A Techno-Economic Analysis of Methane Mitigation Potential from Reported Venting at Oil Production Sites in Alberta

The technical and economic potential for reducing methane emissions from reported venting and flaring volumes in 2015 at 9422 upstream oil production sites in Alberta, Canada was evaluated in a comprehensive site-by-site analysis. For each site, up to six different technologies for mitigation were considered, based on conserving gas into pipelines, combusting gas on site, or using gas for on-site fuel. Economic viability of mitigation was calculated using current economic parameters and gas price projections on a net present cost basis. Monte Carlo simulations suggest that a 45% reduction in methane emissions (consistent with current federal and provincial targets) from reported flaring and venting is technically and economically feasible at overall average costs ranging from $-2.98 CAD/tCO₂e (i.e., a profit) to $2.51 CAD/tCO₂e with no one site paying more than $11.02 CAD/tCO₂e. If the reported baseline emissions are augmented to reflect results of recent airborne measurements, overall economics of mitigation generally improve due to larger available gas volumes at many sites. Considering federal carbon price targets of $50 CAD/tCO₂e by 2022, there are relevant economic opportunities for mitigating methane from reported venting and flaring volumes well beyond a 45% reduction. This could partially offset the challenge in addressing the additional methane emissions from fugitive and unreported venting sources.