Devon Energy Corp. has managed to make the task of complying with new U.S. Environmental Protection Agency regulations into a moneymaking proposition in western Oklahoma.
The company has figured out a way to keep methane and other forms of carbon known as “volatile organic compounds” from leaking out of oil storage tanks in its operations in the Cana Woodford Shale.
Devon is using vapor recovery units to compress the gas so that it can be placed into a pipeline to be sold. Otherwise, that gas would be burned off or simply leak out into the air.
“It keeps it out of the atmosphere,” said Jim Heinze, manager of production engineering for Devon's Anadarko Basin unit. “It's burned in somebody's house.”
The EPA is cracking down on emissions of some volatile organic compounds, which can cause environmental or health problems.
Travis Dean, a Devon construction and facilities engineers, said new regulations that took effect last fall slashed the allowable amount of such emissions to 6 tons per facility. The limit had been 40 tons per facility, so oil and natural gas companies had their work cut out for them.
“Devon has a lot invested across the company to comply with these regulations,” Dean said.
When possible, Devon now connects four well pads in the Cana to a single tank battery equipped with a compressor to prepare the vapor for sale.
“If you can compress that gas, you can sell it and make money off of it,” he said.
Dean said Devon chose to work with Oklahoma City-based Flogistix in western Oklahoma because its vapor recovery units work well with low-pressure gas. He estimated Devon has been able to capture 99.86 percent of the emissions from its storage tanks in the Cana since adding those units.
Heinze said the market for such services is booming because of the new EPA regulations intended to control greenhouse gas emissions from oil and natural gas production.
He said those vapors accumulate most often in storage tanks. Drilling and completion operations are not as much of a concern when it comes to emissions.
Dean said Devon's approach to addressing the new regulations is not unique, but the company has worked hard to find ways to cut costs and redundancies in its operations.
He said capturing excess vapors from well sites makes Devon's operations in the Cana more efficient because it needs fewer pumps and less pipeline. The company also saves on equipment costs because it uses eight storage tanks per section instead of 24.
Dean said Devon has used that layout on two occasions so far, but he expects to add up to seven more this year because of the company's aggressive drilling plans in the play.
“That's worked out pretty well for us,” he said.
Dean said the vapor recovery accounts for less than 1 percent of Devon's natural gas stream, but it is enough to cover the rental costs on the equipment.