AltaGas Turin Acid Gas Injection Project Verification Report

Transcription

1 AltaGas Processing Partnership AltaGas Turin Acid Gas Injection Project Verification Report March 9, (604)

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3 Statement of Verification March 9, 2017 Alberta Environment and Parks 12th Floor, Baker Centre Street Edmonton, Alberta T5J 1G4 Introduction AltaGas Processing Partnership ( The Responsible Party ) engaged Brightspot Climate Inc. (Brightspot Climate) to review the greenhouse gas (GHG) emission reduction and removal project, AltaGas Turin Acid Gas Injection Project ( The Project ). The Project was developed in accordance with the Quantification Protocol for Acid Gas Injection, Version 1, May 2008 ( The Protocol ). The Responsible Party s GHG Assertion consists of the Offset Project Plan, Offset Project Report and supporting documentation. The GHG Assertion covers the reporting period January 1, 2016 December 31, 2016 and states an emission reduction and removal claim of 76,610 tonnes CO 2e over this period. The emission reduction and removal claim consists exclusively of 2016 vintage credits. The Responsible Party is responsible for the preparation and presentation of the information within the GHG Assertion. Our responsibility as the verifier is to express an opinion as to whether the GHG Assertion is materially correct, in accordance with approved Protocol, the Specified Gas Emitters Regulation (Alta. Reg.139, 2007) (the Regulation ), and the Alberta Environment and Parks Technical Guidance for Offset Project Developers, Version 4.0, February Scope We completed our review in accordance with the ISO Part 3: Greenhouse Gases: Specification with Guidance for the Validation and Verification of Greenhouse Gas Assertions (ISO, 2006). As such, we planned and performed our work to provide positive, but not absolute assurance with respect to the GHG Assertion. The verification procedures that were performed through the course of the verification were developed based on the results of a risk assessment that was completed during the verification planning stage. +1 (604) info@brightspot.co

4 These verification procedures are described in the Verification Plan. Certain verification procedures included data sampling. The sampling type, sample size and the justification for the planned sampling type and size are detailed in a Sampling Plan, which is included in the Verification Plan. Conclusion I believe our work provides a reasonable basis for my conclusion. There are no unresolved discrepancies detected in the GHG Assertion. Based on our review, it is my opinion at a reasonable level of assurance that the GHG Assertion is materially correct and presented fairly in accordance with the relevant criteria. Sincerely, Aaron Schroeder, P.Eng. Brightspot Climate Inc. Vancouver, British Columbia

5 Brightspot Climate Inc. Verification Report Verification Summary This Verification Report follows the standardized format prescribed in the Alberta Environment and Parks guidance document, Section Table 1: Verification Summary Project Name: AltaGas Turin Acid Gas Injection Project Project Information: Geographic Boundary: AltaGas Turin Sour Gas Processing Plant near Turin, Alberta. LSD: W4M (Processing Plant) W4 (Injection Well) Project Contact Information: Alberta Offset System Criteria Evaluated (see Verification Activities): Verification Objectives: Stefan Dimic, Commercial Representative, AltaGas Processing Partnership 1700, 355 4th Avenue SW Calgary, AB T2P 0J1 (p) (f) (e) stefan.dimic@altagas.ca (w) The project must meet the eligibility criteria stated in Section 7 of the Specified Gas Emitters Regulation (SGER). In order to qualify, emission reductions must: Occur in Alberta; Result from actions not otherwise required by law and be beyond business as usual and sector common practices; Result from actions taken on or after January 1, 2002; Occur on or after January 1, 2002; Be real, demonstrable, quantifiable and verifiable; Have clearly established ownership; and Be counted once for compliance purposes. issue a verification statement on whether the GHG assertion is without material discrepancy; issue a verification report that provides details of the verification activities; and complete the confirmations activities defined in the Alberta Environment and Parks Verification Guidance Document, Section 5.4, Table Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance, Version 1.0, January Alberta Environment and Parks. 1

6 Brightspot Climate Inc. Verification Report Verification Summary: There are no unresolved discrepancies detected in the GHG Assertion. Verification Team Members: Lead Verifier: Analytical Support: Peer Reviewer: Aaron Schroeder, P.Eng. Will Grundling, MSc. Nathan Muegge, P.Eng. Project Start Date: November 30, 2004 Credit Start Date: Credit Period: January 1, The data required to quantify emissions reductions from November 30, 2004 to December 31, 2004 was unavailable. Initial credit period: January 1, 2005 December 31, 2012 Crediting Extension Period: January 1, 2013 December 31, 2017 Offset Project Report Date: March 8, 2017 Expected Lifetime of Project: Actual Emissions Reductions Achieved: Other Environmental Attributes: Ownership: Project Registration: The AGI system is expected to be a permanent operation for the sequestration of acid gas at the AltaGas Processing Partnership Turin Sour Gas Processing Plant. 2016: 76,610 tonnes CO 2e The Project does not have any other environmental attributes, credits or benefits. AltaGas Processing Partnership maintains 100% ownership of the environmental attributes created by the Project. Brightspot Climate is not aware of any other systems or registries where the Project has been registered. The Responsible Party has not disclosed registration of the Project on any other system or registry. Verification Report Date: March 9,

