Pneumatic controllers, second-largest source of oil and gas industry emissions in basin

Some in the industry estimate the policy could cut emissions of methane, ozone-causing chemicals and volatile organic compounds by as much as 33% at retrofitted well sites. Colorado has more than 52,000 active wells in oil and natural gas fields. Big, multiwell locations that produce high volumes of oil and gas can have 50 pneumatic controllers or more, while a low-volume well system would typically have at least five. Non-emitting controllers that are powered by electricity can be used in place of pneumatic controllers, but electrical power isn’t readily available at many well sites. The retrofit proposal creates a sliding scale of controller replacement targets meant to account for varied access to electricity at well sites in remote and rugged areas. Solar power could be used on sites to provide electricity for non-emitting controllers, but the industry isn’t yet convinced solar power and battery systems can be used broadly. Such systems have been widely adopted in cloudier British Columbia, which barred new pneumatic controllers starting Jan. 1, and that program has some retrofitting requirements for natural gas compressor stations. Occidental said it has tested retrofitting large well sites and found it cost $180,000 for switching a site with 10 wells to non-emitting controllers. Bringing in solar to power a retrofit increased costs to as much as $290,000, and the solar added to the land area a well project disturbs, the company said.

Companies that have 75% or more of their wells already using non-emitting controllers must increase that percentage to 96.5% by May 1, 2023. Companies at the lower end of the range, all the way down to currently having no non-emitting controllers, will have to remove gas-powered pneumatic controllers on 35% of wells in the first year and have at least 55% of their wells switched to non-emitting controllers by May 1, 2023. Natural gas companies’ compressor stations would have a similar sliding scale for retrofits on their systems. The flexibility helps prevent companies from having to replace controllers on wells the companies intend to plug and replace with a new, nearby well in the next two years. Oil and gas companies in the core and western parts of the Denver-Julesburg Basin, which is nearest Front Range cities, have been using electrical no-bleed controllers at most of their new well sites in recent years. But operators with wells in more rural parts of Colorado balked at requiring blanket retrofits to replace pneumatic controllers. Most rural well sites lack the electrical line access needed to power non-emitting controllers. Adding lines would be very expensive and, in some cases, not even possible, industry members said.

Colorado oil companies, environmental groups agree to climate-protection changes at thousands of well sites, by Greg Avery, Denver Business Journal, https://www.bizjournals.com/denver/news/2021/02/04/colorado-oil-environmental-group-methane-reduction.html

Environmental groups and oil and gas companies have reached an agreement and are proposing a plan to Colorado regulators about replacing pollution-emitting devices at thousands of wells statewide, slashing industry greenhouse gas emissions.

The idea, negotiated over three years, is being proposed to Colorado air quality regulators by industry and conservation groups and would be precedent-setting nationally.

Oil and gas companies and natural gas pipeline owners would replace a majority of pneumatic controllers at wells and natural gas compressor stations around the state by mid-2023, eliminating almost all pneumatic controllers from parts of the Denver-Julesburg Basin oilfields that are closest to Front Range communities.

The idea scheduled to be taken up at the Air Quality Control Commission meeting on Feb. 18. It would add to several emissions-reduction steps taken by regulators in recent years, and is something Dan Haley, president and CEO of the Colorado Oil and Gas Association, hopes the AQCC will quickly adopt. “Colorado’s oil and natural gas industry is proud of this joint proposal, with another first-in-the-nation effort,” Haley said. “The Colorado way is about putting differences aside and coming together to find solutions.”

The pact builds on the success environmental conservation groups and the oil industry have had negotiating regulations about groundwater protections, which state oil regulators adopted last year, and methane reductions negotiated in 2014 that have since been updated.

Pneumatic controllers are powered by pressurized natural gas and help regulate the pressures of equipment used at oil and gas well sites.

Collectively, they’re one of the industry’s biggest sources of emitted methane, a natural gas ingredient that’s considered a potent greenhouse gas and a major driver of climate change. But replacing pneumatic controllers is expected to cost the industry tens of millions of dollars.

