United States
Environmental Protection
Air and Radiation
April 2001
             LESSONS LEARNED

             Executive Summary

             Pneumatic instrument systems powered by high-pressure natural gas are often used across the natu-
             ral gas and petroleum industries for process control.  Typical process control applications include
             pressure, temperature, liquid level, and flow rate regulation. The constant bleed of natural gas from
             these controllers is collectively one of the largest sources of methane emissions in the natural gas in-
             dustry, estimated at approximately 24 billion cubic feet (Bcf) per year in the production sector, 16
             Bcf from processing and 14 Bcf per year in the transmission sector.

             Companies can  achieve significant cost savings and  methane emission reductions by converting
             natural gas-powered pneumatic  control systems to compressed instrument air systems.  Instrument
             air systems substitute compressed air for the pressurized natural gas, eliminating methane emissions
             and providing additional safety  benefits. Cost effective applications, however, are limited to those
             field sites with available electrical power, either from a utility or self-generated.

             Natural Gas STAR Partners have  reported savings of up to 70,000 thousand cubic feet (Mcf) per year
             per facility by replacing natural gas-powered pneumatic systems with  instrument air systems, repre-
             senting annual savings of up to $210,000 per facility.  Partners have found that most investments to
             convert pneumatic systems pay for themselves in just over one year. Individual savings will vary de-
             pending on the design, condition and specific operating conditions of the controllers.
i  EPA
'  430
I  B-
•  01-
:  002
              Method for Reducing Gas
              Replace Gas with Air in
              Pneumatic Systems (per fa-
                        Average Volume
                         of Gas Saved
Average Value
 of Gas Saved
Average Cost of
              1 Assumed value of gas is $3.00/Mcf.
              ' Cost of installing compressor, dryer, and other accessories, and annual electricity requirements.
Average Pay-
back (years)
This is one of a series of Lessons Learned Summaries developed by EPA in cooperation with the natural gas industry
on superior applications of Natural Gas STAR Program Best Management Practices (BMPs) and Partner Reported Op-
portunities (PROs).  Converting natural gas operated pneumatic devices to instrument air systems is a highly cost-
effective method of reducing methane emissions in the natural gas industry.	^	.


The natural gas industry uses a variety of process control devices to operate
valves that regulate pressure, flow, temperature, and liquid levels.  Most in-
strumentation and control equipment falls into one of three categories: (1)
pneumatic; (2) electrical; or (3) mechanical. In the vast majority of applica-
tions, the natural gas industry uses pneumatic devices, which make  use of
readily available high-pressure natural gas to provide the required energy and
control signals.

Pneumatic instrument systems powered by high-pressure natural gas are used
throughout the natural gas industry.  In the production sector, an estimated
250,000 pneumatic devices control and monitor gas and liquid  flows and
levels in dehydrators and separators, temperature  in dehydrator regenerators,
and pressure  in  flash tanks.  Most processing plants already use instrument
air, but some use gas pneumatics, and including the gathering/booster sta-
tions that feed these processing plants, there are about 13,000 gas pneumatic
devices in this sector.  In the transmission sector, an estimated  90,000 to
130,000 pneumatic devices actuate isolation valves and regulate gas flow and
pressure at compressor stations, pipelines, and storage facilities.  Pneumatic
devices also are found on meter runs at distribution company  gate stations
and distribution grids where they regulate flow and pressure.

Exhibit 1 depicts a pneumatic control system powered by natural gas.  The
pneumatic control system consists of the process control instruments and
valves that are operated by natural gas regulated at approximately 20-30
pounds per square inch (psi), and a network of distribution tubing to  supply
all of the control instruments. Natural gas is also  used for a few "utility serv-
ices," such as small  pneumatic pumps, compressor motor starters and isola-
tion shut-off valves.