7 Brightspot Climate Inc. Verification Report Introduction This document contains the following six sections: 1. Verification Summary: as shown in Table 1 above. 2. Verification Report Introduction: this section defines the parties associated with this verification, a description of the project and the verification objective, scope and criteria applied to the verification. A list of the Responsible Party s documents reviewed through the course of the verification is also provided in this section. 3. Verification Schedule: lists important verification activities and dates. 4. Verification Findings: this section includes a discussion of the results of each verification procedure and each qualitative and quantitative discrepancy identified as well as a summary of the total materiality of discrepancies. 5. Confirmations: a table provides details of the confirmation activities completed by the verifier, as required by Alberta Environment and Parks Statements: Verification team biographies, Statement of Verification, Conflict of Interest statement and Statement of Qualifications. The final Verification Plan is a separate document that was developed at the outset of the verification. The Verification Plan includes a description of the final verification strategy, verification procedures and sampling that was applied to the verification. The final Verification Plan is appended to this report. Parties Associated with the Verification ISO defines the following terms used in the context of a GHG verification: GHG Assertion: a declaration or factual and objective statement made by the Responsible Party. The Alberta Environment and Parks Technical Guidance Document extends this definition to include the information included in the Baseline Emissions Inventory Application and the Specified Gas Compliance Report. GHG Project: activity or activities that alter the conditions identified in the baseline scenario, which cause GHG emission reductions or GHG removal enhancements. The GHG project that is the subject of this verification is the AltaGas Turin Acid Gas Injection Project, which will be referred to throughout this document as the Project. ISO defines the following parties associated with the verification: Responsible Party: person or persons responsible for the provision of the greenhouse gas assertion and supporting GHG information. The Responsible Party for this verification is AltaGas Processing Partnership. 2 See Section 5.4 of Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance, Version 1.0, January Alberta Environment and Parks. 3

8 Principles Brightspot Climate Inc. Verification Report Intended User: individual or organization identified by those reporting GHG-related information as being the one who relies on that information to make decisions. The Intended User for this verification is Alberta Environment and Parks. Verifier: competent and independent person, or persons, with responsibility for performing and reporting on the verification process. The verifier for this verification is Brightspot Climate Inc. The members of the verification team are provided in section 3 of this document. ISO defines four fundamental principles to conducting a greenhouse gas verification, namely independence, ethical conduct, fair presentation and due professional care. Brightspot Climate has implemented processes, including requiring appropriate training for all verification team members, to ensure the application of these principles for this verification. A final Conflict of Interests Checklist is included in Section 6 of this report. Project Description Blue Source Canada (Blue Source) has been working with AltaGas Processing Partnership (AltaGas) to quantify and report the greenhouse gas emission reductions associated with acid gas injection at the Turin Acid Gas plant. Blue Source and AltaGas have developed an Offset Project Plan (OPP) for each of the Projects, which describes the emission reduction technologies that have been implemented. The OPP describes the Projects, the methodologies applied to quantify the emission reduction and the processes for measuring and monitoring GHG information. The quantification of the emission reduction is the difference between emissions in the baseline and project conditions. A dynamic baseline is applied to quantify baseline emissions, that is, measured quantities during the reporting period are used to estimate baseline emissions for the same period. This approach conforms with the protocol approved by Alberta Environment and Parks. The baseline emission sources include fuel extraction and processing (emission source B9 in the OPP) and incineration (emission source B6 in the OPP). Emission sources during the project period include fuel extraction and processing (emission source P12 in the OPP), acid gas dehydration and compression (emission source P6 in the OPP) and upset flaring (emission source P8 in the OPP). The emission reduction achieved between January 1, 2016 and December 31, 2016 (known as the reporting period ) will be reported and verified within the scope of this verification. 4

9 Verification Details Brightspot Climate Inc. Verification Report Verification Parameters Table 2: Verification Objectives, Criteria and Scope Verification Objectives Criteria issue a verification statement on whether the GHG assertion is without material discrepancy; issue a verification report that provides details of the verification activities; and complete the confirmations activities defined in the Alberta Environment and Parks Verification Guidance Document, Section 5.4, Table 26. Climate Change and Emissions Management Act Specified Gas Emitters Regulation (Alta. Reg.139, 2007) Technical Guidance for Offset Project Developers, Version 4.0, February 2013 Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance, Version 1.0, January 2013 Quantification Protocol for Acid Gas Injection, Version 1, May 2008 Scope Project Name: AltaGas Turin Acid Gas Injection Project Geographic Boundary: AltaGas Turin Sour Gas Processing Plant near Turin, Alberta. LSD: W4M (Processing Plant) W4 (Injection Well) Physical Operations: Capture and permanent sequestration of the acid gas stream to reduce the quantity of CO 2 released to the atmosphere Project condition includes compression, transportation, and injection of acid gas Baseline processes include flaring Emission Sources: Natural Gas Combustion, Extraction and Processing Electricity Consumption IPCC GHGs Emitted: CO 2, CH 4 and N 2O Reporting Period: January 1, 2016 December 31,

