use of an

appropriate industry standard or use of manufacturersrecommended procedures.

The NGER approach to ow measurement is consistent

with the US EPA MRR 98.233 as it provides for the

measurement of quantities of gas under Division 2.3.6 of the

NGER Measurement Determination where a criterion AAA

(using appropriate international standards) or criterion BBB

(using industry practice) is set out. This level of consistency

provides condence that the existing NGER Measurement

Determination framework for measurement and calibration is

suitable for cost effective, accurate measurement of owback

associated with well completions and workovers.

Figure 3:

DIICCSRTE summary of US EPA MRR 98.233 (g) Gas well venting during completions and workovers from hydraulic

fracturing of specic methods, with associated requirements for measurement instrumentation and calibration in

Part 98.234 (b).

Is flowback vent

or flare volume

measured

Equation W10B

Emission equal thesum of measured

volumes minus

injected volumes

Equation W10A

Emission equal the sum of

volumes derived from

measured flow rate volumes

minus injected and captured

volumes

Equation 11B

Method for sonic flow

Method 2

Flow rateestimated from

pressure

measurement

Flow ratemeasured

Equation 11A

Method for sub- sonic

flow

Sampling rules on number of wells measured, by well type and sub basin

Must operate and calibrate flowmeters, composition analysers and pressure gauges according to:

Calibration requirements

Accuracy & frequency:

Use manufacturer recommended procedures

Appropriate industry standard

Accuracy specs calibration error calculations

May use appropriate standard

method by a standard org, or

Industry practice

Yes

No

2. Well Sampling:this refers to the US EPA MRR

requirement for measurements from a sample of wells for

a specied period of time to determine a basin-wide default

backow rate as a proportion of the production rate to be

applied to all wells in the basin.

The US sampling approach consists of requirements for:

l the number of wells to be measured per sub basin and by

well type (vertical or horizontal);

- one sample for less than or equal to 25 well

completions or workovers;

- two samples for 26 to 50 completions or workovers;

- three samples for 51 to 100 completions or workovers;

- four samples for 101 to 250 completions or workovers;

- ve samples for greater than 250 completions or

workovers; and

l

a period of time a measurement is taken; and

l the number of years the measurement can be used to

estimate emissions before new samples are required.


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A deduction term is provided to account for where owback

gas is captured and recovered. If the estimated owback

volume was sent to a are, then a are methodology would

subsequently apply. If the volume of gas was vented, then it

would be estimated as a vent emission.

The US sampling requirements have been designed for

the circumstances of the US gas extraction industry and

there may be aspects which are not well suited to Australian

conditions.

Mandating use of direct measurement for ventedfugitive emissions from CSG well completionsand workovers with fracking

The second proposed enhancement is to introduce a

mandatory requirement for the use of the Method 4 direct

measurement approach for vented emissions from well

workovers and completions where fracking has been used.

This approach would mirror the US EPA provisions where

a direct measurement approach is mandated for fugitive

emissions from CSG extraction activities but only where

fracking technologies are used.

The Governments policy approach to the measurement

of emissions is to deliver enhanced accuracy of emission

estimates over time. Greater accuracy enhances the

efciency of the arrangements by ensuring that each facility

faces a carbon liability that most accurately reects its

emissions prole. The specication of minimum standard

methodologies for certain sources will be applied where

the benets to the efciency of the system outweigh the

compliance costs of implementing more accurate monitoring

methods.

At present, in other sectors, higher order methods have been

required in NGER for three discrete activities: certain fuels

combusted for power generation, fugitive emissions from

Submissions are sought from industry, technical experts and other stakeholders on theapplicability of US EPA MRR 98.233 (g) for Australias measurement circumstances for a

rened Method 4 (Direct measurement of fugitive emissions associated with well completionsand workovers.

Sampling approach

The US EPA MRR uses a well sampling approach detailed in Section 4.1.2. Comments are sought on the applicability

of the sampling regime associated with US MRR 98.233 (g) for the specic characteristics of the Australian gas

industry and how the sampling regime could be improved to suit Australias circumstances.

