ConocoPhillips touts gas capture programs

James Fenton
ConocoPhillips optimization technician Jamie Huffman talks on June 30 during a tour of a ConocoPhillips natural gas site in Aztec. The company is touting its environmental programs to cut methane emissions.

AZTEC — ConocoPhillips, the state's largest oil and gas producer, says it has used technological advances and other means to cut the company's annual greenhouse gas emissions in half.

In the last few years, the Houston-based Lower 48 oil and gas company has reaped benefits by capturing more gas and selling it.

That was made possible by three strategies, company officials say — improving plunger lift operations and compressor equipment, replacing chemical pumps with solar-powered pumps, and retrofitting well site facilities with "low-bleed" pneumatic devices that intermittently emit gas to open and close valves and power other functions.

The company has also converted 15 percent of its vehicle fleet — about 35 trucks — from diesel fuel to propane auto gas. The company's field operators and technicians drive an average of 25,000 miles each year to reach well sites throughout the San Juan Basin. The propane gas, produced locally in Ignacio, Colo., delivers reductions — 60 percent for carbon monoxide, 12 percent for carbon dioxide, 20 percent for nitrogen oxide and greenhouse gases by a quarter — per vehicle.

Because of the often remote, spread-out, location of wells in the San Juan Basin and lack of alternative power supplies, area operators have turned to pneumatic controllers powered by natural gas produced at the well site to run equipment.

A number of those controllers are older "high-bleed" devices that emit methane and were installed when the wells were originally produced.

In one year, a single high-bleed pneumatic control valve device typically releases 500,000 standard cubic feet of natural gas — the equivalent of tail pipe emissions from five cars — into the atmosphere, according to the U.S. Environmental Protection Agency.

Although the company is working to install more efficient equipment, Myke Lane, ConocoPhillips' environmental coordinator, said gas emitted from high-emission pneumatic devices is used to power vital production processes in areas where other power sources are not available.

ConocoPhillips project supervisor Virgil Chavez talks about the tools they use on June 30,during a tour of ConocoPhillips natural gas site in Aztec.

"There's this general idea that we're wasting gas — we have this production, and a portion of the production is wasted," Lane said. "If we didn't have pneumatic controllers, if we don't have those plunger lifts, we might as well plug (and abandon) the well. ... It's being utilized in order to get the bulk production. There's a real misconception that we're just throwing that gas away and wasting it where it could have gotten revenues. If we don't do that, we don't produce the well."

Alex Renirie with the Sierra Club said in an email that Lane's explanation misses the point.

"Regardless of what you call it, the oil and gas industry is recklessly emitting dangerous pollutants like methane into our air, which threatens our health and our environment," Renirie said. "The EPA and BLM rules aimed at reducing fugitive methane emissions from oil and gas target a whole range of equipment throughout the production process, including plugging leaking pipes and installing readily available technologies. Both agencies have conducted in-depth analyses of which cost-effective technologies minimize the impact of oil and gas pollution on our health and climate."

Nonetheless, ConocoPhillips' spokeswoman Davy Kong said the company recently completed its program to replace the high-emission controllers with "low-bleed" models that emit less greenhouse gas.

Since 2011, about 6,000 high-bleed devices — with emissions of greater than six standard cubic feet per hour, or scfh — have been replaced with low-bleed devices — emissions of less than or equal to six scfh — at the company's San Juan Basin well sites.

The company has also installed "smart" plunger lift systems with sensors that reduce emissions and optimize gas production on wells. Plunger lift systems carry water from a well to restore the flow of oil and gas to the surface.

Since 2010, ConocoPhillips has installed the automated controllers on 2,400 plunger-lift wells. The technology allows a well's performance to be monitored remotely, eliminating the need for visits by field technicians to collect that information.

ConocoPhillips officials insist that the industry's transition to environmentally sustainable operations has to be driven by the bottom line, not the federal government.

Since 2012, the EPA's Greenhouse Gas Reporting Program has required producers like ConocoPhillips that emit 25,000 metric tons of carbon dioxide equivalent or more of greenhouse gases each year in the U.S. to report those emissions.

According to the EPA's reporting data, ConocoPhillips' San Juan Basin operations emitted about 3.4 million metric tons, of CO2e in 2014, the most recent year of data available. By contrast in 2013, the company's basin operations emitted nearly twice that amount — nearly 6.6 million metric tons, of  CO2e.