10 Brightspot Climate Inc. Verification Report Documents Reviewed The following Responsible Party s documents were reviewed through the course of the verification (only the most recent version is listed in instances where multiple versions were reviewed): AltaGas Turin GHG Calculator_2016_v7-March xlsx Turin_AGI_Final OPR_2016_V2_ _BSC signed.pdf OPP_Turin 2012.pdf Plant Sales Gas Meter 2016 (2 samples only).pdf Sales Analyis.xlsx Turin_Acid_Gas_Analysis_Jan-Dec_2016.pdf Meter calibration reports (various) Turin compressor Power 2016.xlsx Petrinex Volumetric submissions (monthly) S30 Reports (monthly) ZEDi Reports (monthly) ESC2480 Blue Source Canada AltaGas Turin SRU Sulsim Simulation Report 2016.pdf Site Visit The site visit was conducted on February 10, 2017 by Aaron Schroeder. The site visit included observation of the emission sources, metering and data systems used for recording metered quantities. The following Responsible Party staff were interviewed regarding various aspects of the Project. Derek Jensen, Operations Manager, AltaGas Judy Wiest, Administrator, AltaGas Kelsey Lank, Carbon Solution Analyst Blue Source Canada Tooraj Moulai, Carbon Solution Analyst Blue Source Canada Further details of the verification activities that were conducted on site, including observations and inquiries, are provided in Table 4 of this report. Verification Schedule The verification was completed according to the schedule established between the Responsible Party and the Verifier in the Verification Plan. The verification reached important milestones on the following dates: Verification Kickoff Meeting: January 23, 2017 Draft Verification Plan: February 10, 2017 Site Visit: February 10, 2017 Final GHG Assertion March 7, 2017 Draft Verification Report : March 8, 2017 Peer Review March 8, 2017 Final Verification Report March 9,

11 Brightspot Climate Inc. Verification Report Verification Findings The results of the verification risk assessment provided the basis for the verification procedures. Table 3, below, provides a summary of the verification procedures where discrepancies were detected. Table 4, which follows, provides a description of every verification procedure that was completed. Table 3: Verification Findings Summary Activity Data / Inventory Component Description Discrepancy Description Discrepancy Type Discrepancy Magnitude There are no unresolved discrepancies detected in the GHG Assertion. 7

12 Brightspot Climate Inc. Verification Report Table 4: Findings of Verification Procedures Activity Data / Inventory Component Description Verification Procedures Verification Findings PROTOCOL APPLICABILITY REQUIREMENTS 1. The project results from emissions that otherwise would have been released to the atmosphere. Substantive test: Review project schematics and interview facility operators to determine if baseline scenario described in the Offset Project Plan is applicable. The baseline condition for the Project is the implementation of a new Claus sulphur processing unit. The justification for this technology is appropriate for the size and gas composition of the natural gas processing facility. This baseline scenario meets the requirements of the Protocol. No discrepancies detected. 2. Where capture and injection operations are separate, emissions at the source are reported separately. 3. The acid gas injection scheme has obtained approval from the Alberta Energy Regulator under Directive Metering of injected gas volumes occurs as near as possible to injection well. Substantive test: Review the operation s approval to operate an AGI scheme under Directive 051. Substantive test: Interview site operators and metering diagram during site visit regarding the location of the injection meter. The acid gas injection scheme has an approval to operate an AGI scheme, as evidenced by project documentation. No discrepancies detected. Metering of acid gas injected occurs at the injection wellhead as confirmed during the site visit. No discrepancies detected. 8

13 Brightspot Climate Inc. Verification Report Activity Data / Inventory Component Description Verification Procedures Verification Findings 5. The acid gas injection project must occur at a facility that commenced commercial operations prior to July 1, Consolidation of multiple gas streams at the capture facility should have sufficient transparency in the data to attribute emissions to each originating facility. Substantive test: Confirm that commercial operations began at the facility prior to July 1, 2007 by interviewing plant operators during the site visit. Substantive test: Review reported GHG information to trace emissions data back to each source of inlet gas at the capture facility. Substantive test: interview site operators during site visit to determine if inlet gas originates from facilities that are regulated under SGER. Commercial operations began at the AltaGas Turin facility before January 1, 2007, as confirmed with site operation personnel during the site visit. The AGI system was installed and began operation before January 1, No discrepancies detected. Reported GHG information has sufficient transparency to disaggregate the information and trace emissions back to specific inlet gas streams. No discrepancies detected. The Turin facility is receiving gas from the adjacent AltaGas Retlaw and Enchant facilities. Based on project information and gas volumes received from these facilities, neither of these facilities would be a regulated facility under SGER if they were processing natural gas. No discrepancies detected. 9