Exhibit 2 shows a simplified diagram of a pneumatic control loop. A process
condition, such as liquid level in a separator vessel, is monitored by  a float
that is mechanically linked to the liquid level controller outside the vessel. A
rise or fall in liquid level moves the  float upward or downward, which is
translated to small needle valves inside the controller. Pneumatic supply gas is
either directed to the valve actuator by the needle valve pinching off an ori-
fice, or gas pressure is bled off the valve actuator. Increasing gas pressure on

the valve actuator pushes down a diaphragm connected by a rod to the valve
plug, causing the plug to open and increasing the flow of liquid draining out
of the separator vessel. Gas pressure relieved from the valve actuator allows a
spring to push the valve plug closed.
     Exhibit 1:  Natural Gas Pneumatic Control System
             . Liquid
     Natural Gas
     Frnm Plant
                20-30 PSI
      Source: ICF Consulting

                            PC - Pressure Controller

                            LLC - Liquid LevelController
                                                       /•   and Control
                                                          Systems Piping
     Exhibit 2: Signal and Actuation Schematics
    Liquid -
                Vessel Wall
                     Liquid Level
                     Control Instrument
                                            	' ~ *• Bleed

        Pneumatic Gas
              Valve Actuator

    Source: ICF Consulting
                                                                    Page  2

As part of normal operation, natural gas powered pneumatic devices release
or bleed gas to the atmosphere  and,  consequently, are a major source of
methane emissions from the natural gas industry. Pneumatic control systems
emit methane from tube joints, controls, and any number of points within the
distribution tubing network. The actual bleed rate or emissions level largely
depends on the design of the device. In general, controllers of similar design
have similar steady-state bleed rates regardless of brand name. The methane
emission rate will also vary with the pneumatic gas supply pressure, actuation
frequency, and  age or condition of the equipment.

Many partners have found that it is economic to substitute compressed air for
natural gas in pneumatic systems. The  use of instrument air eliminates meth-
ane emissions and  leads to increased gas sales.   In addition, by eliminating
the use of a flammable substance, operational safety is significantly increased.
The primary costs associated with conversion to instrument air systems are
initial capital expenditures for installing compressors and related equipment,
and operating costs for electrical energy to power the compressor motor. Ex-
isting pneumatic gas supply piping, control instruments and valve actuators of
the gas pneumatic system can be re-used in an instrument air system.

A compressed instrument air system  is  shown in Exhibit 3.  In these systems,
atmospheric air is compressed, stored in a volume tank, filtered and dried for
instrument use. Air used for utility services (e.g.  small pneumatic pumps, gas
compressor  motor starters, pneumatic tools, sand blasting) does not need to
be dried. All other parts of a gas pneumatic system will work the same way
with air as they do with gas.
       Exhibit 3: Compressed Instrument Air System

                                            PC - Pressure Controller

                                            LLC - Liquid Level Controller
               Compressor Volume
      Source: ICF Consulting   Tank
                                                      and Control
                                                     Systems Piping
                                                       Utility Air
                                                                 Page 3

The major components of an instrument air conversion project include the
compressor, power source, dehydrator, and volume tank. The following are
descriptions of each  of these components along with important installation

& Compressor.  Compressors used for instrument air delivery are available
   in various types and sizes, from rotary screw (centrifugal) compressors to
   positive displacement (reciprocating piston) types.  The size of the com-
   pressor depends on the size of the facility, the number of control devices
   operated by the system, and the typical bleed rates of these devices. The
   compressor is usually driven by an electric motor that turns on and off,
   depending on the pressure in the volume tank. For reliability, a full spare
   compressor is normally installed.

& Power Source. A critical component of the instrument air control system
   is the  power source required  to operate the  compressor.  Because high-
   pressure natural  gas is abundant and  readily  available, gas pneumatic
   systems can run uninterrupted on a 24-hour, 7-day per week schedule.
   The reliability of an instrument air system, however, depends on the reli-
   ability of the compressor and electric power supply.  Most large natural
   gas plants have either an existing electric power supply or have their own
   power generation system.  For smaller facilities and remote locations,
   however, a reliable source of electric power can be difficult to assure. In
   some  instances, solar-powered battery-operated air compressors can  be
   cost effective for remote locations, which reduces  both methane  emis-
   sions and energy consumption. Small natural gas powered fuel cells are
   also being developed.

l3r Dehydrators.  Dehydrators, or air driers, are an integral part of the  in-
   strument air compressor system.  Water vapor present in atmospheric air
   condenses when the air is pressurized and cooled, and can cause a num-
   ber of problems to these systems, including  corrosion of the instrument
   parts and blockage of instrument air piping  and controller orifices. For
   smaller systems,  membrane driers have become economic. These are
   molecular  filters  that allow  oxygen and nitrogen molecules to pass
   through the membrane, and  hold back water  molecules. They are very
   reliable, with no moving parts, and the filter element can be easily  re-
   placed. For larger applications, desiccant (alumina)  driers are more cost

