verification report for: prepared by: prepared for: version · bluesource methane reduction program...

Bluesource Methane Reduction Program Pool Alpha (#3215-1606) February 2019

Verification Report for: Bluesource Methane Reduction Program Pool Alpha (#3215-1606)

Proponent:

Blue Source Methane ULC

Prepared by:

Brightspot Climate Inc.

Prepared for:

Alberta Climate Change Office

Version: Final

Date:

February 27, 2019


of 86

Table of Contents 1.0 Summary – Offset Project ..................................................................................... 4 1.1 Summary – Facility ........................................................................................................ 7 2.0 Introduction ........................................................................................................ 8

2.1 Objective ............................................................................................................ 9 2.2 Scope ................................................................................................................. 9 2.3 Level of Assurance ............................................................................................. 10 2.4 Criteria ............................................................................................................. 10 2.5 Materiality ......................................................................................................... 10

3.0 Methodology ..................................................................................................... 10 3.1 Procedures ........................................................................................................ 11 3.2 Team ............................................................................................................... 25 3.3 Schedule .......................................................................................................... 26

4.0 Results ............................................................................................................. 26 4.1 Assessment of Internal Data Management and Controls .......................................... 27 4.2 Assessment of GHG Data and Information ............................................................. 28 4.3 Assessment against Criteria ................................................................................. 32 4.4 Evaluation of the GHG Assertion .......................................................................... 38 4.5 Summary of Findings .......................................................................................... 38 4.6 Opportunity for Improvement .............................................................................. 40

5.0 Closure ............................................................................................................. 40 5.1 Verification Statement ........................................................................................ 40 5.2 Limitation of Liability .......................................................................................... 40 5.3 Confirmations .................................................................................................... 41

6.0 References ........................................................................................................ 42 Appendix A: Final Verification Plan and Sampling Plan ............................................................ 43 Appendix B: Statement of Qualifications .............................................................................. 72 Appendix C: Findings and Issues ......................................................................................... 75 Appendix D: Statement of Verification ................................................................................. 78 Appendix E: Conflict of Interest Checklist ............................................................................. 81 Appendix F: Supplemental Diagrams/Tables/Figures .............................................................. 84

List of Tables Table 1: Risk Assessment .................................................................................................. 15 Table 2: Findings of Data Integrity Verification Procedures ..................................................... 27 Table 3: Findings of GHG Data and Information Verification Procedures .................................... 28 Table 4: Findings of Criteria Verification Procedures ............................................................... 32 Table 5: Offset Criteria Assessment ..................................................................................... 37 Table 6: Summary of Findings ............................................................................................ 39 Table 7: Confirmation Findings ........................................................................................... 41 Table 8: Detailed Findings and Issues Log ............................................................................ 76 Table 9: Supporting Documentation Reviewed ...................................................................... 85


of 86

Instructions are in italics throughout and should not be deleted when report is complete. Some instructions are specific to the verification of facilities and for offset projects. The document is not restricted but do not alter the format, the layout, the headings or the overall ‘look and feel’ of the document. If if is more usefule to paste information outside of the text box, use the empty line just below the text box to drop text or tables int. This should not change the headings or the formats. There are several dropdown boxes in the document that must be completed.

• Complete report in Verdana 10pt font (no italics). • After the report is complete, right click the table of contents and ‘update field’ which will

update page numbers in Table of Contents. • If an instruction only applies to facilities or only applies to offsets indicate ‘not applicable’. • Appendix F is available for additional tables, diagrams etc.


of 86

1.0 Summary – Offset Project

Item Description

Project Title

Enter project title (must match the registry project title)

Bluesource Methane Reduction Program Pool Alpha

Project Description

Provide a brief description of the project and baseline conditions.

This project endeavours to reduce greenhouse gas emissions through the direct reduction of natural gas (methane) venting from pneumatic devices. This project is an aggregation of multiple subprojects.

Project Location

Include the latitude and longitude for each unique location or installation. Include legal land location if applicable and other information identifying the unique location.

All subprojects are located throughout Alberta’s provincial boundary.

Project Start Date

Enter the project start date.

All subprojects are a result of actions taken on or after January 1, 2002. The actual project start date per device will vary according to the conversion date of each unit.

Offset Start Date

Enter the start date for offset credit generation.

January 17, 2018

Offset Crediting Period

Enter the offset crediting period, including the offset start date. Include day, month year.

January 17, 2018 – December 31, 2022

Reporting Period

Enter the reporting period being verified.

July 1, 2018 – December 31, 2018

GHG Assertion (Actual Emission Reductions/Sequestration Achieved)

Enter the actual emissions reductions / sequestration for the reporting period. Enter serial numbers if available.

14,609 tonnes CO2e


of 86

Protocol

Indicate the relevant protocol (if applicable)

Quantification Protocol for Greenhouse Gas Reductions from Pneumatic Devices, Version 2.0, January 2017

Ownership

Enter offset project owner.

Project participants sign a Participation Agreement with Bluesource which directly assigns all emission reduction benefits created from the subprojects to Bluesource, including emission offsets. Bluesource acts as Project Proponent and Developer on behalf of the project participants.

Project Activity

State how the project activity meets the eligibility requirements

The project must meet the eligibility criteria stated in Part 3, Section 16 of the Carbon Competitiveness Incentive Regulation (CCIR). In order to qualify, emission reductions must:

• Occur in Alberta; • Result from an action taken that is not otherwise

required by law at the time the action is taken; • Result from actions taken on or after January 1,

2002; • Occur on or after January 1, 2002; • Be real, demonstrable, quantifiable and verifiable; • Be quantifiable and measurable, directly or by

accurate estimation using replicable techniques.

The verification included an evaluation of these criteria as well as the specific applicability criteria described in the Protocol. The results of this analysis are described in Section 4.3 of this report.

Project Contact

Enter contact name, company name, mailing address, phone number and email address.

Yvan Champagne Blue Source Methane ULC Suite 1605, 840 - 7th Ave SW Calgary, AB T2P 3G2 Phone: (403) 262-3026 Email: [email protected]

Verifier

Verifier name, verifier’s company name, address, phone number email etc.

Aaron Schroeder, P.Eng. Brightspot Climate 401 - 409 Granville St. Vancouver, BC V6C 1T2 Phone: (604) 353-0264 Email: [email protected]

Verification Team Members

Include verification team members, roles, training, training dates and qualifications.

Aaron Schroeder, P.Eng. Roles: Lead Verifier and Designated Signing Authority Training: Greenhouse Gas Verification – ISO 14064- 3, Canadian Standards Association, 2012; Instructor – Greenhouse Gas Verification – ISO 14064-3, University of Toronto, 2015 – 2018


of 86

Jeanna Brown, P.Eng. Role: Associate Verifier Training: GHG Validation and Verification, ISO 14064-3, University of Toronto, October 2017

Rodrigo Cubedo, EIT Role: Associate Verifier

Hector Sanchez, P.Eng. Role: Peer Reviewer Training: Greenhouse Gas Verification – ISO 14064- 3, Canadian Standards Association, 2012

Designated Signing Authority

Enter the designated signing authority for this verification.

Aaron Schroeder, P.Eng. Brightspot Climate 401 409 Granville Street Vancouver BC V6C 1T2 +1 (604) 353-0264 [email protected]

Verification Strategy

Describe the verification strategy used for the verification, including rationale for the approach. Note, if a controls reliance is used, provide justification for how the project is able to support this approach.

The verification strategy applied a largely substantive approach. The verification procedures, which are detailed later in this section, were designed to test the activity data directly, wherever practical. By applying this approach, the verification did not rely heavily on the Responsible Party’s controls, but rather relied on the substantive evidence collected from verification procedures that reviewed metered data, data directly from invoices and independent laboratory reports, for example.


of 86

1.1 Summary – Facility

Item Description

Facility Name and Company Name

List company name and facility name.

Not applicable for offset verification reports

Facility Description

Provide a brief description of the facility.


Baseline Emissions Intensity Description

List the approved BEIA and the baseline years.


Reporter Contact

Enter contact name, company name, mailing address, phone number and email address.


GHG Assertion

Enter the actual emissions, production, emissions intensity and the reduction target being verified.


Verifier

Verifier name, verifier’s company name, address, phone number email etc.


Verification Team Members

Include verification team members, roles, training, training dates and qualifications.


Designated Signing Authority

Enter the designated signing authority for this verification.



of 86

2.0 Introduction Provide an introduction to the facility or project, the verification, and the background.

For Offset Project: summary of offset project baseline, changes to the baseline since project start date and summary of changes at the project since the offset project start date or baseline period.

For Facilities: Description of compliance or baseline report, facility/project boundary, facility identification information, GHG historical performance, summary of changes since the baseline or since the last compliance report.

Summary of Offset Project Baseline

This Project reduces greenhouse gas emissions by reducing the volume of natural gas (methane) vented to atmosphere from pneumatic devices. In the baseline condition, existing devices would continue to vent higher volumes of natural gas, consisting primarily of methane, to atmosphere. In the project condition, these high venting pneumatic devices are replaced with functionally equivalent devices or systems that have significantly lower vent rates.

