I15MU154.DOCX

This is the Carbon Credits (Carbon Farming Initiative—Oil and Gas Fugitives) Methodology Determination 2015.

(1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

Commencement information
Column 1	Column 2	Column 3
Provisions	Commencement	Date/Details
1. The whole of this instrument	The day after this instrument is registered.

Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.

(2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.

3 Authority

This determination is made under subsection 106(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(b) ends on the day before this determination would otherwise be repealed under subsection 50(1) of the Legislative Instruments Act 2003.

5 Definitions

In this determination:

Act means the Carbon Credits (Carbon Farming Initiative) Act 2011.

amendment Act has the meaning given by subsection 11(5).

API Compendium has the same meaning as in the NGER (Measurement) Determination.

component, in relation to a gas, means a component of the gas that is listed in an item of the table in subsection 2.22(3) of the NGER (Measurement) Determination.

declaration day, for an oil or gas fugitives (RTF) project, means the day the project is declared to be an eligible offsets project.

facility has the same meaning as in the NGER Act.

flare device means a device that flares fugitive leak emissions or process venting emissions, but does not include a device that is directly associated with the operation of an electricity production device.

flare device included in the project for a reporting period means a flare device that, for one or more periods during the reporting period, combusts fugitive leak emissions or process venting emissions that would have been vented to the atmosphere if the project had not been undertaken.

flaring means the combustion of gas for a purpose other than producing energy.

fugitive leak emissions means any 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 section 5.4.3, 5.6.4, 5.6.5 or 6.1.2 of the API Compendium;

(b) fugitive emissions within the meaning of section 6 of the API Compendium.

fugitive leak measurement period has the meaning given by section 33.

gas capture equipment: equipment (which may be a single piece of equipment, or multiple pieces of equipment that make up a system) is gas capture equipment if:

(a) the equipment captures fugitive leak emissions or process venting emissions; and

(b) without the equipment, the emissions would be released to the atmosphere.

gas quantity means a quantity of gas expressed in tonnes.

historical sampling data has the meaning given by subsection 34(1).

intention notice time has the meaning given by subsection 11(5).

mass fraction means the fraction by mass, expressed as a percentage, of a particular component in a gas quantity.

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 operating period for a flare device has the meaning given by section 32.

monitoring requirements means the requirements set out in sections 31 to 34.

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) Determination 2008.

NGER Regulations means the National Greenhouse and Energy Reporting Regulations 2008.

NGER report means a report about the operations of a facility that is required to be provided to the Regulator under any of the following sections of the NGER Act:

(a) section 19;

(b) section 22G;

oil or gas facility has the meaning given by section 6.

oil or gas fugitives (RTF) project (short for oil or gas fugitives (re‑route to flare) project) has the meaning given by subsection 8(2).

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;

(d) regenerators.

relevant component gas measurements has the meaning given by subsection 22(3).

re‑routed gas quantity has the meaning given by section 19.

s means the number of component gases present in a gas quantity.

standard conditions has the same meaning as in the NGER (Measurement) Determination.

substitute newness requirement has the meaning given by subsections 11(2) and (3).

6 Meaning of oil or gas facility

A facility is an oil or gas facility if the facility is undertaking one or more of the following activities:

(a) an oil or gas exploration activity that is:

(i) drill stem testing; or

(ii) well completion; or

(iii) well workovers;

(b) crude oil production;

(d) crude oil refining;

(e) natural gas production or processing;

(f) natural gas transmission.

7 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.

Part 2—Oil or gas fugitives (RTF) projects

8 Oil or gas fugitives (RTF) projects

(1) For paragraph 106(1)(a) of the Act, this determination applies to an offsets project that:

(a) involves the installation and operation of gas capture equipment and the use of the equipment to re‑route process venting emissions or fugitive leak emissions to a flare device for combustion; and

(b) is undertaken at an oil or gas facility; and

(i) coal mining activities; or

(ii) oil exploration well drilling activities; or

(iii) gas exploration well drilling activities.

(2) A project covered by subsection (1) is an oil or gas fugitives (RTF) project.

Part 3—Project requirements

Division 1—General requirements

9 Operation of this Division

For paragraph 106(1)(b) of the Act, this Division sets out requirements that must be met for an oil or gas fugitives (RTF) project to be an eligible offsets project.