& Volume Tank The volume tank holds enough air to allow the pneumatic
   control system to have an uninterrupted supply of high pressure air with-
   out having to run the air compressor continuously.  The volume tank al-
   lows a large withdrawal of compressed  air for a short time, such as for a
   motor starter, pneumatic pump or pneumatic tools,  without affecting the
   process control functions.
                                                               Page 4

Economic and
Reducing methane emissions from pneumatic devices by converting to in-
strument air control and instrumentation  systems can yield significant eco-
nomic and environmental benefits for natural gas companies including:

ft Financial Return From  Reducing Gas Emission Losses.   Assuming  a
   natural gas price of $3.00 per Mcf, savings from reduced emissions can
   be estimated at $360 per year per device or $210,000 or more per year
   per facility.  In many cases, the cost of converting to instrument air can be
   recovered in less than a year.

ft Increased  Life of Control  Devices and Improved Operational Effi-
   ciency.   Natural gas  used in pneumatic control  devices and instruments
   often contains corrosive gases (such as carbon dioxide and hydrogen sul-
   fide) that can reduce the effective operating life  of these devices. In ad-
   dition, natural gas often  produces by-products of iron oxidation, which
   can  plug small orifices in the  equipment resulting in operational ineffi-
   ciencies  or hazards.  When  instrument air is used, and properly filtered
   and dried, system degradation is reduced and operating life is extended.

ft Avoided Use Of Flammable Natural  Gas.  Using compressed air as an
   alternative  to natural gas eliminates the use of a flammable substance,
   significantly increasing the safety of natural gas processing plants and
   transmission and distribution systems.  This can be particularly important
   at offshore installations, where risks associated with hazardous and flam-
   mable materials are greater.

ft Lower Methane Emissions.  Reductions in methane emissions have been
   reported as high as  70,000 Mcf per facility annually, depending on the
   device(s) and the type of control application.
The  conversion  of  natural  gas
pneumatics   to   instrument   air
system is applicable to all natural
gas  facilities  and  plants.    To
determine the most cost-effective
applications,  however,  requires a
technical and economic feasibility
study.  The  six  steps  outlined
below, and the practical example
with cost tables, equations and
factors, can help companies to evaluate their opportunities.

Step 1:  Identify Possible Locations For  Instrument Air System Installa-
tions. Most natural gas-operated pneumatic control systems can be replaced
with instrument air.  Instrument air systems will require new investments for
the compressor, dehydrator, and other related equipment, as well as a supply
of electricity. As a result, a first step in a successful instrument air conversion
Decision Process for Converting Gas
Pneumatic Devices to Instrument Air:
                                                          1. Identify possible locations for system
                                                          2. Determine optimal system capacity.
                                                          3. Estimate the project costs.
                                                          4. Estimate gas savings.
                                                          5. Evaluate the economics.
                                                          6. Develop an implementation plan.
                                                            f-^T"1 *  f f-*f* '«,
                                                                                   J    °

project is screening existing facilities to identify locations that are most suit-
able for cost effective projects.  In general, three main factors should be con-
sidered during this process.

0*  Facility Layout. The layout of a natural gas facility can significantly affect
    equipment and installation costs for an instrument air system. For exam-
    ple, conversion to instrument air may not be cost effective at decentral-
    ized facilities where tank batteries are remote or widely scattered.  In-
    strument air is most appropriate when used at offshore platforms and on-
    shore facilities  where  pneumatics are consolidated  within  a relatively
    small area.

&  Number Of Pneumatics.  The more pneumatic controllers converted to
    instrument air,  the greater the  potential  for reduced  emissions and  in-
    creased company savings. Conversion to instrument air is most profitable
    when a company is planning a facility-wide change.

•&  Available Power Supply. Since most instrument air systems rely on elec-
    tric power for operating the compressor, a cost-effective, uninterrupted
    electrical energy source is essential. While major facilities often have an
    existing power supply  or their own power generation  system, many
    smaller and remote facilities do not. For these facilities, the cost of power
    generation generally makes the  use of instrument air unprofitable. In ad-
    dition,  facilities with dedicated generators need to assess whether the
    generators have enough available capacity to support an air compression
    system, as the cost of a generator  upgrade can be prohibitive.  Remote
    facilities should examine alternatives for power generation, which range
    from micro-turbines to solar power.