Measurement and calibration requirements

Comments are sought on the utility of the existing NGER Measurement Determination measurement and calibration

requirements for application to measurement methods for well completions/workovers.

underground coal mines and peruorocarbon emissions from

aluminium smelting. The Governments decision to mandate

the use of higher order methods for these activities was

made after considering the benets delivered by higher order

methods (e.g. increased accuracy of emission estimates)

against the costs, such as the potential increased costs to

industry associated with implementing the method.

It is recognised that mandatory reporting may give rise to

costs to the industry due to the additional sampling costsassociated with direct measurement (e.g. instrumentation

and labour).

Nonetheless, given the relatively early stage of development

of fracking techniques in CSG production, and the wide

variation in geological circumstances and history across

well elds, there is a high likelihood of wide variations in

emissions from specic CSG extraction facilities such that

increased measurement accuracy would deliver relatively

larger improvements in efciency. Consequently, there is a

strong case for mandating a higher-order method to foster:

l accuracy in emissions reporting for these CSG extraction

activities;

l the development of appropriate emissions mitigation

incentives for CSG extraction activities; and

l reduced potential future compliance and transition costs,

by mandating a method at an early stage in the sectors

development.

Accordingly, it is proposed to make it a requirement in the

NGER Measurement Determination that reporters use the

direct measurement of emissions methodology(i.e, Method 4) for the estimation of vented fugitive emissions

from well completions and workovers for CSG extraction

where fracking techniques have been used.


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Stakeholder consultation will be conducted on any proposed changes to measurement methods in relation to both of these

issues during 2014.

Table 3:

Proposed transition periods

Specic Proposals for NGER (Measurement) Determination amendments: Proposed to take effect from:

Rened Method 4 to apply to vented fugitive emissions from CSG well completions/workovers. 1 July, 2013

Mandating the use of Method 4 for vented fugitive emissions from CSG well completions/workovers

where fracking technologies have been used.

1 July, 2015

Development of Method 1 Australian specic emission factors for leakage from well casings from CSG

extraction; and for leakage from CSG production and processing facilities.

1 July, 2015

Transition to the new measurement approaches

The Department proposes that the renements to the direct

measurement methods specied under Method 4 for the

current update of the NGER Measurement Determination

will apply from 1 July 2013 on a voluntary basis. Making the

rened Method 4 available on a voluntary basis allows for

it to be practically validated in Australian conditions, while

providing a potential pathway to mandatory reporting after a

suitable period. However it is possible that the actual uptake

of Method 4 may be low if the use of the method is voluntary.

There is a need to provide sufcient notice prior to the

implementation of additional reporting requirements. A notice

period would provide affected stakeholders with sufcient

time to understand the measurement requirements and take

the necessary steps to ensure that equipment and business

processes are adequate to meet the requirements set out in

the methods.

A notice period would also allow time for affected

stakeholders to understand the potential impacts of the

revised methods on liabilities under the carbon price.

It is proposed that there would be a two year notice period

for the introduction of the requirement for mandatory use

of the direct measurement Method 4 - in which case,the requirement for reporters to use the revised direct

measurement method would apply from 1 July 2015. This

date aligns the introduction of the requirement with the

commencement of the exible price period under the carbon

pricing arrangements.

For similar reasons, it is planned to also adopt the revised

Method 1 Australia-specic emission factors discussed in

section 3 from 1 July 2015, following consultation on the

outcomes of the CSIRO study.

Submissions are sought from industry, technical experts and other stakeholders on the

proposed transition period for the introduction of mandatory use of Method 4.


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5. INSTRUCTION FOR SUBMISSIONOF COMMENTS

Where possible, submissions should be lodged electronically in a text based format (such as PDF, Word doc) via

email:

[email protected]

Submissions may alternatively be sent to the postal address below to arrive by the due date.

Submissions will not be treated as condential unless this is specically requested, and may be made publicly

available. If a submission (or extracts of a submission) is to be kept condential, please indicate this in the submission.

Interested parties may make submissions by 8 May, 2013. The Department reserves the right not to consider late

submissions.

