At Arolytics, we like visuals. This post helps introduce an image we have talked about a lot in our management meetings.
Look up “cost of air pollution” and you’ll find thousands of hits describing the impact of energy production on society. Less often do we consider the costs to industry.
The oil and gas industry in Canada is a leader in environmental protection, spending $6.5B annually on environmental controls, or about 55% of the total spent by all businesses in Canada (Statscan, 2017). About two-thirds of these costs take the form of capital-intensive expenditures on process equipment or structures. For air pollution management, we’re talking about gas management and recycling systems, such as flares, combustors, and incinerators. Generally, such investments are the result of compliance measures, where operators and regulators are involved (two parties).
While operators are happy to share data on regular investments in environmental protection, it’s harder to quantify costs associated with unforeseen air issues. Emissions of toxic air pollutants (e.g. H2S, VOCs) are problematic if they endanger staff, or if local landowners suffer through hazardous odour issues. Where this occurs, three parties (landowners, regulators, operator) are typically involved in managing the issue. There will be complaints and regulatory actions, and potentially court cases. Unintended air issues may cause the operator to throttle back operations, to limit drilling and production, to install new equipment (regardless of cost or culpability), to conduct extra air monitoring, to hire additional consultants, to defend itself in court, to potentially suffer lost production, or worse suffer a shutdown. Since these issues tarnish corporate reputation, companies rarely talk openly about the real cost of air issues. Air issues may cause an erosion of social license that has a cumulative and spillover effect to other geographies and to the reputation of industry as a whole.
Air issues are almost always unintended. But they still happen frequently. Typically, a Health Safety and Environment (HSE) employee will be charged with managing air issues. He or she may have some simple handheld sensors and a finite budget for consultants. He or she likely does not have access to predictive analytics that forecast the impact of operations on nearby landowners, at different times of day, today or next week. Some HSE staff might not have significant training in atmospheric dynamics to understand why air quality liabilities (and complaints) occur under specific weather conditions. In the ideal world, the HSE employee would have a tool to forecast and avoid health and safety problems and public complaints.
Now to methane. New federal and provincial regulations will require – for the first time – accurate measurement of methane emissions from the majority of oil and gas production sites. Methane is the dominant gas in air emissions from extractive sites, and the carrier for air toxics and odours that trigger complaints and erode social license. Air toxic emissions have been regulated for many decades, but predictive tools are still lacking. With widespread methane “metering”, we finally have the information necessary to drive dispersion models to forecast downwind concentrations of air pollutants and odours. In other words, to forecast regulatory exceedences where people live and work. These forecasts can be run in the cloud, with connectivity to the powerful meteorological databases (used by Windy and other websites), for emission forecasts and hindcasts, to help investigate complaints, and for potential fenceline issues.
Methane is a new compliance cost, but it also represents an air quality management opportunity for oil and gas operators.
At Arolytics, we talk frequently about the concept drawing below. What if we could do this cheaply, in the cloud, for all relevant oil and gas sites in Canada? What if we could make the analytics and visualization real time? And, what if it was so user- friendly even the CEO could use it? In 2018 we started working on a platform concept called “AROviz”.
Interested in learning more? Contact us at Arolytics to continue the conversation, or to discuss beta trials at your sites. We look forward to chatting!