Summary of Changes

The Responsible Party’s Offset Project Report (OPR) indicates that there have been no changes to the project boundaries and no equipment changes during the reporting period.

The OPR states that the project’s boundaries, operations and major sources of greenhouse gas emissions have not changed from those previously reported.

The OPR indicates that the project deviates from the OPP in the following ways:

• The activity start date is listed in the OPP as January 2, 2018 with an anticipated crediting period of January 2, 2018 – December 22, 2018. While the activity start date was January 2, 2018, the credit start date is January 17, 2018. These dates correspond to the CSA Registry approval and posting dates for the Project.

• The OPP indicates that the Protocol vent rate values are used in the quantification for the Fisher C1 device type. However, the Responsible Party has used the manufacturer vent rate instead, due an error identified in the Protocol values, and has indicated this change in the OPR.

Through the course of the verification, the changes described above were confirmed. No additional changes to the project boundary, emission sources, measurement and monitoring or quantification methodologies were found.


of 86

2.1 Objective Describe the objective of the verification (should include expressing an opinion).

The objective of the verification is as follows:

• to issue an verification statement on whether the GHG assertion is without material discrepancy;

• to issue an verification report that provides details of the verification activities; and • to complete the “confirmations” activities defined in the Alberta Climate Change Office

Standard for Validation, Verification and Audit, Section 5.1.3.

2.2 Scope Define the scope in terms of: geographical, organizational, activities and processes, sources, sinks, categories and greenhouse gases included (considering the completeness of the inventory), GHG assertion time period.

For offset verifications: include the serial range (i.e. XXXX-XXXX-XXX-XXX-XXX-XXX to XXXX-XXXX-XXX-XXX-XXX-XXX) if assigned (i.e. in the case of government verification a serial range will be available, otherwise not applicable).

For Facilities: ensure all specified gases and source categories are evaluated. Include list of negligible emission sources and justification for Emission Performance Credits (EPCs). Include listing of end products.

Project Name: Bluesource Methane Reduction Program Pool Alpha

Serial Range: To be assigned at registration.

Geographic Boundary: All subprojects are located within Alberta’s provincial boundary.

Physical Operations: Natural gas processing and compression Pneumatic devices and controllers

Emission Sources: High-to-Low Bleed Pneumatic Controller Conversions • B7: Vented Fuel Gas • P7: Project Vented Gas • P9: Fuel Extraction and Processing

IPCC GHGs Emitted/Removed: Carbon Dioxide (CO2)

Methane (CH4)

Nitrous Oxide (N2O);

Remaining IPCC GHGs were not emitted in the baseline or project condition.

Reporting Period: July 1, 2018 – December 31, 2018


of 86

2.3 Level of Assurance The verification was conducted to a reasonable level of assurance.

Choose type of verification from the dropdown box above.

Provide explanation on level of assurance.

The Standard for Validation, Verification and Audit, Version 3.0, December 2018 requires that verifications must be designed and completed to a reasonable level of assurance.

2.4 Criteria Outline the program criteria used and relevant supporting documentation (acts, regulations, protocols, standards, guidance documents, project documentation etc).

The program criteria used and relevant supporting documentation is as follows:

• Climate Change and Emissions Management Act • Carbon Competitiveness Incentive Regulation 255/2017, with amendments up to and

including Alberta Regulation 96/2018 • Standard for Validation, Verification and Audit, Version 3.0, December 2018. Alberta

Climate Change Office • Standard for Greenhouse Gas Emission Offset Project Developers, Version 2.0, July 2018 • Quantification Protocol for Greenhouse Gas Reductions from Pneumatic Devices, Version

2.0, January 25, 2017

2.5 Materiality Define the materiality of the verification.

The materiality threshold is defined in The Standard for Validation, Verification and Audit, Version 3.0, December 2018. For this verification, the materiality threshold is 5%.

3.0 Methodology Statement that the verification is performed according to ISO 14064-3.

Summary of the assessments/tests/reviews/evaluations that were conducted during the verification.

This verification was designed and completed according to the requirements of the ISO 14064-3 Standard.

The following verification activities (assessments/tests/reviews/evaluations) were conducted through the course of this verification. The specific verification activities that were conducted are detailed in the Verification Plan, which is appended to this report. They are also listed with the verification findings throughout section 4 of this report.

• Observations: the site visit included a tour of a sample of the project sites to observe emission sources and data systems used for recording activity data;


of 86

• Review of documentation: documentation supporting the activity data was reviewed, including review of any manual transcription that was applied between documents and the emission quantification software;

• Recalculation: the emissions reduction was recalculated using metered data and original data sources and by applying the quantification methodologies stated in the Responsible Party’s Offset Project Report; the methods for calculating any averages used in the emission quantification were recalculated and evaluated for accuracy and appropriateness;

• Inquiry: the site visit included an interview of operations and instrumentation personnel. • Analytical procedures: a year-over-year comparison of overall emissions offsets was

performed.

3.1 Procedures Description of how the verification was conducted including: description of the nature, scale and complexity of the verification activity, confidence and completeness of the responsible party’s GHG information and assertion, assessment of GHG information system and its controls, assessment of GHG data and information, assessment of GHG information system and controls, assessment against criteria, evaluation of the GHG assertion.

The verification strategy applied a largely substantive approach. The verification procedures, which are detailed later in this section, were designed to test the activity data directly, wherever practical. By applying this approach, the verification did not rely heavily on the Responsible Party’s controls, but rather relied on the substantive evidence collected from verification procedures that reviewed metered data, data directly from invoices and independent laboratory reports, for example.

Regarding the scale and complexity of the verification procedures, the verification risk assessment was leveraged to design verification activities appropriate to address the inherent, controls and detection risk evaluated in relation to each activity data and boundary condition. In most cases, these verifications involved review of documentation, recalculation or analytical procedures designed to produce verification evidence to support the accuracy, completeness and consistency of the information. All activity data and boundary conditions were evaluated through the verification risk assessment and verification activities were designed and completed commensurate with the verification risk assessed.

In a similar way, the data integrity, quantification methodologies and quantification itself were assessed through the verification risk assessment. Verification procedures were designed and completed to address each of these key areas.

Verification evidence was developed from each of these verification activities, which was used to establish a verification conclusion regarding the GHG information systems, the Responsible Party’s controls and ultimately, the GHG Assertion.

Describe steps of the verification including planning, assessment, site visit, off-site verification, and report preparation.

The verification was conducted according to the ISO 14064-3 standard, which establishes four primary phases of a greenhouse gas verification as described in this section. The relevant sections from the ISO standard are noted below.


of 86

Agreement (ISO Section 4.3)

The verification level of assurance, objectives, criteria, scope and materiality was affirmed in the contract for services and re-affirmed during a verification kickoff meeting.

A conflict of interest review was conducted prior to beginning work and monitored throughout the verification. A conflict of interest statement is appended to this report.

Internally, Brightspot Climate began documenting the verification upon contract signing. All documentation related to the verification will be maintained for a period of seven years following the date of the verification statement.

Approach (ISO Section 4.4)

Brightspot Climate conducted an initial review of the Project’s greenhouse gas information, primarily by reviewing the reports and the Offset Project Plan. Brightspot Climate prepared a verification risk assessment based on this information, evaluating:

a) the inherent risks of discrepancies for each variable used to calculate each emission source and the general greenhouse gas reporting system;

b) the risk that the Responsible Party’s controls are insufficient to detect and prevent each inherent risk from causing a discrepancy in the GHG assertion; and

c) the potential magnitude of each inherent and control risk described above resulting from the contribution of the associated emission source.

This information was used to develop an appropriate verification procedure for each identified risk. Each procedure was designed to reduce the probability that the verification would not detect a discrepancy that has not been corrected by the Responsible Party’s controls. The tolerable error for each emission source is stated in the verification risk assessment.

Generally, a substantive approach was applied to the verification. Therefore, the verification procedures relied more heavily on data analysis than on controls testing.

Verification Plan

Brightspot Climate developed a Verification Plan that documents the level of assurance, verification objective, verification criteria, verification scope, and materiality. Additionally, the Verification Plan provides general description of the Project, documents operational and organizational changes that have occurred since the previous verification, explains the Project’s control environment, and describes the safety requirements of the site visit.

Assessment (ISO Sections 4.5 – 4.7)

The verification procedures consist primarily of tests, analysis and review focused on the following six critical areas:

a) The completeness and relevance of emission sources included in the GHG Assertion;

b) The consistency of the emission sources and quantification methodologies between the Protocol, the Offset Project Plan, Offset Project Report and the tools used to quantify the emission reduction;

c) The accuracy and level of transparency of measured and estimated data sources, data integrity of electronic and manual data transfers and transcription between data systems and the GHG calculation;

d) The accuracy of the GHG emissions reduction calculations;

e) The completeness, accuracy and transparency of information presented in the Offset Project Plan and Offset Project Report documents, including the implementation of stated methodologies and emission factors in the quantification of emissions reductions; and


of 86

f) The accuracy of transcription of final calculated values into the GHG Assertion, including the “confirmations” required by ACCO as described in the ACCO Standard for Validation, Verification and Audit.

The principles defined in the preceding six areas are defined in ISO 14064-1 (accuracy, completeness, consistency, relevance and transparency).

Site Visit

Rodrigo Cubedo attended a three day site visit to a sample of the subproject sites within the aggregated project. The selection of sites considered site ownership and subproject types within the aggregated project. During the site visits, completeness of data sources, accuracy of measurement and data system integrity was tested through observation and interviews with site operations and instrumentation personnel.

The following Responsible Party personnel were interviewed regarding various aspects of the Project:

• Waheed Zaman, Environmental Engineering EIT, Blue Source • Alex Fritz, Junior Methane Reductions Analyst, Blue Source • Chris Lake, Operator, Tangle Creek • Tyrone Gray, Operator, Tangle Creek • Chris Kirkness, Operator, Pine Cliff • Kelly Healing, Operator, Clearview • Brent MacMillan, Operator, NAL Resources

Further details of the verification activities that were conducted on site, including observations and inquiries, are provided in Section 4 of this report.

Verification Procedures

The remainder of the verification procedures was conducted through a desk review following receipt of the draft GHG Assertion.

Through the course of the assessment phase of the verification, Brightspot Climate issued questions and requests for additional documentation and data. These requests were consolidated in a simple electronic tracking system to maintain a common record of communication.

The Responsible Party had the opportunity to address any issues that were raised through the course of the verification before they were documented as discrepancies in the Verification Report.

Evaluation and Statement (ISO Sections 4.8 – 4.9)

Following the completion of all verification procedures and consideration of all information received from the Responsible Party, the verifier was tasked with concluding whether the GHG assertion is without material discrepancy and whether the verification reviewed sufficient and appropriate evidence to support a reasonable level of assurance.

If any outstanding discrepancies remained, their materiality would have been calculated according to ACCO guidance such that both the aggregate net quantitative error and the absolute quantitative error could be reported. In such circumstances, qualitative discrepancies would be evaluated based on the potential impact on the GHG assertion and the potential impact on the Intended User’s ability to use the reported information.

Peer Review

The independent Peer Reviewer conducted a complete review of the verification. The peer review process examined:


of 86

a) The completeness of the verification risk assessment; b) The appropriateness of the verification procedures considering the inherent and control

risks identified in the verification risk assessment; c) The appropriateness of any sampling conducted in each of the verification procedures; d) The completeness of each verification procedure, including the verifiers documentation

of work completed; e) Closure of any issues raised by the verifier through the course of the verification; f) The sufficiency and appropriateness of all evidence reviewed through the verification to

support a reasonable level of assurance; and g) A review of the final Verification Statement and Conflict of Interest Statement.

Verification Report

The Verification Report includes a Verification Statement, Statement of Qualifications, Conflict of Interest Statement and a report on the findings of the verification. The final Verification and Sampling Plan has been appended to the Verification Report, including the results of the verification risk assessment.

Describe how the risk based approach was implemented in the sampling plan. Identify categories of risk including inherent risk, and detection risk (organization and verifier). Include the Verification Plan with the Sampling Plan in Appendix A. Paste the risk assessment table in this section.

Verification risk is defined as the risk of an incorrect verification conclusion. It can be calculated as the product of

• The Project’s inherent risks; • The Responsible Party’s control risks; and • The detection risks associated with the verifier’s verification procedures.

Inherent Risk × Control Risk × Detection Risk = Verification Risk

The verifier cannot affect the inherent risk or the control risk. Therefore, to reduce the overall verification risk and reach the agreed level of assurance (defined in the verification scope), the verifier must design verification procedures that reduce the detection risk.

Each inherent and control risk was provided with the risk score (high/medium/low). The risk analysis of inherent and control risks considers both the magnitude of the activity data or inventory component on the overall GHG assertion as well as the probability that the risk will result in a discrepancy, as assessed by the verifier.

The Verification Risk Assessment Summary on the following pages describes the following information: • Activity Data / Inventory Component: The boundary, eligibility requirement, data

component or reporting activity being evaluated. • Inherent Risk: The verifier’s evaluation of inherent risk. Inherent risks have been

categorized according to the ISO 14064-1 principles (accuracy, completeness, consistency, relevance, transparency).


of 86

• Control Risk: A description of the Responsible Party’s controls (if any controls are applicable) and the verifier’s evaluation of control risks.

• Max Detection Risk: The maximum detection risk that can be applied and still result in an overall verification risk that meets the agreed level of assurance.

• Designed Detection Risk: The detection risk of the verification procedure that the verifier intends to complete. Note that the designed detection risk must always be equal to or lower than the maximum detection risk.

• Verification risk: the product of the inherent, control and (designed) detection risk, as defined in the equation above.

Important note: The verification strategy for this verification applies both substantive tests and control tests. Substantive tests are designed to focus on directly testing activity data or inventory components and their associated inherent risks. Control tests are designed to focus on testing the Responsible Party’s controls and if the test is successful, relying on the Responsible Party’s control. Therefore, control tests indirectly test activity data or inventory components.

Each verification procedure listed in the following table denotes if the procedure is a substantive or control test.

Table 1: Risk Assessment

Activity Data/ Inventory Component

Inherent Risk Control Risk Max Detection Risk

Detection Risk Design

Description Verification Risk

Protocol Applicability Requirements

Functional equivalence must be demonstrated

Relevance (medium)

Level of service may have changed between the baseline and project conditions.

The Responsible Party does not have a control specifically designed to address this inherent risk.

Low Low Substantive test: Observe equipment and interview operations staff during site visit to determine level of service provided by project implementation.

Low

Protocol is applicable to methane vent reductions; not applicable to reduction of propane or conversion from propane to methane

Relevance (low)

Propane devices may have been included in the inventory.


High Low Substantive test: Observe equipment and interview operations staff to determine if any propane devices are, or have been, installed.

Low


of 86





Project must be a conversion (brownfield) or an acceptable install (greenfield)

Relevance (high)

Project may have been implemented at greenfield sites that do not meet protocol requirements.


Low Low Substantive test: Review documentation for a sample of sites that establishes eligibility according to Table 1 of the Protocol.

Low

Pneumatic devices must be properly maintained and inspected

Consistency (low)

Pneumatic devices may vent excessively if not properly maintained.

Control: The Responsible Party has ensured that Project Participants have implemented annual inspection and maintenance procedures as part of regular operations.

Control Risk: These procedures may not have been implemented or maintained at all project sites (low).

High Medium Control Test: Review the Responsible Party’s management system and records to determine if inspection and maintenance procedures have been implemented for all sites and have been maintained through the reporting period.

Low


of 86





An inventory of devices must be maintained

Completeness (medium)

The inventory of devices may be incomplete.

Control: The Responsible Party has generated an inventory list with data confirmation via field visits.

Control Risk: This inventory may be incomplete or contain inaccurate data (low).

Low Low Substantive test: Observe devices during site visit and compare against project inventory to evaluate completeness.

Low

Accuracy (medium), Completeness (medium)

The inventory of devices may include incorrect data.

Control: The Responsible Party has implemented a centralized data management system.

Control Risk: The inputted data may be incorrect or incomplete (low).

Low Low Substantive test: Review documentation supporting the record of conversion (installation/conversion date) and device specifications.

Low

The project must meet the requirements of the Alberta Offset System

Relevance (high)

The project may not have met the requirements of the Alberta Offset System.


Low Low Substantive test: Evaluate the Responsible Party’s evidence regarding the general requirements of the Alberta Offset System.

Low


of 86





Protocol Flexibility

Implementation of multiple pneumatic device conversions

Completeness (medium)

The project aggregates installations at multiple project sites. The data and documentation may not be complete for all sites.

Control: The Responsible Party has implemented a centralized data management system.

Control Risk: The inputted data may be incorrect or incomplete (low).

Low Low Substantive test: Evaluate the completeness of the required data and documentation for all project sites included in the aggregated project.

Low

Statistically relevant comparisons or emission factors may be used

Accuracy (medium)

An inappropriate emission factor may be applied.

Control: The Responsible Party has only used statistically relevant emission factors derived by a third party.

Control Risk: The emission factors may be applied incorrectly.

Low Low Substantive Test: Recalculate the complete emission reduction using original data and methods described in the approved quantification protocol.

Low


of 86





Site-specific and make and model-specific emission factors may be applied

Accuracy (medium)

An inappropriate emission factor may be applied.

Control: The Responsible Party has documented a “preferential selection” methodology for selecting appropriate emission factors.

Control Risk: The selection process may be implemented incorrectly (low).

Low Low Substantive test: Assess the emission factors applied in the calculations to the preferential selection method documented in the OPP, and compare to reference values provided in the relevant reference documents.

Low

Preferential order of methods for baseline and project activity quantification for certain project types

Accuracy (low)

An inappropriate quantification methodology may be used.

Control: The Performance Standard approach to baseline quantification will be used, as presented in Section 2.0 of the Protocol.

Control Risk: The Performance Standard approach may not be implemented correctly (low).

High Low Substantive Test: Recalculate the complete emission reduction using original data and methods described in the approved quantification protocol.

Low


of 86





Quantification Data

Gas analysis

(% CH4 and % CO2)

Accuracy (low)

Reported gas compositions may not accurately represent the gas composition.

Control: Gas analysis is conducted by an independent lab. An internal process is used to validate results.

Control Risk: Validation process may not be properly implemented (low).

High Low Substantive test: Analyze gas compositions for significant fluctuations or abnormal gas concentrations.

Low

Accuracy (low)

Reported gas compositions may be incorrectly transcribed into the emission reduction calculation.


High Medium Substantive test: Confirm the accurate transcription of the gas analyses into the emission reduction calculation.

Low

Completeness (low)

The gas compositions may not include a valid gas composition for each period at the required frequency.


High Low Substantive test: Review completeness of gas composition data.

Low


of 86





Operating hours Accuracy (medium)

Inaccurate or incomplete operating hours.


Low Low Substantive test: Compare operating hours used in calculations with government reported values.

Low

Device vent rates

Accuracy (low)

An incorrect value may be used in the calculation.


High Low Substantive test: Review and confirm selected specified vent rate values using recalculation spreadsheet.

Low

Medium Substantive test: Review and confirm transcription of device specifications from supporting documentation (field technician installation record) into the Lukla data management system.

Low

Emission factors – natural gas extraction and processing

Accuracy (low)

Incorrect emission factors may be applied in the calculation.


High Low Substantive test: Compare the emission factors applied in the calculations to the values provided in the relevant reference documents.

Low


of 86





Reference density of methane and carbon dioxide at STP conditions

Accuracy (low)

The densities of methane and carbon dioxide applied in the calculation may not represent the densities at STP conditions.


High Low Substantive test: Compare the densities of methane and carbon dioxide applied in the calculations to the values provided in the relevant reference documents.

Low

Emission Quantification and Reporting

Application of the approved quantification protocol

Accuracy (medium)

The project developer may not have implemented approved quantification methodologies or applied additional methodologies

Control: The Responsible Party has developed an Offset Project Plan that is intended to conform to the requirements of the approved quantification protocol.

Control Risk: The protocol requirements may not have been implemented correctly (medium).

Low Low Controls test: Compare the methodologies described in the Responsible Party’s Offset Project Plan to the methodologies described in the approved quantification protocol.

Low


of 86





Substantive test: Recalculate the emission reduction using original metered data and methods described in the approved quantification protocol.

Low

Quantification of emission reduction

Accuracy (medium)

Emission reduction calculation may contain arithmetic errors.


Low Low Substantive test: Recalculate the emission reduction using original metered data.

Low

Data Integrity

Activity data and emission factor data integrity

Accuracy (medium)

Data may not have been accurately transferred between electronic systems and calculation sheets.

Control: The Responsible Party uses electronic data transfers whenever possible to maintain data integrity.

Control Risk: Electronic data transfers may result in errors or may not be available for all data (medium).

Low Low Controls test: Analyze all activity data for abnormal data (zeros, missing data, values outside range).

Low


of 86





Substantive test: Recalculate the complete emission reduction using original data.

Low

Transcription of final emission reduction into Offset Project Report

Accuracy (Low)

Final emission reduction may not have been transcribed accurately from calculation spreadsheets into the Offset Project Report.


High Low Substantive test: Compare the final emission reduction quantity reported by the Responsible Party to the quantity reported in the Offset Project Report. Also, compare these quantities to the recalculated quantity in previous verification procedures.

Low


of 86

3.2 Team List verification team members including peer reviewer(s).

Describe the qualifications and training of the team members and peer reviewer(s) including dates of training and certifications.

For Offsets: fill in the sample Statement of Qualification provided and included in Appendix B.

For Facilities: include the Statement of Qualifications from the facility compliance form in Appendix B.

ISO 14064-3 defines sixteen subject matter areas in which the verifier should demonstrate familiarity (see ISO 14064-3, Section A.2.2.3). The verification team has competencies in each of these sixteen subject matter areas.

Lead Verifier: Aaron Schroeder, P.Eng.

Aaron Schroeder will be the Lead Validator and Designated Signing Authority. His extensive experience quantifying and verifying greenhouse gas emissions satisfies all sixteen subject matter areas defined in the standard.

Biography: Aaron Schroeder has eleven years of professional experience analyzing, quantifying and verifying greenhouse gas emissions in North America. Prior to forming Brightspot Climate Inc. in 2015, Aaron worked for several years leading a team of fifteen greenhouse gas verification and policy analysts across Canada with ICF International. He provided leadership for this team and led the development of ICF’s standardized verification process, conformant with ISO 14064-3. In 2012, ICF’s verification process was accredited by the American National Standards Institute (ANSI).

Mr. Schroeder’s hands on experience conducting greenhouse gas verifications includes numerous engagements for oil and gas extraction and processing, refining, pipeline, electricity generation and petrochemical facilities. Additionally, he has conducted verifications of emission reduction projects in industrial facilities, renewable energy, waste management and agriculture. He is sought after for his expertise devising strategies to bridge the gap between theoretical and practical implementation of methodologies for quantifying, reporting and verifying.

In 2014, the University of Toronto engaged Mr. Schroeder to instruct professional development courses on greenhouse gas inventory and project quantification, reporting and verification. Since 2014, Mr. Schroeder has instructed several of these courses in live, two-day sessions and on-line instruction as a sessional lecturer through the university’s School of Environment. Additionally, Mr. Schroeder has worked with the School of Environment to re-write and update the courses.

Training: Greenhouse Gas Verification – ISO 14064-3, Canadian Standards Association, 2012; Instructor – Greenhouse Gas Verification – ISO 14064-3, University of Toronto, 2015 - 2017

Associate Verifier: Jeanna Brown, P.Eng.

Biography: Jeanna Brown is a Professional Engineer with thirteen years of experience in the oil and gas industry. During her previous employment, she focused on drilling engineering and well planning for wells of varying complexity. She has experience with field based drilling engineering/operations, wellsite supervision and exploration projects. More recently, Jeanna’s technical focus concentrated on in-situ oil sands projects and thermal/steam well design. Since joining Brightspot, Jeanna has gained experience working on GHG verifications for a variety of projects related to oil and gas production and processing, agriculture and electricity generation.

Training: Jeanna received GHG Validation and Verification, ISO 14064-3, training through the University of Toronto in September 2017.


of 86

Associate Verifier: Rodrigo Cubedo, B.Eng.

Biography: Rodrigo Cubedo has a background in mechanical engineering, specializing in aerospace projects. Rodrigo has leveraged his engineering experience to understand and systematically improve the processes used to work with international clients. He is fluent in Spanish, English, French and basic Mandarin. His experience working with a large accounting firm through an in-house deployment of analytical software exposed him to a systematic research framework, which he has recently used to complete GHG verifications.

Training: Rodrigo Cubedo graduated as a mechanical engineer from McGill University in June of 2016.

Peer Reviewer: Hector Sanchez, P.Eng.

Biography: Hector Sanchez is a Professional Engineer with over 10 years of experience. He holds a Bachelor of Engineering Science in Chemical and Environmental Engineering from the University of Western Ontario and is registered as a Professional Engineer in the Province of Ontario. Hector has completed supplementary verification training, receiving a GHG verification certificate of training for ISO 14064. Hector has acted as a Lead Verifier in over 50 GHG verifications in in a range of projects under Alberta, British Columbia, Ontario and Quebec’s Greenhouse Gas Reporting Regulations. These projects included work at sour gas processing facilities, oil sands SAGD facilities, natural gas pipelines, mining refining, as well as several coal and natural gas combined-cycle electric generating facilities. Additionally, Hector has helped upstream oil and gas producers to comply with the different flaring regulations in the Province of Alberta and Saskatchewan (Directive S10) which provides enforceable regulatory requirements for reducing flaring and venting of associated gas. Hector’s previous work experience as an engineer in a sour natural gas processing facility provides important technical knowledge for these projects.

Training: Greenhouse Gas Verification – ISO 14064-3, Canadian Standards Association, 2012

3.3 Schedule Provide a list or table of verification activities and dates. Indicate when the verification was completed.

Verification Kickoff Meeting January 9, 2019

Draft Verification Plan January 17, 2019

Site Visit January 22, 23 & 24, 2019

Supplementary Information Request February 4, 2019

Draft Verification Report February 25, 2019

Final Verification Report February 27, 2019

4.0 Results Add introduction to results section here, if desired.

The verification results are presented in the following five subsections. Subsections 4.1 – 4.3 present the results of the verification procedures for the data integrity (4.1), Quantification Methodologies and Quantification (4.2), and Boundary Conditions and Activity Data (4.3).


of 86

4.1 Assessment of Internal Data Management and Controls Provide a summary the information system(s) and its controls for sources of potential errors. Include information on the selection and management of data, process for collecting and consolidating data, data accuracy systems, design and maintenance of the GHG system, the systems and processes that support the GHG information system and results from previous assessments if applicable.

