3. Environmental Protection at an Affordable Cost Bruce R. Peachey, P.Eng., MCIC

4. What is “Environmental Protection” ◊Achieving a “sustainable” balance Environment, Economics and Security ◊Environment – Don’t destroy our own home ◊Economics - Support human desire to improve themselves ◊Security – Ensure the same for future generations

5. What is an “Affordable Cost” ◊No limit to avoid a “terminal” condition ◊True costs of environmental change are hard to quantify. Less environmental change will likely have less cost ◊Positive economics to ensure value added ◊Buy down risk where impacts are uncertain

6. Indicators ◊Social - Conspicuous Consumption “Perrier Water” at $3/L vs. $.03/L from tap ◊Climate – Energy Use Global Energy output = 550 EJ (1996) Water vapour impacts vs. “Measurable GHG’s” ◊Toxicity – Cost “High Tech” = High Cost = High Emissions Somewhere ◊Economic – Positive Economics Best “environmental” projects make $ Best “economic” projects minimize environmental impacts

7. Social Indicator = Conspicuous Consumption ◊Easiest way to achieve “Environmental Protection at an Affordable Cost” is to Reduce Conspicuous Consumption “Perrier Water” at $3/l (mostly cost to transport glass and water) vs. >$0.03/l from the tap Only eating “perfect tomatoes” New vs. Used (Social life vs. Design Life) Buy vs. Rent or Lease (Status symbol vs. utility) ◊Social Issues require education and new role models.

8. Climate Indicator = Energy Use ◊“Measured” Global Energy Output= 550 EJ (‘96) Energy to heat atmosphere 1 degree C = 450 EJ ◊Adding energy makes things more energetic! ◊Water vapour impacts vs. “Measurable GHG’s” “Weather” driven by humidity more than temperature »Rainfall on U.S. Eastern Seaboard has a 7 day cycle »Humidity measurement key to weather prediction (1917) »Need predict humidity changes to predict weather (future) “Heat Pipe Effect” moves energy to Arctic air masses »Temperature increase greater at higher latitudes »Rapid increase in glacier melting

9. Toxicity Indicator = Cost ◊Why High Tech materials are expensive: Large resource input (energy, people) High purity requires high processing cost »“Pure water” vs. “Clean Water” Scarce components = large volumes of reject Specialized processing (acids, heavy metals, solvents) All lead to more emissions of toxic or potentially toxic materials ◊High cost means high emissions somewhere

10. Economic Indicator = Positive Economics ◊Economics are a reality Environmentalists and engineers need to get paid “Ethical funds” and stocks have to show a return Financial results are society’s “scorecard” ◊Best “environmental” projects make $ for someone ◊Best “economic”projects minimize environmental impacts ◊“Affordable” = “Profitable” ◊More profitable = Quicker and more widespread implementation

11. Priority #1 - Reduce ◊Reduce Net Energy Use Make complete use of energy generated Don’t dump energy to atmosphere if someone can use it ◊Simplicity of Design Less hardware -->Less cost--> Less energy/emissions to make ◊Biochemical to Replace “Pots & Kettles” Low energy routes to the same products ◊Influence Public Help them select products based on good life cycle impacts? Weed out false/misleading information.

12. Priority #2 - Reuse ◊Close materials loops Find uses for all concentrated streams Use processes and site plants to generate “locally useful byproducts” ◊Design Products for Reuse Standardize materials & packaging to allow refill Design for secondary uses ◊Stop calling things “waste” streams By-products looking for a use.

13. Priority #3 - Recycle ◊Don’t use non-recyclable materials Avoid vinyl-chlorides Avoid composite materials ◊Develop small scale, local recycling processes to reduce transportation energy Community level composting & fibre recycling ◊Plan Landfill Sites to Allow for Mining Segregate metals, asphalt, biomass, other hydrocarbons

14. Picking “Robust Solutions” ◊Best projects for Environmental Protection: Don’t stimulate more conspicuous consumption Net energy demand reductions on Life Cycle Basis Don’t create other problems (toxics) Positive economics to motivate use Go in the right order: ›First Reduce ›Second Reuse ›Third Recycle

15. New Paradigms for Robust Projects ◊Mostly from Energy and Petrochemicals Industries Hydrocarbon Vent Remediation Oilfield Water Management Cogeneration Use of Pure Byproduct Streams Energy Recovery

16. THC Emissions by Industry Sector Total 1995 = 2276 kt Ref: CAPP Pub #1999-0009

17. VOC Emissions by Industry Sector Total 1995 = 681 kt Ref: CAPP Pub #1999-0009

18. CH 4 Emissions by Industry Sector Total 1995 = 1594 kt Ref: CAPP Pub #1999-0009

19. Hydrocarbon Vents – Heavy Oil Heavy Oil Venting Well Test Case - High Volume Casing Vent - #1 Catalytic Heater Tank Vent - #2 Tank at 65 - 85 deg C Secondary Catalytic Heater (If Required)

