Pembina Pipeline Corporation Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases 1999 _______________________________________________________

SUBMITTED APRIL, 2001

Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

TABLE OF CONTENTS Page 1.

Introduction

1

2.

Company Profile

2

3.

Senior Management Support

9

4.

Estimated Emissions

11

5.

Performance Indicators

13

6.

Forecast

15

7.

Actions to Reduce Emissions

17

8.

Results Achieved

21

9.

Target and Projection

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10. Measures to Achieve Target

24

11. Employee Awareness & Education

26

12. Reporting

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Appendix: Estimated Emissions

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

INTRODUCTION Global warming is recognized as an environmental issue at national and international levels. According to the recent international agreement in Kyoto, the federal government has committed Canadians to reducing emissions of greenhouse gases by 6% from the 1990 level by the years 2008 - 2012. The federal, Voluntary Challenge and Registry (VCR) Program for Climate Change challenges Canadian organizations to voluntarily take actions to limit or reduce net emissions of greenhouse gases. Pembina Pipeline Corporation (Pembina or PPC) has accepted the Voluntary Challenge by submitting its letter of intent to participate in the program and report on its action plan and provide annual update reports for the management of greenhouse gases This report presents an update on Pembina’s 1998-action plan submitted to the VCR Registry in 1999. It presents a summary of updated emissions, emissions forecast, benchmarking of performance indicators; results achieved and measures to be implemented to achieve target in future years. Unless specifically referred to as the Pembina pipeline system, the term Pembina or PPC in this report includes all of the following pipeline systems owned and operated by Pembina: • • • •

Peace Pembina Federated (acquired in 200) Western (acquired in 2000)

2. COMPANY PROFILE 2000 Environmental Services

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

Pembina transports light crude oil, condensate and natural gas liquids. Virtually no heavy oil is transported on any of the Pembina systems, nor is Pembina a natural gas carrier.

2.1 Growth Opportunities for Pembina Pembina continues to expand its service through new battery and facilities connections, tie-ins to third-party pipelines, and expansion of Pembina's existing systems to service new oil and gas producing areas. Ongoing exploration and development activity by the producer community could continue to fuel demand for pipeline service in the regions served by Pembina's pipeline systems, particularly on the Peace System operating in northwestern Alberta and northeastern British Columbia. The most significant increase in throughputs on the Pembina System could potentially come from technology developments to improve the recovery of crude oil in the main Pembina field. At the present, it is estimated that only 21% of initial crude oil in place is recoverable using present technology. Pembina's management is actively reviewing potential acquisitions and believes that Pembina is very well positioned to take advantage of any favorable opportunities to acquire or otherwise expand Pembina's business. The following paragraphs provide a brief description of Pembina’s current and newly acquired pipeline systems. A schematic of pipeline network operated by Pembina is presented in Figures 1 to 4. The overall pipeline system is shown in Figure 5. 2.2 Peace System • • • •

1,990 km of pipe with two inter-connections from third party pipeline systems Batched system carrying crude oil, condensate, NGLs (natural gas liquids) and ethane In operation since 1955 with significant expansion throughout its 43 year history Major pipeline expansion completed in 1997, adding 66,000 barrels/day of capacity, provides for expected growth in throughputs originating in the Deep Basin region

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

Fort St. John

DEEP BASIN DISTRICT

Peace River

Gordondale NORTHERN DISTRICT

Dawson Creek Valleyview

La Glace

Grande Prairie

Valleyview

Fox Creek

SOUTHERN DISTRICT

Windfall

Deep Basin Expansion Crude Oil Pipeline

Edson

Gas Liquids Pipeline Crude & Liquids Batched

Trans Mountain

Edmonton

IPL

Figure 1: Peace System

2.3 Pembina System • • • •

1,300 km of pipe serving 204 field batteries with one inter-connection from a third party pipeline system Separate crude oil and condensate gathering pipeline systems Mainline constructed in 1954, expanded substantially over the years to meet growing regional oil production Condensate service added in the 1980s and expanded in 1998 to meet growing demand

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

Edmonton Drayton Valley

Pembina Crude Pipeline Pembina Condensate Pipeline

Rangeland/Pembina Tie-in Booster Station Main Pump Station

Figure 2: Pembina System

2.4 New Pipelines Purchased by Pembina In July 2000, Pembina purchased Federated Pipelines and Western Facilities. 2.4.1 Federated Pipelines Pembina Pipeline Corporation has successfully completed its purchase of 100% of the shares of Federated Pipe Lines Ltd. from Anderson Exploration LTD’s subsidiary, Home Oil Company Limited, and Imperial Oil Limited. In a related transaction, Pembina closed the purchase of the Cynthia Pipeline from Imperial. •

3,200 kilometres of operating pipelines, in seven distinct feeder systems, is one of the largest feeder pipeline networks in Western Canada. 2000 Environmental Services

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases • • •

The Federated systems are open-access; multi-shipper pipelines transporting crude oil, condensate and natural gas liquids. The Cynthia Pipeline is a 121kilometre pipeline, which connects to Federated's Brazeau pipeline system. Federated's pipeline throughput in 1999 averaged around 232,300 barrels/day.

