Terasen Gas 2005 GHG VCR Progress Report

Terasen Gas Inc.
2005
Progress report
To the Canadian Standards Association
Climate Change, GHG Registries'
Canadian GHG Challenge Registry©
Recipient of the VCR program’s
Leadership Award for the Oil and
Gas ­– Pipelines and Natural Gas
Distribution sector in 2001 and 2003
Awarded to
Terasen Gas' 1999, 2000,
2001, 2002, 2003 and 2004
VCR Submissions
Company profile
Terasen Gas Inc. is the largest distributor of
natural gas in British Columbia serving over
792,000 customers in over 100 communities
in the province’s Interior and Lower Mainland
regions. Terasen Gas Inc. is a wholly owned
subsidiary of Terasen Inc.
Terasen Inc. is a leading energy company and
provider of services related to energy and water
distribution. Terasen Inc. is a publicly held
company listed on the Toronto Stock Exchange
under the symbol “TER” with head office located
in Vancouver, British Columbia.
Table of contents
Company profile
2
Terasen Gas service territory
3
Letter from the President
5
Overview
6
GHG emissions management
at Terasen Gas
8
Inventory of GHG emissions from
Terasen Gas operations
9
Inventory updates
11
Projection of GHG emissions from
Terasen Gas operations
12
Managing emissions –
GHG mitigation measures
A: Internal measures
19
Managing emissions –
GHG mitigation measures
B: Using offsets and emission
reduction trading to manage
GHG emisssions
19
Supply and demand
side activities
20
Education, training and
awareness programs
23
Appendix A: GHG inventory and
inventory methodology
25
27
29
Results achieved
14
Appendix B: GHG reduction
measures from operations
GHG reduction target
17
References/websites
Contact information
For more information, please contact:
Sharon McCarthy
Environmental Affairs Manager
Terasen Gas Inc.
16705 Fraser Highway
Surrey, B.C. V3S 2X7
Phone: 604-592-7684
Facsimile: 604-576-7105
e-mail: sharon.mccarthy@terasengas.com
For more information on Terasen Gas, you can also
visit our website at www.terasengas.com.
A letter from
Randy Jespersen,
President,
Terasen Gas
gas through the construction of a $32 million
natural gas pipeline from Squamish to Whistler.
Converting the propane system to natural gas
presents an opportunity to reduce GHG emissions
and improve regional air quality. The Sustainable
Energy Strategy also targets significant longer term
reductions in the GHG intensity of the RMOW’s
energy use, including transportation.
We are pleased to submit our first GHG emissions
progress report to the new Canadian Standards
Association (CSA) Climate Change, GHG Registries'
Canadian GHG Challenge Registry© (the Registry).
As a long term supporter of the Registry’s
predecessor, Canada's Climate Change Voluntary
Challenge and Registry, Terasen Gas submitted
annual reports on the company’s GHG emissions
management program; this year’s submission
marks our eleventh voluntary report.
We support the CSA Climate Change, GHG
Registries’ goal to encourage corporations and
individuals to take voluntary action on climate
change and plan to continue reporting on our own
Company efforts to manage GHG emissions.
As reported in this submission, we have exceeded
the target for 2004 GHG emission reductions that
was set in last year’s report. For 2005 through
2010 we are targeting a further 6200 t CO2e
reduction from new internal measures and offset
projects, an amount equal to 6.5 per cent of our
2000 base year emissions.
In addition to our efforts to reduce emissions
from our operations, programs to help customers
use natural gas more efficiently through
demand side management initiatives, customer
communications, and other customer services
continue. Once again Terasen Gas received an
award from Natural Resources Canada (NRCan) for
its customer energy efficiency programs. This year’s
award was in NRCan’s Outreach category, which
recognizes public education or awareness activities
that inform Canadians about energy efficiency.
Randy L. Jespersen
We are also pleased to report that our work with
the Resort Municipality of Whistler (RMOW), to help
them plan for the community’s growing energy
demands as they prepare to host the 2010 Olympic
and Paralympic Winter Games, is producing results.
On April 18, 2005 the RMOW and Terasen Inc.
signed a memorandum of understanding to develop
a Sustainable Energy Strategy for Whistler. One of
the key elements of this strategy is the conversion
of the existing Whistler propane system to natural
Overview
This year’s submission, prepared in accordance
with the May 2005 Registry guidelines1, reports
on new developments in our Company’s GHG
emissions management program and ongoing
efforts to reduce GHG emissions from our
operations. The report covers the operations of
Terasen Gas Inc. (Terasen Gas).
As shown in Table 1, GHG emissions from
Terasen Gas operations were estimated to be 99,000
t CO2e in 2004, 3.4 per cent above 2000 levels;
however, contracted delivery of GHG reductions
from offset projects in 2004 produced a 10,000
t CO2e emission reduction, such that our net3 2004
emissions were 6.4% below 2000 (baseline year) levels.
This year’s report references the 2000 baseline year
that was established in our 2004 VCR2 submission.
As an explanatory note, the 2000 baseline is based
on the “actual” or “with actions” inventory of GHG
emissions for the year 2000 and includes both
“direct” and “indirect” emissions. Direct emissions
are GHG emissions from the Company’s operations,
including those arising from energy consumption in
buildings and vehicles. Indirect emissions are GHG
emissions associated with purchased electricity.
Through a combination of operational efficiencies,
equipment selection and offset project investment,
we have significantly reduced emissions below
"Business as Usual" levels. Without these efforts,
it is estimated that the GHG emissions from our
operations would have increased substantially as
shown in Figure 1.4,5
Table 1: GHG emissions from Terasen Gas operations* (tonnes CO2e)
(t CO2e)
2000 baseline
95,800
2004 GHG emissions (before offsets)
99,000
% change from baseline
+3.4% 2004 GHG offset projects 10,000
2004 GHG emissions (net offsets)
89,000
% change from baseline
-6.4%
* Includes both direct and indirect GHG emissions from operations, including buildings and vehicles.
1 Canadian
GHG Challenge Registry: Guide to Entity & Facility-Based Reporting”, Version 4.1, May 2005, CSA Climate Change, GHG Registries., http://www.ghgregistries.ca/
2The VCR program, or Climate Change Voluntary Challenge and Registry program, was the CSA Climate Change, GHG Registries’ program predecessor.
3In this submission, we use the term “net” to refer to GHG emission inventory numbers that reflect the reductions achieved through the purchase of emission reductions from on-site activities, referred to as GHG offsets.
4Offset projects are included under “Actual”.
5In keeping with the Registry’s “Canadian GHG Challenge Registry Guide to Entity & Facility-Based Reporting”, “Business As Usual” or “BAU” is used to refer to the projection of performance “as if no emission reduction activities had taken place …this is also called a ‘Reference Case’, ‘Without Emission Reductions’ or ‘Frozen Efficiency Forecast’”. (Registry Guide, p. 17)
Figure 1: GHG emissions from Terasen Gas operations
160,000
140,000
120,000
100,000
80,000
60,000
40,000
Business as usual
Actual (after offsets)
20,000
2000
2001
2002
2003
2004
In this Registry progress report, we update what
Terasen Gas is doing to:
GHG efficiency improvements in operations
have also been achieved over 2000 levels when
measured on a unit of production basis.6 As shown
in Table 2, GHG emissions per customer have been
maintained at 2000 levels (before offsets) however,
when accounting for offset project reductions a
9.8 per cent decrease (improvement) was achieved.
While GHG emissions per terajoule of gas delivered
have increased over 2000 levels (when calculated
before offsets), this performance indicator also
shows a decrease (improvement) when offset
reductions are included.
• manage the GHG issue
• contribute to the development of effective and
economically sound climate change policy
• improve our GHG inventory data
• reduce GHG emissions from our own operations
• invest in GHG offset projects outside our company
• help our customers find ways to reduce
emissions from their use of natural gas as an
energy source, and
• educate our employees and customers about the
climate change issue.
Table 2: GHG Performance on a Per Unit Basis*
t CO2e per customer t CO2e per terajoule of energy delivered
2000 Baseline
0.125
0.491
2004 (before offsets)
0.126
0.539
% change from baseline
0.4% 9.8%
2004 (net offsets)
0.113
0.484
% change from baseline
- 9.8%
- 1.4%
.
* The calculation of these performance indicators are based on sales volumes that have been normalized to account for temperature.
The calculations also exclude shipments for thermal power generation and other third parties, as well as the GHG emissions directly
associated with making these shipments. Shipments for generation facilities and other third parties vary considerably from year to
year. The GHG emissions associated with making these shipments are, however, included in the Company’s GHG inventory numbers.
6While
Table 2 reports on GHG intensity on the basis of two very broad indicators, t CO2e per TJ and t CO2e per customer, it is
important to recognize that the GHG emissions profile of Terasen Gas is a function of many different variables and that no one
variable is ideal for tracking aggregate GHG performance on an intensity or unit of production basis.
GHG emissions management at Terasen Gas
The strategies of the GHG management program
of the Terasen Gas group of companies, including
Terasen Gas Inc., focus on three key areas:
The Terasen Gas GHG management program is
coordinated through the Company’s Environmental
Affairs group.
•Managing GHG emissions from operations: Our strategy is to implement best GHG practices
in system design and operations and GHG
emissions quantification.
Senior executive and the board of directors receive
regular updates on the climate change issue and the
Company’s GHG emission reduction performance
relative to targets. The program is managed under
the Company’s Health, Safety and Environmental
policy and its Environmental Management System.
•Supporting customer efforts to reduce GHG
emissions from natural gas use:
Our strategy is to provide a reliable supply of
natural gas at rates that are competitive with
more GHG intensive fuel choices. We also offer
our customers energy-efficiency programs and
information to help them use our product wisely.
Terasen Gas also participates in and supports the
work of several industry level efforts including:
•The Canadian Gas Association (CGA) Air
Management sub-committee and the CGA
Sustainable Growth sub-committee ­— these
committees are currently engaged, on behalf
of the downstream natural gas industry, in
climate change policy discussions with the
government and undertake studies intended
to contribute to policy understanding,
development and implementation.
•Participating in the GHG policy and program
development process:
Our strategy is to contribute to the policy
development process and to support the
development of sound and economically efficient
policy choices.
•The Canadian Energy Partnership for
Environmental Innovation — this is the
environmental technology research arm of
the downstream natural gas industry which
is comprised of transmission and distribution
companies including Terasen Gas. This group
has collaborated on numerous climate change
studies over the years, particularly on research to
improve the industry’s GHG emissions inventory
data and methodologies.
Pictured here is one of the dry line heaters currently being
installed at several Terasen Gas stations. This new line heater
technology offers energy savings over the firetube heater design
that has historically been used by the natural gas industry.
Inventory of GHG emissions
from Terasen Gas operations
Figure 2: A simplified schematic of the natural gas delivery system: from wellhead to customer.
•Fugitive: Controlled (vented and flared)
emissions result when natural gas is vented or
flared for operational and construction reasons.
The natural gas used by Terasen Gas customers
is primarily supplied from production wells in
northeastern British Columbia and Alberta and
delivered via transmission pipelines (some operated
by Terasen Gas). Distribution mains and services
(almost all operated by Terasen Gas) distribute natural
gas directly to customers’ homes and businesses.
Figure 2 provides a simplified schematic of the
natural gas delivery system.
•Fugitive: Uncontrolled (leaks and upsets)
emissions arise from leaks in buried pipelines or
above ground piping and equipment and when
lines and equipment are accidentally damaged.
Since natural gas is primarily composed of methane,
the majority of controlled and uncontrolled
emissions are composed of methane with much
smaller quantities of CO2.
In the course of providing this natural gas delivery
service, direct GHG emissions, that is, those
occurring at our facilities (including company
vehicles), occur from three main sources in our
operating system:
Indirect emissions occur offsite when fossil fuels
are used to generate the electricity used in the
offices and facilities of Terasen Gas and to power
control equipment, electric motors and cathodic
protection systems. GHG emissions from
Terasen Gas operations are shown in Table 3 and
Figure 3. The three greenhouse gases (CO2, CH4 and
N2O) are expressed here as tonnes of carbon dioxide
equivalent (t CO2e) using global warming potentials
of 21 for CH4 and 310 for N2O7.
•Combustion emissions result from the
consumption of natural gas to operate pipeline
compressors, line heaters, LNG vaporizers and
space and water heating appliances. Combustion
emissions also result from the fuel used to power
the Company’s vehicles. GHG emissions from
combustion are predominantly carbon dioxide
(CO2) with much smaller amounts of methane
(CH4) and nitrous oxide (N2O).
7
“Some gases are more radiatively active than others; that is, they have a greater ability to trap heat in the atmosphere. In order to
compare GHG’s on a common basis they are typically converted to carbon dioxide equivalents by multiplying their mass by a factor
referred to as “Global Warming Potential” or GWP, which is “a measure of the relative radiative effect of a given substance compared
to CO2, integrated over a chosen time horizon.”[IPCC Working Group 1, Technical Summary, 2001, p.46] There is year-to-year variability in direct emissions.
This variability arises from:
There is also year-to-year variability in indirect
emissions which is primarily a function of the annual
shift in the GHG intensity of the electricity supply
system in British Columbia. Since 2001, electricity
consumption by Terasen Gas has also increased with
the addition of one electric powered compressor.
• Differing levels of compressor and line heater energy
used in response to weather, system operating
conditions and natural gas shipments, and
• Variation in the quantity of fugitive emissions from
construction activities, third party damages and
other operating variables.
Table 4 provides a breakdown of the company’s
direct emissions by component GHG.
Table 3: GHG emissions from Terasen Gas operations for 2000-2004 (t CO2e)
Year
Direct
Indirect
Total Before Offset
Offsets
Total Net Offset
2000
95,100
700
95,800
900
94,900
2001
98,100
1,300
99,400
2,500
96,900
2002
95,500
600
96,100
2,800
93,300
2003
94,000
1,100
95,100
9,900
85,200
2004
98,300
700
99,000
10,000
89,000
Table numbers may not add due to rounding.
.
Figure 3: GHG emissions from Terasen Gas operations
120,000
100,000
80,000
60,000
40,000
Offsets
Net emissions
20,000
2000
2001
2002
2003
2004
Table 4: GHG Emissions from Terasen Gas operations for 2000-2004: by component greenhouse gas (tonnes)
Year
CO2
CH4
N2O
2000
20,575
3,271
0.56
2001
18,471
3,543
0.41
2002
19,079
3,409
0.44
2003
16,366
3,469
0.40
2004
19,338
3,610
0.51
Table 4 and Figure 5 exclude indirect emissions.
10
Figure 4 shows the emissions from operations disaggregated into the main emission sources – combustion
(operations), combustion (vehicles and buildings), fugitives (controlled emissions), and fugitives
(uncontrolled emissions). Figure 5 provides a further breakdown by component greenhouse gas (CO2, CH4,
and N2O) with the appropriate GWP weighting.
Figure 4: 2004 GHG emissions by emission source
Figure 5: 2004 GHG emissions by component GHG
N2O
0.2%
Fugitives Controlled
16%
Combustion –
Operations
20.3%
14%
63%
Combustion –
Vehicles &
Buildings
CO2
7%
Fugitives Uncontrolled
79.5%
CH4
Inventory updates
including the Canadian Energy Partnership
for Environmental Innovation’s roll-up of
GHG emissions for the Canadian natural gas
transmission and distribution sectors.
The company continues its efforts to improve the
quality of its inventory data. For example, in 2004 a
comprehensive review of the quantity of natural gas
vented at compressor stations was undertaken. The
data from this review have now been incorporated
into the estimate of emissions from this source.
Further details of the GHG inventory
methodology and detailed inventory data
can be found in Appendix A.
Terasen Gas also continues to participate
in industry-wide GHG inventory initiatives
11
Projection of GHG emissions
from Terasen Gas operations
Terasen Gas anticipates that future increases in
GHG emissions will come from two areas:
regional transmission grid and helped protect
our customers from natural gas price volatility.
However, our operating emissions will increase as
this transmission system is used since, by design,
transmission operations require compressor energy
to move the gas and are more GHG intensive than
distribution operations. By incorporating the
latest design and operating practices for these new
transmission facilities, Terasen Gas has ensured that
emissions from these new facilities are minimized.
• A small and gradual increase in operating
emissions as our distribution system expands
to meet a growing customer base. In the
past Terasen Gas has mitigated this increase
in emissions with internal reductions.
We will continue to implement feasible
reduction measures; however, as measures get
implemented, we will have fewer viable new
opportunities to reduce emissions within our
operations.
Our transmission system is operated in response to
a complex set of variables. These include natural
gas price differences between the BC and Alberta
markets, weather, economic conditions and the
operating dynamics of the regional pipeline
transmission grid. For this reason, we have included
low and high projections for the GHG emissions
associated with compressor energy use. Figure 6
shows how the major sources of emissions from
operations are projected to change in the future
under the “actual” or “with actions” case.
• Of more significance, an increase in emissions
associated with compressor energy use as
Terasen Gas helps meet the growing demand for
transmission services within the region.
With the completion of the Southern Crossing
Pipeline (SCP) project in late 2000, Terasen
Gas significantly increased capacity to provide
transmission services. The SCP project has
helped alleviate supply constraints within the
Figure 6: GHG emissions projection by source
140,000
tonnes CO2 equivalent
120,000
100,000
80,000
60,000
40,000
20,000
0
- 20,000
- 40,000
2005
2006
2007
2008
2009
2010
Compressor combustion
emissions – high
Other combustion
emissons
Uncontrolled
emissions
Compressor combustion
emissions – low
controlled
emissions
Offsets
12
Table 5 shows the annual projections under the low scenario, for both Business as Usual (BAU) and actual8.