A fit for purpose electronic data management system has been implemented by the Responsible Party, called “Lukla”. This system is used to collect and store all of the pneumatic device data parameters to support the quantification. The Project’s GHG quantification is primarily performed in a set of Excel spreadsheets. All data required to quantify emissions reductions for the Project is either manually transcribed into these spreadsheets or electronically transferred from other spreadsheets. The final calculated quantities are manually transferred into the Offset Project Report. Data validation is completed before information is transferred; therefore, there are no active data controls in this document.

All activity data are referenced from 3rd party lab analysis reports, government reported values (via Petrinex), manufacturers’ specifications and other reference documents.

The Responsible Party maintains an Offset Project Plan (OPP) and produces an Offset Project Report (OPR), which document the emission sources, processes for collecting GHG activity data, equations applied to quantify emissions reduction, calculation assumptions, averaging methods applied in the quantification, and a discussion of GHG data management.

Findings from Previous Verification

There were no unresolved material or immaterial discrepancies noted in the previous Verification Report.

Results of Verification Procedures

There were three verification procedures completed to test data integrity. The results of these procedures are provided in the following table.

Table 2: Findings of Data Integrity Verification Procedures

GHG Report Element

Verification Procedures Verification Findings

Activity data and emission factor data integrity

Controls test: Analyze all activity data for abnormal data (zeros, missing data, values outside range).

Relevant activity data such as gas analyses and operating hours were evaluated for completeness and abnormal values.

No discrepancies detected.

Substantive test: Recalculate the complete emission reduction using original data.

The recalculated emission reductions matched the quantities asserted by the Responsible Party. It is therefore a reasonable conclusion that data integrity has been maintained from points of data collection through reporting.



of 86

GHG Report Element


Transcription of final emission reduction into Offset Project Report

Substantive test: Compare the final emission reduction quantity reported by the Responsible Party to the quantity reported in the Offset Project Report. Also, compare these quantities to the recalculated quantity in previous verification procedures.


4.2 Assessment of GHG Data and Information Provide a summary of the information found during the verification of the GHG data and a summary of the GHG Assertion that was assessed.

For Facilities: Confirm that the quantification methodologies that were used in the compliance report are the same as those reported in the BEIA.

For Offset Projects: Confirm that the quantification methodologies that were used by the project proponent are the same as those described in the project plan. Indicate which quantification methodologies were used by the project proponent.

The GHG information consists of the activity data applied to quantify emissions reductions, the source documentation for the activity data, the information in the Offset Project Plan, as described in the previous section of this report, and the documentation supporting the boundary, methodologies, meter calibration, and emission factors.

Table 3: Findings of GHG Data and Information Verification Procedures

GHG Report Element


Verification Findings

Quantification Data

Gas analysis

(% CH4 and % CO2)

Substantive test: Analyze gas compositions for significant fluctuations or abnormal gas concentrations.



of 86

GHG Report Element



Substantive test: Confirm the accurate transcription of the gas analyses into the emission reduction calculation.

For one subproject participant, gas analysis data was provided as an export from a third party laboratory database. The transcribed values were compared to the original values and found to match.

For the other subproject participants, gas analyses had been manually transcribed into a spreadsheet. A sample of gas analyses were selected and transcription was checked. No discrepancies were detected in the sample of manually transcribed gas compositions.

Transcription of the gas analysis data to the emission reduction calculation was completed accurately.


Substantive test: Review completeness of gas composition data.

ACCO has approved a deviation from the Protocol for the Responsible Party that allows for use of established default gas composition values for methane and carbon dioxide, for sites where a current annual gas composition analysis is not available.

A review of gas compositions applied in the quantification confirmed that annual gas composition data were used when available, and when not available, the default values were applied appropriately, in accordance with the approved deviation.


Operating hours Substantive test: Compare operating hours used in calculations with government reported values.

The operating hours data for each site were compared against government reported values and/or raw data from the subproject participant’s SCADA systems. One error was identified which was corrected by the Responsible Party.

Reported operating hours reflect production downtime during which fuel gas systems (supplying the pneumatic instruments) often remain energized. This is therefore a conservative approach to accounting for operating hours in the quantification.

No unresolved discrepancies detected.


of 86

GHG Report Element



Device vent rates Substantive test: Review and confirm selected specified vent rate values using recalculation spreadsheet.

The vent rate values used in the quantification were generally taken from the Protocol or manufacturer specifications. For one conversion type, vent rates were derived from a statistically relevant set of field measurements as described in the Protocol.

For devices where the supply pressure was between the two supply pressures listed in Appendix C of the Protocol or manufacturer specification, the Responsible Party applied a calculation method to estimate an appropriate emission factor. This was done based on supplier data and guidance from a third party subject matter expert. The verification team reviewed the supporting documentation and expert attestation, and has deemed this to be a reasonable approach.


Substantive test: Review and confirm transcription of device specifications from supporting documentation (field technician installation record) into the Lukla data management system.

Installation Records (IRs) were reviewed for a sample of subprojects (70 records, as per the sampling plan). Device specifications and installation dates were compared between the IRs and the calculation sheets.

Four minor discrepancies were identified, related to device make/model and supply pressures, and limited to two subproject participants. These discrepancies were corrected, and the sample was expanded to include an additional 11 subprojects representing ten percent of those two operators’ subprojects. No discrepancies were detected in the expanded sample, validating the integrity of the data transfer from the field IRs to the Lukla data management system and then to the emission reduction quantification.



of 86

GHG Report Element



Emission factors – natural gas extraction and processing

Substantive test: Compare the emission factors applied in the calculations to the values provided in the relevant reference documents.


Reference density of methane and carbon dioxide at STP conditions

Substantive test: Compare the densities of methane and carbon dioxide applied in the calculations to the values provided in the relevant reference documents.


Emission Quantification and Reporting

Application of the approved quantification protocol

Controls test: Compare the methodologies described in the Responsible Party’s Offset Project Plan to the methodologies described in the approved quantification protocol.


Substantive test: Recalculate the emission reduction using original metered data and methods described in the approved quantification protocol.


Quantification of emission reduction

Substantive test: Recalculate the emission reduction using original metered data.



of 86

4.3 Assessment against Criteria Provide a description of how eligibility criteria is met or not met.

For Offset Project: Complete Table 1 to indicate if the GHG Assertion conforms to the Regulation and Standard for Greenhouse Gas Emission Offset Project Developers eligibility criteria.

For Facilities: Delete Table 1 and Indicate if verification criteria are met or not met and explain.

Table 4: Findings of Criteria Verification Procedures

GHG Report Element


Protocol Applicability Requirements

Functional equivalence must be demonstrated

Substantive test: Observe equipment and interview operations staff during site visit to determine level of service provided by project implementation.

During the site visits, the verification team observed the pneumatic controllers and transducers, and found that an equivalent level of service is provided by all installations.

Site staff indicated that the systems work well and reliably. Ongoing maintenance is performed during regular facility maintenance.

Manufacturer specifications indicate that the low bleed replacement devices can perform equivalent operational function when compared to the high bleed devices present in the baseline condition, further supporting functional equivalence.


Protocol is applicable to methane vent reductions; not applicable to reduction of propane or conversion from propane to methane

Substantive test: Observe equipment and interview operations staff to determine if any propane devices are, or have been, installed.

During the site visits and interviews with site personnel no propane devices were observed, and there were no indications of the use of propane.



of 86

GHG Report Element


Project must be a conversion (brownfield) or an acceptable install (greenfield)

Substantive test: Review documentation for a sample of sites that establishes eligibility according to Table 1 of the Protocol.

This aggregated project includes only high to low bleed pneumatic device conversions. Greenfield projects are not eligible for this project type.

During the site visits and desktop review of the device conversion records, the verification team confirmed that all sites were implemented as brownfield conversions, in accordance with Table 1 of the Protocol.


Pneumatic devices must be properly maintained and inspected

Control Test: Review the Responsible Party’s management system and records to determine if inspection and maintenance procedures have been implemented for all sites and have been maintained through the reporting period.

The Responsible Party has developed and documented an Annual Device Inspection Procedure. As this is the first year of the project and the devices have been in place for less than one year, annual inspections have not yet been completed. However, interviews with the Responsible Party and operations personnel indicated that ongoing maintenance and inspection programs will be performed as part of regular maintenance activities, in compliance with the documented Annual Inspection Procedure.


An inventory of devices must be maintained

Substantive test: Observe devices during site visit and compare against project inventory to evaluate completeness.

The Responsible Party maintains a comprehensive inventory list of subprojects included in the aggregated project. Installed equipment observed during site visits were compared against the Responsible Party’s inventory.



of 86

GHG Report Element


Substantive test: Review documentation supporting the record of conversion (installation/conversion date) and device specifications.

Installation Records (IRs) were reviewed for a sample of subprojects (70 records, as per the sampling plan). Device specifications and installation dates were compared between the IRs and the calculation sheets.