10 General requirements

(1) An oil or gas fugitives (RTF) project must be undertaken at an oil or gas facility for the project.

(2) An oil or gas fugitives (RTF) project must involve the following abatement activities:

(a) installing and operating gas capture equipment to capture and re‑route:

(i) fugitive leak emissions; or

(ii) process venting emissions;

at an oil or gas facility that would otherwise have been released to the atmosphere;

(b) re‑routing the emissions captured by the equipment to a flare device for combustion.

(3) An oil or gas fugitives (RTF) project must not relate to fugitive leak emissions or process venting emissions from a particular source if emissions from that source were being captured by gas capture equipment and flared at any time before the declaration day for the project.

(4) An oil or gas fugitives (RTF) project must not relate to process venting emissions from equipment that is used in a production process and that was not installed before the declaration day for the project.

Division 2—Additionality requirements

11 Requirement in lieu of newness requirement

(1) For subparagraph 27(4A)(a)(ii) of the Act, the substitute newness requirement is in lieu of the newness requirement for an oil or gas fugitives (RTF) project.

(2) The project meets the substitute newness requirement if it has not begun to be implemented.

(3) The project also meets the substitute newness requirement if:

(a) the project proponent or project proponents for the project:

(i) gave the Regulator a written notice of intention to make an application in relation to the project that satisfied:

(A) paragraphs (1)(a) to (d) of item 388B of Schedule 1 to the amendment Act; or

(B) paragraphs (1)(a) to (d) of item 388C of that Schedule; and

(ii) made the application under section 22 of the Act, or were taken to have done so under the Act, before 1 July 2016; and

(b) the project had not begun to be implemented at the intention notice time.

(4) A determination as to whether a project has begun to be implemented at a particular time is to be done as if for the purposes of subparagraph 27(4A)(a)(i) of the Act (so that subsections 27(4B) to (4E) of the Act apply).

(5) In this section:

amendment Act means the Carbon Farming Initiative Amendment Act 2014.

intention notice time has the same meaning as in item 388B or 388C of Schedule 1 to the amendment Act, as appropriate.

Note: Transitional provisions in the Carbon Farming Initiative Amendment Act 2014 allowed prospective proponents who gave notice of their intentions before the date of Proclamation of that Act to have the newness of their projects assessed as at the time of their notice, provided that they made the section 22 application before 1 July 2015. The effect of this section is to extend this deadline to 1 July 2016 for this determination.

Part 4—Net abatement amount

Division 1—Preliminary

12 Operation of this Part

For paragraph 106(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 (RTF) project that is an eligible offsets project.

Division 2—Method for calculating net abatement amount

13 Summary

An oil or gas fugitives (RTF) project involves carbon abatement from capturing, re‑routing and flaring gas that would otherwise be released to the atmosphere.

The carbon dioxide equivalent net abatement amount for a reporting period is worked out by comparing the emissions resulting from flaring the re‑routed gas with the emissions that would have resulted from the gas being released to the atmosphere if the project had not been carried out.

Amounts of re‑routed gas consisting of process venting emissions, which are intentional emissions from equipment used in a production process and are likely to vary with changes in production, must be measured continually. Amounts of re‑routed gas consisting of fugitive leak emissions, which are not directly associated with production levels, may be measured during a fugitive leak measurement period. Amounts of re‑routed gas that contain both kinds of emissions must be treated as process venting emissions.

The carbon dioxide equivalent net abatement amount for a reporting period is adjusted by a sampling discount factor for sampling uncertainty associated with relevant component gas measurements. Ancillary emissions are taken into account if doing so would have a material effect on net abatement.

14 Net abatement amount

(1) The carbon dioxide equivalent net abatement amount for a reporting period, in tonnes CO2‑e, is worked out using the formula (equation 1):

where:

ANA means the carbon dioxide equivalent net abatement amount for the reporting period, in tonnes CO2‑e.

n means the number of flare devices included in the project for the reporting period.

i means a flare device included in the project for the reporting period.

EV,i means the emissions that would have resulted from the release of the re‑routed gas quantity in relation to flare device i in the reporting period if the project had not been undertaken, in tonnes CO2‑e, worked out using equation 2.

EF,i means the emissions from flaring the re‑routed gas quantity in relation to flare device i in the reporting period, in tonnes CO2‑e, worked out using equation 3.

SDFi means the sampling discount factor for flare device i in the reporting period, worked out in accordance with section 21.

