For a while there, it seemed LDAR was no longer critical.
No one wanted to talk about LDAR. Investments in LDAR improvements shriveled. Some teams even lost their jobs.
The people in charge appeared to be converging on a view that seemed to suggest that the problem of leak detection was no longer a priority.
- For a while there, it seemed LDAR was no longer critical.
- Why are we so confident that LDAR remains critical and a priority for the energy industry and the world?
- Expect more regulatory scrutiny
- What should energy companies be doing about gas leaks?
- What are we doing to help improve LDAR outcomes?
- LDAR, it’s good for the environment and good for the bottom line.
- What is the EPA recommended LDAR program?
- Methane Emission Reduction
- Industry Efforts to focus on the environmental challenges
The last administration, so favorable towards fossil fuel, seemed to generally deemphasize the importance of LDAR and environmental compliance. We spoke with compliance officers who told us they were already understaffed, and if methane leaks were not important, then LDAR compliance was no longer a priority. Monitoring by inspectors slowed down, and some saw it as an opportunity to slow down their LDAR monitoring.
COVID-19 shut the world down, and demand for oil and gas fell, resulting in depressed prices. Investments in the sector dried up, and some good companies closed up shop.
At the same time, the alternative energy story reached a global fever. It seemed that everywhere fossil fuel was no longer necessary. The world would eliminate the need for fossil fuels shortly.
Here in the USA, a new administration with a substantial progressive agenda favoring what was labeled the Green New Deal aggressively pitched a narrative that undermined the value of fossil fuels.
Against that backdrop, one could understand the broad pessimism around LDAR.
Why are we so confident that LDAR remains critical and a priority for the energy industry and the world?
To understand our view on the importance of LDAR, we need to remind everyone of a few fundamental truths.
- No one has designed a fossil fuel exploration, production, storage, or distribution system immune from leaks.
- Gas leaks are a hazard to the businesses, the community affected, and the environment generally.
- Alternative energy sources will eventually replace fossil fuel use; however, alternative energy only represents 5% of today’s energy generated. It will be a while before that transition is complete.
Further, we know from experience that gas leaks are occurring even when production slows down.
An unfortunate reality is that gas leaks don’t go away because an energy company is bankrupt or no longer in business.
Gas leaks don’t go away until we get rid of leaking equipment. And let’s face it, even that will not eliminate all VOC emissions.
The simple reality understood by LDAR professionals is that leak detection is a critical priority and will be for a long time into the future!
Several enlightened energy management teams understood this and kept their LDAR teams intact and their eyes on improving leak detection despite those counter-prevailing winds that suggested otherwise.
Let’s face it, the new administration may be decidedly anti-fossil fuel, but they are all in on compliance. After all, it may be a cudgel to go after the industry.
That suggests an aggressive compliance stance by the EPA towards methane and other volatile organic compounds (VOC) gas leaks. Remember the 0000a rules that were delayed or ignored under the old administration in the USA? Expect to see it back on the agenda and pushed aggressively.
Corporate leaders and investment managers are paying more attention to environmental metrics. We expect that LDAR’s performance and diligence will significantly contribute to the energy industry meeting newly planned rigorous environmental reporting standards.
Expect more regulatory scrutiny
As we worked on this piece, Apple Inc called for the U.S. Securities and Exchange Commission (SEC) to require companies to disclose far-reading emissions information such as how customers use their products.
Expect to see more emphasis on Scope 3 emission reporting and an impact on energy business valuations. That alone will have the effect of pushing more top managers to invest more in LDAR capabilities.
Even if you are not a publicly-traded company subject to SEC rules, we humbly suggest that every management team get to know the value of their LDAR operation. For a reminder on our view of why this is important, see our previously published eBook that lays out Why every Energy Executive should know LDAR.
What should energy companies be doing about gas leaks?
In October 2007, the EPA published a document titled Leak Detection and Repair – A Best Practices Guide in which they said:
In setting Compliance and Enforcement National Priorities for Air Toxics, EPA has identified LDAR programs as a national focus.
The EPA was right then about the importance of leak detection and repair efforts when they crafted the initial LDAR regulations. In arriving at the LDAR requirements, they built a substantial LDAR database and used that data to develop science-based recommendations for improving LDAR operations.