Postal address

Assistant Secretary

National Inventory Systems and International Reporting Branch

Land Division

DIICCSRTE

GPO Box 854

ACT 2601


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The NGER Measurement Determination is designed to

facilitate the integration of corporate and facility level dataprovided under the Act with international data standards on

greenhouse emissions.

The scope of the NGER Measurement Determination is given

by the following categories of emission sources:

The emission sources are:

l Fuel combustion:emissions from the combustion of

fuel for energy (see Chapter 2 of the NGER Measurement

Determination);

l Fugitive emissionsfrom the extraction, production, aring,processing and distribution of fossil fuels (see Chapter 3

of the NGER Measurement Determination);

l Industrial process emissionswhere a mineral, chemical

or metal product is formed using a chemical reaction that

generates greenhouse gases as a by-product (see

Chapter 4 of the NGER Measurement Determination);

and

l Waste emissionsfrom waste disposal either in

landll, as management of wastewater or from waste

incineration (see Chapter 5 of the NGER Measurement

Determination).

The NGER Measurement Determination provides methods

that allow for both direct emissions monitoring and more

typically the estimation of emissions through the tracking of

observable, closely-related variables. This framework reects

the approaches of the international guidelines governing

the estimation of national greenhouse gas inventories such

as those developed by the Intergovernmental Panel on

Climate Change (IPCC). At its simplest, emissions may be

estimated by reference to reportable data such as fossil fuel

consumption, evidenced by invoices, and the use of specied

emission factors provided in the NGER Measurement

Determination. For emissions from fuel combustion, for

example, data on fuel consumption would be multiplied by a

specic emission factor for that fuel to generate an emissions

estimate. A similar approach has been used for over a

decade in the voluntary reporting program Greenhouse

Challenge Plus and before that, Greenhouse Challenge.

Greater levels of complexity and measurement effort may in

some circumstances produce better estimates of emissions

at facility level. This may result from, for example, sampling

and analysis of a fuel consumed for its carbon content andother qualities that will affect actual emissions generated by

its combustion at a facility.

6. ANNEXES

Annex A

Denitions

Fugitive emissions

Fugitive emission means the release of emissions (non-fuel

combustion) that occur during the extraction, processing and

delivery of fossil fuels.

Flares, leaks and vents

For the purposes of NGER reporting, fugitive emissions

in the oil and gas sector, including CSG, are classied asbeing a are, leak or vent. For leaks and vents, the NGER

Measurement Determination makes use of denitions and

methods adapted from the American Petroleum Institute

Compendium of Greenhouse Gas Emissions Methodologies

for the Oil and Natural Gas Industry(API, 2004 and 2009):

l Flare:the combustion of a gas or liquid for a non-energy

purpose;

l Leak:unintentional emissions from equipment valves,

anges, pump seals, compressor seals, relief valves,

sampling connections, process drains, open-ended lines,

casing, tanks, casing leaks and other leakage sources

from pressurised equipment not dened as a vent; and

l Vent:emissions that are the result of process or

equipment design or operational practices.

Well completions and workovers

The Department interprets the terms Gas well completion

and Gas well workoverto mean the following:

l Gas well completion:activities and methods of preparing

a well for the production of gas.

l Gas well workover:remedial operations performed on a

producing well to try to increase production.

time to understand the measurement requirements and take

the necessary steps to ensure that equipment and business

processes are adequate to meet the requirements set out in

the methods.

NGER emission estimation framework

The NGER Act 2007 makes reporting mandatory for

corporations whose energy production, energy use, orgreenhouse gas emissions meet certain specied thresholds.


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Direct monitoring of emissions is also potentially an important

approach to emissions estimation. While not common, such

direct monitoring already occurs in some form in some

instances such as in the coal industry, where state legislation

requires the monitoring of methane levels for health and

safety reasons.