14 Brightspot Climate Inc. Verification Report Activity Data / Inventory Component Description Verification Procedures Verification Findings 7. The emission reduction quantification is based on actual measurements. Substantive test: Review source of quantitative data used in the emission reduction quantification and compare to protocol requirements for measurement type and frequency. Modeled and actual measurements are used to quantify emissions in the baseline condition. Actual measurements are used to quantify all emission sources in the project condition except electricity consumption of auxiliary equipment and heaters, which each account for small proportions of the total emissions in the project condition. All parameters meet the monitoring requirements of the Protocol. No discrepancies detected. 10

15 Brightspot Climate Inc. Verification Report Activity Data / Inventory Component Description Verification Procedures Verification Findings 8. The project must meet the eligibility criteria stated in section 7 of the Specified Gas Emitters Regulation (these are the requirements of the Alberta Offset System) Substantive test: Review the evidence provided by the Responsible Party related to the requirements of the Alberta Offset System. Occurs in Alberta The AltaGas Turin facility is located near Turin, Alberta, as confirmed during the site visit. Actions not otherwise required by law confirmed that acid gas injection is not a required activity. Actions taken on or after January 1, 2002 commissioning of the acid gas injection facility occurred in 2004, as confirmed by project documentation. Real, demonstrable, quantifiable the verification procedures confirmed that the emission reductions in the assertion meet these requirements. The specific verification procedures supporting this conclusion include observation during the site visits, review of supporting meter calibration reports and documentation and the recalculation of the emission reduction. Clearly established ownership AltaGas Turin is owned by the Responsible Party, as shown on the AltaGas website and asserted by the Responsible Party. Counted once for compliance purposes The Responsible Party provided a Statutory Declaration that the emission reduction will be registered only in the Alberta Offset System. No discrepancies detected. 11

16 Brightspot Climate Inc. Verification Report Activity Data / Inventory Component Description PROTOCOL FLEXIBILITY Verification Procedures Verification Findings The thermal energy credit produced by a Claus unit in the baseline condition may be excluded if it is relatively small compared to the overall emission reduction. QUANTIFICATION DATA Claus unit estimated monthly run time, tail gas composition, tail gas volume Gas volumes acid gas injection, flare, flare fuel Substantive test: Review the justification for the excluding the thermal energy credit and determine if it meets the requirements of the protocol. Substantive test: Analyze SULSIM model inputs, comparing input values to plant operational values. Substantive test: Assess accuracy of transcription of SULSIM model results to quantities applied in emission reduction quantification. Controls test: Review meter calibration documentation for each meter used in emission reduction quantification. The thermal energy credit that would be realized from a Claus unit is very small, given the low concentration of sulphur in the raw gas. Excluding the thermal energy credit in the emission reduction quantification provides a conservative result. Therefore, the Responsible Party is justified in excluding the thermal energy credit in the emission reduction quantification. No discrepancies detected. The model input data was reviewed. The 2016 gas composition and gas flow rates matched the data used in the emission reduction quantification. No discrepancies detected. The SULSIM model results were correctly transcribed into the emission reduction quantification. No discrepancies detected. Meter calibration reports were available for all gas meters used in the emission reduction quantification. All meter reports indicated that meters were operating within manufacturer specifications through the course of the reporting period. No discrepancies detected. 12

17 Brightspot Climate Inc. Verification Report Activity Data / Inventory Component Description Verification Procedures Verification Findings Gas compositions plant fuel gas, acid gas AGI injection compressor electricity consumption AGI injection auxiliary equipment electricity consumption Heaters power rating, number in service, operating hours Substantive test: Review gas composition reports for invalid results and compare transcription of results into the emission reduction quantification. Substantive test: Compare transcription of electricity consumption data into the emission reduction quantification. Substantive test: Observe AGI auxiliary equipment during site visit and compare to equipment inventory in the Offset Project Plan. Substantive test: Analyze equipment nameplate ratings and runtime assumptions for appropriateness. Substantive test: Analyze equipment nameplate ratings and runtime assumptions for appropriateness. All gas compositions were found to be valid results and correctly transcribed into the emission reduction quantification. No discrepancies detected. Electricity consumption data was correctly transcribed into the emission reduction quantification. No discrepancies detected. The inventory of auxiliary equipment for the acid gas injection process in the project documentation is complete, based on observations made during the site visit. No discrepancies detected. Equipment nameplate ratings and runtimes were compared to equipment at a similar facility and found to be appropriate. Runtime assumptions are appropriate based on a review of the gas plant operating time for the reporting period. No discrepancies detected. Equipment nameplate ratings and runtimes were compared to equipment at a similar facility and found to be appropriate. Runtime assumptions are appropriate based on a review of the gas plant operating time for the reporting period. No discrepancies detected. 13

18 Brightspot Climate Inc. Verification Report Activity Data / Inventory Component Description Verification Procedures Verification Findings Emission factors natural gas combustion, natural gas extraction and processing, Alberta electricity consumption grid factor Substantive test: Compare transcription of emission factors into the emission reduction quantification. The emission factors used in the emission reduction quantification were correctly transcribed from the Alberta Emission Factor Handbook. No discrepancies detected. EMISSION REDUCTION QUANTIFICATION AND REPORT Application of the approved quantification protocol Substantive test: compare the methodologies described in the Responsible Party s Offset Project Plan to the methodologies described in the approved quantification protocol. The verification team compared the methods described in the Offset Project Plan to the methods described in the approved Quantification Protocol. The quantification methods described in the Responsible Party s Offset Project Plan adhere to the methods described in the approved Quantification Protocol. No discrepancies detected. Substantive test: Recalculate the emission reduction using original metered data. The independent recalculation of the emission reduction resulted in the same emission reduction quantity asserted by the Responsible Party. Therefore, the approved Protocol quantification methods were applied in the Responsible Party s emission reduction quantification. No discrepancies detected. 14

19 Brightspot Climate Inc. Verification Report Activity Data / Inventory Component Description Verification Procedures Verification Findings Quantification of emission reduction Substantive test: Recalculate the emission reduction using original metered data. The independent recalculation of the emission reduction resulted in the same emission reduction quantity asserted by the Responsible Party. Therefore, the verification team concluded that no arithmetic or calculation errors were made by the Responsible Party in the emission reduction quantification. No discrepancies detected. Transcription of final emission reduction into Offset Project Report Substantive test: compare the final emission reduction quantity reported by the Responsible Party to the quantity reported in the Offset Project Report. Also, compare these quantities to the recalculated quantity in previous verification procedures. The emission reduction quantity was accurately transcribed into the Offset Project Report. No discrepancies detected. 15

20 Brightspot Climate Inc. Verification Report Additional Findings The previous verification for this facility, which was conducted by ICF Consulting Canada, Inc., identified a qualitative discrepancy related to the electricity grid consumption emission factor applied in the emission reduction quantification. Recent (draft) guidance from AEP, which will be effective for the 2017 reporting period, indicates that projects may apply revised emission factors, provided all emission factors referenced from a specific source are updated. It remains unclear if the emission factor described above should be updated. The revised emission factor applied in the emission reduction quantification results in a GHG assertion 665 tonnes CO 2e greater than if the original emission factor, which is defined in the Offset Project Plan, was applied (approximately 1.6% of the emission reduction asserted). Confirmations Section 5.4 of the Alberta Environment and Parks Verification Technical Guidance document lists six activities that are beyond the scope of a typical greenhouse gas verification, but are required by Alberta Environment and Parks. The confirmations refer to information contained in the Specified Gas Compliance Report (Excel spreadsheet) submitted by the Responsible Party. Table 5: Confirmation Findings Confirmation Consistency of offset project information across offset project documentation Offset project location and any applicable approvals information Methodology documents or procedures manual exist Offset project contact, report dates, emission reduction numbers, etc. (part of one above) Completeness and accuracy of process and data flow diagrams Confirmation Findings Offset project information in the Offset Project Plan is consistent with the information in the Offset Project Report. All information is consistent with the requirements described in the relevant criteria. The project is located near Turin, Alberta, as confirmed during the site visit. The acid gas injection scheme has an approval to operate an AGI scheme, as evidenced by project documentation. The Responsible Party has documented all relevant methodologies, procedures and controls in the Offset Project Plan. The Offset Project Report was signed by the AltaGas Divisional Vice President, Gas Commercial. The final emission reduction quantity calculated by the Responsible Party was accurately transcribed into the Offset Project Report. The Responsible Party s data flow chart, which is included in the Offset Project Plan, accurately describes the data flows within the project. 16

21 Brightspot Climate Inc. Verification Report Appendices The following documents are appended to this report, as follows: Peer Review Report Statement of Qualifications Conflict of Interest Statement Final Verification Plan 17

22 Peer Review Report Responsible Party: Project: AltaGas Processing Partnership AltaGas Turin Acid Gas Injection Project Date Peer Review Completed: March 9 th, 2017 Verification Activities Reviewed Verification Process Verification Risk Assessment Comments The verification risk assessment identified all relevant emission sources described in the Quantification Methodology Document and site visit notes. Verification activities were designed to mitigate the inherent and control risks defined during the risk assessment. Data Sampling Data sampling was not used for this verification. Verification Activities Issues raised during the verification Conflict of Interest Working notes provide sufficient detail to demonstrate that all verification activities were completed through the course of the verification. All questions and issues raised during the verification were sufficiently addressed by the Responsible Party. An assessment for threats to independence was conducted before the verification began and after the verification was completed. No real or perceived conflicts of interest were identified. Verification Conclusion Verification Evidence Eligibility Evaluation Comments Sufficient evidence supporting the eligibility of the project was provided by the Responsible Party. Sufficient and Appropriate Evidence Discrepancy Analysis The evidence collected through the verification activities reduces the overall verification risk and supports the verification conclusion. No unresolved discrepancies reported. Verification Report All documentation required in the Verification Report is included and complete. Based on the documentation reviewed during the peer review process, I believe the verification of the 2016 vintage verification for the abovementioned Project was completed in accordance with the ISO standard and the criteria established in the Alberta Environment and Parks document, Technical Guidance for Greenhouse Gas Verification at Reasonable Level of Assurance, Version 1.0 January as well as the Quantification Protocol for Acid Gas Injection, Version 1.0, May Sincerely, Nathan Muegge, P.Eng. (p)

23 Statement of Qualifications Lead Verifier Details Lead Verifier Name: Aaron Schroeder Professional Designation: Professional Engineer Phone Number: +1 (604) Verifying Company Name: Brightspot Climate Inc. Lead Verifier Training GHG Verification - ISO , Canadian Standards Association, 2012 CCP GHG Validation and Verification, University of Toronto, 2016 (Instructor) Verification Team Biographies Lead Verifier: Aaron Schroeder, P.Eng. has eleven years of professional experience analyzing, quantifying and auditing greenhouse gas emissions in North America. Mr. Schroeder s hands on experience conducting over 150 greenhouse gas verifications includes numerous engagements for industrial facilities in power generation, oil and gas production and processing, natural gas pipelines and a wide range of emission reduction projects in beef and dairy management, conservation cropping (zero-tillage) and nitrogen fertilizer management, and renewable energy and waste management. Mr. Schroeder is a sessional instructor at the University of Toronto s School of Environment for professional development. He instructs the school s greenhouse gas quantification and verification courses. Analytical Support: Will Grundling, MSc. will provide analytical support to the verification team through the completion of the verification procedures and the development of the Verification Report. His verification experience includes event inventories, Alberta s SGER compliances, Ontario GHG Reporting Regulation verifications, and Fed Cattle Aggregation and Vent Gas and Instrument Air offset projects. Peer Reviewer: Nathan Muegge, P.Eng. has a broad background in the application and evaluation of conventional and emerging energy technologies with over a decade of experience in the fields of energy & environment. He has completed over 30 greenhouse gas verifications of annual SGER compliance reports as Lead Verifier or Technical Expert, including reports for several natural gas processing and power generation facilities. Nathan completed verification through the Canadian Standards Association in 2009 Verification of Greenhouse Gas Reports using ISO as well as additional training through the Jacques Whitford Training Institute in 2008 Environmental Auditing, Legislation, Regulations and other Canadian Requirements. 19

24 Statement I, Aaron Schroeder, meet or exceed the qualifications of third party auditors described in Section 18 of the Specified Gas Emitters Regulation. Signed: Date: March 9, 2017 Aaron Schroeder, P.Eng. Brightspot Climate Inc. Vancouver, British Columbia 20

25 Conflict of Interest AltaGas Turin Acid Gas Injection Project Brightspot Climate monitored threats to independence throughout the duration of the project. The following declaration affirms that: 1. The verifying organization or the verification team members do not financially benefit directly from the Project Developer or the Project Developer s Project. 2. The verifying organization or verification team members are not in a position of assessing their own work. 3. The verifying organization, members of the verification team, or persons in the chain of command for the verification do not promote, nor can be perceived to promote, the Project Developer's position or opinion to the point that objectivity may, or may be perceived to be, compromised. 4. No member of the verification team is too sympathetic to the Project Developer's interests by virtue of a close relationship with the Project Developer, its directors, officer or employees. 5. No member of the verification team or person in the chain of command is deterred from acting objectively and exercising professional skepticism by threats, actual or perceived, from the directors, officers or employees of the Project Developer. Date: March 9, 2017 Location: Vancouver, BC Signed: Aaron Schroeder Lead Verifier. Brightspot Climate +1 (604) info@brightspot.co

26 AltaGas Processing Partnership AltaGas Turin Acid Gas Injection Project Verification Plan February 10, (604)

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28 Brightspot Climate Inc. Verification Plan Terminology ISO defines the following terms used in the context of a GHG verification: GHG Assertion: a declaration or factual and objective statement made by the Responsible Party. The Alberta Environment and Parks Technical Guidance Document 1 extends this definition to include the document that identifies the greenhouse gas emission reduction and/or removals and offset credits being claimed by the offset project over a defined period of time. Project: activity or activities that alter the conditions identified in the baseline scenario which cause greenhouse gas emission reductions or greenhouse gas removal enhancements. The GHG Assertion subject of this verification is for the AltaGas Turin Acid Gas Injection Project, which will be referred to throughout this document as the Project. ISO defines the following parties associated with the verification: Responsible Party: person or persons responsible for the provision of the greenhouse gas assertion and supporting GHG information. The Responsible Party for this verification is AltaGas Processing Partnership. Intended User: individual or organization identified by those reporting GHG-related information as being the one who relies on that information to make decisions. The Intended User for this verification is Alberta Environment and Parks (AEP). Verifier: competent and independent person, or persons, with the responsibility of performing and reporting on the verification process. The Verifier for this verification is Brightspot Climate Inc. (Brightspot Climate). The members of the verification team are provided in section 3 of this document. 1 Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance, Version 1.0, January Alberta Environment and Parks. i