Figure 3: Federated Pipeline System 2.4.2 Western Facilities 2000 Environmental Services

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases • • •

The Western pipelines, which comprise the largest feeder pipeline system in B.C., consist of approximately 575 kilometres of operating pipelines in three crude oil feeder systems. The pipelines represent the largest feeder pipeline system in B.C. (British Columbia) and transport 95% of all oil produced in the province, generating stable operating cash flow from a regulated rate base. In 1999, the pipelines transported 42,800 barrels/day of crude oil and condensate.

With the existing and newly acquired (federated and Western facilities) pipeline systems, Pembina's network now consists of over 7,500 kilometres of pipeline and related facilities making Pembina as Canada's leading feeder pipeline transportation business.

Figure 4: Western Facilities Pipelines

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

PEMBINA FEDERATED WESTERN

ALBERTA

FACILITIES

BY OTHERS Taylor Dawson Creek

B.C

Edmonton Hardisty

Kamloops

Calgary

Vancouver

Figure 5: Pembina’s Pipeline Systems

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

2.5 Five Year Pipeline Throughput Statistics Average annual throughputs of liquid products for the past five years are summarized in Table 1. The outlook for 2000 calls for a substantial increase in pipeline throughputs. Table 1: Average Pipeline Throughputs (Thousands of Barrels/Day) Peace System Crude Oil Condensate NGLs System Total Pembina System Crude Oil Condensate NGLs System Total

1999 83.5 31.0 77.9 192.4 1999 83.0 10.9 0 93.9

1998 92.3 38.8 70.2 201.3 1998 84.0 17.2 3.5 104.7

1997 102.1 34.6 61.9 198.6 1997 87.9 15.0 8.6 111.5

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1996 111.9 31.1 58.1 201.1 1996 93.4 13.2 13.4 120.0

1995 112.3 31.9 57.8 202.0 1995 101.7 13.8 3.7 119.2

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

3. SENIOR MANAGEMENT SUPPORT 3.1 Statement of Commitment The Company views the VCR Program as a credible and timely response by Canadians to demonstrate their commitment to address the complex climate change issue. According to its letter of intent dated February 2, 1999, the senior management and the company remain fully committed to participate in the VCR Program. Pembina views the VCR Program as an opportunity to reduce emissions and save operating costs. 3.2 Implemented Policy on GHG Emissions Consistent with its Health, Safety and Environmental policy; Pembina developed a policy on management of greenhouse gases in 1999. The policy has been communicated to all employees. The main principles governing this policy are: • • • • • •

Implement projects and programs, which improve energy efficiency of operations in a cost-effective manner. Audit its operations and monitor performance toward reducing emissions of greenhouse gases. Procure best practical technology and equipment, which will help reduce energy consumption and emissions of greenhouse gases. Fine-tune operating and maintenance practices to further reduce the use of electrical energy and minimize release of fugitive air emissions. Create increased awareness among employees on the greenhouse gas issue by providing knowledge and information on greenhouse gases/global warming and soliciting input from employees to reduce emissions. Fulfill its reporting obligations to the VCR.

3.3 Company Contact Pembina's contact for all correspondence and communications on management of greenhouse gases and the VCR Program is Mr. Fred Kuipers, Manager Land and Environment.

He can be reached at the following address: 2000 Environmental Services

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

Mr. Fred Kuipers Manager Land and Environment Pembina Pipeline Corporation Corporate Affairs Department 707 - 8th Avenue, S.W. Calgary, Alberta T2P 2M7 Telephone: (403) 231-7487 Fax: (403) 231-7507 E- Mail: [email protected]

4. ESTIMATED EMISSIONS

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

The baseline year chosen for reporting emissions and performance indicators is 1998. In 1998, the Pembina Corporation sold its oil and gas operations and amalgamated with Peace Pipe Line Ltd. to form a new company called “Pembina Pipeline Corporation”. In July 2000, Pembina acquired Federated Pipelines and Western Facilities (as described in Section 2). The sources of emissions and emission estimation procedures have been detailed in our Action Plan report, submitted to the registry in early 2000. These details are not repeated here. The terms CO2E (carbon dioxide equivalent) refers to equivalent mass of all various greenhouse gases based on their global warming potential (GWP) with GWP for CO2 being one. The GWP for methane (CH4) and nitrous oxide (N2O) are 21 and 310 respectively. CO2E emission is calculated by multiplying masses of individual gases by their respective GWP and adding these products together. Table 2 presents estimated emissions (direct and indirect) for Pembina for 1999 and for the base year (1998). Percentage contribution of each source is shown in Table 3. Consumption of electrical energy is the main contribution (96.4%) to total CO2E emissions. Electricity is mostly used to drive pipeline pumps at main pumping stations and booster stations throughout the system. Other uses for electricity include building and facility lighting, building heating, and operation of process instruments. Diesel and propane (LPGs) are used as fuel for running some pumps, and domestic heating. Gasoline and diesel are used as fuel for company vehicles. The contribution of emissions due to combustion of fossil fuels is quite low. Fugitive air emissions were estimated to be quite low and are not included in this inventory. Table 2: Total PPC’s Estimated CO2E Emissions (Tonnes) Year 1998 1999

