The Daily Oil Bulletin’s first annual Energy Excellence Awards were held in Calgary on Thursday, May 2. Awards were handed out in 12 categories under the banners of Operational and Project Excellence, Innovation and Research Excellence, and Exporting Excellence.

Over the next two weeks we will be profiling the champions in each of the 12 subcategories. Today’s instalment, sponsored by industry partner Fluor, profiles the champion in the category Operational Excellence: Industry Accelerator.

Click here to read about all of the champions and finalists.

With tightening emissions regulations coming into play, Bluesource Methane recognized an opportunity to help the oil and gas sector meet the new 45-per-cent-by-2025 methane emission reduction targets.

That was three years ago when the industry was slogging through the worst downturn in a generation. Bluesource reasoned that not all producers would have the capital, time and expertise to take on the task of switching out hundreds of high-bleed pneumatic controllers in the field.

So Bluesource started talking to Alberta companies and drew upon its two decades of expertise as an advisory and capital provider for low-carbon environmental projects across North America and launched the Methane Reduction Program.

A key feature of the offering is its ability to finance the cost of swapping high-bleed pneumatic controllers for more lower GHG emissions units. Oil and gas producers incur no capital outlay. Bluesource recovers its outlay costs through the reduction in fuel gas used and carbon offset credits. Once the equipment is paid out, the producer owns the equipment and shares ongoing proceeds with Bluesource 50-50.

“Beyond [the financing piece], we are doing something that can be quite challenging for companies to oversee,” says Yvan Champagne, president of Bluesource Methane.

A retrofit of some 500 controllers, for example, can be a formidable undertaking. The process starts with identifying all the controllers currently in place, determining which controllers are eligible for retrofit, creating an inventory of where they are, drawing up a plan of work, coordinating delivery of equipment with suppliers, executing the field work and then tracking of emission results. Some companies underestimate the expertise and amount of work this involves.

“What has been interesting is that some of larger producers that we talked to last year that said, ‘I think we’re going to tackle this internally,’ have come back to us and said, ‘You know what, I think you have a better approach. I think we’re just going to let you do it,’” Champagne says.

The recognition that a specialized service provider can do certain things better than a producer is a bit of shift in thinking among some oil and gas companies, especially among some larger producers in Alberta that have historically done everything in-house. Champagne says that this shift is driven by the persistently low commodity prices that force producers to run lean on staff and Bluesource’s work to date in bringing together key partners to deliver optimal solutions efficiently and effectively.

“We have a world-class data management platform. We partnered with three of the largest E&I [engineering and installation] companies in Alberta that are very effective at replacing equipment and doing our inventory work,” Champagne says.

With Spartan Controls onboard as its primary supplier, Bluesource has installed around 4,100 controllers for 15 oil and gas producers since 2017. It is on track to reach its goal of installing 7,000 controllers.

These retrofits to date have cut and estimated emissions by 180,000 tonnes of CO2e in 2018 and saved oil and gas producers over $4 million in capital expenditures that they would have incurred to upgrade controllers themselves.

“This is the equivalent of taking roughly 35,000 cars worth of emissions off the road or, in terms of the emission from power required by the average Canadian house, it’s close to 5000 houses. So the numbers are quite staggering and they will just keep going up dramatically over the life of the program, which is really exciting,” Champagne says.

When Bluesource reaches its target of 7,000 controller swap-outs, it will have dealt with 10 per cent of the eligible controllers in Alberta. This is significant for Alberta’s emission reduction targets as well as worker safety because, in many cases, methane from older pneumatic controllers is vented into enclosed spaces that workers must access.

Industry Partner:

Since 1949, Fluor Canada has been involved in the engineering, procurement and construction of a wide range of energy related projects that are spread across the Canadian landscape. Throughout its 70-year history in Canada, Fluor has provided local, regional and international clients with full-service capabilities, which include economic evaluations, conceptual engineering, feasibility studies, program management, detailed engineering, procurement, transportation and logistics, modularization, fabrication, direct-hire construction, construction management, commissioning, start-up, operations and maintenance. 

Click here to read about all of the champions and finalists.