Step 2:  Determine Optimal  System Capacity.   Once  project sites have
been identified, it is important to determine  the appropriate capacity of the
new instrument air system. The capacity needed is a direct function of the
amount of compressed air needed to both  operate the  pneumatic instru-
mentation and meet any utility air requirements.
                                                  Rule of Thumb:
                                                  1 cfm air/control loop
Instrument Air  Requirements.   The com-
pressed air needs  for the pneumatic system
are equivalent to the volume of gas being used
to run the existing instrumentation  - adjusted
for air losses during the drying process. The current volume of gas usage
can be determined by a direct meter reading (if a meter has been in-
stalled). In non-metered systems, a conservative rule of thumb for sizing
air systems is one cubic foot per minute (cfm) of instrument air for each
control loop (consisting of a pneumatic controller and a control valve).
                                                                Page 6

The  initial estimate  of instrument  air needs
should then  be adjusted to account  for  air
losses during the drying process.  Typically, the
membrane filters in the  air dryer  consume
about 17 percent of the air input. As a result,
the estimated volume of instrument air usage is 83 percent of the total
compressed air supply:  i.e. divide  estimated air usage by 83 percent.
Desiccant driers do not consume air and therefore require no adjustment.
                                                   Rule of Thumb:
                                                   17% of air input is
                                                   consumed by the
                                                   membrane drier
                                               Rule of Thumb:
                                               Pneumatic air uses:
                                               1/3 for instrument air
                                               2/3 for utility air
& Utility Air Requirements. It is common to use
    compressed  air for  utility purposes, such as
    engine   starters,  pneumatic  driven  pumps,
    pneumatic tools (e.g., impact wrenches), and
    sand blasting. Unlike instrument air, utility air
    does not have to be dried. The frequency and
    volumes of such  utility air uses are additive.  Companies will need to
    evaluate these other compressed air services on a site-specific basis, al-
    lowing for the possibility of expansion at the site. A general rule of thumb
    is to assume that the maximum rate of compressed air needed periodi-
    cally for utility purposes will be double the steady rate used  for instru-
    ment air.

Exhibit 4 illustrates how the gas  savings and instrument air compressor size
can be estimated. Using the rule of thumb of 1 cfm/control loop, the current
gas usage would translate  to approximately 35  cfm of dry instrument air.
Adjusting for the dryer's air consumption (17 percent of air input), the total
instrument air supply requirement will  be 42 cfm.  Factoring  in utility air
needs of about 70 cfm, the project would require a total of 112  cfm of com-
pressed air.

Step 3: Estimate the Project Costs.  The major costs associated with install-
ing and operating an  instrument air system are the installation costs for com-
pressors, driers, and volume tanks, and energy costs. The actual installation
costs wiil be a function of the size, location, and other location  specific fac-
tors. A typical conversion of a natural gas pneumatic control system to com-
pressed instrument air costs approximately $35,000 to $60,000.

To  estimate the cost for a given project,  all expenses associated with  the
compressor, drier, volume tank, and power supply must be calculated. Most
vendors are willing to provide estimates of the equipment costs  and installa-
tion requirements (including  compressor size, motor horsepower, electrical
power requirements,  and storage capacity). Alternatively, operators can  use
the following information on  the major system components to estimate the
total installed cost of the instrument air system.
                                                            Page  7

Exhibit 4: Calculate Gas Savings and Compressor Size for Converting Gas
         Pneumatics to Instrument Air
Given: For an average size production site with gas pneumatics, glycol dehydra-
    tion, compression, 35 control loops, and an average of 10 cfm utility gas us-
    age for pneumatic pumps and compressor engine starting.
    A = Total Compressed Air
    L = Control loops
    lAu = Instrument air use
    lAs = Instrument air supply
    UAu = Utility air use
    UAs = Utility air supply
    P = Price of natural gas ($3.00 per Mcf)
    M = Minutes in a year (525,600)
    Rule of thumb: 1  cfm per control loop for estimating instrument air systems.
    Rule of thumb: 17% of air is bypassed in membrane driers.
    Rule of thumb: 1/3rd of total air used for instruments, 2/3rds of total air used
    for utility services.
(1)  Calculate: V = Value of Gas Saved
    V = (lAu + UAu)*M*P/1000
    lAu = L*(1 dm/loop)
    V = (35*1 +10)*525,600*$3.00/1000 = $71,000 per year
(2)  Calculate: A = Air compressor capacity required.
    A = lAs + UAs
    lAs = IAu/(100% - % air bypassed in drier)
    UAs = lAu*(fraction of utility air use)/(fraction of instrument air use)
    A = (35*1)/(100%-17%) + (35*1}*(2/3) / (1/3) = 112 cfm
  Compressor Costs.  It is common to install two compressors at a facility
  (one operating and one stand-by spare) to ensure reliability and allow for
  .maintenance and overhauls without service interruptions. The capacity
  for each of the compressors must be sufficient to handle the total ex-
  pected compressed air volume for the project (i.e., both instrument and
  utility air).  Exhibit 5 presents cost estimates for purchasing and servicing
  small, medium, and large compressors.  For screw-type compressors, op-
  erators  should  expect to  overhaul the unit every 5 to 6 years. This nor-
  mally involves exchanging the compressor core for a rebuilt compressor at
  a cost of approximately $3,000, with an additional $500 in labor expense
  and a $500 core exchange credit.
Exhibit 5: Air Compressor Costs
Air Volume
- (cfm)
2,500 1
- Annual
Service ($/yr)
5-6 2
5-6 2
1 Cost includes package compressor with a volume tank.
2 Rebuilt compressor costs $3000 plus $500 labor minus $500 core exchange credit.
                                                                 Page 8

   Volume Tank. Compressed air supply systems
   include a  volume  tank,  which maintains a
   steady pressure  with  the  on-off operation  of
   the air compressor. The rule of thumb in de-
   termining the size  of the  volume tank is  1-
                 Rule of Thumb:
                 1 gallon tank capac-
                 ity/1 cfm air
   gallon capacity  for each  cfm of compressed air.   Exhibit 6  presents
   equipment costs for small, medium, and  large volume tanks.  Volume
   tanks have essentially no operating and maintenance costs.
  Exhibit 6: Volume Tank Costs
 1 Small reciprocating air compressors, 10 horsepower and less, are commonly supplied
 with a surge tank.	
Of Air Dryer Costs.  Because instrument air must be very dry to avoid plug-
   ging and corrosion, the compressed air is commonly put through a dryer.
   The most common dryer used in small to  medium applications is a per-
   meable membrane dryer. Larger air systems may use multiple membrane
   dryers, or, more  cost effectively, alumina  bed desiccant dryers.   Mem-
   brane dryers filter out oil mist and particulate solids and have no  moving
   parts. As a result, annual operating costs are kept low.  Exhibit 7 presents
   equipment and service cost data for different size dryers. The appropri-
   ate sized dryer would need to accommodate the expected volume of gas
   needed for the instrument air system.
 Exhibit 7. Air Drier Costs
 1 Largest membrane size; use multiple units for larger volumes.
Using the equipment information described above, the total installed cost for
a project can be calculated. Exhibit 8 illustrates this using the earlier example
of a medium-sized production facility with an instrument air requirement of
42 cfm and  a maximum utility air requirement of 70 cfm (for a total of 112
cfm of compressed air). To estimate the installed cost of equipment, it is a
common practice in industry to assume that installation labor is equivalent to
                                                               Page  9

equipment purchase cost (i.e. double equipment purchase cost to estimate
the installed  cost).  This would be suitable for large, desiccant dried  instru-
ment air systems, but for small, skid-mounted instrument air systems a factor
of 1.5 is used to estimate the total installed cost (installation labor is half the
cost of equipment).
 Exhibit 8: Calculate Total Installation Costs
     Compressors (2)       = $25,000 (Exhibit 5)
     Volume Tanks (2-small) = $1,000 (Exhibit 6)
     Membrane Drier      = $4,500 (Exhibit 7)
     Installed Cost Factor   =1.5
 Calculate Total Installed Cost:
     Equipment Cost
     Total Cost
= Compressor Cost + Tank Cost + Dryer Cost
= $25,000 + $1,000 + $4,500
= $30,500
= Equipment Cost * installation Cost Factor
= $30,500*1.5
= $45,750
In addition  to the facility costs, it  is also necessary to estimate the energy
costs associated with operating the system.  The most significant operating
cost of an  air compressor is electricity,  unless the site  has excess self-
generation capacity.  To continue  the  example  from above, assuming that
electricity is purchased at  7.5 cents per kilowatt-hour (kWh)  and that one
compressor is in standby while the other compressor runs at full capacity half
the time (a 50 percent operating factor), the electrical power cost amounts to
$13,140 per year.  This calculation is shown in Exhibit 9.
 Exhibit 9: Calculate Electricity Cost
     Engine Power        = 30 HP
     Operating Factor (OF) = 50 percent
     Electricity Cost       = $0.075/kwh
 Calculate Required Power:
     Electrical Power      = Engine Power * OF * Electricity Cost
                        = [30 HP * 8,760hrs/yr * 0.5 * $0.075/kwhJ/0.75 HP/kw
 •	=$13,140/yr	
Step 4: Estimate Gas Savings. To estimate the gas savings that result from
the installation of an instrument air system, it is important to determine the
normal bleed rates (continuous leak from  piping networks, control devices,
                                                                 Page 10