Through its learning and education program, the EPA has discovered that a well-implemented LDAR program delivers business, operational, safety, and environmental benefits. Further, the EPA has done a terrific job documenting and sharing lessons learned in what they call the Best Systems of Emissions Reduction (BSER).
The EPA’s best practices are a road map that every energy company should use in attacking their leak detection problem. Even if the regulations do not cover your company’s operation, we think there is excellent value in implementing a serious LDAR program. The benefits are compelling.
What are we doing to help improve LDAR outcomes?
The pandemic led to slowdowns and a general malaise in some businesses, but not the case with our team.
We spent the pandemic recommitting to improving everything we knew about leak detection and figuring out ways to drive inefficiency out.
The result? We have eliminated an average of 25% of the cost of our LDAR solutions. And we have improved every aspect of the approach and technology we recommend and use ourselves.
That means that LDAR teams can now invest in solutions to find gas leaks faster, more safely, and effectively with paybacks of less than a year.
The EPA recommendations are an excellent baseline for starting to think about LDAR. Still, because of the regulatory mindset, all too often, that’s where teams settle on their adoption and implementation.
That means that too many teams are still using old technology and a dated approach to LDAR.
By focusing on inspecting each component which is a potential leak point, teams end up stuck implementing an expensive approach that allows for annual inspections at best.
But we know that leaks are random, and the average time a leak will be spouting unchecked on average is half the inspection cycle time. That means if you inspect once a year, you will find gas leaks on average six months late.
What should a company do then?
The obvious answer is to increase the frequency of inspections.
But the inspection protocols are focused on finding every minute leak and expensive. It’s just not cost-effective to take the same approach to gas leak detection.
Our team has been working to rethink the approach and the solutions they use to dramatically increase the frequency of targeted inspections while also reducing the cost of comprehensive assessments.
How do we do that?
We start with Pareto’s rule. The largest leaks are the smallest in number and account for the majority of the potential gas leak.
So we focus on using technology that helps identify large leaks faster. Our overview scan methodology implements systems that can cost-effectively identify large leaks through regular inspections. If we inspect each month, then the average large leak is found in two weeks, resulting in a 90% reduction from an annual approach, for example.
We ensure that each detailed inspection uses the BSER technology (sniffers, OGI, etc.), which are orders of magnitude more productive for identifying gas leaks than the traditional FID approach first recommended by the EPA.
You find your most significant gas leaks a lot earlier, and your overall operation is more productive.
That’s right. When thoughtfully implemented, companies find LDAR saves operational costs, reduces safety issues, and improves environmental performance.
LDAR, it’s good for the environment and good for the bottom line.
We encourage every energy executive to spend a little more time supporting your LDAR teams and bringing new technology and approaches to this vital operation.
We all need LDAR teams to succeed.
What then should be the LDAR priorities?
Your priorities for LDAR depend on where you sit within the industry.
But by and large, there is enough benefit in LDAR for everyone. We say that the top of the list is spending more time understanding how LDAR contributes to your business and building the necessary capabilities to improve your current LDAR outcomes.
We recommend you don’t just adopt the EPA method, actively seek to innovate on top of those recommendations and seek out readily available process and technology solutions to make your LDAR technician more effective.
What is the EPA recommended LDAR program?
The EPA regulations require a written LDAR program. It lays out five fundamental elements for every LDAR program. They are:
The EPA has collected LDAR data from thousands of operations and established that certain valves, pumps, and other related process equipment tend to leak. The EPA recommends identifying, tagging, and locating each regulated component on process flow diagrams or piping/instrumentation diagrams. These are the components that you should add to your audit list for monitoring or regular inspections.
The EPA recommends a periodic field audit to update your list and their locations.
The EPA method has traditionally recommended physical tags. However, virtual tagging and 3D modeling can significantly enhance the identification, positioning of a leak and inform the repair technician of the exact location. Companies will also save from not frequently replacing tags that are lost or destroyed by the environment.
Method 21 requires measuring VOC emissions from regulated components in parts per million (ppm). A leak is detected when ever the measured concentration exceeds the threshold standard (i.e., leak definition) for the applicable regulation.
Many equipment leak regulations also define a leak based on visual inspections and observations (such as fluids dripping, spraying, misting, or clouding from or around components), sound (such as hissing), and smell.
The challenge is that leak definitions vary by component type, regulation, and monitoring interval. They may also vary depending on the type, for example, gas, vapor, light, or heavy liquid.
This variation in definitions makes the LDAR inspection and reporting process confusing at the inspection level.
We recommend using a definition lower than the regulation and simplifying your LDAR program using the most stringent leak definition when multiple regulations govern.
The primary method for monitoring to detect leaking components is EPA Reference Method 21 (40 CFR Part 60, Appendix A).
Method 21 is a procedure used to detect VOC emissions from process equipment using a portable detecting instrument.
Monitoring intervals vary according to the applicable regulation but are typically weekly, monthly, quarterly, and yearly. For connectors, the monitoring interval can be every 2, 4, or 8 years. The monitoring interval depends on the component type and periodic leak rate for the component type.
The portable detecting instruments first recommended by the EPA were a photoionization detector (PID) or a flame ionization detector (FID).
A PID is a portable gas and vapor detector that contains an ultraviolet lamp that releases photons absorbed by the compound in an ionization chamber. Technicians use a PID to identify the presence of a range of volatile organic compounds (VOC). PID delivers results quickly and is easy to use. They need regular cleaning, but they are accurate, reliable, and have good sensitivity for VOC detection.
FID equipment is typically heavier and larger than PID. It uses a hydrogen-air flame to ionize a sample gas and determine its concentration. It is more costly and less reliable than a PID. It requires regular refilling of the hydrogen cylinder and can be more cumbersome to use. They are frequently calibrated with methane, the main component of natural gas, making them a better choice when measuring natural gas.
Both PID and FID have a place in every LDAR program, but a monitoring technician must be close to every monitored or leaking component for accurate leak monitoring. This proximity requirement makes them less safe, more cumbersome, and consequently forces less frequent inspections.
The EPA approves modern approaches such as optical gas imaging (OGI) and I.R. or laser detection devices as alternate methods which can be dramatically safer, more cost-effective, and quicker. These new methods will continue to improve as new capabilities are implemented, such as quantification, comparative monitoring. And while they meet todays’ LDAR requirement, they open a path to convert LDAR operations beyond mere compliance.
The purpose of leak detection is to prioritize maintenance activities towards repairing leaking components. The EPA recommends, and it is good practice to repair leaking components as soon as possible after detection. If possible, replace problem components with leakless or other improved technologies.
The EPA recommends records of the equipment, inspection, location, regular maintenance, testing, leak occurrence, and repair. We can’t imagine running a complex operation without those basics.
In summary, a good LDAR program is not very different from an excellent preventative maintenance program. It embodies all the best practices of a well-run operation and focuses that lens on finding hazardous air pollutants (VHAP) or gas leaks that occur in your process.
Methane Emission Reduction
In 2014 Colorado led the way by specifically regulating Methane reductions. Federal regulations then followed in 2016 (40 CFR part 60, subpart OOOO), generally referred to as Quad-O.
The regulations apply to well sites, gas processing plants, tank farms, and every other part of the oil and natural gas supply chain. A potpourri of known historical sources of leaks – fugitive emissions, thief hatches, compressors, valves, vents, and other components across these facilities are subject to LDAR compliance.
There are more than a million well heads in the USA, each with a small collection of regulated components.
Innovative operators find Optical Gas Imaging and Drone enabled OGI scans a dramatically more effective approach to inspecting these logistically challenging facilities and components.
And, in so doing, they are discovering all kinds of savings in the process. One team generated six-figure savings simply by eliminating scaffolding required for access to conduct inspections.
Industry Efforts to focus on the environmental challenges
One Future is a coalition of 41 natural gas companies.
ONE Future’s goal is to ensure the future of natural gas as a clean energy source by reducing member company methane emissions to 1% (or less).
USING UNIFORM, EPA-APPROVED REPORTING PROTOCOLS, THE COALITION REGISTERED A 2019 METHANE INTENSITY NUMBER OF 0.334%, BEATING ITS ONE PERCENT GOAL BY 67%.
The Environmental Partnership consists of 83 companies and includes many of the USA’s major oil and natural gas producers committed to continuously improving its environmental performance.
The Environmental Partnership’s initial focus is on technically feasible solutions, commercially proven to reduce emissions reductions significantly. The Environmental Partnership will provide a forum for participants to share information and analyze best practices and technological breakthroughs to improve our understanding of emissions and how best to reduce them.
Advisor, Entrepreneur, Strategist, & Transformation Agent