Industry Task Force Presents Study of Hydrocarbon Dew Point and Interchangeability Issues

On March 2, at the public meeting of the Federal Energy Regulatory Commission (FERC or the Commission), representatives of the Natural Gas Council summarized two reports previously filed in Docket No. PL04-3-000: White Paper on Liquid Hydrocarbon Dropout in Natural Gas Infrastructure (“Hydrocarbon Dew Point Report”) and White Paper on Natural Gas Interchangeability and Non-Combustion End Use (“Gas Interchangeability Report”).

These reports follow from an industry conference that the Commission held on February 18, 2004 to consider hydrocarbon dew point and interchangeability issues. At that conference, a group of stakeholders from all areas of the industry led by the Natural Gas Council (the group refers to itself as NGC+) explained that it had formed a technical work group to address the hydrocarbon liquid dropout issues specific to domestic gas supply and another work group to address the interchangeability issues associated with high Btu LNG imports.

Hydrocarbon Dew Point

The Hydrocarbon Dew Point Report examines the issue of “hydrocarbon liquid dropout” and recommends how it can be managed so as to balance the concerns of various stakeholders.

Briefly, when natural gas is produced, it contains varying quantities of non-methane hydrocarbons. Historically, these non-methane hydrocarbons, known as “natural gas liquids” or “NGLs” have been extracted from the gas stream at processing plants and sold separately. Because NGLs increase the heating value of the gas stream, rising natural gas prices relative to NGL prices give gas suppliers an economic incentive to reduce extraction levels or bypass processing entirely. Hydrocarbons in the gas stream, however, can cause the hydrocarbon liquids to drop out of the gas phase – which in turn can cause a variety of operational and safety problems for pipelines and LDCs, as well for end-use applications. The temperature and pressure point at which hydrocarbons begin to condense and drop out of the gas stream is known as the hydrocarbon dew point (HDP).

The Hydrocarbon Dew Point Report contains a detailed, technical discussion of the behavior of hydrocarbons in a natural gas stream and describes some of the methods used to control hydrocarbon liquid drop out. The report then provides an overview of the different methods used to measure the HDP and discusses the value of the various methods in predicting hydrocarbon liquid drop out.

The Hydrocarbon Dew Point Report concluded that control of hydrocarbon liquid drop out requires use of a control parameter. The report identified two suitable methods (control parameters) for determining the temperature where appreciable amounts of NGLs will condense: the cricondentherm HDP (CHDP) and the C6+ GPM methods. The Hydrocarbon Dew Point Report, however, included a specific finding that “the cricondentherm HDP offered the greatest operational flexibility for all stakeholders.” The Hydrocarbon Dew Point Report did not adopt any specifications for hydrocarbon content or the HDP, but included Appendix B: “Parameters To Be Considered In Establishing CHDP or C6+ GPM Based Limits.”

Finally, the Hydrocarbon Dew Point Report recommends that additional research should be conducted to build a database to support the assumptions and improve the accuracy of the control parameters, and to develop a cost effective, hydrocarbon-specific, direct-reading dew point analyzer.

Gas Interchangeability

The Gas Interchangeability Report was intended to define acceptable ranges of characteristics for natural gas that can be consumed by end users while maintaining safety, reliability, and environmental performance. In addition to the non-methane hydrocarbons discussed above, natural gas, when it is produced, also contains inert gases such as nitrogen and carbon dioxide, which lower its heating value. Gas from different regions of the country varies in heating value. Imported LNG, however, tends to contain more of the non-methane hydrocarbons and few inerts, and thus has a higher heating value than domestic gas.

The Gas Interchangeability Report defines interchangeability as “the ability to substitute one gaseous fuel for another in a combustion application without materially changing operational safety, efficiency, performance or materially increasing air pollutant emissions.” Varying natural gas composition beyond acceptable limits can cause safety problems, harm combustion equipment, increase air emissions, and cause problems where gas is used as a manufacturing feedstock. Also, burner systems designed since the early 1990s to reduce air emissions have less tolerance for fluctuations in gas composition than older equipment. In attempting to define an acceptable range of natural gas characteristics, the Gas Interchangeability Report examines the various methods that have been used to define fuel interchangeability, considers the effects of changing natural gas composition on various types of end use equipment and combustion technologies, and seeks “to define an approach to apply interchangeability parameters” that could ultimately “define acceptable ranges of natural gas that can be consumed by end users while maintaining safety, reliability, and environmental performance.”

The report concludes with a list of 28 specific findings and 11 recommendations. Among other things, the report finds that the Wobbe number (based on heating value and specific gravity of a gas) provides the best single index and measure of gas interchangeability; however, there are limitations to its applicability, and additional specifications are required. The report also finds that “significant data gaps exist that inhibit non-traditional supplies from entering the North American Market.”

The report recommends interim interchangeability guidelines to be applied during a transition period of up to three years so that data gaps can be closed and longer term interchangeability guidelines and standards developed. The interim guidelines propose a plus or minus 4 percent Wobbe variation from local historic averages subject to a maximum Wobbe limit of 1400 and maximum heating value limit of 1110 Btu/scf. Also, the interim guidelines propose a maximum limit for butanes + of 1.5 mole percent and for total inerts of 4 mole percent.

Implications

Although the reports do not offer substantive resolutions to these long-standing issues, they represent the beginning of a process that ultimately may lead to the adoption of specific standards – on a national, regional, or other basis – for controlling hydrocarbon liquid dropout and for gas interchangeability. If and when such standards are adopted, they will affect all phases of the industry. A major issue will be the allocation of costs necessary to comply with any such standards.