etc.), as well as the peak bleed rates (associated with movements in the con-
trol devices).  One approach is to list all the control devices, assess their nor-
mal and peak bleed rates, frequency of actuation, and estimates of leakage
from the piping networks.  Manufacturers of the control devices usually pub-
lish the emission  rates for each type of device, and for each type of opera-
tion.  Rates should be increased by 25  percent for devices that have been in
service without overhaul for five to 10 years, and by about 50 percent for de-
vices that have not been overhauled for more than 10 years to account for
increased leakage associated with wear and tear. Alternatively, installing a
meter may be more accurate, provided  monitoring occurs over a long enough
period of time  to take account of all the. utility uses of gas (pumps, motor
starters, activation of isolation valves).

The  Lessons Learned study,  "Options for Reducing Methane Emissions from
Pneumatic Devices  in the  Natural  Gas Industry," provides  brand name,
model, and gas consumption  information for a wide variety of currently used
pneumatic devices. Manufacturer information and actual field  measurement
data, wherever  available, are provided as well (see Appendix of that report).

To simplify the calculation of gas savings for the purpose of this lesson learned
analysis,  we can  use the earlier rules of thumb to estimate the gas savings.
The gas savings for the medium-sized production facility example in  Exhibit 4
include the conservatively estimated 35 cfm  used  in the 35 gas pneumatic
controllers plus the gas used occasionally for compressor motor starters and
small pneumatic chemical and transfer pumps. (Note that replacing these gas
usages will result  in direct savings of  gas emissions.) Natural gas is  not used
for pneumatic toots or sand  blasting, so additional compressed air provided
for these services does not reduce methane emissions.  Assuming an annual
average of 10 cfm gas use for natural gas powered non-instrument services,
the gas savings would be 45 cfm. As shown in Exhibit 10, this is equivalent to
23,652 Mcf per year  and annual savings of $71,000.
 Exhibit 10:
      Calculate Gas Savings
     Pneumatic instrument gas usage
     Other non-instrument gas usage
 Calculate Value of Gas Saved:
     Volume of Natural Gas Saved
                              35 cfm
                              10 cfm
                            = Instrument Usage + Other Usage
                            = 35 cfm + 10 cfm
                            = 45 cfm
Annual Volume of Gas Saved    = 45 cfm * 525,600 min/yr/1000
                            = 23,652 Mcf/yr
                            = volume * $3.00/Mcf
                            = 23,652 Mcf/yr * $3.00/Mcf
                            = $71,000/year
    Annual Value of Gas Saved
                                                                Page 11

Step 5: Evaluate the Economics.  The cost effectiveness of replacing the
natural gas pneumatic control systems with instrument air systems can be
evaluated using straightforward cost-benefit economic analyses.

Exhibit 11 illustrates a cost-benefit analysis for the medium-sized production
facility example. The cash flow over a five-year period  is analyzed by show-
ing the magnitude and timing of costs from Exhibits 8  and 9 (shown in pa-
rentheses) and benefits from Exhibit 10.  The annual maintenance costs asso-
ciated  with the compressors and air drier, from  Exhibits 5 and  7, are ac-
counted for, as well as a five-year major overhaul of a compressor per Exhibit
5.  The net present value (NPV) is equal to the benefits minus  the  costs ac-
crued over five years and discounted by 10 percent each year.  The Internal
Rate of Return (IRR) reflects the discount rate at which the NPV generated by
the investment equals zero.
Exhibit 1 1 : Economic Analysis of Instrument Air System Conversion

Installation Cost ($)
O&M Cost ($}
Overhaul Cost ($)
Total Cost ($)
Gas Savings ($)
Annual Cash Flow
Cumulative Cash
Flow ($)
iH^^wl'l* gf!
"5lf\J&« wBljSKS^jJIJjg;




