Workshop Results - Hydrocarbon Value Chain in Mexico - Blueprint for a Country Program

By John Beath

Jun 29

 

 

 

 

 

 

 

During the week of May 15th 2018, Mexico held a workshop to develop a strategy for conducting research on the sustainability of its hydrocarbon value chain and I was honored to serve as an invited delegate to the Life Cycle Assessment Thematic Track.  The conference sponsors were:  Stanford University Precourt Institute for Energy, Institutu Mexicano del Petroleo, Secretarta de Energia (Mexico).  In the photo, Dr. Adam Brandt (Stanford University) presents our panel’s findings in the final group session.

A large collection of ideas and issues was generated, but here I’ll share those that centered around the science associated with carbon and water in the hydrocarbon value chain.  This truly is a set of ideas that could be applied to any country that wants to begin actively managing its carbon impact in a positive way.

 

Conclusions by Panel on Existing and New Facilities

  • There is an urgent need to upgrade and improve operations at existing refineries to enhance their efficiency and reduce the production of waste streams.
  • Existing facilities will need major changes if the nature of the crude supply changes. To do this, an economic model should be developed that looks both at capital and operating costs of various potential changes.
  • Enhanced Oil Recovery (EOR) will need to be carefully evaluated as part of the future pathway.  Many Mexican conventional wells are in decline and would benefit from EOR if it can be delivered economically; this must be balanced against costs and impacts for developing other onshore or offshore sources of crude oil and natural gas.
  • There is a need to explore the use of CO2 in commercial products as an alternative to carbon capture and storage (CCS).  One such process uses CO2 as an ingredient in the manufacture of concrete.
  • There is a need to improve the efficiency of combustion equipment.
  • Where unconventional oil and gas is produced in new areas, significant attention will need to be paid to infrastructure.  There is an urgent need to do this collaboratively, and  not on a per-company or per-facility basis.  In many cases the local workforce may not be adequate, but investing in improving the community resources (including training) may be the only way to have these new projects accepted.

Conclusions By Panel on Life Cycle Assessment

  • Current data is poor and inconsistent in how impacts were determined.  This is an excellent opportunity to develop standards for impacts determination that can be used to evaluate and compare new proposed activities.  To start the process, a baseline should be developed using the new standards.  As part of the process, field observations are essential to validate the representations made (very recent US experiences in Oil and Gas methane leakage characterization underscore this need).
  • To help facilitate the process, standardized models may be introduced to reduce the effort to compare and ensure fair comparisons.  The use of EIO models, as well as impact characterization methods should be studied to determine what combination fits the hydrocarbon chain in Mexico best.  Mexican climate change law will be evolving and it will be important to establish a management of change process for any model selected.
  • New business opportunities in Mexico provide a climate for best practice selection as well as for the development of improvements in technology.
  • The human capability in Mexico needs to be enhanced to perform these analyses, as well as to operate in ways which implement best practices and new technology needed.  To this end it was recommended that a Life Cycle Institute be established that offers training consistent with the models, processes and conclusions reached.  This organization should collaborate with national scientific institutes as well as universities.
  • In order to implement new technology effectively, it will be important for any new facilities to be constructed to accommodate a variety of feeds and produce a variety of products. This can be done on a facility-specific basis, or by having a network of narrowly focused but complementary facilities (for example, there is a significant difference between offshore or foreign heavy crude oil and gas, and onshore oil-shale derived feedstocks).
  • An important infrastructure opportunity exists for pipeline expansion.  Elsewhere these pipelines have been developed without collaboration; but a key opportunity exists if different companies are required to work together.  One key aspect that will be important to new facility construction is the extent to which international standards will be applied.
  • Significant challenges exist in developing timely and appropriate regulations, and in incentivizing industry to meet the national carbon goals.  It may be necessary to rely on enforcement (and what that may cost) as part of the formula to achieve the desired outcomes.

Conclusions By Panel on Efficient Use of Water

  • Since hydraulic fracturing requires large volumes of water and Mexican oil shale deposits are in arid regions, it is likely deep groundwater that is largely uncharted to date will need to be leveraged.  This will also drive the need to recycle water (e.g., to use produced water for fracturing where contaminant levels can be tolerated or adjusted).
  • It may be necessary to address water scarcity in affected communities as well in order to gain acceptance for new facility construction.
  • Significant improvement in existing refinery water use will likely be necessary to address any expansion plans, or if new refineries are constructed.
  • It will be important to address naturally occurring radiation (NORM) in these new waters.

Overall this was a very well-run conference and a rewarding experience.  I was particularly impressed with the team of translators that assisted with all the general sessions and in each panel room.  Technical terms can be difficult to translate in real time, but this team of men and women did not miss a beat even though many of the discussions were highly technical.

For further information on how all of this progresses over time, you may wish to reach out to Dr. Adam Brandt at Stanford who invited me to the meeting and shared the session on LCA that I attended:

https://eao.stanford.edu/people/adam-brandt

IEA has also posted an excellent document on Mexico at:

https://www.iea.org/publications/freepublications/publication/EnergyPoliciesBeyondIEACountriesMexico2017.pdf

About the Author

Read John's full bio here: http://www.beath.us/john-beath/

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