1. How to Reduce Fuel Gas Consumption Paul Nelson Manager, Commercial Operations AltaGas Ltd. May 9, 2008

2. Background Natural gas is an essential fuel used in oil and gas production Natural gas is an essential fuel used in oil and gas production Fuel usage in oil and gas production and processing accounts for approx. 9% of all raw gas produced (44,000 e3m3/d, or 1.6 Bcf/d) Fuel usage in oil and gas production and processing accounts for approx. 9% of all raw gas produced (44,000 e3m3/d, or 1.6 Bcf/d) Initial site specific studies shows potential for reduction Initial site specific studies shows potential for reduction 10% reduction in fuel gas consumption would mean addition sales of 4.4 e6m3/d or 160 MMcf/d 10% reduction in fuel gas consumption would mean addition sales of 4.4 e6m3/d or 160 MMcf/d

3. Economic benefit (potentially $500 million more sales, at $9/GJ) Economic benefit (potentially $500 million more sales, at $9/GJ) Greenhouse gas reductions (3 million tonnes CO2e per year) Greenhouse gas reductions (3 million tonnes CO2e per year) Extended life of facilities Extended life of facilities Energy efficient operations are often more cost-effective operations Energy efficient operations are often more cost-effective operations Benefits of Energy Efficiency

4. Total Fuel Use in the Upstream Sector (incl. straddle, bitumen and injection) Source: ERCB

5. Total Fuel Use in the Upstream Sector (excl. straddle, bitumen and injection) Source: ERCB

6. Gas Plant Fuel Usage Source: ERCB

7. Gathering System Fuel Usage Source: ERCB

8. Gas Battery Fuel Usage Source: ERCB

9. Fuel Gas Efficiency Committee Formal Government/industry committee established May 2006, chaired by Alberta Energy Formal Government/industry committee established May 2006, chaired by Alberta Energy Mission statement: Mission statement: To set direction and provide leadership to improve the upstream industry’s petroleum energy efficiency per unit of production and reduction of fuel gas use in oil and gas production, pipeline and gas processing facilities regulated by the ERCB To set direction and provide leadership to improve the upstream industry’s petroleum energy efficiency per unit of production and reduction of fuel gas use in oil and gas production, pipeline and gas processing facilities regulated by the ERCB

10. Members: Alberta Department of Energy (chair) Alberta Department of Energy (chair) Gas Processing Association Canada Gas Processing Association Canada ERCB ERCB CAPP CAPP SEPAC SEPAC Natural Resources Canada Natural Resources Canada Individual Producers and Midstreamers Individual Producers and Midstreamers Fuel Gas Efficiency Committee

11. Result: Best Management Practices Consultant has completed a series of documents for maximizing fuel gas efficiency in oil and gas production and processing operations Consultant has completed a series of documents for maximizing fuel gas efficiency in oil and gas production and processing operations Funding shared between government and industry Funding shared between government and industry Final product is 17 BMP documents Final product is 17 BMP documents BMP’s will be publicly accessible BMP’s will be publicly accessible

12. Where Fuel Gas is Used Source: ERCB

13. Gas Plant Fuel Usage Source: ERCB

14. List of BMP’s List of BMP’s

15. Sample: Glycol Dehydrators

16. Sample: Glycol Dehydrators Contents

17. Sample: Glycol Dehydrators Logic Diagrams and Graphs 4.4 Operational Adjustments Logic Diagram

18. Sample: Glycol Dehydrators Case Studies

19. How to Reduce Fuel Gas Consumption? Use Best Management Practices!

20. Next Steps BMP’s to reside on CAPP website, available for downloading BMP’s to reside on CAPP website, available for downloading BMP material to be incorporated into industry training courses BMP material to be incorporated into industry training courses Industry and government to monitor usage and to quantify impact of adoption of the BMP’s Industry and government to monitor usage and to quantify impact of adoption of the BMP’s