Electrical (Indirect) 124200 98713

Diesel (Direct) 4.6 55

LPGs (Direct) 105.6 116

Vehicle Fleet (Direct) 3142 3522

CO2E (Total) 127452 102405

Table 3: Total PPC’s Estimated Emissions (% of Total) Year 1998 1999

Electrical (Indirect) 97.45 96.39

Diesel (Direct) 0.00 0.05

LPGs (Direct) 0.08 0.11

Vehicle Fleet (Direct) 2.47 3.44

CO2E (Total) 100.00 100.00

Tables 4 and 5 present estimated emissions of greenhouse gases by each source for both the Peace and the Pembina systems. The Pembina system consumes less energy (and hence provides lower emissions) per distance-throughput of products. This is mainly 2000 Environmental Services

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

due to presence of several trunk lines and associated pumping and gathering equipment for the Peace system, requiring additional energy to gather and transport products. Table 4: Total Estimated Emissions (CO2E in Tonnes) for Peace System Year 1998 1999

Electrical (Indirect) 103,500 82,627

Diesel (Direct) 4.64 54.6

LPGs (Direct) 105.6 116.1

Vehicle Fleet (Direct) 1900.36 2130.22

CO2E (Total) 105,511 84,928

Table 5: Total Estimated Emissions (CO2E in Tonnes) for Pembina System Year 1998 1999

Electrical (Indirect) 20,700 16,086

Diesel (Direct) 0 0

LPGs (Direct) 0 0

Vehicle Fleet (Direct) 1241.44 1391.60

CO2E (Total) 21,941 17,478

Emission estimates for PPC for 1999 indicate that the total CO2E emissions were lower by some 25,000 tonnes compared to those for the baseline year. This is due to lower product throughputs in pipelines and improvements made in energy savings (as indicated by improved values of performance indicators (presented in Tables 6 through 8 in Section 6). Emissions from combustion of diesel fuel are higher in 1999 as compared to those for 1998. This is due to an incomplete inventory on diesel consumption in 1998. PPC will be re-visit diesel consumption data, while updating the entire emissions inventory for the year 2000.

5. PERFORMANCE INDICATORS The indicators chosen for monitoring Pembina's performance are Throughput Energy Index, TEI (energy consumed per unit kilometre throughput) and Throughput Carbon 2000 Environmental Services

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

Index, TCI (carbon dioxide equivalent emissions per unit kilometre throughput). The performance indicators for Pembina for 1999 and 1998 (baseline year) are presented in Tables 6 through 8. The term m3OE in these Tables refers to oil equivalent volume (in m3) and is obtained by multiplying product volumes by their respective conversion factors (based on an energy equivalent basis) and adding these products together. These factors are published in Table 2 of the CAPP document, “Global Climate Change Voluntary Challenge Guide”, Publication # 2000-0004, June 2000. The m3OE conversion factors for various products transported by Pembina are summarized in the emission calculations presented in Appendix 1. The m3OE volume represents volumes of various products based on their energy content and is a standard used for reporting performance indicators by CAPP. Table 6: Estimated Performance Indicators (Total PPC) Year 1998 1999

TEI (kw-hrs)/(m30E*km) 0.0044 0.0037

TCI (CO2E, kg)/(m30E*km) 0.0047 0.0040

Table 7: Estimated Performance Indicators for Peace System Year 1998 1999

TEI (kw-hrs)/(m30E*km) 0.0052 0.0042

TCI (CO2E, kg)/(m30E*km) 0.0055 0.0045

Table 8: Estimated Performance Indicators for Pembina System Year TEI (kw-hrs)/(m30E*km) TCI (CO2E, kg)/(m30E*km) 1998 0.0025 0.0028 1999 0.0023 0.0026 Data presented in Tables 6 through 8 show that PPC’s emissions and energy consumption per unit distance-throughput have reduced from the baseline year. That shows an overall improvement in energy consumption and reduction of CO2E emissions.

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

6. FORECAST Increased activities in oil and gas exploration will provide additional opportunities for growth to Pembina for transportation of liquid petroleum products. The extent of the growth potential is not fully known but will be determined on a year by year basis. Emissions for PPC have been forecasted to the year 2008 and are presented in Table 9 and Figure 6. Emissions have been forecasted based on the following assumptions. 2000 Environmental Services

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases •

The Peace system will have greater opportunities for growth compared to all other systems. An average growth rate of ~2% in throughput every year is assumed.

