Environment
The environmental benefits are tremendously valuable. It is becoming increasingly important to be able to demonstrate to regulatory authorities that all practical steps are taken to minimise the environmental impact of any industrial activity be it oil production or waste disposal. It is unlikely that future projects will be granted licences or permissions unless proposals include an acceptable method for dealing with “by-product” methane.
Rapid Return on Investment
VGP technology is a very attractive option as it offers rapid return on investment.
By transforming the methane from a waste product that required abatement treatments into a sellable product we are creating a new on going revenue stream for the business. As can be seen from the diagram below, implementing VGP technology is cost effective and an environmentally friendly way of dealing with methane emissions.
Costs
Typically the capital cost of virtual gas pipelines can be recovered within 2 years from energy sales or fuel costs saved.
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Cost of Reducing CH4 Emissions from Oil
| Abatement Technology | Year | Capital Cost ($/tCO2eq) | Annual Cost ($/tCO2eq) | Reduction Efficiency | Breakeven Price ($/ tCO2eq)ª |
|---|---|---|---|---|---|
Flaring: offshore |
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| 2010 | 832.60 | 24.91 | 98% | $170.35 | |
| 2020 | 832.60 | 24.91 | 98% | $170.35 | |
Flaring: onshore |
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| 2010 | 33.30 | 0.99 | 98% | $6.82 | |
| 2020 | 33.30 | 0.99 | 98% | $6.82 | |
Direct use (offshore) |
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| 2010 | 55.51 | 1.11 | 90% | $7.09 | |
| 2020 | 55.51 | 1.11 | 90% | $7.09 | |
Reinjection (onshore) |
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| 2010 | 66.61 | 2.21 | 95% | $10.14 | |
| 2020 | 66.61 | 2.21 | 95% | $10.14 | |
ª Based on 15-year lifetime.
Source EPA USA
