(274d) An Optimization-Based Methodology for the Reduction of Gas Flaring in Shale Oil Production

Gas flaring is a common practice around the world, where nearly 5300 billion cubic feet (bcf) are burnt each year releasing 400 million tons of equivalent CO₂ emissions to the atmosphere (Farina, 2010). Governments are reacting by implementing strict environmental regulations that restrict gas flaring. For instance, in 2014 the North Dakota's Industrial Commission established a set of targets which aim to reduce flared gas to 10% by 2020 (EIA, 2014). As new regulations are implemented, several initiatives have spurred in different countries aiming at the monetization of associated gas sources that have been historically regarded as non-profitable. The World Bank is actively supporting gas flaring reduction programs through the Global Gas Flaring Reduction Initiative (GGFR) (http://www.worldbank.org/en/programs/gasflaringreduction). Nonetheless, commercialization of small gas volumes entails considerable technical and economic challenges. In this regard, great efforts are being made for developing small-scale modular plants for different processing pathways such as gas-to-liquids (GTL), gas to compressed natural gas (CNG) and liquified natural gas (LNG), and gas-to-wire (GTW). These modular plants have caught attention from different sectors due to their comparatively low capital investments and flexibility to be relocated once a gas source has been depleted. Besides gas processing, gas injection for enhanced oil recovery (EOR) is subject to extensive research as a strong alternative for reusing associated gas and increasing oil production (Sheng, 2017).

The selection of technologies for monetization of small gas volumes greatly depends on efficiencies of processing facilities, capital expenses, market conditions, and environmental aspects. Moreover, the variant nature of associated gas production adds a layer of complexity in the decision-making process. Therefore, the design of flaring reduction programs results in systems of high complexity where decisions are deeply interconnected. Optimization techniques are powerful tools that can be implemented to tackle these types of problems. This has been demonstrated in Tan and Barton (2015), where the production of liquid fuels with modular plants was addressed and shown to be profitable. Moreover, Gao and You (2017) addressed the economic and environmental feasibility of producing LNG with modular plants and conventional facilities for centralized electricity generation. Nonetheless, an integrated approach is required to exploit potential synergies between different monetization pathways.

Accordingly, this work introduces a novel optimization-based methodology that supports the design of case-specific gas flaring reduction programs via an integrated economic and environmental analysis. The novelty of the optimization framework stems from the integration of four monetization pathways: 1) physical processing monetization, 2) chemical processing monetization, 3) gas to wire monetization for distributed electricity generation, and 4) gas reinjection monetization for enhanced oil recovery. The methodology requires information such as geographic distribution and production profiles of gas sources, techno-economic information of small-scale modular plants and EOR projects, processing sites location, markets location, demand and spot prices of final products. A multiperiod Mixed Integer Linear Programming model (MILP) enables the optimization of strategic decisions such as investments plan, technologies portfolio selection, and operational decisions such as activation of well-pads, relocation of modular plants, and amount of associated gas reinjected into the reservoir. The decisions are optimized so that the environmental impact, measured as the total equivalent CO₂ emissions, is minimized and profit, measured as the net present value (NPV), is maximized. The capabilities of the proposed methodology are illustrated through a case study for the Bakken region. The case study is used to investigate economic and environmental trade-offs of associated gas commercialization in the United States.

References

EIA, 2014. Today in energy - North Dakota aims to reduce natural gas flaring [online Document]. URL https://www.eia.gov/todayinenergy/detail.php?id=18451 (accessed 12.4.18).

Farina, M., 2010. Flare Gas Reduction: Recent global trends and policy considerations, GE Energy Global Strategy and Planning.

Gao, J., You, F., 2017. Can Modular Manufacturing Be the Next Game-Changer in Shale Gas Supply Chain Design and Operations for Economic and Environmental Sustainability? ACS Sustain. Chem. Eng. 5, 10046–10071. https://doi.org/10.1021/acssuschemeng.7b02081

Sheng, J.J., 2017. Critical review of field EOR projects in shale and tight reservoirs. J. Pet. Sci. Eng. 159, 654–665. https://doi.org/10.1016/j.petrol.2017.09.022

Tan, S.H., Barton, P.I., 2015. Optimal Dynamic Allocation of Mobile Plants to Monetize Associated or Stranded Natural Gas, Part I: Bakken Shale Play Case Study. Energy, Manuscr. Rev. 93, 1581–1594. https://doi.org/10.1016/j.energy.2015.10.043