•

On an average, energy consumption per distance throughput (TEI) will decline every year by 0.5% by implementing various energy saving measures. Table 9: Forecasted Emissions Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Peace 105,511 84,928 87,038 89,201 91,418 93,689 96,018 98,404 100,849 103,355 105,923

Forecasted CO2E (t) Pembina Federated 21,941 0 17,478 0 17,564 159,521 17,651 161,898 17,739 164,310 17,826 166,759 17,915 169,243 18,003 171,765 18,092 174,324 18,182 176,922 18,272 179,558

Total Pembina Western 0 0 5,139 5,216 5,293 5,372 5,452 5,533 5,616 5,700 5,784

127,452 102,405 269,263 273,966 278,760 283,646 288,628 293,705 298,882 304,158 309,538

Total CO2E emissions for PPC are anticipated to increase by the year 2008 due to acquisition of the Federated and Western facilities and slight increase in throughputs of products. PPC will identify and implement energy saving measures, which make economic sense, on an ongoing basis. As a result, PPC anticipates that the performance indicators, namely, TEI and TCI will remain stable or decline slightly in future years.

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

Forecasted CO2E Emissions for PPC 350,000

CO2E (tonnes)

300,000 250,000 200,000 150,000 100,000 50,000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year Peace

Pembina

Federated

Total PPC

Figure 6: Forecasted Emissions for PPC

7. ACTIONS TO REDUCE EMISSIONS 2000 Environmental Services

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

Employees at Pembina have been aware of the global warming issue for several years and have been working on finding ways to reduce emissions. The main focus of PPC’s efforts has been to reduce in consumption of electricity, which is used to operate its pumps and motors. 7.1 Pump Operations Optimized Pembina actively strived to ensure that pumps are operated according to its standard operating practice of utilizing only the required number of pumps for a given throughput demand. Pumps on the Peace System are automatically controlled from the Edmonton Control Centre, whereas pumps on the Pembina system are automatically controlled from the Drayton Valley Control Centre. 7.2 Throttle Control on Pump Discharge Valves Minimized Occasionally, pump discharge valves need to be throttled in order to meet the throughput requirements. This practice places an extra burden on pumps and consumes a larger amount of electrical energy. Throttle control valves on the pump discharge are used only if necessary. This operating practice helps in reducing throttling of valves and hence optimize energy consumption. 7.3 Electrical Equipment Operated Below Peak Demand As a measure to reduce power costs, Pembina continued to operate its pumps and other electrical equipment by staying within the peak demand load. Operation of electrical equipment is maximized during off-peak hours and reduced below the peak demand load during peak hours. This practice reduces electrical costs and emissions of greenhouse gases. 7.4 Variable Frequency Drivers (VFDs) Reviewed and Installed In 1999, Pembina’s engineering staff undertook a study on power savings. The study focussed on identifying options available to reduce energy consumption and improve operating efficiencies. Several pumping stations on Pembina’s pipeline systems were chosen to study economic viability of installing VFDs on pump motors.

The main conclusions of the study were as follows:

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases •

VFD’s were not an economically viable option for existing stations. Resizing the impeller on some pumps was found to be a better option to provide more flexibility in controlling throughputs and reduce energy consumption.

•

In some cases, VFD’s were found to be an economically viable option for new installations of motors and pumps.

Since 1998, Pembina has installed several VFDs on pumps in order to utilize energy efficient equipment, wherever economically feasible. These installations are summarized in Table 8. Table 10: Installation of VFDs System Federated Federated Federated Federated Pembina Pembina

Location Taylor Bonanza Belloy Snipe Lake Anadime Carrot Creek

Motor hp 2000 2000 2000 2000 75 100

Date installed 1998 1998 1998 1998 1998 2000

7.5 High Versus Regular Efficiency Motors – Replace or Rewind? The 1999 power saving study recommended purchasing of high efficiency motors when a new installation or replacement is required. It was determined that rewinding of a motor when it burnt out was not necessarily the best option. The engineering study recommended that lower hp (50 hp), re-winding was found to be somewhat more economical. However, if the burn-out is severe and damage to the laminations occurs, or if rewinding may cause degradation of efficiency, then purchasing of a new high efficiency motor should be considered. Replacement or rewinding of a burnt out motor is not always the easiest decision. Pembina staff considers above recommendations before replacing burnt-out motors. It is a standing policy of the Company to purchase high efficiency motors for new installations. 7.6 Improved Power Factors on Electrical Motors

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

By definition, power factor in an electric circuit is the ratio of real power in kilowatts and the total power in kVA. Reactive power, either inductive or capacitive, always acts at right angle or 90 degrees to the real power. The higher the power factor, the lesser the loss of energy through reactive power. Power Factor = (kW)/(kVA) Capacitors are electrical devices that are installed on motor circuits to compensate for the reactive power (kVARs) and improve the power factor. Since the summer of 1999, Pembina has installed capacitors to improve power factors of electrical motors running centrifugal pumps at locations shown in Table 11. As a result of installing these capacitors, Pembina no longer has to pay a penalty cost for lower power factors. Table 11: Installation of Capacitors to Improve Power Factors System Peace Peace Peace Peace Peace Peace Peace