When functioning properly, pneumatic controllers emit small bursts of natural gas as they adjust pressures in pipes or collection vessels. The emissions can be much greater when the pneumatic controller isn’t functioning properly.

Hundreds of thousands of pneumatic controllers continuously operate at the more than 52,000 active wells in Colorado’s oil and natural gas fields. Big, multiwell locations that produce high volumes of oil and gas can have 50 pneumatic controllers or more, while a low-volume well system would typically have at least five. Non-emitting controllers that are powered by electricity can be used in place of pneumatic controllers, but electrical power isn’t readily available at many well sites.

The state’s Air Pollution Control Division has proposed eliminating the use of pneumatic controllers on new wells going forward. The proposal from industry and environmental groups adds a program to have companies start removing pneumatic controllers from existing wells, too. The proposal leaves companies flexibility to pick how to replace the controllers and which wells to modify, rather than create a rigid replacement standard.

It’s an effective compromise, said Robin Cooley a Colorado lawyer with the San Francisco-based environmental group Earthjustice, who helped negotiate the deal.

“We are getting the emissions reduction but companies are getting to decide how they go about it,” she said, noting that pneumatic controllers are the second-largest source of oil and gas industry emissions in the Denver-Julesburg Basin.

“Pneumatics are the last big source we hadn’t looked at comprehensively for regulation,” Cooley said. “It’s the last of the low-hanging fruit.”

Even oil and gas companies involved don’t know how many pneumatic controllers would be switched under the plan, but it’s expected to be more than 100,000.

Some in industry estimate the policy could cut emissions of methane, ozone-causing chemicals and volatile organic compounds by as much as 33% at retrofitted well sites.

Environmental groups aren’t sure of the number, but they agree Colorado oil and gas industry emissions would improve markedly.

With ambitious greenhouse gas reduction targets set in state law, those reductions are necessary, they say.

The retrofit proposal creates a sliding scale of controller replacement targets meant to account for the realities of varied access to electricity at well sites in remote and rugged areas.

At the high end of the range, companies that have 75% or more of their wells already using non-emitting controllers must increase that percentage to 96.5% by May 1, 2023. Companies at the lower end of the range, all the way down to currently having no non-emitting controllers, will have to remove gas-powered pneumatic controllers on 35% of wells in the first year and have at least 55% of their wells switched to non-emitting controllers by May 1, 2023.

Natural gas companies’ compressor stations would have a similar sliding scale for retrofits on their systems.

The flexibility helps prevent companies from having to replace controllers on wells the companies intend to plug and replace with a new, nearby well in the next two years.

The prohibition pneumatic controllers at new wells would start applying on May 1. That coincides with when first-of-their-kind fracking emissions strategies and wellsite monitoring requirements would go into effect, measures the AQCC passed at the end of summer.

Oil and gas companies in the core and western parts of the Denver-Julesburg Basin, which is nearest Front Range cities, have been using electrical no-bleed controllers at most of their new well sites in recent years.

But operators with wells in more rural parts of Colorado balked at requiring blanket retrofits to replace pneumatic controllers. Most rural well sites lack the electrical line access needed to power non-emitting controllers. Adding lines would be very expensive and, in some cases, not even possible, industry members said.

Environmental groups have argued that solar power could be used on sites to provide electricity for non-emitting controllers, but the industry isn’t yet convinced solar power and battery systems can be used broadly.

Conservation groups point out that such systems have been widely adopted in cloudier British Columbia. That Canadian province barred new pneumatic controllers starting Jan. 1, and that program has some retrofitting requirements for natural gas compressor stations.

Occidental Petroleum Corp., the largest oil and gas producer in Colorado and which has a major presence in the Denver-Julesburg Basin, supports the compromise that environmental groups and industry reached.

In its filings to the AQCC, Occidental said it has tested retrofitting large well sites and found it cost $180,000 for switching a site with 10 wells to non-emitting controllers. Bringing in solar to power a retrofit increased costs to as much as $290,000, and the solar added to the land area a well project disturbs, the company said.