These are also illustrated in Figure 7. The following projections are further broken down by component
greenhouse gases in Table 6.
Table 5: GHG emissions from operations – actual & business as usual projections – low scenario (t CO2e)
Year
Projected Actual
– Direct
Projected Actual
Offsets
– Indirect
Projected Actual
(Net Offset)
Projected –
Business As Usual
2005
101,000
500
10,000
91,500
131,400
2006
102,400
1,100
10,000
93,500
133,400
2007
103,900
1,600
10,000
95,500
135,300
2008
105,200
1,600
15,000
91,800
136,700
2009
106,600
1,500
15,000
93,200
138,200
2010
108,000
1,600
15,000
94,600
139,600
Numbers may not add due to rounding.
.
Figure 7: Projection of GHG emissions from Terasen Gas operations
160,000
140,000
120,000
100,000
80,000
60,000
40,000
Business as usual
Actual
2000 baseline
20,000
2004
2005
2006
2007
2008
2009
2010
The “Actual” emissions in Figure 7 are shown for the “Low Scenario”, net of offsets and include indirect emissions.
Table 6: Projected direct GHG emissions by component greenhouse gases (tonnes)
Year
CO2
CH4
N2O
2005
20,848
3,664
0.54
2006
20,928
3,727
0.54
2007
21,009
3,789
0.54
2008
21,090
3,851
0.54
2009
21,172
3,913
0.54
2010
21,255
3,975
0.54
.
Table 6 excludes indirect emissions. Based on the “Actual” projection.
8 The
Business as Usual (BAU) projection is the sum of the “Actual” or “With Actions” projection plus the projected GHG reduction measures.
13
Results achieved
In our 2004 progress report we established a new baseline year of 2000 and also set a new reduction target
referenced to this 2000 baseline year. As can be seen from Table 7, GHG reduction measures implemented in
2004 exceeded the 2004 reduction target.
Table 7: GHG emissions reduction from Business as Usual –
Comparison of reduction target and results achieved for 2004 (t CO2e)
2004 Target*
2004 Results
Internal Reduction Measures Low pressure system pipe replacement
65
77
Upgrade pneumatically powered control equipment
291
71
Upgrade line heaters
100
326
Reduce LNG tank boil-off 0
866
Off-Site Reduction Measures Incremental Offset Reductions
609
109
Total 1,064
1,340
.
* New measure reductions for 2004 that were projected in the Terasen Gas 2004 VCR submission.
14
Table 8 summarizes the cumulative annual reduction results achieved from 2000 to 2004, inclusive. In
addition to the GHG reduction measures listed below, Terasen Gas also implemented measures prior to 2000.
These are described in our earlier VCR submissions. A more detailed listing of the measures listed in Table 8
is provided in Appendix B.
Table 8: Cumulative annual GHG emissions reduction from Business as Usual –
Results achieved from 2000 through 2004 (t CO2e)
2000
2001
2002
2003
2004
689
748
877
877
898
21,863
8,457
23,357
19,497
37,082
12
12
843
799
756
Internal Reduction Measures Transmission - Uncontrolled
Transmission - Controlled
LNG - Uncontrolled
LNG - Controlled
692
1,384
1,384
1,384
2,250
Distribution - Uncontrolled
153
172
172
203
280
Distribution - Controlled
0
0
66
120
191
Distribution Combustion
1,309
1,309
1,309
1,455
1,781
Buildings
0
187
187
187
187
Indirect- Electricity
0
40
16
15
26
Off-Site Reduction Measures Offset Projects
920
2,490
2,753
9,891
10,000
Total Annual Reductions
25,637
14,799
30,963
34,429
53,452
Reduction measures calculated
as a % of the 2000 baseline
26.8%
15.4%
32.3%
35.9%
55.8%
.
Note that there is some year-to-year variability in annual reductions due to the variability in activity levels, (for example, the use
of isolation fittings and drawdown compressor varies from year to year). In particular, the 2000, 2002, 2003 and 2004 use of the
drawdown compressor is higher than normal due to valve upgrade work on the Coastal transmission system.
In the case of electricity measures, the variability is due to annual variations in the GHG intensity of electricity supply.
Because these amounts are small, they have not been adjusted to a common electricity emission factor.
15
Figures 8 and 9 show performance on the bases of “GHG emissions per customer” and “GHG emissions
per delivered gas volumes”9. There are some year-to-year changes in these performance indicators due to
the normal variability in system operations and fluctuations in sales volumes in response to price and
other economic signals.
Figure 8: GHG emissions per customer
tCO2e per account
0.140
0.120
0.100
0.080
0.060
Before offsets
After offsets
0.020
2000
2001
2002
2003
2004
Figure 9: GHG emissions per volume of natural gas delivered
tCO2e per terajoule
0.600
0.500
0.400
0.300
0.200
Before offsets
After offsets
0.100
2000
9
2001
2002
2003
2004
The calculation of these performance indicators are based on sales volumes that have been normalized to account for temperature. The calculations also exclude shipments for thermal power generation and other third parties, as well as the GHG emissions directly
associated with making these shipments. Shipments for generation facilities and other third parties vary considerably from year to
year. The GHG emissions associated with making these shipments are, however, included in the Company’s GHG inventory numbers.
16
GHG reduction target
Figure 10 shows a projection of the target reductions
from 2005 through 2010 from all measures including:
the most viable reduction measures have already
been implemented. Any future internal measures
will likely be implemented as part of equipment
or system upgrades. Given the short lead times
on most system improvements (two years or less is
typical), we are not able to easily project longer term
outcomes in this instance.
• new measures planned for future years,
• measures that have been implemented between
2000 and 2004, and
• those measures that involve ongoing action to
maintain GHG performance.10
The Company’s GHG reduction target is reviewed on
an annual basis. The Environmental Affairs group
coordinates this review in consultation with the
Company’s Transmission, Distribution, Regulatory
and Business Development groups to confirm that
the prior year’s reduction measures have been
implemented as planned. At the same time, future
internal and offset project reduction measures are
updated to reflect any changes in the Company’s
future capital and operating plans.
Table 9 lists the new measures currently identified
for future implementation. Although these
future new measures are modest, we continue to
look for internal opportunities, and implement
reduction measures within our operations that
make business sense and help us maintain our
efforts to implement industry best GHG practices.
Although we expect that other internal reductions
will be identified, it needs to be mentioned that
Figure 10: GHG emission reductions from Business as Usual –
new, ongoing & previously implemented measures
50,000
tonnes CO2 equivalent
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
2005
2006
2007
2008
2009
New offset emission
reductions
Ongoing offset
emission reductions
New internal measures
Ongoing & previously
implemented measures
10GHG
2010
reductions can involve a one time activity or they may require continued actions. For example, when a high-bleed pneumatic
controller is replaced with a low or no bleed unit, this results in a one time reduction in GHG emissions that persists indefinitely. On the other hand, several of our GHG reduction measures rely on the ongoing practice of certain operating procedures. For example,
to reduce vented volumes from transmission pipeline blowdowns, either the drawdown compressor or isolation fittings need to be
used on each new job. Similarly, leak repairs have a limited lifespan as new leaks are generated over time; as a result, to maintain
reductions from leak detection and repair efforts requires ongoing action to maintain this reduced level of fugitive emissions. Other examples of ongoing GHG reduction activities include annual summer shut-down of line heaters to save energy and ongoing
education and communication efforts to reduce third party system damages.
17
The results of these reviews are then communicated
to the Health, Safety and Environment (H, S&E)
Committee of the Utility Management Team, and
to the H,S&E Committee of the Board of Directors.
A final update is then reported to the full Board of
Directors of Terasen Inc.
The projected growth in offset project acquisitions
reflects our view that offsets are a viable GHG
management tool; however our continued
investment in offset projects will be contingent
upon regulatory recognition of offsets as a means of
meeting future GHG compliance requirements.
Table 9: GHG emissions reduction from Business as Usual –
cumulative new target reductions for 2005 through 2010 (t CO2e)
2005
2006
2007
2008
2009
2010
Internal Reduction Measures Low pressure system
pipe replacement
52
52
52
52
52
52
Upgrade pneumatically
powered control equipment
223
223
223
223
223
223
Upgrade line heaters
731
768
805
843
917
954
Off-Site Reduction Measures Incremental Offset Reductions
0
0
0
5,000
5,000
5,000
Total “New” Measures
1,007
1,044
1,081
6,118
6,192
6,230
New reduction measures
calculated as a % of the
2000 baseline
1.1%
1.1%
1.1%
6.4%
6.5%
6.5%
.
18
Managing emissions – GHG mitigation measures
A: Internal measures
Previous VCR reports have described many of our internal GHG reduction measures and Appendix B contains
a listing of the measures we have implemented in the 2000 through 2004 period. These measures are further
illustrated by category in Figure 11.
Figure 11: GHG emission reductions by category (2004)
Reductions in
Combustion
emissions
6%
Reductions in Fugitive
Uncontrolled
emissions
7%
87%
Reductions in Fugitive
Controlled emissions
In the above graph the category of Reductions in Fugitive Controlled Emissions has been normalized
to adjust for year-to-year variability in the use of drawdown compressor and isolation fittings.
B: Using offsets and emission reduction
trading to manage GHG emissions
A GHG offset occurs when a company invests in
GHG mitigation activities outside its own operations
and uses these emission reductions to offset its
own internal emissions. Alternately, a company
might choose to trade (buy or sell) GHG emission
reductions as needed to meet its reduction target.
When a company with low cost reductions sells to
a company with higher cost reductions, the overall
cost of meeting the GHG reduction goal is reduced.
Terasen Gas has been an active participant in
the development and pilot testing of these GHG
mitigation tools. Through GEMCo (the Greenhouse
Emissions Management Consortium), Terasen Gas
has invested in two landfill gas recovery projects
and contracted to receive up to 10,000 t CO2e per
year in emissions reductions through 2007 and
15,000 t CO2e per year from 2008 through 2012.
19
Supply and demand side activities
Through purchasing decisions and efforts to influence customer behaviour, company actions often have an
impact on indirect GHG emissions (off site). In this section, we look at some of the supply and demand side
actions that Terasen Gas has undertaken.
On the supply side
Terasen Gas supports the market for more energy and
GHG efficient materials and equipment by specifying
these products when purchasing or through materials
recycling.
equipment manufacturer) natural gas
fuelled vehicles for its fleet.
Recently, approximately 50 percent of the
Cathode-Ray Tube(CRT) computer monitors in use
at the company’s Surrey Operations Centre were
replaced with flat, Liquid Crystal Display(LCD)
monitors. LCD monitors consume less than half
the electricity used by CRT monitors. In addition,
buildings where flat screen monitors are used often
require considerably less air conditioning to ensure
effective operation of computer components.
Some Terasen Gas examples include:
• New office equipment such as photocopiers
and fax machines must feature energy
saving options.
• Materials recycling programs are in place at
all offices.
• The Company purchases OEM (original
On the demand side
• support climate change initiatives
Demand Side Management (DSM) refers to “utility
activity that modifies or influences the way
in which customers use energy services.” DSM
initiatives produce benefits for the utility, the
customer and society. Of particular interest are
reduced emissions resulting from lower natural
gas consumption—contributing to improved local
air quality and a reduction in greenhouse gases.
However, there are many additional benefits to
DSM programs. DSM programs help:
• overcome barriers to market transformation
of efficient technology
• support job creation, and
• defer transmission facility improvements
through targeted DSM.
Terasen Gas has been offering DSM programs for
over a decade and continues to promote natural gas
conservation and efficiency to customers through a
combination of awareness, education and incentive
programs. In the past four years, over 85,000
customers have participated in our DSM programs.
• improve the overall economic efficiency of end
use applications
• meet customer expectations by assisting them
with managing their energy use
Energy conservation and efficiency is also being
promoted by a number of other utilities, agencies
and industry members. Whenever feasible,
Terasen Gas attempts to partner with others
to leverage utility DSM funds.
• educate consumers regarding energy efficiency
and environmental impact
• maintain the competitive position of natural
gas relative to other energy sources
• enhance the safety and improve the
operating characteristics of customer’s
energy utilization systems
20
2.Commercial Energy Utilization Advisory
This program is being offered
to larger commercial
customers by the Terasen Gas
Commercial Energy Services
group. The program offers
an initial benchmarking
consultation and an onsite
assessment of natural gas
conservation and efficiency
opportunities, along with
recommendations for energy
savings measures
and an estimate of the savings impact
of potential measures.
In 2004, in addition to education and awareness
activities, Terasen Gas offered its customers four
DSM incentive programs described below. Table 10
summarizes the estimated annual energy and GHG
emission reduction benefits anticipated as a result
of DSM program participation in 2004.
1.Destination Conservation
Destination Conservation (DC) is a K-12 school
program involving students, teachers and school
facilities management staff.
The program is organized by the Pacific Resource
Conservation Society, a BC based non-profit
group, and offered to school districts. It
features energy conservation curricula and
support materials for participating teachers
and technical assistance to school facilities
management staff.
Terasen Gas has contributed a portion of the first
year operating costs for the program in a number
of school districts in prior years. In 2004, Terasen
Gas supported the Abbotsford School District
with funds for 21 schools.
3. Residential Heating System Upgrade Program
In 2004 an expanded version of similar programs
offered by Terasen Gas in 2002 and 2003 was run
from September through December. Existing
natural gas customers were offered financial
incentives to replace older furnaces or boilers
with high-efficiency models. The program was
co-sponsored by Natural Resources Canada
(NRCan) who contributed $325,000 towards
promotional costs and customer incentives.
Table 10: 2004 DSM program energy savings (GJ) and GHG reductions (t CO2e)
Program
Participants
Annual Energy
Savings (GJ)
Annual GHG
Reduction (t CO2e)
Lifetime GHG
Reduction (t CO2e)
Residential
Heating System Upgrade
Fireplace Upgrade
Commercial
Utilization Advisory
Community Based
Destination Conservation
Other Activities
Awareness and Education
n/a
n/a
Research & Program Design
n/a
n/a
Total
2220
30,636
1,532
30,636
476
6,902
345
8,628
45
21
2,762
26,730
6,300
70,568
21
1,337
315
3,529
20,048
935
60,257
4. Residential Fireplace Upgrade
This new pilot program launched June 15, 2004
was designed to replace existing inefficient gas
log sets with heater-style gas fireplace inserts.
The CPR results will form the basis for future
program development within a comprehensive
DSM portfolio. It is anticipated that the CPR will
be completed in the fall of 2005.
Other DSM activity: In November 2004, TGI initiated a Conservation
Potential Review (CPR). A CPR examines available
technologies and determines their “conservation
potential” over the study period through economic
screening. The CPR compares the economic
and achievable potential of viable measures
to a base case scenario.
Once again Terasen Gas
received an award for its
Energy Star® Furnace
Upgrade Program
­— this time in NRCan’s
“Outreach” category,
which recognizes public
education or awareness
activities that inform
Canadians about energy
efficiency. Pictured here is
Siobhan Chretien, Terasen
Gas Marketing Manager
(right) receiving the award
from Marlene Catterall, MP
for Ottawa West.
22
Education, training and awareness programs
Employee Training
As reported in earlier VCR submissions, Terasen Gas
continues to run a GHG awareness and education
program for employees that explains the science
of climate change and discusses measures that
Terasen Gas employees can take at work and on an
individual basis to reduce GHG emissions. Begun in
February 1999, we have now held 49 sessions for 604
employees (about 40% of all employees). In addition,
our intranet site features a reader friendly yet
informative section on climate change.
In other areas,
•Terasen Gas continues to support the Community
Energy Association (formerly BC’s Energy Aware
Committee), a non-profit society promoting
energy conservation, energy efficiency and green
energy sources through community energy
planning and project implementation.
•Terasen Gas continues to sponsor the Douglas
College Institute of Urban Ecology’s Green Links
program, which works to enhance biodiversity,
improve carbon sequestration and promote
bicycle/walking trails on urban utility corridors.
Our company’s public web site (www.terasengas.com)
features a section describing the company’s response
to climate change and also contains sections that
help our customers use natural gas more efficiently.
This information combined with the customer
energy-efficiency programs described earlier in this
report help give customers the knowledge they need
to reduce GHG emissions from end use.
•Terasen Gas is a member of the City of Vancouver’s
Climate Change Task Force; a task force created
to assist the city with developing the components
of a GHG Emissions Reduction Action Plan. The
plan has a community GHG emissions focus and
promotes partnership with other agencies in the
city and region. The plan is intended to provide
leadership and coordination of GHG reduction
measures in the city on corporate and community
issues. Terasen Gas:
Community based efforts Terasen Gas and parent company, Terasen Inc.
are involved in several community-based efforts
intended to encourage the development of energy
and GHG efficient civic infrastructure.
– supports the city with its initiative
– provides guidance on GHG issues and
natural gas use
Vancouver – Whistler 2010 Winter Olympic Games
Terasen was a supporter of Vancouver-Whistler’s
successful bid for the 2010 Olympic Winter Games,
which featured sustainability as one of its key
themes. As the process moves forward to the next
phase, we continue our involvement through
our participation in the 2010 Sustainable Energy,
Transportation and Energy Efficiency Committees.