1 72,890
Payback Period (months)
s,*&u%Z££ »X«3

1 Electrical power at 7.5 cents per kilowatt-hour.
2 Maintenance costs include $1 ,200 compressor service and $2,000 air drier membrane
3 Compressor overhaul cost of $3,000, inflated at 10% per year.
4 Value of gas = $3.00/Mcf.
5 Net Present Value (NPV) based on 1 0% discount rate for 5 years.
Step 6: Develop an Implementation Plan. After determining the feasibility
and economics of converting to an instrument air system, develop a system-
atic plan for implementing the required changes.  This can include installing a
gas measuring meter in the gas supply line, making an estimate of the number
of control loops, ensuring an uninterrupted supply of electric energy for oper-
ating the compressors, and replacing old, obsolete and high-bleed controllers.
It is recommended that all necessary changes be made at one time to mini-
mize labor costs and disruption of operations.  This may include a parallel
strategy to install low-bleed devices in conjunction with the switch to instru-
ment air systems. There are similar economic savings for conserving instru-

                      ment air use as for conserving methane emissions with low bleed pneumatic
                      devices.  Whenever specific pneumatic devices are being replaced, such as in
                      the case of alternative mechanical and/or electronic systems,  the existing
                      pneumatic devices  should be replaced on a similar economic  basis as dis-
                      cussed in the companion  Lessons Learned  study,  "Options for Reducing
                      Methane Emissions from Pneumatic Devices in the Natural Gas Industry".
Several EPA Natural Gas Star Partners have reported the conversion of natural
gas pneumatic control systems to compressed instrument air systems  as the
single most significant source of methane emission reduction and a source of
substantial cost savings.  Exhibit 12 below highlights the accomplishments that
several Natural Gas STAR Partners have reported.
                      Spirit En-
         Installed an air compression sys-
         tem at its Fresh Water Bayou fa-
         cility in southern Vermilion Par-
         ish, Louisiana  	
         Installed compressed air system
         to drive pneumatic devices in 10
         South Louisiana facilities
         Installed instrument air systems at
         3 production satellites and 1
         central tank battery at Postle CO2
         Converted pneumatic controllers
         to compressed air, including new
 over 2
         Used instrument air operated de-
         vices on over 4300 valves at off-
         shore platforms	
         Installed 15 instrument air sys-
         tems in New Mexico facilities
38,000 per
                       1Valueofgas = $3.00/Mcf.
                       * Calculated based on partner-reported costs and gas savings.
The majority of Partners' experiences  in  substituting  natural gas-powered
pneumatic devices and  control  instrumentation with alternative controllers
have involved the installation of compressed instrument air systems.  Some
additional  alternatives to gas pneumatics implemented by Partners are de-
scribed below:
                                                                                        Page 13

•& Liquid Nitrogen.  In a system using liquid nitrogen, the volume tank, air
    compressor and drier are replaced with a cylinder containing cryogenic
    liquid nitrogen.  A pressure regulator allows expansion of the nitrogen gas
    into the instrument and control-piping  network at the desired pressure.
    Liquid  nitrogen  bottles are  replaced  periodically.    Liquid  nitrogen-
    operated devices require handling of cryogenic liquids, which can be ex-
    pensive as well as a potential safety hazard.  Large volume demands on a
    liquid nitrogen system require a vaporizer.

*& Mechanical Controls and Instrumentation System.  Mechanical instru-
    ment and control devices have a long history of use in the natural gas and
    petroleum industry.   They are usually  distinguished by the  absence of
    pneumatic and electric components, are simple in design, and require no
    power source.  Such equipment operates using springs,  levers, baffles,
    flow channels, and hand wheels.  They have several disadvantages, such
    as limited application, the need for continuous calibration, lack of sensi-
    tivity, inability to handle large variations, and potential for sticking parts.

& Electric and Electro-Pneumatic Devices.  As a result of advanced tech-
    nology and increasing sophistication, the use of electronic instrument and
    control devices is increasing.  The advantage of these devices is that they
    require no compression devices to supply energy to operate the equip-
    ment; a simple  120-volt electric supply is used for  power. Another ad-
    vantage is that the use of electronic instrument and control devices is far
    less dangerous than using combustible natural gas or cryogenic liquid  ni-
    trogen cylinders. The disadvantage of these devices is  their  reliance  on
    an uninterrupted source of electric supply, and significantly higher costs.

