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Archive for February, 2014

Vortex Tools covers Colorado becoming the first state to control methane emissions at oil and gas sites, as well as noting its solution to help keep oil and gas companies in compliance with more stringent air quality standards. 

The Colorado Air Quality Commission just passed the strictest oil and gas air regulation issues in the nation, as they are the first to directly address and regulate emissions of methane gas (which is linked to climate change). For some, this is an overdue environmental necessity. For others, it’s one more attempt to shut down oil and gas production under the guise of purely health and environmental motivations.

Gov Hickenlooper (colorado.gov)

Gov Hickenlooper (colorado.gov)

After four days of hearings, on February 23rd, the state Air Quality Control Commission (AQCC) passed the motion by a vote of 8-1. They did so with support from Governor John Hickenlooper, environmental groups, and three large oil and gas operators — Anadarko, EnCana, and Noble Energy — along with Colorado’s largest natural gas gathering/processing company, DCP Midstream.

However, several smaller oil and gas companies, along with the Colorado Oil and Gas Association (COGA) and the Colorado Petroleum Association (CPA), opposed the far-reaching aspects of the regulations. COGA spokesman Doug Flanders noted, “Unfortunately, we were not successful in ensuring that the rule accommodates the differences in basins and operators. Nevertheless, we are committed to working with our operators, our communities and the state to successfully and effectively implement these rules.”

According to the Denver Business Journal, “State officials have pegged compliance costs at about $42.5 million a year, or less than $500 per ton of pollution eliminated. Executives at some of the Colorado’s biggest oil and gas companies have said the state’s estimate is in line with their estimates and a cost they consider acceptable.”

Funny thing about estimates that occur before regulations go into effect: they often fall woefully short once the laws of supply and demand kick in. If you must fix something to avoid fines (and yes, avoid damaging the environment), no one is surprised when the cost of fixing that requirement goes way up.

In addition:

The new operations standards are expected to remove from the air about 93,500 tons per day of volatile organic compounds (VOCs), which can cook into ozone on hot, sunny days, state officials have said.

They’re also expected to cut methane leaks by about 65,000 tons per year, with the methane — a strong greenhouse gas — captured and redirected into pipelines bound for markets.

Methane: harmful even when not coming from the backside of a cow

Methane: harmful even when not coming from the backside of a cow

So how are these rules different?

1. The regulations affect all of Colorado

This is something oil and gas proponents don’t like because different areas can have different issues, so a blanket approach not only takes the power away from the individual counties to make their own decisions, but can potentially apply standards that don’t make sense to that area. Like an omnibus or a comprehensive reform bill, some things get over-regulated, where other things aren’t regulated enough. In addition, these sweeping decisions can also be viewed as a state power grab over what should be an ongoing area-by-area conversation. For example, attempts to ban fracking in Colorado went after a statewide approach, got shot down, and returned as county-by-county initiatives (with some successes, some failures).

However, understand this: Similar to how a ban on fracking essentially shuts down oil and gas production, over-regulating methane emissions in producing oil and gas wells can do the same thing. For activists opposed to oil and gas, this is simply a greater victory, but the Average Joe voter may not be aware of all the damaging effects of this sweeping move, especially to the local economy and jobs.

2. The regulations require routine checks for leaks

This makes sense. If equipment is malfunctioning or something needs to be repaired (because it’s not doing what it’s designed to do), it should be fixed. Regulators can check up to once a month and any issue needs to be resolved in 15 days or the company faces ongoing fines.

I’ve been to enough oil and gas conferences to where I’ve heard repeatedly that oil and gas companies state they’re not opposed to regulation, just bad regulation. A lot of the larger companies — like the four above — are stepping out ahead of regulations to embrace these changes. Many of them now realize that the concerns of the Average Joe towards oil and gas are important (even if those concerns are shaped by misinformation supplied by activists opposed to this energy industry). This should be an obvious understanding, but it’s only recently, with some fracking bans succeeding, that valuing these concerns has increased.

But why are these big four on the opposite side of a lot of the smaller companies? Part of it is innovation. I saw a presentation from XTO Energy where they were detailing changes to their standards to improve wildlife protection. They weren’t being forced; it seemed like an “everybody wins” business practice. However, these larger companies can also afford to take a slight hit in Colorado if it helps their PR elsewhere. Noble Energy I’m unsure on; they’re fairly committed to Colorado, but the last time strong oil and gas regulations showed up in Colorado, EnCana slashed their state budget to 10% of what it was the year before. If EnCana pulls back again, they still have a global business to work with, but Colorado takes a hit on the jobs they no longer provide, and the smaller oil and gas companies take a hit due to increased costs.

 3. The regulations specifically target methane

Prior legislation only regulated volatile organic compounds (VOCs). When referring to oil and gas emissions, VOCs typically mean harmful gases and vapors. Previously, no other state has regulated methane, as it’d be difficult to enforce throughout the oil and gas chain. Which brings us to the next point:

4. The regulations include the entire natural gas chain

This includes “the well site, storage tanks, gathering lines and compression stations as well as processing plants.”

I’m all for preventing methane issues — especially in leaking and abandoned wells that should have their environmentally negligent issues addressed — but there are ongoing production areas that will become an issue. I mentioned above that methane regulation would be difficult to enforce throughout the entire chain. It’s not tough to enforce because the EPA doesn’t have the means — they have infrared cameras on helicopters to fly over and fine with ease — it’s tough to enforce because so many parts of producing wells have problems that stem from moving gas, especially with the 95% compliance rate they’ve set.

Natural gas is hard to control. It’s not like you can just grab it in scoops and stick it a giant zip lock bag that’ll never leak, and once it’s loose, there is no amazing net to swat over this loose natural gas to reel it back in.

As with many issues in the oil and gas industry, solutions shift once the existing solution is regulated away.

Vortex Tools has a solution to vented methane emissions at the well site. As with VOCs, the Vortex tool spins the flow of oil, gas, water, and natural gas liquids. By doing so, much of what would be fugitive vapors are converted to liquids and not allowed to escape at the culprit atmospheric release points. This allows operators to remain in compliance with EPA air standards (customer data shows negligible vapors at the well site, even at 103-degree F ambient daytime temperatures) and recover more valuable oil, condensate, and natural gas liquids to boot.

Vortex vapor recovery tool

Vortex vapor recovery tool

For more info on this application, email me at colin (at) vortextools (dot) com.

Of course, the largest sources of methane emissions still belong to termites and volcanoes, but bugs, exploding lava, and giant smoke clouds don’t listen to regulations. Maybe we’ll work on a solution to them next.

For now, it will be interesting to see if other states follow the standards set here or if it’s simply a Colorado-only effect for all the good and bad these regulations can bring.

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Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

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Vortex Tools shares a cartoon on oil and gas profits vs. the taxes they have to pay. 

You know how there’s that mental image many people have of oil and gas executives rolling around on piles of easily made money? This cartoon came out a while ago, but it recently made the rounds again. Sadly, make the profit 2-4 cents lower per gallon and it’s more accurate:

oil tax pic

There are large funds coming into oil and gas, but as there are also large associated expenses, there isn’t that much left over compared to other industries.

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Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

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Valentine's Donut: Skip this, mumbling something about calories.

Valentine’s Donut: Skip this, mumbling something about calories.

SpiroFlo uses another holiday to show how being cheap can be rephrased as green values.

Ah, yes, Valentine’s Day.

Call it an opportunity to rage or buy into corporate and societal expectations. Call it a chance to hear “I like you, but I’m not ‘in like’ with you.” Me, I call it an opportunity to show how green values can line up with being cheap:

  1. Don’t you dare buy a card. $4 for an impersonal message on a murdered tree? Nay, I say! Go with an e-card that you can customize and email with minimal carbon impact. Be sure to break up with your significant other if you find it printed out later. Hang onto your memories in your memory, dear.
  2. Insist on only buying fair trade, eco-friendly chocolate. Make your standards so high that no chocolate will suffice, and insist that as you didn’t want your lover to bear that burden of guilt, no chocolate was the only way to remain principled.
  3. Get local flowers. Do not invest in the sham that is overpriced flowers; do not enable the environmental impact of delivering flowers across state lines. Note that I didn’t even say “buy” local flowers. Just step over into your neighbor’s yard and snip off a few bloomed delights. If caught by said neighbor, insist that it is your duty to share the beauty of earth and spout off something about corporate greed.
  4. Keep date night inside: Of course you’re not going to be wasteful by dressing up and driving out to an overpriced dinner you booked months in advance. Instead you will respect the environment by staying in your home with all the lights and heat turned off. Maybe you’ll even venture again into your neighbor’s yard to “share the beauty of earth” by sneaking fistfuls of (up until recently) planted vegetables back to your room.
  5. And finally: Don’t be single. Living and commuting by yourself? Your carbon footprint is bigger than it should be. This means that if you are married, you can consider it enough of a Valentine’s Day gift to bless earth with your living situation, and smugly judge all those single people who clearly just hate the environment.

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Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

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