– advises on Action Plan elements and options
– assists with building community support
Public education
Terasen Gas publishes a number of brochures and
pamphlets to encourage residential customers to
adopt energy savings measures and practices. In
2004 the Hot Tips booklet, Heart of your Home
(a guide to energy-efficient heating systems)
and a number of data sheets were updated and
published. These booklets and data sheets are
available to customers on request. Additional
conservation tips and advice have been made
available through Homeswest Magazine
(a Terasen Gas advertiser-supported publication)
and through part sponsorship of the Shell Busey
Home Discovery radio show. All publications are
available online at www.terasengas.com
23
Related activities in other business Subsidiaries of Terasen Inc.
While this submission is intended to report on
the GHG management activities of our natural gas
utility operations, the knowledge and experience
gained from our own GHG management efforts
can often be leveraged to provide GHG reduction
benefits in other markets through the nonregulated business subsidiaries of our parent
company, Terasen Inc. Here are some examples.
vehicles using United States Environmental
Protection Agency-certified kits. Converting light
duty vehicles from gasoline to natural gas yields a
GHG reduction of approximately 25 percent.
• Lower Lonsdale Energy Corporation: An
innovative heating system developed and
implemented by Terasen Utility Services in
partnership with the City of North Vancouver
won three major awards in 2004, including a
national Energy Efficiency Award for outstanding
development and promotion of energy efficiency.
• Terasen Inc. company, Clean Energy Fuels, is
North America’s leading provider of natural
gas for vehicles. Clean Energy Fuels, partially
owned by Terasen Inc., is North America’s
leading provider of natural gas for vehicles
(NGV). Clean Energy Fuels continued its strong
growth in North America for 2004. In Canada,
the NGV market was encouraged by the rollout
of a Natural Resources Canada pilot program to
provide grants for the conversion of light duty
Some Green Links
projects have been
undertaken in conjunction
with the Terasen Gas
Environmental Community
Outreach (ECO) program.
Shown here is the the
Healy Creek rehabilitation
project. As part of this
effort native vegetation
that included snowberry,
thimbleberry, nootka rose,
salmon berry, Oregon
grape, and red-osier
dogwood was replanted.
24
Appendix A: GHG inventory and
inventory methodology
Fugitive: controlled and uncontrolled emissions:
The original basis for the company’s inventory of
fugitive and vented emissions was a study prepared
for the Canadian Gas Association (CGA) by Radian
International LLC (“1995 Air Emissions Inventory
of the Canadian Natural Gas Industry”, April 1997).
For the most part, the Radian study applies national
average system emission factors to company specific
data on components (activity factors) to estimate
fugitive emissions. Following up on the Radian study,
Gas Research Institute (GRI) Canada commissioned
a handbook (GRI Handbook) to provide member
companies with further guidance in compiling more
company specific system inventories11 and in 2001,
URS Corporation (formerly Radian) provided updated
emission factor documentation.12
In this appendix we provide more detailed
information on the inventory of GHG emissions
from the operations of Terasen Gas and the
methodologies employed to develop the inventory.
A1: GHG inventory methodology
GHG emissions from Terasen Gas operations are
comprised of three main categories:
1. Combustion (energy use) emissions. Combustion
emissions are predominantly CO2 with minor
amounts of CH4 and N2O.
2. Fugitive - uncontrolled emissions from natural
gas leakage from underground and aboveground
piping and equipment and accidental system
damages. These emissions are predominantly
methane with much smaller amounts of CO2.
3. Fugitive - controlled emissions from the venting
or flaring of natural gas from our system due to
venting for construction purposes, venting from
pneumatically operated control equipment where
natural gas is the power gas medium, and releases
of natural gas as an over-pressure protection
mechanism. Currently Terasen Gas has no
sources of flared emissions in its inventory.
Controlled emissions are predominantly methane
with much smaller amounts of CO2.
In 2000, the company retained an independent
engineering firm to do on-site measurement
of fugitive emissions at the company’s own
transmission station sites. Fugitive emissions at
a representative sampling of distribution station
locations and industrial meter sites were also
measured. In early 2001, the same firm was retained
to measure system emissions from the newly
constructed Southern Crossing Pipeline compressor
stations and a sampling of block valve locations.
Combustion (energy use) emissions:
Since 2000, with a few small exceptions, all of the
company’s energy consumption has been metered
and so the GHG emissions associated with energy
use are simply obtained by multiplying the quantity
of energy consumed by the appropriate emission
factors for each fuel type.
The company’s current (2005 Canadian GHG
Challenge Registry report) inventory has been
assembled using a combination of these materials
but with an increasing emphasis on developing
more accurate, company-specific estimates. In the
case of vented emission sources, both engineering
calculations and manufacturers’ data (in the case of
pneumatically operated equipment) have also been
applied to company specific information to estimate
vented volumes. Both current and prior years’
inventories have been re-estimated based on this
latest information to produce a “restated” inventory
from 2000 through 2004.
The GHG emission factors used to calculate
combustion emissions have been obtained from
the Registry‘s May, 2005 “Canadian GHG Challenge
Registry Guide To Entity & Facility-Based Reporting”
Registration Guide, EPA’s AP42 website, and
Environment Canada and electricity supplier
reference documents.
11
“Handbook for Estimating Methane Emissions from Canadian Natural Gas Systems”, Prepared for GRI Canada by Clearstone Engineering Ltd., Enerco Engineering Ltd., and Radian International, May, 1998
12 “Updated Canadian National Greenhouse Gas Inventory for 1995: Emission Factor Documentation”, Technical Memorandum, Aug. 23, 2001, T.M. Shires and C.J. Loughran, URS Corporation.
25
A2: GHG inventory
The inventory in Table A1 has also been broken
down by operating sector as follows:
•The Vehicles and Building categories include all
combustion related emissions associated with
energy used in the company’s fleet vehicles,
office buildings, other buildings such as machine
shop, meter shop and muster stations. Estimated
emissions from leased office facilities are also
included under “Buildings”.
•Transmission includes the portion of the Terasen
Gas pipeline system that operates at higher
transmission pressures within dedicated rightsof-way, including the compressor, control, sales
metering and block valve stations.
•The Indirect category includes electricity
emissions associated with electricity consumed in
offices and other buildings, cathodic protection,
electric powered control equipment and one
electric powered compressor station.