Although these options have advantages, systems using air instead of natural
gas are the most widely employed  alternative  in  replacing natural gas-
operated pneumatic control devices.  It is important to note that maintaining
a constant, reliable supply of dry, compressed air in a plant environment is a
significant cost, albeit more economic than  natural gas.  Therefore, a parallel
strategy to install low-bleed devices in conjunction with the switch to instru-
ment air systems (refer to the previous Lessons Learned, "Options for Reduc-
ing Methane Emissions from Pneumatic Devices in the Natural Gas Industry"),
and to design a maintenance schedule to keep the instruments and control
devices in tune, is often economic. Such  actions can significantly reduce the
consumption of instrument air in the overall system and, therefore,  minimize
both the  size of the compression system and the electricity consumption over
the life of the plant.
                                                                Page 14

 'essons Darned from STAR Partners are:

Installing instrument air systems has the  potential to increase  revenues
and substantially reduce methane emissions.

Instrument air systems may  extend  the life cycle of system equipment,
which  can accumulate  trace amounts of sulfur  and  various acid gases
when controlled by natural gas, thus adding to the potential savings and
increasing operational efficiencies.

Remote locations and facilities without a reliable source of electric supply
often need to evaluate alternate power generation sources. When feasi-
ble,. soiar-powered air compressors  provide an economical and ecologi-
cally beneficial  alternative to expensive electricity in remote  production
areas.  On site  generation using microturbines running on natural gas  is
another alternative.

A parallel strategy of installing low-bleed devices  in conjunction with the
switch  to instrument air systems is often economic.

Existing infrastructure can be used; therefore, no pipe replacement  is
needed. However, existing piping and tubing should be  flushed clear of
accumulated debris.

Rotary air compressors are normally lubricated with oil, which must be
filtered to maintain the life and proper performance of membrane driers.

Use of instrument air will eliminate safety hazards associated with flam-
mable  natural gas usage in pneumatic devices.

Nitrogen-drive systems may  be  an alternative to instrument air  in special
cases, but tends to be expensive and handling of  cryogenic gas is a safety
                                                            Page 15

Bill Cober, C&B Sales and-Services, Inc., (337) 837-2701

J. Frederick, Spirit Energy 76

Paul M. Cunning, U.S. EPA Natural Gas STAR Program, (202) 564-9736
End Notes
Adams, Mark.  Pneumatic Instrument Bleed Reduction Strategy and Practical
Application, Fisher Controls International, lnc.1995.
Scalfana, David B., "Case History  Reducing Methane Emissions From High
Bleed Pneumatic Controllers Offshore," Chevron U.S.A. Production Co. SPE
Soules, J.R. and P.V. Iran.  "Solar-Powered Air Compressor: An Economical
and Ecological Power Source for Remote Locations," Otis Engineering Corp.
SPE 25550, 1993.
Schievelbein, V.H., "Hydrocarbon Recovery from Glycol Reboiler Vapor With
Glycol-Cooled Condenser," Texaco, Inc. SPE 25949..1993.
Games, J.P., Reuter, C.O. and C.M. Beitler, "Field Testing Results for the R-
BTEX Process for Controlling Glycol Dehydrator Emissions," Gas Research In-
stitute, Radian Corporation, SPE 29742,1995.
Gupta, Arun, Ansari, R. Rai and A.K. Sah. "Reduction of Glycol Loss From Gas
Dehydration Unit At Offshore Platform in Bombay Offshore - A Case Study,"
N.A.K.R. IOGPT, ONGC, India, SPPE 36225,1996.
Schievelbein, Vernon H. "Reducing Methane Emissions from Glycol Dehy-
drators," Texaco EPTD, SPE 37929, 1997.
Beitler, CM., Reif, D.L., Reuter, C.O, and James M. Evans. "Control Devices
Monitoring for Glycol Dehydrator Condensers: Testing and Modeling Ap-
proaches,"  Radian International LLC, Gas Research  Institute, SPE  37879,
Reid,  Laurance, S. Predicting the  Capabilities  of Glycol Dehydrators, SPE-
AIME, Laurance Reid Associates.
Fisher, Kevin S., Reuter,  Curtis, Lyon, Mel and Jorge Gamez. Glycol Dehy-
drator Emission Control Improved,  Radian Corp., Public Service Co. of Colo-
rado Denver, Gas Research Institute.
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