29 Brightspot Climate Inc. Verification Plan Introduction This document serves to communicate information between the parties associated with the independent verification of the Offset Project Report for AltaGas Turin Acid Gas Injection Project. This document contains three sections: 1. The introduction, which defines the principles by which this verification will be conducted; 2. The GHG Assertion, which describes the subject matter of the verification; and 3. The Verification, which defines the verification parameters and the GHG inventory principles that will be tested by the verification. This third section also provides information regarding the verification team and any findings from previous verifications for this Project. The verification procedures, including the sampling plan and the results of the verification risk assessment, will be appended to this verification plan in the final verification report. The Responsible Party developed the Project in accordance with the requirements of the Quantification Protocol for Acid Gas Injection, Version 1, May 2008 (the Protocol). Principles ISO defines four fundamental principles to conducting a greenhouse gas verification, namely independence, ethical conduct, fair presentation and due professional care. Brightspot Climate has implemented processes, including mandatory training for all verification team members, to ensure the application of these principles for this verification. Regarding the principle of independence, Brightspot Climate conducted an assessment of threats to independence prior to initiating this verification. No real or perceived threats to independence were identified. Brightspot Climate will continue to monitor for threats to independence throughout the course of this verification. A final Conflict of Interests Checklist will be appended to the Verification Statement. 1

30 GHG Assertion Project Subject Matter Brightspot Climate Inc. Verification Plan The Technical Guidance Document 2 defines subject matter in Section as follows: The subject matter for an offset project is the greenhouse gas emissions from the offset project and baseline, including the total greenhouse gas emission reduction and/or removals achieved by the offset project that can be appropriately evaluated against the program criteria. The subject matter for the Project is defined in the verification scope, which is described in Table 4. GHG Assertion The Responsible Party s asserted emission reduction is provided in the following table: Table 1: Baseline and Previous GHG Assertions GHG Emission Reduction 2016: 76,610 tonnes of CO 2e Source: AltaGas Turin Acid Gas Injection Project 2016 Offset Project Report Changes to Operations and Boundaries This is the first year that Brightspot Climate has provided verification services for the Project. The following modifications to the original project have been made since the original Offset Project Plan was developed. Further details of each of these items are provided in the Offset Project Report. SSR P6 Electricity consumption for the acid gas compressor was previously modeled based on nameplate values. For this GHG assertion, actual metered values were used. SSR B6a The modeled molar ratio of sulphur tail gas previously assumed; however since the injected acid gas is dehydrated and the volume of gas used in the model is the volume of acid gas injected, it is more appropriate to use a dry acid gas volume. This change has been applied in this GHG assertion. SSR B6b Nitrous oxide emissions from incineration of tail gas were previously not included, but have now been included in this GHG assertion. SSR P12 The volume of fuel gas consumed for Catadyne heaters (SSR P9) has been added to the Fuel Extraction and Processing calculation for this GHG assertion. 2 Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance, Version 1.0, January Alberta Environment and Parks. 2

31 Brightspot Climate Inc. Verification Plan Responsible Party s Data Management Systems Table 2, below, describes the data measurement, estimation and data storage locations for all GHG information used by the Responsible Party to produce the GHG inventory. The final column in this table describes the data storage location and the path (intermediate data transfer) prior to use in the GHG inventory. Table 2: GHG Inventory Data Management Activity Data Description Measurement Type Data Storage Location / Path Sulphur recovery unit estimated monthly run time, tail gas composition, tail gas volume Gas volumes acid gas injection, flare, flare fuel Gas compositions plant fuel gas, acid gas AGI injection compressor electricity consumption AGI injection auxiliary equipment electricity consumption Heaters power rating, number in service, operating hours Emission factors natural gas combustion, natural gas extraction and processing, Alberta electricity consumption grid factor Modeled in SULSIM Metered Measured Metered Estimated Estimated Reference values SULSIM Report >> Emission Reduction Quantification AltaGas Historian >> AltaGas Production Accounting >> Petrinex Reports >> Emission Reduction Quantification Maxxam Laboratories Reports >> Emission Reduction Quantification Fortis Data Extract Report >> Emission Reduction Quantification Nameplate readings, plant run time >> Emission Reduction Quantification Nameplate readings, plant run time >> Emission Reduction Quantification Alberta Emission Factor Handbook >> Emission Reduction Quantification Responsible Party s Control Environment The following table describes the Responsible Party s quality assurance controls applied to the GHG information used to produce the GHG inventory. Note that the verification procedures may not rely upon these controls to establish sufficient and appropriate evidence to support the GHG Assertion. Table 3: Responsible Party Data Controls Activity Data Description Gas volumes acid gas injection, flare, flare fuel Application of the approved quantification protocol Responsible Party Controls Responsible party conducts periodic meter calibration. Responsible Party has developed an Offset Project Plan that is intended to conform to the requirements of the approved quantification protocol. 3