•Distribution includes the mains and service
lines and associated gate, regulating, and
meter stations that deliver natural gas at lower
pressures directly to the end users.
•The LNG Plant, which provides peak shaving and
natural gas storage services.
Table A1: Inventory of GHG emissions from Terasen Gas operations –
detailed breakdown (t CO2e)
2000
2001
2002
2003
2004
Transmission
Fugitive- Uncontrolled
8,847
14,727
9,486
9,494
9,454
Fugitive- Controlled
5,680
5,738
5,695
4,126
4,233
Combustion
3,091
2,329
3,837
2,974
5,071
Transmission Total 17,619
22,794
19,018
16,594
18,757
LNG Plant
Fugitive- Uncontrolled
1,225
1,225
394
438
481
Fugitive- Controlled
3,885
3,385
3,664
3,836
2,021
Combustion
513
467
682
411
480
LNG Total
5,624
5,078
4,740
4,685
Distribution
Fugitive- Uncontrolled
2,983
44,393
44,067
46,540
49,398
52,264
Fugitive- Controlled
9,749
9,773
9,770
9,775
9,781
Combustion
10,017
9,223
8,477
7,523
7,991
Distribution Total
64,159
63,064
64,787
66,696
70,037
Buildings
2,339
1,908
1,844
1,464
1,403
Vehicles
5,327
5,241
5,158
4,596
5,100
Indirect- Electricity
730
1,287
622
1,058
738
Actual Total
95,797
99,371
96,169
95,093
99,017
.
26
Appendix B: GHG reduction measures
from operations
Table B1 lists the operations based and offset GHG reduction measures that Terasen Gas implemented from
2000 through 2004 inclusive. As discussed earlier, some of these measures involve one-time activities while
others require ongoing efforts to ensure the reductions persist into the future.
Table B1: List of GHG measures & reductions achieved
Measure
Reduction 13, 14
achieved (2004)
(t CO2e)
Comments
Measures that reduce controlled or uncontrolled emissions (~ CH4)
Use isolation fittings and
22,868 (adjusted)
drawdown compressor
(35,721 actual) The GHG reduction from this measure varies with pipeline
construction activity levels. In 2004, the estimate GHG reduction
was considerably higher at 35,721 t CO2e than the 2000 through
2004 average reduction of 22,868 t CO2e per year.
Pneumatic equipment upgrades
1552
Terasen Gas continues to look at the feasibility of replacing high
bleed pneumatic equipment at the sites where it is still in use.
LP system replacement
280
The sections of LP main remaining in service (now at less than 1%
of all distribution mains) will be replaced based on the standard
main replacement criteria applied to all mains in service. Reduce transmission 898
station fugitives
Terasen Gas now has to implement follow-up LDAR (leak
detection and repair) procedures to ensure that these reductions
are maintained over time.
Reduce LNG plant fugitives
388
Terasen Gas now has to implement follow-up LDAR (leak
detection and repair) procedures to ensure that these reductions
are maintained over time. This work was completed in 2002.
LNG tank repair 368
Eliminate L11 venting and
2250
reduce L9 tank venting from
boil-off emissions.
Elimination of the L11 tank venting was an operational practice
was introduced in 2000. 2004 Modifications to the main (L11)
storage tank’s boil-off compressor increased compressor capacity
and reduced emissions from boil-off that previously was no
captured and compressed.
13 All
reduction estimates have been recalculated using the most current emission factors, inventory data and calculation methodologies. While the above estimates are shown to the nearest single digit to facilitate reporting, the actual uncertainty range in these estimates
is higher and varies depending on the specific measure.
14
The method for estimating the emission reductions for each measure varies depending on the measure in question and may involve
the use of engineering calculations, metered energy consumption data, operating data, energy modelling, field measurements,
manufacturers’ specifications, published component emission factors, etc. With access to the original data sets, the documented results could be replicated.
Table continues on next page ...
27
Table B1: List of GHG measures & reductions achieved
Measure
Reduction 15, 16
achieved (2004)
(t CO2e)
Comments
Measures that reduce combustion emissions (~ CO2)
Reduce line heater energy use
1,781
The operating practices needed to maintain a portion of this
reduction (e.g., summer shut-down) and the upgrade of line
heaters to more efficient units will continue.
Reduce building natural gas 214
and electricity energy use
The energy savings from the new FV Gas Operations and Training
Centres produced this estimated reduction. Future efforts to
reduce emissions through building energy efficiency activities
will continue but are anticipated to be small.
GHG Offsets
Norseman landfill gas
offset project
2,500
IGRS landfill gas offset project
7,500
Total
40,599 (adjusted)
53,452 (actual)
15 All
reduction estimates have been recalculated using the most current emission factors, inventory data and calculation methodologies. While the above estimates are shown to the nearest single digit to facilitate reporting, the actual uncertainty range in these estimates
is higher and varies depending on the specific measure.
16
The method for estimating the emission reductions for each measure varies depending on the measure in question and may involve
the use of engineering calculations, metered energy consumption data, operating data, energy modelling, field measurements,
manufacturers’ specifications, published component emission factors, etc. With access to the original data sets, the documented results could be replicated.
28
References/websites
Canadian GHG Challenge Registry
Guide to Entity & Facility-Based Reporting,
Version 4.1, May 2005
www.ghgregistries.ca
Handbook for Estimating Methane Emissions
from Canadian Natural Gas Systems,
D.J. Picard, M. Stribrny and M.R. Harrison, Clearstone
Engineering Ltd., Enerco Engineering Ltd. and
Radian International, prepared for Gas Research
Institute Canada, May 1998
EPA AP 42,
U.S. Environmental Protection Agency
website on emission factors,
www.epa.gov/ttn/chief/
Terasen Gas: www.terasengas.com
Updated Canadian National Greenhouse Gas
Inventory for 1995: Emission Factor Documentation,
Technical Memorandum, Aug. 23, 2001,
T.M. Shires and C.J. Loughran, URS Corporation.
29