Location Kakwa Wapiti Laglace Fox Creek Fox Creek Valleyview Lator

Motor hp 1200 1200 1200 1950 800 1200 1200

# 3 3 5 3 3 2 3

Capacitors Detail 112.7 Kvar @ 4.16 Kv 170 Kvar @ 4.16 Kv 150 Kvar @ 4.16 Kv 250 Kvar @ 4.16 Kv 150 Kvar @ 2.4 Kv 125 Kvar @ 2.4 Kv 125 Kvar @ 4.16 Kv

Power factor Improved to >0.9 >0.9 >0.9 >0.9 >0.9 >0.9 >0.9

7.7 Use of Drag Reducing Agents Reviewed Drag reducing agents are chemicals that reduce friction losses due to flow of liquids in pipelines. As a result, less pumping energy is required to transport a given volume of liquid product. Pembina has studied various chemicals to assess feasibility of using them. Preliminary studies indicate that these chemicals are cost-prohibitive for routine use in transportation of products. In other words, the estimated savings in electrical energy costs o not cover the cost of DRAs.

7.8 Tree Planting Program Initiated In 1999, Pembina planted some 200 trees through the Tree Canada Program. 2000 Environmental Services

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

7.9 Floating Roof Installed on Tanks Hydrocarbons from storage tanks are emitted due to standing losses (vapor pressure of the products) and breathing losses (changes in tank levels due to throughput variations). A small amount of these hydrocarbons would be comprised of CH4 and CO2. Since 1998, Pembina has installed internal floating roofs on storage tanks containing liquid petroleum products in order to minimize losses of hydrocarbons. Table 12 presents a summary of floating roofs installed on Pembina’s storage tanks. In 1998, Pembina estimated total emissions of hydrocarbons (BTEX and total hydrocarbons) form a majority of its tanks. In order to estimate emissions of CH4 and CO2, sampling of tank vapors is necessary. This sampling program and estimation of emissions are planned to be completed in 2001. Our emission inventory will be updated in the next update report to include tank emissions along-with emissions for the Federated and Western facilities. Table 12: Floating Roof Installations on Storage Tanks System

Location

Tank #

Duty (Size, bbl)

Pembina Crude Oil Northern Northern Cremona Cremona

Buck Creek Judy Creek Belloy Belloy Carstairs Harmattan

4 T 117 T 600 T 601 T 501 T 107

Condensate (96,000) Condensate (55,000) Condensate (10,000) Crude oil (10,000) Condensate (7,500) Condensate (10,000)

Floating Roof (type) Yes (internal) Yes (internal) Yes (internal) Yes (internal) To be installed To be installed

Installation Date 2000 1999 1999 1999 2001 2001

8. RESULTS ACHIEVED It is difficult to quantify benefits achieved by each action implemented by Pembina toward reducing energy consumption. However a review of emissions and performance 2000 Environmental Services

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

indicators clearly indicates that Pembina's operations were relatively more energy efficient compared to the baseline year. Figures 7 and 8 represent trends of performance indicators for 1999 compared to those for the baseline year of 1998. Results clearly indicate that Pembina’s energy consumption and CO2E emissions per unit distance throughput have reduced from those for the baseline year.

Throughput Energy Index (TEI)

(kw-hrs)/(km)(m3OE)

0.0060 0.0050 0.0040 0.0030 0.0020 0.0010 0.0000 1998

1999 Year Total PPC

Peace

Pembina

Figure 7: Benchmarking of Throughput Energy Index (TEI)

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

Throughput Carbon Index (TCI)

(Kg CO2E)/(km)(m3OE)

0.0060 0.0050 0.0040 0.0030 0.0020 0.0010 0.0000 1998

1999 Year Total PPC

Peace

Pembina

Figure 8: Benchmarking of Throughput Carbon Index (TCI)

9. TARGET AND PROJECTION 2000 Environmental Services

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

Pembina is committed to stabilize or reduce its energy consumption and emissions per unit throughput transported over a unit distance. The Throughput Energy Index (TEI) and the Throughput Carbon Index (TCI) will be monitored with time and every attempt will be made to stabilize or reduce values of these indices. The expected performance indicators are as shown in Tables 13 and 14.

Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Table 13: Expected Trend of Energy Index TEI, kw-hrs/km*m3OE Peace Pembina Federated Western 0.00522 0.00253 0.00522 0.00253 0.00425 0.00228 0.00425 0.00228 0.00422 0.00226 0.00422 0.00226 0.00420 0.00225 0.00420 0.00225 0.00418 0.00224 0.00418 0.00224 0.00416 0.00223 0.00416 0.00223 0.00414 0.00222 0.00414 0.00222 0.00412 0.00221 0.00412 0.00221 0.00410 0.00220 0.00410 0.00220 0.00408 0.00219 0.00408 0.00219 0.00406 0.00218 0.00406 0.00218

Total PPC 0.00444 0.00372 0.00401 0.00399 0.00397 0.00395 0.00394 0.00392 0.00390 0.00388 0.00387