32 Brightspot Climate Inc. Verification Plan Verification Principles ISO defines six principles that are fundamental to the fair accounting and reporting of GHG information. The verification procedures will test that these principles have been upheld through the Responsible Party s inventory, accounting and reporting processes. Section of ISO defines these principles as follows: Accuracy: reduce bias and uncertainty as far as practical Completeness: include all relevant emission sources Conservativeness: use conservative assumptions, values and procedures to ensure that GHG emission reductions or removal enhancements are not over-estimated Consistency: enable meaningful comparisons of reported emissions (from year to year or between facilities or between companies) Relevance: select GHG sources, sinks and reservoirs, data and quantification methodologies appropriate to the needs of the intended user Transparency: disclose sufficient and appropriate GHG information to facilitate verification and to allow intended users to make decisions with relative confidence 4

33 Verification Parameters Brightspot Climate Inc. Verification Plan The verification will be conducted according to the parameters defined in the following table: Table 4: Verification Parameters Level of Assurance Reasonable assurance issue a verification statement on whether the GHG assertion is without material discrepancy; Objectives issue a verification report that provides details of the verification activities; and complete the confirmations activities defined in the Alberta Environment and Parks Guidance Document 3, Section 5.4, Table 26. Climate Change and Emissions Management Act Specified Gas Emitters Regulation Criteria Technical Guidance for Offset Project Developers, Version 4.0, February 2013 Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance, Version 1.0, January 2013 Quantification Protocol for Acid Gas Injection, Version 1.0, May Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance, Version 1.0, January Alberta Environment and Parks. 5

34 Brightspot Climate Inc. Verification Plan Project Name: AltaGas Turin Acid Gas Injection Project Geographic Boundary: AltaGas Turin Sour Gas Processing Plant near Turin, Alberta. LSD: W4M (Processing Plant) W4 (Injection Well) Scope Physical Operations: Emission Sources: IPCC GHGs Emitted: Capture and permanent sequestration of the acid gas stream to reduce the quantity of CO 2 released to the atmosphere Project condition includes compression, transportation, and injection of acid gas Baseline processes include flaring Natural Gas Combustion, Extraction and Processing Electricity Consumption CO 2, CH 4 and N 2O Reporting Period: January 1, 2016 December 31, 2016 Materiality Quantitative materiality threshold is 5% of asserted greenhouse gas emission reduction An unqualified verification conclusion may be issued despite immaterial quantitative discrepancies that do not exceed the materiality threshold in aggregate (calculated as both net and gross overall discrepancy). Tolerable Error Thresholds The tolerable error threshold per issue in either the baseline or project condition will be graduated as follows for emission sources: 2% for emission sources greater than 50% of total baseline or project emissions; 5% for emission sources between 20% and 50% of total baseline or project emissions; and 10% for emission source less than 20% of total baseline or project emissions. All discrepancies will be described in the Verification Report. Verification Kickoff Meeting: January 23, 2017 Preliminary Verification Schedule Draft Verification Plan: February 10, 2017 Site Visit: February 10, 2017 Draft Verification Report : February 28, 2017 Final Verification Report March 1,

35 Findings from Previous Verifications Brightspot Climate Inc. Verification Plan There was one qualitative misstatement from the previous verification report: Inconsistent change in reference emission factors. The emission factor used for quantification of emissions associated with electricity consumption in the project condition was changed in the 2015 GHG Assertion. The emission factor has been changed from 0.88 to 0.64 tco2e/mwh to reflect the Carbon Offset Emission Factors Handbook dated March 4, The change accounts for an increase of approximately 1,613 tco 2e, or 2% of the total Assertion in comparison to emission quantified with the electricity emission factor used in previous reporting periods. Due to the ambiguity of the direction provided in the Memorandum, this has been qualified as a qualitative misstatement. Emission factor reference sources for all other parameters are consistent with the Offset Project Plan. No other emission factor reference sources were updated to reflect the Carbon Offset Emission Factors Handbook. Source: AltaGas Turin Acid Gas Injection Project Verification Report, March 1, 2016 Verification Team Aaron Schroeder, P.Eng., will be the Lead Verifier and Designated Signing Authority for this verification. His extensive experience quantifying and verifying greenhouse gas emissions satisfies all sixteen subject matter areas defined in the ISO Will Grundling, MSc. will provide analytical support to the verification team through the completion of the verification procedures and the development of the Verification Report. His verification experience includes event inventories, Alberta s SGER compliances, Ontario GHG Reporting Regulation verifications, and Fed Cattle Aggregation and Vent Gas and Instrument Air offset projects. Nathan Muegge, P.Eng., will conduct an independent peer review of the verification. Mr. Muegge has completed over 30 greenhouse gas verifications of annual SGER compliance reports as Lead Verifier or Technical Expert, including reports for several natural gas processing facilities. Additional information regarding the qualifications of the verification team will be provided in a Statement of Qualifications, which will be appended to the Statement of Verification. Site Safety Requirements Personnel conducting site visits are required to wear personal protective equipment including steel-toed boots, Nomex coveralls, hard hat, safety glasses with side shields and gloves. A site orientation must be completed before entering the site. 7