ConocoPhillips optimization technician Jamie Huffman talks about the company's efforts to reduce emissions on June 30 during a tour of a natural gas site in Aztec.

ConocoPhillips — the No.1 producer of natural gas, natural gas liquids and oil in the San Juan Basin and in New Mexico — has assets across 1.3 million net acres that include 9,700 oil and gas wells and part ownership in about 4,000 wells in the aging Southwestern gas field, according to Jeff Mitchell, the company's San Juan operations manager.

Mitchell said that in the San Juan Basin alone, ConocoPhillips produces one billion cubic feet equivalent, or Bcf, of natural gas each day, roughly the amount needed to meet a week's worth of natural gas needs in the state of Delaware.

Sharon Zubrod — ConocoPhillips' health, safety and environment manager — said some of the EPA rules penalize the company for producing oil and gas as part of a large asset — and for operating west of the Mississippi River. Operators in western states typically use more components at well sites, and the EPA has devised a chart of default average component counts for equipment, which it says is intended to help streamline and encourage companies' reporting rates.

Rules in Subpart W—Petroleum and Natural Gas Systems, require those companies to collect, calculate and report emissions, equipment counts and other data.

Subpart W tracks emission sources such as production, processing, transmission, storage and distribution. Since reporting began, the majority of emissions have come from onshore oil and gas production and natural gas processing, according to the EPA.

Those emissions came primarily from two sources — processing (venting, equipment leaks, and flaring) and gas combustion in engines, tank heaters and field separators.

Emissions reported by the U.S. oil and gas industry in 2014, totaled 54 million metric tons of carbon dioxide equivalent, or MMT CO2e, from venting; 29 MMT CO2e from equipment leaks and 30 MMT CO2e from flaring, according to EPA data.

Methane made up the bulk of onshore production and equipment leak emissions, while carbon dioxide was emitted primarily from natural gas processing and flaring, according to 2014 EPA data.

ConocoPhillips optimization technician Juan Cardenas provides a tour of an oil and gas facility on June 30 at a site in Aztec.

When reporting to the EPA, Zubrod said that for certain types of equipment, ConocoPhillips has to use default component counts specified in the rule in lieu of counting the actual number of components on all 255,000 pieces of equipment in the company's San Juan asset. That means an operator in an eastern state's single valve on a separator is equivalent to 34 separator valves in a western state such as New Mexico.

Zubrod said the EPA's reporting formula unfairly penalizes larger operators like ConocoPhillips in the San Juan Basin.

"The way that (the EPA defines) the reporting basins created a basin for San Juan that put the 225,000 pieces of equipment in one reporting bucket," she said. "Most other places got cut up. So, by the nature of how the EPA defined the basins, there's no way we'll not be No. 1 (at emissions). We recognize that while we'll always be rated No. 1 one for our operations here, given the size of our leasehold and the things that we do, all we can do is make our wells the most efficient and effective in reducing emissions as much as we can."

Zubrod again said that finding those efficiencies has to "make sense economically."

"We're very committed. Well before it was required, we were aggressively, proactively and voluntarily reducing emissions here in the San Juan (Basin)," she said. "Obviously, it has to be a win-win for us, but our ultimate goal is to ensure that we get the most gas into the pipe. We don't want to be emitting. We want to be capturing and selling that gas."

Ernesta Jones with the EPA said in an email that operators have options when reporting emissions and other data.

"Facilities have the option to count the number of equipment components of each type (e.g., valve, connector, open-ended line, or pressure relief valve) or count the number of major (pieces of) production equipment at the facility and then estimate the number of equipment components of each type using default average component counts for each piece of major equipment," Jones said.

"The default average component counts may vary depending on the geographic location of the facility," she said. "The resulting counts are then multiplied by the average estimated time of operation, the concentration of methane and carbon dioxide in the gas and applicable emission factors in order to calculate emissions from this source.  But again, flexibility is provided in Subpart W."

Zubrod said ConocoPhillips has made strides capturing more natural gas in recent years than it did prior to 2012, but new technology — or new thinking — is needed for future advances.

"We're really to the point where we've exhausted all the low-hanging fruit," Zubrod said. "We need some real technology changes, or some philosophy changes, on how operations are done, to continue to reduce our emissions profile from where it's at now."

James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621.

ConocoPhillips optimization technician Juan Cardenas provides a tour of one of the company's oil and gas facilities on  June 30 at a site in Aztec. The company has been working to reduce its emissions.