Table 14: Forecasted Values of TCI TCI, CO2E in kg/km*m3OE Pembina Federated Western 0.00278 0.00551 0.00278 0.00256 0.00452 0.00256 0.00255 0.00449 0.00449 0.00253 0.00447 0.00447 0.00252 0.00445 0.00445 0.00251 0.00443 0.00443 0.00250 0.00441 0.00441 0.00248 0.00438 0.00438 0.00247 0.00436 0.00436 0.00246 0.00434 0.00434 0.00245 0.00432 0.00432

Total PPC 0.00471 0.00400 0.00398 0.00396 0.00394 0.00392 0.00390 0.00388 0.00386 0.00384 0.00382

Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Peace 0.00551 0.00452 0.00449 0.00447 0.00445 0.00443 0.00441 0.00438 0.00436 0.00434 0.00432

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

10. MEASURES TO ACHIEVE TARGET In order to stabilize energy consumption and emissions per unit throughput, Pembina proposes to implement the following measures. It is difficult to quantify energy saving benefit in many instances, but this will certainly be attempted as Pembina develops and implements a formal energy management program in future years. 10.1 Undertake Energy Audits Pembina could not undertake the auditing program as stated in the 1998 action plan. However, it has every intent to develop an energy audit protocol and undertake an energy audit of major pumping stations. At least one facility is planned to be audited every year. The audit will undertake a detailed review of energy consumption, type of equipment, load factors and a review of operating and maintenance practices in order to identify additional opportunities for saving energy. This audit would also review and identify any additional opportunities for using variable frequency drivers on pumping units. 10.2 Use of High Energy Efficiency Motors According the recommendation made in the 1999 power study, Pembina staff will ensure that all new motors purchased are rated as high efficiency motors. Rewinding and replacing of motors will be based on considerations of the motor hp and age. 10.3 Use of VFD’s Consistent with the 1999 power study recommendation, Pembina will review installation of VFDs on new motors, which make economic sense. 10.4 Operating Practices According to its standard operating practices Pembina will continue to add energy efficiency measures in its daily operating practices. Examples of such measures are: •

Continue to operate electrical equipment below peak demand load.

•

Continue to operate pumps based on the throughput demand and minimize throttle control on pump discharge valves.

10.5 Vehicle Fleet Management

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Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

Last year, Pembina could not undertake a review of its vehicle fleet with respect to use of motor fuel, types of vehicles and operating and maintenance practices. Next year, Pembina plans to develop a protocol to review vehicle fleet management and motor fuel consumption. This review will assess types and number of vehicles operated, operator routes and inspection and maintenance of vehicles. 10.6 Undertake Further Review of Drag Reducing Agents Pembina plans to undertake a further review of DRAs to assess their benefits, costs and feasibility of using them. Pembina will continue to monitor the cots of DRAs and review their use as a means of reducing power consumption, if they are found to be costeffective. 10.7 Estimate Emissions of CO2 and CH4 from Tanks To date, we have estimated emissions of selected organic compounds such as BTEX (benzene, ethylbenzene, toluene and xylene) from storage tanks containing liquid hydrocarbons. These tanks would also release small amounts of CO2 and CH4. Pembina will attempt to quantify these emissions by conducting vapor space sampling and using API (American Petroleum Institute) methods of estimating tank emissions. 10.8 Update Emissions Inventory and Baseline Emissions Due to acquisitions of the Federated and Western Pipelines, Pembina’s net total emissions for future years will increase. Pembina will estimate emissions for the year 2000 for all facilities owned and operated by the company. The emissions forecast and performance indicators will be re-estimated and the emissions inventory database will be updated with emissions adjusted to the baseline year. Specifically the emissions inventory update program will undertake: • • • •

Estimating emissions of CO2 and CH4 from PPC’s storage tanks Estimate actual emissions for 2000 for Peace, Pembina, Federated and Western facilities. Revise emissions forecast based on new knowledge and business plan. Estimate/forecast performance indicators and benchmark emissions.

11. EMPLOYEE AWARENESS & EDUCATION

2000 Environmental Services

25

Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

In 1999, Pembina communicated its action plan to key staff in engineering and operations though the company’s internal e-mail system. The Company’s commitment to participate in the VCR Program has been communicated to the staff. PPC reviewed its safety and environmental performance with staff every month and annually. During these meetings, Pembina encourages discussions on management of greenhouse gases. As part of the company environmental awareness training program, PPC has discussed the concerns related to global warming and greenhouse gases, with its field staff and held a special information session on the issue with field supervisors and foremen. Contractors and consultants working for the company were made aware of company's commitment to participate in the VCR Program and conduct their work and activities by using energy efficient work practices and equipment. The Company will provide an electronic (or a paper) copy of this report and future progress reports to all employees. This communication will reinforce Company's commitment and provide information on its plan to manage emissions of greenhouse gases. Additionally, the Company has an Employee Recognition Program, which will be used to encourage ideas for improving energy efficiency and reduce emissions. Projects or ideas successfully implemented will be recognized through this incentive and award program.

2000 Environmental Services

26

Pembina Pipeline Corporation: 1999 Update Report on the Voluntary Challenge and Registry (VCR) Action Plan Management of Greenhouse Gases

12. REPORTING Pembina is committed to report progress on the action plan to the VCR Registry every year. The report format will be consistent with elements of champion reporting recommended by the Registry.

2000 Environmental Services

27

Pembina Pipeline Corporation

1.0

1999

Indirect Emissions Due to Electrical Consumption (tonnes) (1998 information is left in to provide baseline comparison and facilitate spreadsheet calculations) Electric Power Generation Emission Factors (g/kw-hr) Province Alberta

CO2 1025.00

N2O 0.030

CH4 0.007

NOx 2.070

CO2E 1035

CH4 0.84 0.67

NOx 248.40 197.43

CO2E 124200.00 98712.89

CH4 0.70 0.56

NOx 207.00 165.25

CO2E 103500.00 82626.73

NOx 41.40 32.17

CO2E 20700.00 16086.16

Electrical Consumption (kw-hrs) Year 1998 1999

Peace 100000000 79832591

Pembina 20000000 15542180

Total PPC Estimated Electrical Emissions (tonnes) Year 1998 1999

CO2 123000.00 97759.14

N2O 3.60 2.86

Total Peace Estimated Electrical Emissions (tonnes). Year 1998 1999

CO2 102500.00 81828.41

N2O 3.00 2.86

Total Pembina Estimated Electrical Emissions (tonnes). Total PPC Year 1998 1999

CO2 20500.00 15930.73

N2O 0.60 0.47

CH4 0.14 0.11

2000 Environmental Services

Emissions from Fuel Consumption

Pembina Pipeline Corporation

2.0

Propane (l) 60000 66000

Diesel (l) 1700 20000

1999

Propane and diesel are used as fuel for running some pumps, and domestic heating (Peace System). No fuel is used by the Pembina System. Fuel Consumption Year 1998 1999

CO2 t/kL 2.73 1.11 to 1.76

CH4 kg/ML 0.06 to 0.25 0.03

CH4 0.000000425 0.000005

N2O 0.0000138 0.00001518

N2O 0.00000068 0.000008

CO2E 105.60 116.16

CO2E 4.64 54.60

N2O Kg/ML 0.13 to 0.4 0.23

Emission Factors for Combustion of Fossil Fuels (Adopted from the VCR Guide) Fuel Diesel Oil LPGs M = 10**6 k =10**3

CO2 4.641 54.6

CH4 0.0000018 0.00000198

Emissions (t) from Combustion of Diesel Oil Year 1998 1999

CO2 105.6 116.16

Emissions (t) from Combustion of LPGs Year 1998 1999

2000 Environmental Services

Pembina Pipeline Corporation

3.0

1999

From Company Vehicles Fuel Consumption in 1998 Fuel Gasoline Diesel Propane

Consumption liters 1236480 13812 1428

Prorated in liters Peace Pembina 747901 488579 8354 5458 864 564

Fuel Consumption in 1999 Fuel Gasoline Diesel Propane

Consumption liters 1350000 48000 0

Prorated in liters Peace Pembina 816565 533435 29033 18967 0 0

Emission Factors (Environment Canada) Assume most vehicles are light duty trucks, equipped with some form of emission control. Factors for propane use for transportation are not available. Use factors for energy use. Fuel Gasoline Diesel Oil Propane

CO2 (g/l) 2360 2730 1530

CH4 (g/l) 0.37 0.0078 0.03

N2O (g/l) 0.45 0.40 0.00

2000 Environmental Services

5.0

4.0

CO2 2918.09 37.71 2.18 2957.98

CO2 3186.00 131.04 0.00 3317.04

Electrical 124200 98713

Year 1998 1999

Electrical 97.45 96.39

Total CO2E Emissions for 1998 (% of Total)

Year 1998 1999

Total CO2E Emissions (tonnes)

Fuel Gasoline Diesel Oil Propane Total

Emissions (tonnes) for 1999

Fuel Gasoline Diesel Oil Propane Total

Emissions (tonnes) for 1998

Pembina Pipeline Corporation

LPGs 0.08 0.11

LPGs 105.60 116

N2O 0.61 0.02 0.00 0.63

N2O 0.56 0.01 0.00 0.56

2000 Environmental Services

Diesel 0.00 0.05

Diesel 4.64 55

CH4 0.50 0.00 0.00 0.50

CH4 0.46 0.00 0.00 0.46

1999

Vehicle Fleet 2.47 3.44

Vehicle Fleet 3142 3522

CO2E 3384.81 137.00 0.00 3521.81

CO2E 3100.19 39.42 2.19 3141.80

Total CO2E 100.00 100.00

Total CO2E 127452 102405

Peace 105,511 84,928

CO2E Prorated on km Peace Pembina 2047.35 1337.46 82.87 54.13 0.00 0.00 2130.22 1391.60

CO2E Prorated on km Peace Pembina 1875.19 1225.00 23.84 15.58 1.32 0.86 1900.36 1241.44

Pembina 21,941 17,478

Page 4

Updated Inventory

Pembina Pipeline Corporation

6.0

1999

Product Throughputs Peace System (m3) Year 1998 1999

Crude Oil 5407000 4754490

Condensate 2336000 1765140

NGLs 3727000 4435626

Total 11470000 10955256

Total m3OE 9625170 9448510

Condensate 1063000 620646

NGLs 0 0

Total 6231000 5346666

Total m3OE 6071550 5253569

NGLs 3727000 4435626

Total 17701000 16301922

Total m3OE 15696720 14702079

Pembina System (m3) Year 1998 1999

Crude Oil 5168000 4726020

Total Pembina Pipeline Corporation Operated Throughputs Year 1998 1999

Crude Oil 10575000 9480510

Condensate 3399000 2385786

Conversion Factors for Estimating Oil Equivalent Throughputs (from the CAPP Guide) Product Light oil (m3) Heavy Crude Liquid Ethane (m3) Liquid Propane (m3) Liquid Butane (m3) Liquid Condensate (m3) NGL (m3) Gas Plant Sales NGL (m3) Straddle Plant

m3OE Conversion 1.000 1.075 0.480 0.660 0.750 0.850 0.720 0.690

2000 Environmental Services

Pembina Pipeline Corporation

Peace System NGLs Year

1999

Peace System NGLs (m3) C3 C4 2198000 127000

Performance Indicators

C2 1402000

7.0

Throughput Energy Index (TEI) (kw-hrs/m3OE*km)

1998

7.1

Energy Content HHV in GJ 37.4 27.5 18.5 28.7 25.4 34.7 38.7 38.5

Nova 19000

Propane 5.62 6.04

m3OE

15696720 14702079

Dis k 3 3

(Electrical energy + Energy from combustion of fossil fuels)/(m3OE throughout)* (km distance transported)

TEI is defined ad energy expended (kw-hrs) per m3 oil equivalent transported over a kilometer distance. TEI =

Fuel Natural gas (per e3m3) NGL (per m3) Liquid ethane (per m3) Liquid butane (per m3) Liquid propane (per m3) Motor gasoline (per m3) Diesel (per m3) Light crude (per m3)

1990 1300 Energy Expended (kw-hrs) Gasoline Diesel 154.46 2.16 168.64 9.47

1 kw-hr of electrical energy = 3.6 MJ 1GJ = 1000 MJ Peace Pipeline Distance (km) = Pembina Pipeline Distance (km) =

Electrical 120000000 95374771

1kw-hr =GJ*3.6/1000

The following heating or energy equivalent values are used (CAPP Guide)

Year 1998 1999

2000 Environmental Services

Pembina Pipeline Corporation

1999

Throughput Energy Index (TEI) 0.0060 0.0050 (kw-hrs)/(km)(m3OE)

0.0040 0.0030 0.0020 0.0010 0.0000 1998

1999 Year Total PPC

Peace

Pembina

2000 Environmental Services

7.2

1999

0.0000

0.0010

0.0020

0.0030

0.0040

0.0050

0.0060

Year 1998 1999

TCI = m3OE Throughput 15696720 14702079

1998

Total PPC

Pembina

1999

Distance, km 3290 3290

TCI (kg/(m3OE*km) 0.0047 0.0040

2000 Environmental Services

Peace

Year

Throughput Carbon Index (TCI)

Total CO2E (kg) 127452042 102405470

(Total CO2E emissions in kg)/(m3OE throughout)*(km distance transported)

It is a measure of CO2E emissions per unit throughput over a kilometer distance.

Throughput Carbon Index (TCI) (CO2E kg/m3OE*km)

Pembina Pipeline Corporation

(Kg CO2E)/(km)(m3OE)

Page 8

Updated Inventory

Pembina Pipeline Corporation

8.0

1999

Performance of Individual Systems Peace System, TEI

Electrical 100000000 79832591

Energy Expended (kw-hrs) Gasoline Diesel 93.43 1.40 102.01 6.83

Propane 5.57 6.04

Electrical 20000000 15542180

Energy Expended (kw-hrs) Gasoline Diesel 61.03 0.76 66.64 2.64

Propane 0.05 0.00

Year 1998 1999

m3OE 9625170 9448510

Dis k 1 1

Pembina System TEI Year 1998 1999

m3OE

Peace System TCI Year 1998 1999

Total CO2E (kg) 105510603 84927715

m3OE Throughput 9625170 9448510

Distance, km 1990 1990

TCI (kg/(m3OE*km) 0.0055 0.0045

m3OE Throughput 6071550 5253569

Distance, km 1300 1300

TCI (kg/(m3OE*km) 0.0028 0.0026

Pembina System TCI Year 1998 1999

Total CO2E (kg) 21941439 17477755

2000 Environmental Services

6071550 5253569

Dis k 1 1