20. Hydrocarbon Vents – Conventional Oil Or

21. Hydrocarbon Vents – Natural Gas Control Valves Metering Pumps Fuel Destroy VOC’s Power

22. Water and Oil Production in Western Canada Water Production Oil Production

23. Oilfield Water Management DHOWS C-FER/NPEL Minimizes Energy Use Reduces Brine Flow by Aquifers Prolongs Well Life Reduces Surface Facilities Reduces Operating Costs Reduces Surface Spills

24. Oilfield Water Management – Same Well Source/Injector/Recycle Lake or River Source Cap rock Oil Leg Water Leg Cap rock Underlying Aquifer DHOWS Move toward “Ideal” Pump

25. Cogeneration – Compressor Sites Canadian Sales Pipeline Fuel Use* = 0.24 tcf/yr (4.4% of sales) Similar Volume for U.S. Portions of Pipelines #1 Only Requires Power Deregulation #2 Adapt Geothermal Technology Distributed generation – “free” fuel TransCanada Power – 40 MW plants #1 #2 * Source NRCan Energy Outlook

26. Gas Transportation Energy Distribution Ref: CAPP Pub #1999-0009

27. Cogeneration – Gas Plants Gas Production Fuel Use* = 0.43 tcf/yr (7.8% of sales) H2S Converted to Sulphur* = 0.19 tcf/yr (exothermic) Compression, Dehydration, Liquids and Sulphur Removal #1 Potential of over 1,000 MW from major sour gas plants. (RTM/CAPP ‘91) #2 Potential of 80 MW from fractionation plants. (RTM/CAPP ’91) #3 Adapt Geothermal Technology * Source CAPP 1996 Statistics #1#2 SweeteningFractionation #3

28. Cogeneration – Major Sites Initially only requires deregulation Secondary opportunities for other sources. E.g. Steam vents in Cold Lake, E.g. Thermomechanical Pulp Mills Petrochemical Refinery Oil Sands Heavy Oil Petrochemical Refinery Oil Sands Heavy Oil Add Cogen Total Planned in Alta/Sask Alone > 1,000 MW

29. Use of By-Product Streams – CO/CO 2 e.g. Syncrude/Suncor 1996 = 12 Mt/yr CO/CO 2 Potential Products Ethanol (on-site fuel) Acetone Bioreactors Compression & Pipelines Fischer-Tropsch CH 4 Potential Uses Oil Recovery Other Users Potential Products On-site Fuels Diluent for Blending CO 2 CO/CO 2 Biomass & Bugs

30. Use of By-Product Streams - Shingles Value of asphalt in landfill streams = $40/t Cost to dump in landfill = $40-$100/t Replace buying raw asphalt & gravel Needs standards for use in Roads Better filler for Potholes? Estimated Size of Stream in Alberta = 120 t/d Shingle Manufacture Re-roofing LandfillsRoads/Highways Remove Nails & Wood Asphalt

31. Energy Recovery – Water Users Large users might be economic High volume water users Also require heat or power Hydraulic Power Recovery Municipal Pump StationsEnd-user Pressure Reduction Power or heat generation

32. Energy Recovery – Gas Users Large users might be economic High volume gas users Also require power or cooling Utility Pressure Letdown Stations Pneumatic Power Recovery Compressor Stations End-user Pressure Reduction Power or cooling

33. ◊Environmental Protection Can meet objectives of Environment, Economics and Security of Supply ◊Solutions possible with focused changes: Social  Education & Motivation Technical  Economics & Regulation Potential  Opportunity with R&D ◊Key to Affordable Solutions: What if…….Why not……….. Summary

34. Acknowledgments ◊Clients - NRCan & PERD, Oil & Gas Producers ◊Alliance Partners - C-FER Technologies Inc., KR Croasdale & Associates, R&D 2000, Scott- Can Industries, Colin Gosselin ◊Contact Networks - CSChE, PTAC, ACR, CIM, SPE, CAPP, individual colleagues ◊New Paradigm Affiliates - KeyTech Energy Inc., Blackline Oil Corp. & Avatar Systems Inc. ◊Family and Friends

35. Contact Information Advanced Technology Centre 9650-20 Avenue Edmonton, Alberta Canada T6N 1G1 tel: 780.450.3613 fax: 780.462.7297 email: info@newparadigm.ab.ca web: www.newparadigm.ab.ca