Four minor discrepancies were identified, related to device make/model and supply pressures, and limited to two subproject participants. These discrepancies were corrected, and the sample was expanded to include an additional 11 subprojects representing ten percent of those two operators’ subprojects. No discrepancies were detected in the expanded sample, validating the integrity of the data transfer from the field IRs to the Lukla data management system and then to the emission reduction quantification.



of 86

GHG Report Element


The project must meet the requirements of the Alberta Offset System

Substantive test: Evaluate the Responsible Party’s evidence regarding the general requirements of the Alberta Offset System.

Occurs in Alberta – All sites in the aggregated project are located within Alberta, as confirmed by project documentation.

Actions not otherwise required by law – No regulatory requirements were found to apply to the project activity for the sites in the aggregated project.

Actions taken on or after January 1, 2002 – Installation and commissioning of all devices occurred after this date, as confirmed by project documentation, installation records, and inquiries of site operations staff.

Real, demonstrable, quantifiable – The verification procedures confirmed that the emission reductions in the aggregated assertion meet these requirements. The specific verification procedures supporting this conclusion include observation during the site visits, review of supporting documentation, and the recalculation of the emission reduction.

Clearly established ownership – This project involves a number of Project Participants. Ownership is established in agency agreements with Bluesource which directly assigns offset ownership created from the subprojects to Bluesource who acts as project Proponent and developer on behalf of the project participants. Relevant excerpts from the Participation Agreements were reviewed by the Verification Team.

Counted once for compliance purposes – The project credits will be registered with the Alberta Emissions Offset Registry (AEOR). Brightspot Climate is not aware of any other systems or registries where the Project has been registered. The Responsible Party has not disclosed registration of the Project on any other system or registry.



of 86

GHG Report Element


Protocol Flexibility

Implementation of multiple pneumatic device conversions

Substantive test: Evaluate the completeness of the required data and documentation for all project sites included in the aggregated project.


Statistically relevant comparisons or emission factors may be used

Substantive Test: Recalculate the complete emission reduction using original data and methods described in the approved quantification protocol.

Emission factors derived from a statistically relevant set of field measurements was applied for one device conversion type in the aggregated project. The field measurements and determination of the emission factors were done by a third party.


Site-specific and make and model-specific emission factors may be applied

Substantive test: Assess the emission factors applied in the calculations to the preferential selection method documented in the OPP, and compare to reference values provided in the relevant reference documents.

Not applicable. Site-specific and make and model-specific emission factors were not used in the quantification.

Preferential order of methods for baseline and project activity quantification for certain project types

Substantive Test: Recalculate the complete emission reduction using original data and methods described in the approved quantification protocol.

The independent recalculation of the emission reduction resulted in the same emission reduction quantity asserted by the Responsible Party. Therefore, the approved Protocol quantification methods and preferential order of methods were applied in the Responsible Party’s emission reduction quantification.



of 86

Table 5: Offset Criteria Assessment

Offset Eligibility Criteria

Assessment

Reduction or sequestration occurs in Alberta

The aggregated project includes subprojects at locations throughout Alberta. The Aggregated Project Reporting Sheet was reviewed to confirm all locations are within the Province of Alberta.

Result from actions not required by Law at the time the action is taken

The project activity is not required by municipal, provincial or federal regulations or directives until January 1, 2023.

Result from Actions taken on or after January 1, 2002 and occur on or after January 1, 2002

All subprojects are a result of actions taken on or after January 1, 2002. The actual project start date per device will vary according to the conversion date of each unit.

Reduction or sequestrations is real and demonstrable

The emission reduction was demonstrated through measurement and estimation of data required for the quantification. The GHG information presented to the verification team included sufficient and appropriate evidence to substantiate conformance with the Protocol Applicability Requirements and to substantiate the quantification data.

Quantifiable and measurable

The emission reduction was demonstrated through measurement and estimation of data required for the quantification. This data was substantiated by sufficient and appropriate evidence. Table 3 of this report presents the findings of the evaluation of each variable required for the emission reduction quantification.

Verified by a third party verifier that meets the requirements in Part 1 for the Standard for Validation, Verification and Audit.

Brightspot Climate Inc. is an independent third-party verifier that meets the requirements outlined in Section 1 of the Standard for Validation, Verification and Audit. The Lead Verifier and Designated Signing Authority, Aaron Schroeder, is a Professional Engineer and has extensive experience quantifying and verifying greenhouse gas emissions, satisfying all sixteen subject matter areas defined in the ISO 14064-3 Standard.


of 86

4.4 Evaluation of the GHG Assertion The verification assessment is that the GHG Assertion meets the requirements of the Carbon Competitiveness Incentive Regulation

Provide an assessment of the evidence collected during the verification. Determine if the data and information available support the GHG assertion. Provide a conclusion on whether the assertion meets the materiality requirements and the level of assurance agreed to at the beginning of the verification process.

The results of each verification procedure are provided in the preceding three subsections (4.1 – 4.3). Sufficient and appropriate evidence was collected through the verification procedures to reach the verification conclusion at a reasonable level of assurance, which is provided in the Verification Statement.

The data and GHG information provided by the Responsible Party is sufficient to support the GHG assertion.

There were no unresolved material or immaterial discrepancies detected in the final GHG assertion.

4.5 Summary of Findings Provide a summary of material and immaterial discrepancies expressed in tonnes and as net and absolute error in Table 2. Include whether the discrepancy was an understatement or an overstatement.

Include a more detailed description and log of results in Appendix C the “Issues Log”. This log will include both resolved and unresolved issues from the verification. Unresolved issues should be brought forward to Table 2.


of 86

Table 6: Summary of Findings

Number the finding with the year and provide a unique # for each finding. Note: A detailed description of all material and immaterial findings should be provided in Table 3 of Appendix C. Provide only a summary statement (1-4 sentences) for each unresolved immaterial finding and each material finding (resolved or unresolved). If the finding is a resolved material finding, then put the tonnes net and absolute in the summary description column and indicate n/a in the net and absolute columns. Do not include the tonnes in the total error calculation. Indicate the type of error (qualitative or quantitative). Indicate the Source Category (for facilities) or the Source/Sink (for offsets). Indicate if the finding is an understatement or overstatement. Provide both net and absolute error in tonnes of CO2 eq and as a % of the assertion. Provide the total net error and the total absolute error in tonnes of CO2 eq and as a % of the assertion.

Result Type Summary Description of Finding Source Category or Source/Sink

Understatement / Overstatement

Tonnes CO2e % net

Tonnes CO2e % absolute

There were no material or unresolved immaterial discrepancies detected in the final GHG assertion.


of 86

4.6 Opportunity for Improvement Provide feedback on the data management system and controls, transparency, completeness of the inventory, additions to the quantification methodology document or diagrams, etc. Include positive considerations and observations also.

Identify strengths and weaknesses that may help to improve the report/s for the current facility, sector, and compliance program. Identify ways in which the project/facility could be more easily verified.

Overall, the GHG information was orderly and thoroughly presented.

The quantification spreadsheets were satisfactorily organized and sufficiently transparent to conduct the verification procedures.

Sufficient and appropriate evidence was provided by the Responsible Party to conduct each of the verification procedures.

The Offset Project Plan and Offset Project Report thoroughly document the emission sources, quantification approach, equations, data collection and information controls.

5.0 Closure 5.1 Verification Statement Include the signed verification statement in Appendix D.

Instructions to insert a pdf: 1. Click Insert>Object 2. In the Object dialog box click Create from File and then click Browse. 3. Find the pdf you want to insert then click Insert. 4.Click OK.

For Offset Projects: fill in the sample Verification Statement provided, sign, scan and paste.

For Facilities: paste a signed version of the Verification Statement from the facility compliance form. Include the conclusion on the GHG assertion and any qualification or limitations and the level of assurance.

Provide the verification conclusion in the drop down box below.

The verification conclusion is:

Positive

5.2 Limitation of Liability Include signed Conflict of Interest Checklist in Appendix E.

For Offset Projects: fill in the sample Conflict of Interest Checklist provided, sign, scan and paste.

For Facilities: paste the signed Conflict of Interest Checklist from the facility compliance form.

Insert limitation of liability statement and include information in an Appendix F if applicable.


of 86

5.3 Confirmations Document information confirmed, including any discrepancies or inconsistencies, as per the Confirmations section in the Standard for Greenhouse Gas Verification.

Section 5.1.3 of the Standard for Validation, Verification and Audit document lists nine activities that are beyond the scope of a typical greenhouse gas verification.

Table 7: Confirmation Findings

Confirmation Confirmation Finding

Correct entry of administrative fields such as facility codes and legal locations

The Offset Project Report was reviewed for completeness and accuracy. All project and legal location information is complete and accurate.

Quantification Methodology document is provided and consists of the required components

The Responsible Party has documented all relevant methodologies, procedures and controls in the Offset Project Plan and the Offset Project Report.

Simplified process flow diagrams and energy diagrams

This requirement is not applicable to this Offset Project.

Fuel usage This requirement is not applicable to Offset Projects.

Additional request items/forms are complete and reasonable justification provided where needed

The Statutory Declaration was reviewed and found to be complete.

The Aggregated Project Reporting Sheet was reviewed. Sub-projects listed on this sheet were included in the Aggregated Project Planning Sheet and accurately describe the sub-projects included in the Project.

N/A is checked on pages in the reporting form that do not apply

This requirement is not applicable to Offset Projects.

For forecasting facilities, the fund to credit ratio was met for all four reporting periods


For oil sands facilities, the area fugitive calculations are accounted for, as required


Project report information details as required The Responsible Party has prepared an Offset Project Report that meets all the requirements specified in the Standard for Greenhouse Gas Emission Offset Project Developers, Version 2.0, July 2018


of 86

6.0 References Author. Year. Title. (no hyperlinks)

No reference documents, other than the criteria documents defined in Section 2.4, were used to complete this verification.

of 86

Appendix A: Final Verification Plan and Sampling Plan


of 86

Information to be included in the Verification Plan and Sampling Plan:

Revisions to the sampling plan

Date originally sent to Facility/project

Level of assurance agreed with the facility/project developer

Verification scope

Verification criteria

Amount and type of evidence (qualitative and quantitative) necessary to achieve the agreed level of assurance

Methodologies for determining representative samples

Sampling Plan and Procedures

Risk Assessment: Risks of potential errors, omissions or misrepresentations that are identified throughout the verification process including:

- Details of site visit

-offset/facility boundaries

- Methodologies, emissions factors and conversions used

- Comparability with the approved baseline

- Conformance to the program criteria

- Integrity for the responsible party’s data management system and control (organization chart, GHGH management plan, personnel/consultant training, protocols used, control system documentation, software/program documentation/certifications)

- Greenhouse gas data and information, including the type of evidence collected, verification testing and crosschecking, inventory of emission sources

- Discussion of data management, (measurement, fuel sampling, calibration, consistent use of standard conditions, data storage, procedures to fill missing data; procedures to repair inconsistent data, adjustment of variables and factors)

- Other relevant information

+1 (604) 353-0264 • www.brightspot.co • [email protected]

Blue Source Methane ULC

Methane Reduction Program Pool Alpha Verification Plan

January 17, 2019

This page intentionally blank

Brightspot Climate Inc. – Verification Plan Blue Source Methane ULC – Methane Reduction Program Pool Alpha

i

Terminology

ISO 14064-2 defines the following terms used in the context of a GHG verification:

GHG Assertion: a declaration or factual and objective statement made by the Responsible

Party.

The Alberta Climate Change Office Standard for Validation, Verification and Audit1 extends this

definition to include the document that identifies the greenhouse gas emission reduction and/or

removals and emissions offsets being claimed by the offset project over a defined period of

time.

Project: activity or activities that alter the conditions identified in the baseline scenario which

cause greenhouse gas emission reductions or greenhouse gas removal enhancements.

The GHG Assertion subject of this verification is for the Bluesource Methane Reduction

Program Pool Alpha which will be referred to throughout this document as “the Project”.

ISO 14064-2 defines the following parties associated with the verification:

Responsible Party: person or persons responsible for the provision of the greenhouse gas

assertion and supporting GHG information.

The Responsible Party for this verification is Blue Source Methane ULC (Blue Source).

Intended User: individual or organization identified by those reporting GHG-related information

as being the one who relies on that information to make decisions.

The Intended User for this verification is the Alberta Climate Change Office (ACCO).

Verifier: competent and independent person, or persons, with the responsibility of performing

and reporting on the verification process.

The Verifier for this verification is Brightspot Climate Inc. (Brightspot Climate). The members of

the verification team are provided in section 2 of this document.

1 Standard for Validation, Verification and Audit, Version 3.0, December 2018, Alberta Climate Change Office.


1

Introduction

This document serves to communicate information between the parties associated with the

independent verification of the Offset Project Report for the Blue Source Methane Reduction Program

Pool Alpha.

This document contains six sections:

1. The Introduction, which defines the principles by which this verification will be conducted;

2. The Verification, which defines the verification parameters and the GHG inventory principles that

will be tested by the verification. This section also provides information regarding the verification

team and site visit;

3. The Responsible Party Data Management and Controls, which describes the data management

system and control environment implemented by the Responsible Party;

4. Previous GHG Assertions, which describes any modifications to the original project that have

been made since the original Offset Project Plan was developed and any findings from previous

verifications for this Project;

5. The Verification Risk Assessment and Verification Procedures, which describes the risks of

potential errors, omissions or misrepresentations to the overall GHG assertion and the

verification procedures that have been developed to reduce the overall verification risk; and

6. The Sampling Plan, which lists the verification procedures that could apply sampling of the

project data, along with the sampling size, the sampling methodology and justification.

The Responsible Party developed the Project in accordance with the requirements of the Quantification

Protocol for Greenhouse Gas Emission Reductions from Pneumatic Devices, Version 2.0, January 2017 (the Protocol).

GHG Quantification Principles

ISO 14064-2 defines six principles that are fundamental to the fair accounting and reporting of GHG

information. The verification procedures will test that these principles have been upheld through the

Responsible Party’s inventory, accounting and reporting processes.

Section 3.2 – 3.6 of ISO 14064-2 defines these principles as follows:

Accuracy: reduce bias and uncertainty as far as practical

Completeness: include all relevant emission sources

Conservativeness: use conservative assumptions, values and procedures to ensure that GHG

emission reductions or removal enhancements are not over-estimated

Consistency: enable meaningful comparisons of reported emissions (from year to year or

between facilities or between companies)

Relevance: select GHG sources, sinks and reservoirs, data and quantification methodologies

appropriate to the needs of the intended user


2

Transparency: disclose sufficient and appropriate GHG information to facilitate verification and

to allow intended users to make decisions with relative confidence


3

Verification

Verification Principles

ISO 14064-3 defines four fundamental principles to conducting a greenhouse gas verification, namely

independence, ethical conduct, fair presentation and due professional care.

Brightspot Climate has implemented processes, including mandatory training for all verification team

members, to ensure the application of these principles for this verification.

Regarding the principle of independence, Brightspot Climate conducted an assessment of threats to

independence prior to initiating this verification. No real or perceived threats to independence were

identified. Brightspot Climate will continue to monitor for threats to independence throughout the

course of this verification. A final “Conflict of Interests Checklist” will be appended to the Verification

Statement.

Verification Parameters

The verification will be conducted according to the parameters defined in the following table:

Table 1: Verification Parameters

Level of Assurance Reasonable assurance

Objectives

• issue a verification statement on whether the GHG assertion is

without material discrepancy;

• issue a verification report that provides details of the verification

activities; and

• complete the “confirmations” activities defined in the Alberta

Climate Change Office Guidance Document2, Section 5.1.3

Criteria

• Climate Change and Emissions Management Act

• Carbon Competitiveness Incentive Regulation 255/2017 with

amendments up to and including Regulation 96/2018

• Standard for Validation, Verification and Audit, Version 3.0,

December 2018

• Standard for Greenhouse Gas Emission Offset Project Developers,

Version 2.0, July 2018

• Quantification Protocol for Greenhouse Gas Emission Reductions

from Pneumatic Devices, Version 2.0, January 2017

2 Standard for Validation, Verification and Audit, Version 3.0, December 2018. Alberta Climate Change Office.


4

Scope

Project Name: Bluesource Methane Reduction Program Pool

Alpha

Geographic Boundary: All subprojects are located throughout Alberta’s

provincial boundary.

Physical Operations: Natural gas processing and compression

Pneumatic devices and controllers Emission Sources: High-to-Low Bleed Pneumatic Controller

Conversions

• B7: Vented Fuel Gas

• P7: Project Vented Gas

• P9: Fuel Extraction and Processing

IPCC GHGs Emitted: Carbon Dioxide (CO2)

Methane (CH4)

Nitrous Oxide (N2O)

Reporting Period: July 1, 2018 – December 31, 2018

Materiality Quantitative materiality threshold is 5% of asserted greenhouse gas

emission reduction.

Preliminary Verification

Schedule

Verification Kickoff Meeting January 9, 2019

Draft Verification Plan January 17, 2019

Site Visit January 22, 23 & 24, 2019

Draft Verification Report February 22, 2019

Final Verification Report March 1, 2019

Verification Team

Aaron Schroeder, P.Eng., will be the Lead Verifier and Designated Signing Authority for this verification.

His extensive experience quantifying and verifying greenhouse gas emissions satisfies all sixteen subject

matter areas defined in the ISO 14064-3.

Jeanna Brown, P.Eng., will provide analytical support to the verification team through the completion of

the verification procedures and the development of the Verification Report.

Rodrigo Cubedo, EIT will provide analytical support to the verification team through the completion of

the verification procedures and the development of the Verification Report.

Hector Sanchez, P.Eng., will conduct an independent peer review of the verification.

Additional information regarding the qualifications of the verification team will be provided in a

Statement of Qualifications, which will be appended to the Statement of Verification.


