California oil producer applies for LCFS credits for producing crude oil using solar-generated power
Under California’s Low Carbon Fuel Standard (LCFS), crude oil producers may generate credits for oil that has been produced using innovative methods and delivered to California refineries for processing. Seneca Resource Corporation (Seneca) has applied for LCFS credits for producing crude oil using solar generated electricity.
Seneca Resources Corporation is the exploration and production (E&P) segment of National Fuel Gas Company, headquartered in Houston, Texas. Seneca explores for, develops and produces natural gas and oil reserves in California, Kansas and the Appalachian Region including the Marcellus and Utica Shales.
Seneca Resources’ West Coast Division was established in 1987 when the company acquired several properties from Argo Petroleum in Ventura County, Ca. In 1998, Seneca expanded its base into Kern County, Ca. by acquiring the HarCor, Whittier and Bakersfield Energy companies and Ivanhoe Energy USA in 2009. In 2012, Seneca acquired a portion of assets in the east Coalinga oil field, located in the western Fresno County, Ca., from Chevron USA, a subsidiary of Chevron Corporation.
The West Coast Division fields are predominately oil producing reserves displaying long life properties, with low decline rates and low operating costs.The Seneca Solar Project is a 3.13 mega-watt (MW) direct current, 2.5 MW alternating current fixed-tilt solar photovoltaic project located near the city of Taft in Kern County, California, at Seneca’s North Midway Sunset oil field. In 2015 the Oil Field produced 1,442,809 barrels (bbl) of crude oil.
The Solar Project consists of 10,120 Canadian Solar 310 watt solar photovoltaic modules and two central inverters which convert the DC solar power from the solar modules into AC power which is used directly to power Seneca’s oil production equipment. The solar panels sit on fixed racking and mounting system tilted at 25 degrees to take advantage of optimal solar production.
According to Seneca, the solar electricity will produce an average of about 20% of Seneca’s historical electricity load—approximately 5,400,000 kilowatt-hours (kWh) annually. The estimated amount of electricity generated is based on the system equipment specifications of the Solar Project, historical weather data in the region and estimated system losses based on system design.
According to the staff of the California Air Resources Board (ARB), Seneca has demonstrated that the solar electricity will be exclusively consumed by the North Midway Sunset Oil Field equipment. The project meets the minimum threshold requirement in carbon intensity (CI) reduction.
To earn LCFS credits, Seneca will be required to provide on a quarterly basis:
The volume (bbl) of crude oil produced during the quarter using the innovative method and the crude name(s) under which it is marketed.
The metered data on solar electricity consumed for crude oil production at the Oil Field during the quarter (kWh).
The total electricity consumed for crude oil production at the Oil Field during the quarter (kWh).
An attestation letter stating that all solar electricity was supplied directly for crude oil production at the Oil Field and that the solar electricity reported for generating LCFS credit did not produce renewable energy certificates or other renewable attributes recognized or credited by any other jurisdiction or regulatory program.
ARB staff is accepting comments on the application until 15 August 2016. After closing the comment period, staff will review submitted comments, request that applicants address any substantive issues related to this application and, if satisfactory, move to approve the application.