NGER Measurement Determination methods

The NGER Measurement Determination has four methods for

reporting:

Method 1: the National Greenhouse Accounts default method

Method 1 provides a class of estimation procedures derived

directly from the methodologies used by the Department of

Climate Change and Energy Efciency for the preparation of

the Australias National Greenhouse Gas Accounts. The use

of methodologies from the Australias National Greenhouse

Gas Accounts anchors Method 1 within the international

guidelines adopted by the UN Framework Convention on

Climate Change for the estimation of greenhouse emissions.

Method 1 species the use of designated emission factors

in the estimation of emissions. These emission factors are

national average factors determined by the Department of

Climate Change and Energy Efciency using the Australian

Greenhouse Emissions Information System (AGEIS).

Method 1 is likely to be most useful for emission sourceswhere the source is relatively homogeneous, such as from

the combustion of standard liquid fossil fuels, where the

emissions resulting from combustion will be very similar

across most facilities.

Method 2: a facility-specic method using industry sampling

and Australian or international standards listed in the NGER

Measurement Determination or equivalent for analysis of

fuels and raw materials to provide more accurate estimates

of emissions at facility level.

Method 2 enables corporations to undertake additional

measurements for example, the qualities of fuels consumed

at a particular facility in order to gain more accurate

estimates for emissions for that particular facility.

Method 2 draws on the large body of Australian and

international documentary standards prepared by standards

organisations to provide the benchmarks for procedures for

the analysis of, typically, the critical chemical properties of the

fuels being combusted.

Method 2 is likely to be most useful for fuels which exhibit

some variability in key qualities, such as carbon content, from

source to source. This is the case for coal in Australia.

Method 2 for fugitive leakage emissions for natural gas

exploration, production and processing utilises API (2009).

Method 3: a facility-specic method using Australian or

international standards listed in the NGER Measurement

Determination or equivalent standards for both sampling and

analysis of fuels and raw materials

Method 3 is very similar to Method 2, except that it requires,

additionally, Reporters to comply with Australian or equivalent

documentary standards for sampling (of fuels or raw

materials) as well as documentary standards for the analysis

of fuels.

Method 4: direct monitoring of emission systems, either on a

continuous or periodic basis

Method 4 provides for a different approach to the estimation

of emissions. Rather than analysing the chemical properties

of inputs (or in some case, products), Method 4 aims to

directly monitor greenhouse emissions arising from an

activity. This approach can provide a higher level of accuracy

in certain circumstances, depending on the type of emission

process, however, it is likely to be more data intensive than

other approaches. Such monitoring already occurs, for

example, in underground coal mines reecting the nature

of the emission process and the importance of relatively

accurate data to support health and safety objectives.


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7. REFERENCES

API (American Petroleum Institute).

l 2004, Compendium of greenhouse gas emissions methodologies for the Oil and Gas Industry, Washington.

l 2009, Compendium of Greenhouse Gas Emissions Methodologies for the Oil and Natural Gas Industry. URS

Corporation, Texas, USA.

http://www.api.org/ehs/climate/new/upload/2009_ghg_compendium.pdf

CSIRO (2012).CSIRO Background Paper for Dec 2012 Meeting, Engineering Energy: Unconventional Gas Production Call for

Input: The Australian Council of Learned Academies Securing Australias Future Research Program.

Day, S., Connell, L., Etheridge, D., Norgate, T., Sherwood, N. (2012).Fugitive greenhouse gas emissions from coal seam gas

production in Australia.CSIRO, Australia.

DCCEE (2012).Coal Seam Gas: Estimation and Reporting of Greenhouse Gas Emissions. Fact Sheet: Australian National

Greenhouse Accounts.

http://www.climatechange.gov.au/climate-change/emissions/~/media/climate-change/emissions/factsheets/NGA-

FactSheet-7-CoalSeamGas-20120430-PDF.pdf

Erno and Schmitz (1996).Measurements of Soil Gas Migration Around Oil And Gas Wells In the Lloydminster Area, Journal of

Canadian Petroleum Technology, Volume 35, Number 7.

Saddler, H. (2012).Review of literature on international best practice for estimating greenhouse gas emissions from CSG , Pitt

and Sherry 2012.


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Documents

2013 Coal Seam Gas: Estimation & Reporting of Fugitive Greenhouse Gas Emissions