EAN means the ancillary emissions associated with implementing the project in the reporting period, in tonnes CO2‑e, worked out using equation 10.

(2) For the purposes of subsection (1), disregard any carbon abatement that is not eligible carbon abatement from the project.

Division 3—Method for calculating emissions

Subdivision A—Calculation of emissions that would have occurred if project not undertaken

15 Emissions that would have occurred if project not undertaken

The emissions that would have resulted from the release of the re‑routed gas quantity in relation to a flare device in a reporting period if the oil or gas fugitives (RTF) project had not been undertaken, in tonnes CO2‑e, are worked out using the formula (equation 2):

where:

QR,i means the re‑routed gas quantity in relation to flare device i in the reporting period, in tonnes, worked out in accordance with section 19.

s means the number of component gases present in the re‑routed gas quantity in relation to flare device i, worked out:

(a) if, under section 34, the project proponent has chosen to use historical sampling data in relation to the reporting period—using that data; or

(b) otherwise—in accordance with the monitoring requirements.

y means a component gas present in the re‑routed gas quantity in relation to flare device i, identified:

(a) if, under section 34, the project proponent has chosen to use historical sampling data in relation to the reporting period—using that data; or

(b) otherwise—as a result of monitoring parameters s and molar fraction in accordance with the monitoring requirements.

GWPy means:

(a) if component y is covered by an item of the table in regulation 2.02 of the NGER Regulations as in force on the declaration day—the Global Warming Potential specified for component y in the table; or

(b) otherwise—zero.

moly,i% means the molar fraction of component y in the re‑routed gas quantity in relation to flare device i, in mol%, worked out:

(a) if, under section 34, the project proponent has chosen to use historical sampling data in relation to the reporting period—using that data; or

(b) otherwise—in accordance with the monitoring requirements.

mwy means the molecular weight of component y, in kilograms per kilomole, set out in the table in subsection 2.22(3) of the NGER (Measurement) Determination.

V means the volume of 1 kilomole of a gas at standard conditions, which is 23.6444 cubic metres.

dTOTAL,i means the density of the re‑routed gas quantity in relation to flare device i, in kilograms per cubic metre, worked out using equation 7.

Subdivision B—Calculation of emissions from flaring

16 Emissions from flaring

The emissions from flaring the re‑routed gas quantity in relation to a flare device in a reporting period, in tonnes CO2‑e, are worked out using the formula (equation 3):

where:

EF,i means the emissions from flaring the re‑routed gas quantity in relation to flare device i in the reporting period, in tonnes CO2‑e.

QR,i means the re‑routed gas quantity in relation to flare device i in the reporting period, in tonnes, worked out in accordance with section 19.

EFi means the emissions factor for flaring the re‑routed gas quantity in relation to flare device i in the reporting period, in tonnes CO2‑e per tonne flared, worked out using equation 4.

OFF means the correction factor for the oxidation of a flared fuel, as set out in section 3.86 of the NGER (Measurement) Determination.

mCO2,i% means the mass fraction of carbon dioxide in the re‑routed gas quantity in relation to flare device i, in mass%, worked out using equation 5.

EFCH4 means the CH4 emissions factor for flaring, in tonnes CO2‑e per tonne flared, as set out in the table in subsection 3.85(2) of the NGER (Measurement) Determination.

EFN2O means the N2O emissions factor for flaring, in tonnes CO2‑e per tonne flared, as set out in the table in subsection 3.85(2) of the NGER (Measurement) Determination.

17 Emissions factor for a re‑routed gas quantity

The emissions factor for flaring the re‑routed gas quantity in relation to a flare device, in tonnes CO2‑e per tonne flared, is worked out using the formula (equation 4):

where:

EFi means the emissions factor for flaring the re‑routed gas quantity in relation to flare device i, in tonnes CO2‑e per tonne flared.

s means the number of component gases present in the re‑routed gas quantity in relation to flare device i, not including carbon dioxide, worked out:

(a) if, under section 34, the project proponent has chosen to use historical sampling data in relation to the reporting period—using that data; or

(b) otherwise—in accordance with the monitoring requirements.

Note: Carbon dioxide in the gas quantity is accounted for by equation 5.

y means a component gas, other than carbon dioxide, that is present in the re‑routed gas quantity in relation to flare device i, identified: