Carbon Credits (Carbon Farming Initiative—Oil and Gas Fugitives) Methodology Determination2015
I, Greg Hunt, Minister for the Environment, make the following determination.
Dated2015
Greg Hunt [DRAFT ONLY—NOT FOR SIGNATURE]
Minister for the Environment
Contents
Part1—Preliminary
1Name
2Commencement
3Authority
4Duration
5Definitions
6References to factors and parameters from external sources
Part2—Oil or gas fugitives projects
7Oil or gas fugitives projects
Part3—Project requirements
Division1—Operation of this Part
8Operation of this Part
Division2—Requirements for all oil or gas fugitives projects
9Requirements for all oil or gas fugitives projects
Division3—Requirements for continuous flaring reduction projects
10General requirements for continuous flaring reduction projects
11Requirement to choose the flare devices included in the project
12Requirement to choose baseline measurement period
Division4—Requirements for reroute to flare projects
13General requirements for reroute to flare projects
14Requirement to choose the flare devices included in the project
15Requirements relating to fugitive leak measurement periods
Part4—Net abatement amount
Division1—Preliminary
16Operation of this Part
Division2—Method for calculating net abatement amount
17Summary
18Net abatement amount
Division3—Submethod 1 for calculating continuous flaring reduction project net abatement amount
Subdivision A—Summary
19Summary
Subdivision B—Monitored flaring activities
20Monitored flaring activity—flare devices subject to pilot light gas flow monitoring
21Monitored flaring activity—flare devices subject to main body gas flow monitoring
Subdivision C—Continuous flaring reduction project net abatement amount
22Continuous flaring reduction project net abatement amount
Subdivision D—Calculating emissions for the baseline period
23Emissions from monitored flaring activity in the baseline activity measurement period
Subdivision E—Calculating emissions for the reporting period
24Carbon dioxide equivalent emissions for the reporting period
25Accuracy factor
26Ancillary emissions
Division4—Submethod 2 for calculating reroute to flare project net abatement amount
Subdivision A—Summary
27Summary
Subdivision B—Reroute to flare project net abatement amount
28Reroute to flare project net abatement amount
Subdivision C—Calculating emissions
29Emissions that would have occurred if the project had not been undertaken
30Accuracy factor
31Emissions from flaring in a reporting period
32Rerouted gas quantity
33Ancillary emissions
Division5—General calculations
34Emissions factor for a gas quantity
35Density of a gas quantity
36Mass fraction of carbon dioxide in a gas quantity
Part5—Reporting, recordkeeping and monitoring requirements
Division1—Recordkeeping requirements
37Operation of this Division
38Records of choices
39Records relating to ancillary emissions
Division2—Monitoring requirements
40Operation of this Division
41Monitoring requirements—general
42Monitoring requirements—monitored operating period
43Consequence of failure to monitor certain parameters
Carbon Credits (Carbon Farming Initiative—Oil and Gas Fugitives) Methodology Determination2015 / 1Reporting, recordkeeping and monitoring requirements Part5
Monitoring requirements Division2
Section43
Part1—Preliminary
1 Name
This is the Carbon Credits (Carbon Farming Initiative—Oil and Gas Fugitives) Methodology Determination 2015.
2 Commencement
This determination commences on the day after it is registered.
3 Authority
This determination is made under subsection106(1) of the Carbon Credits (Carbon Farming Initiative) Act 2011.
4 Duration
This determination remains in force for the period that:
(a)begins when the determination commences; and
(b)ends on the day before this determination would otherwise be repealed under subsection50(1) of the Legislative Instruments Act 2003.
5 Definitions
In this determination:
Act means the Carbon Credits (Carbon Farming Initiative) Act 2011.
API Compendium has the same meaning as in the NGER (Measurement) Determination.
baseline activity gas quantity has the meaning given by section12.
baseline activity measurement period has the meaning given by section12.
baselinemeasurement period has the meaning given by section12.
component, in relation to a gas, means a component of the gas that is listed in an item of the table in subsection2.22(3) of the NGER (Measurement) Determination.
continuous flaring: a flare device is engaged in continuous flaring if:
(a)the flare device is lit; and
(b)the flare device is not engaged in noncontinuous flaring.
continuous flaring reduction project has the meaning given by section7.
declaration day, for a project, means the day the project is declared to be an eligible offsets project.
eligible flaring activity gas quantity has the meaning given by sections20 and 21.
eligible flaring activity period has the meaning given by sections20 and 21.
facility has the same meaning as in the NGER Act.
flare device means a device that flares fugitive gases, but does not include a device that is directly associated with the operation of an electricity production device.
flaring means the combustion of gas for a purpose other than producing energy.
fugitive leak emissions meansany of the following that are not process venting emissions:
(a)emissions from equipment, including emissions from:
(i)storage tanks; and
(ii)loading losses; and
(iii)equipment listed in section5.4.3, 5.6.4, 5.6.5 or 6.1.2 of the API Compendium;
(b)fugitive emissions within the meaning of section6 of the API Compendium.
fugitive leak measurement gas quantity has the meaning given by section15.
fugitive leak measurement period has the meaning given by section15.
gas quantity means a quantity of gas expressed in tonnes.
mass fraction means the fraction by mass, expressed as a percentage, of a particular component in a gas quantity.
meter malfunction, in relation to a measurement, means any period in which a meter intended to perform the measurement is not operating within or to parameters specified by the manufacturer.
molar fraction means the fraction, expressed as a percentage, of a particular component of a gas quantity measured in moles of the component per mole of the gas quantity.
monitored flaring activity has the meaning given by sections20 and 21.
monitored operating period for a flare device has the meaning given by section42.
monitoring requirements means the requirements set out in sections41 and 42.
NGA Factors document means the document entitled “National Greenhouse Accounts Factors”, published by the Department and as in force from time to time.
NGER Act means the National Greenhouse and Energy Reporting Act 2007.
NGER (Measurement) Determination means the National Greenhouse and Energy Reporting (Measurement) Determination2008.
NGER Regulations means the National Greenhouse and Energy Reporting Regulations2008.
noncontinuous flaring: a flare device is engaged in noncontinuous flaring if the flare device is lit andgas is flowing through the main body of the flare device because:
(a)equipment is being maintained, repaired or replaced; or
(b)equipment is not working correctly; or
(c)of an emergency; or
(d)ofany other unexpected event related to production.
oil or gas facility means a facility operated for the purpose of producing, transporting or processing oil or natural gas, or products for which oil or natural gas are primary inputs.
oil or gas fugitives projecthas the meaning given by section7.
process venting emissions means emissions from the engineered or intentional release of gas directly associated with a production process.
Note:Examples of process venting emissions include emissions released from the following kinds of equipment:
(a)acid gas removal units;
(b)nitrogen rejection units;
(c)dehydrators;
(d)regenerators.
rerouted gas quantity has the meaning given by section32.
reroute to flare project has the meaning given by section7.
standard conditions has the same meaning as in the NGER (Measurement) Determination.
submethod means one of the following:
(a)submethod 1 set out in Division3 of Part4;
(b)submethod 2 set out in Division4 of Part4.
6 References to factors and parameters from external sources
(1)If a calculation in this determination includes a factor or parameter that is defined or calculated by reference to another instrument or writing, the factor or parameter to be used for a reporting period is the factor or parameter referred to in, or calculated by reference to, the instrument or writing as in force at the end of the reporting period.
(2)Subsection(1) does not apply if:
(a)the determination specifies otherwise; or
(b)it is not possible to define or calculate the factor or parameter by reference to the instrument or writing as in force at the end of the reporting period.
Part2—Oil or gas fugitives projects
7 Oil or gas fugitives projects
(1)For paragraph106(1)(a) of the Act, this determination applies to an offsets project that could reasonably be expected to result in eligible carbon abatement by:
(a)reducing the amount of emissions from:
(i)continuous flaring; or
(ii)the combustion of gas in the pilot light of a flare device;
at an oil or gas facility (a continuous flaring reduction project); or
(b)capturing fugitive emissions and rerouting thoseemissions to a new or existing flare device (a reroute to flare project).
(2)Anoffsets project that is a continuous flaring reduction project or a reroute to flare project, or both, is an oil or gas fugitives project.
Part3—Project requirements
Division1—Operation of this Part
8 Operation of this Part
For paragraph106(1)(b) of the Act, this Part sets out requirements that must be met for an oil or gas fugitives project to be an eligible offsets project.
Division2—Requirements for all oil or gas fugitives projects
9 Requirements for all oil or gas fugitives projects
(1)An oil or gas fugitives project must be undertaken at an oil or gas facility.
(2)An oil or gas fugitives project must not relate to the exploration of oil or gas reserves.
Division3—Requirements for continuous flaring reduction projects
10 General requirements for continuous flaring reduction projects
(1)A continuous flaring reduction project undertaken at an oil or gas facility must involve abatement activities in relation to one or more flare devices at the facility.
(2)A continuous flaring reduction project must not involve:
(a)redirecting gas from a flare device included in the project to a flare device that is not included in the project, or to a device that is not a flare device; or
(b)venting to the atmosphere gas that would otherwise have been combusted at a flare device included in the project.
11 Requirement to choose the flare devices included in the project
(1)Before the declaration day for a continuous flaring reduction project undertaken at an oil or gas facility, the project proponent must choose one or more flare devices at the facility to be included in the project.
Note:If the oil or gas fugitives project is also a reroute to flare project, the flare devices included in the reroute to flare project may be different from the flare devices included in the continuous flaring reduction project.
(2)Subject to subsection(3), no flare device is to be added to, or removed from, the continuous flaring reduction project after the choice is made under subsection(1).
(3)A flare device that is permanently deactivated or decommissioned is taken to cease to be included in a continuous flaring reduction project at the end of the reporting period in which it is deactivated or decommissioned.
12 Requirement to choose baseline measurement period
(1)For each flare device included in a continuous flaring reduction project, the project proponentmust choose a period starting on or after the declaration day to be the baselinemeasurement period for the flare device in relation to the monitored flaring activity or activities for the flare device.
Note 1:The monitored flaring activities are the use of gas to keep the pilot light of a flare device lit (see section20) and the combustion of gas that has flowed through the main body of a flare device (see section21).
Note 2:If the flare device engages in both kinds of monitored flaring activity, the project proponent may choose a different baseline measurement period for each activity.
(2)The baseline activity measurement period for the flare device in relation to the activity is the baseline measurement period for the flare device in relation to the activity, disregarding any period during the baseline measurement period:
(a)which is not a monitored operating period for the flare device; or
(b)in which there is a meter malfunction in relation to any measurement that the monitoring requirements require in relation to the activity; or
(c)if the activity is the monitored flaring activity referred to in section21—in which the flare is not engaged in continuous flaring.
(3)In choosing a baseline measurement period under subsection(1), the project proponent must ensure that the baseline activity measurement period covers the full range of operating conditions for the flare device that are likely to exist during the reporting periods for the project.
(4)The baseline activity gas quantity for the flare device in relation to the activity is:
(a)for the monitored flaring activity referred to in section20—the gas quantity flowing to the pilot light of the flare device during the baseline activity measurement period, measured in accordance with the monitoring requirements; or
(b)for the monitored flaring activity referred to in section21—the gas quantity flowing through the main body of the flare device during the baseline activity measurement period, measured in accordance with the monitoring requirements.
Division4—Requirements for reroute to flare projects
13 General requirements for reroute to flare projects
(1)A reroute to flare project must involve:
(a)the capture and rerouting of:
(i)fugitive leak emissions; or
(ii)process venting emissions;
at an oil or gas facility that would otherwise have been released to the atmosphere; and
(b)the combustion of the emissions at a new or existing flare device at the facility.
(2)A reroute to flare project must not relate to process venting emissions from equipment that was not installed before the declaration day for the project.
14 Requirement to choose the flare devices included in the project
(1)Before the declaration day for a reroute to flare project undertaken at an oil or gas facility, the project proponentmust choose one or more flare devices (including flare devices that are proposed to be installed) at the oil or gas facility to be included in the project.
Note:If the oil or gas fugitives project is also a continuous flaring reduction project, the flare devices included in the continuous flaring reduction project may be different from the flare devices included in the reroute to flare project.
(2)Subject to subsection(3), no flare device is to be added to, or removed from, the reroute to flare reduction project after the choice is made under subsection(1).
(3)A flare device that is permanently deactivated or decommissioned is taken to cease to be included in a reroute to flare project at the end of the reporting period in which it is deactivated or decommissioned.
15 Requirements relating to fugitive leak measurement periods
(1)If a reroute to flare project includes a flare device at which only fugitive leak emissions are flared, the project proponent may choose a period that starts at or after the start of the first reporting period for the project to be the fugitive leak measurement period for the flare device.
Note:If there is no fugitive leak measurement period for the flare device, it must be continuously monitored in accordance with the monitoring requirements (see section32).
(2)In choosing a period under subsection(1), the project proponent must ensure that the period:
(a)covers the full range of operating conditions for the flare device that are likely to exist during the reporting periods for the project; and
(b)is long enough to allow samples to be collected on enough occasions to produce a representative sample.
(3)The project proponent must measure the gas quantity (the fugitive leak measurement gas quantity) passing through the flare device during the fugitive leak measurement period in accordance with the monitoring requirements.
(4)A period is to be disregarded for the purposes of working out the fugitive leak measurement gas quantity and the duration of the fugitive leak measurement period if:
(a)the period is not a monitored operating period for the flare device; or
(b)there is a meter malfunction in relation to the measurement referred to in subsection(3) during the period.
(5)If:
(a)the fugitive leak measurement period in relation to a flare device has ended; and
(b)there is a significant change in the equipment from which the fugitive leak emissions occur;
the flare device is taken not to have a fugitive leak measurement period at and after the time the change occurs.
(6)Subsection(5) does not prevent the project proponent choosing a new period that starts at or after the time the change occurs to be the fugitive leak measurement period for the flare device.
Part4—Net abatement amount
Division1—Preliminary
16 Operation of this Part
For paragraph106(1)(c) of the Act, this Part specifies the method for working out the carbon dioxide equivalent net abatement amount for a reporting period for an oil or gas fugitives project that is an eligible offsets project.
Division2—Method for calculating net abatement amount
17 Summary
The carbon dioxide equivalent net abatement amount for a reporting period is worked out by adding together the continuous flaring reduction project net abatement amount for the reporting period (if any) and the reroute to flare project net abatement amount for the reporting period (if any).
18 Net abatement amount
(1)The carbon dioxide equivalent net abatement amount for a reporting period, in tonnes CO2e, is worked out using the formula (equation 1):
where:
ANA means the carbon dioxide equivalent net abatement amount for the reporting period, in tonnes CO2e.
ASM1 means:
(a)if the project is a continuous flaring reduction project, and the continuous flaring reduction project net abatement amount for the reporting period, in tonnes CO2e, worked out using submethod 1 is positive—that amount; or
(b)otherwise—zero.
ASM2 means:
(a)if the project is a reroute to flare project, and the reroute to flare project net abatement amount for the reporting period, in tonnes CO2e,worked out using submethod 2 is positive—that amount; or
(b)otherwise—zero.
Note:An oil or gas fugitives project can be a continuous flaring reduction project or a reroute to flare project, or both (see section7).
(2)For the purposes of subsection(1), disregard any carbon abatement that is not eligible carbon abatement from the project.
Division3—Submethod 1 for calculating continuous flaring reduction project net abatement amount
Subdivision A—Summary
19 Summary
A continuous flaring reduction project can involve carbon abatement relating to either, or both, of 2 kinds of flaring activity:
(a)carbon abatement relating to the use of gas in the pilot light of a flare device during periods of continuous flaring and noncontinuous flaring; or