5

Site Visit Safety Requirements

Personnel conducting site visits must be clean shaven and are required to wear personal protective

equipment including CSA approved hard hat, steel toed boots, fire retardant coveralls, work gloves,

hearing protection and eye protection with side shields. A site orientation must be completed before

entering the site.


6

Responsible Party Data Management and Controls

Data Management Systems

The Methane Program Manager from Blue Source Methane ULC, as the project aggregator, has the

primary responsibility for collecting GHG information, quantifying the emission reduction and completing

required documentation.

The Responsible Party uses a 3rd party electronic data management software system to collect, record

and manage GHG information to support the emission reduction quantification. The Responsible Party

uses an Excel based calculator to perform the emission reduction calculations. Table 2, below,

describes the data measurement, estimation and data storage locations for all GHG information used

by the Responsible Party to produce the GHG inventory. The final column in this table describes the

data storage location and the path (intermediate data transfer) prior to use in the GHG inventory.

Table 2: GHG Information Data Management

Activity Data Description Measurement Type Data Storage Location / Path

Gas analysis

(% CH4 and % CO2)

Third party analysis,

annual

Third party report

>> Manual transcription

>> Blue Source calculator

Operating hours

Petrinex reports and

client records,

annual/monthly

Petrinex report / client records

>> Electronic transcription


Baseline vent rate Third party reference,

annual

Manufacturer Reference documents or

Protocol value



Project vent rate Third party reference,

annual

Manufacturer Reference documents or

Protocol value



Emission factors – natural gas

extraction and processing

Reference values,

annual

Alberta Emission Factor Handbook


>> Blue Source Calculator

Reference density of methane

and carbon dioxide at STP

conditions

Third-party reference,

annual

Third party reference value


>> Blue Source Calculator


7

Control Environment

The Responsible Party’s Offset Project Plan (OPP) describes the processes, procedures and systems

that have been designed and implemented within their quality assurance/quality control framework. The

accuracy and completeness of the documentation of the Responsible Party’s controls will be reviewed

through the course of the verification.

The following processes, procedures and systems have been employed by the Responsible Party:

• Quantification is based on direct metering and measurement.

• Data is transferred electronically between systems to reduce transcription errors.

• A fit for purpose electronic data management system has been implemented by the

Responsible Party, called “Lukla”. This system is used to collect and store all of the data

parameters to support the quantification.

• Gas composition is analyzed by a third party laboratory.

• The Responsible Party has implemented a QA/QC and senior review process to validate data,

transcription, calculations, references and methodologies.

• All quantification data is stored on the Responsible Party’s corporate server in a unique project

folder under the date it was downloaded. Electronic data is backed up by a third party service

provider.

• The Responsible Party has implemented a record retention system that meets the requirements

of the Regulation.

• The Offset Project Plan (OPP) is reviewed annually for accuracy, completeness, consistency,

relevance and transparency. The OPP documents:

• Project boundary

• Project processes

• Emission sources

• Changes made to the project since the baseline condition was established

• Activity data used to quantify emissions

• Emission quantification equations and other methods for deriving values required for the

quantification of emissions

• Emission factors and references

• Data management

• Data quality controls and procedures


8

Previous GHG Assertions

Changes to Operations and Boundaries

This is the first year that Brightspot Climate has provided verification services for the Project.

The following modifications to the original project have been made since the Offset Project Plan was

developed. Further details of each of these items are provided in the Offset Project Report.

• The crediting period start date was revised from January 2, 2018 to January 17, 2018.

• The manufacturer specified vent rate is applied in the quantification for the Fisher C1 device,

rather than the value listed in the Protocol (due to an error identified in the Protocol value).

Findings from Previous Verifications

There were no unresolved material or immaterial discrepancies noted in the previous Verification Report.


9

Verification Risk Assessment and Verification Procedures

Verification risk is defined as the risk of an incorrect verification conclusion. It can be calculated as the

product of

• The Facility’s inherent risks;

• The Responsible Party’s control risks; and

• The detection risks associated with the verifier’s verification procedures.

Inherent Risk × Control Risk × Detection Risk = Verification Risk

The verifier cannot affect the inherent risk or the control risk. Therefore, to reduce the overall verification

risk and reach the agreed level of assurance (defined in the verification scope), the verifier must design

verification procedures that reduce the detection risk.

Each inherent and control risk was provided with the risk score (high/medium/low). The risk analysis of

inherent and control risks considers both the magnitude of the activity data or inventory component on

the overall GHG assertion as well as the probability that the risk will result in a discrepancy, as assessed

by the auditor.

The Verification Risk Assessment Summary on the following pages describes the following information:

Activity Data / Inventory Component: The boundary, eligibility requirement, data component or

reporting activity being evaluated.

Inherent Risk: The verifier’s evaluation of inherent risk. Inherent risks have been categorized

according to the ISO 14064-1 principles (accuracy, completeness, consistency, relevance,

transparency)

Control Risk: A description of the Responsible Party’s controls (if any controls are applicable)

and the verifier’s evaluation of control risks.

Max Detection Risk: The maximum detection risk that can be applied and still result in an overall

verification risk that meets the agreed level of assurance.

Designed Detection Risk: The detection risk of the verification procedure that the verifier intends

to complete. Note that the designed detection risk must always be equal to or lower than the

maximum detection risk.

Verification risk: the product of the inherent, control and (designed) detection risk, as defined in

the equation above.

Important note: The verification strategy for this verification is to use substantive tests instead of control

tests wherever possible. Substantive tests are designed to focus on directly testing activity data or

inventory components and their associated inherent risks. Control tests are designed to focus on

testing the Responsible Party’s controls and if the test is successful, relying on the Responsible Party’s

control. Therefore, control tests indirectly test activity data or inventory components.

Each verification procedure listed in the following table denotes if the procedure is a substantive or

control test.


10

Table 3: Verification Risk Assessment Summary

Activity Data /

Inventory

Component

Inherent Risk Control Risk Max

Detection

Risk

Designed

Detection

Risk

Description of Verification

Procedure

Verification

Risk

PROTOCOL APPLICABILITY REQUIREMENTS

Functional

equivalence must be

demonstrated

Relevance (medium)

Level of service may

have changed

between the

baseline and project

conditions.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

Low Low Substantive test: Observe

equipment and interview

operations staff during site visit

to determine level of service

provided by project

implementation.

Low

Protocol is

applicable to

methane vent

reductions; not

applicable to

reduction of

propane or

conversion from

propane to methane

Relevance (low)

Propane devices

may have been

included in the

inventory.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

High Low Substantive test: Observe

equipment and interview

operations staff to determine if

any propane devices are, or have

been, installed.

Low


11

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Project must be a

conversion

(brownfield) or an

acceptable install

(greenfield)

Relevance (high)

Project may have

been implemented

at greenfield sites

that do not meet

protocol

requirements.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

Low Low Substantive test: Review

documentation for a sample of

sites that establishes eligibility

according to Table 1 of the

Protocol.

Low

Pneumatic devices

must be properly

maintained and

inspected

Consistency (low)

Pneumatic devices

may vent

excessively if not

properly maintained.

Control: The

Responsible Party

has ensured that

Project

Participants have

implemented

annual inspection

and maintenance

procedures as part

of regular

operations.

Control Risk:

These procedures

may not have been

implemented or

maintained at all

project sites (low).

High Medium Control Test: Review the

Responsible Party’s

management system and

records to determine if

inspection and maintenance

procedures have been

implemented for all sites and

have been maintained through

the reporting period.

Low


12

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

An inventory of

devices must be

maintained

Completeness

(medium)

The inventory of

devices may be

incomplete.

Control: The

Responsible Party

has generated an

inventory list with

data confirmation

via field visits.

Control Risk: This

inventory may be

incomplete or

contain inaccurate

data (low).

Low Low Substantive test: Observe

devices during site visit and

compare against project

inventory to evaluate

completeness.

Low

Accuracy (medium),

Completeness

(medium)

The inventory of

devices may include

incorrect data.

Control: The

Responsible Party

has implemented a

centralized data

management

system.

Control Risk: The

inputted data may

be incorrect or

incomplete (low).

Low Low Substantive test: Review

documentation supporting the

record of conversion

(installation/conversion date) and

device specifications.

Low


13

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

The project must

meet the

requirements of the

Alberta Offset

System

Relevance (high)

The project may not

have met the

requirements of the

Alberta Offset

System.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

Low Low Substantive test: Evaluate the

Responsible Party’s evidence

regarding the general

requirements of the Alberta

Offset System.

Low

PROTOCOL FLEXIBLITY

Implementation of

multiple pneumatic

device conversions

Completeness

(medium)

The project

aggregates

installations at

multiple project

sites. The data and

documentation may

not be complete for

all sites.

Control: The

Responsible Party

has implemented a

centralized data

management

system.

Control Risk: The

inputted data may

be incorrect or

incomplete (low).

Low Low Substantive test: Evaluate the

completeness of the required

data and documentation for all

project sites included in the

aggregated project.

Low


14

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Statistically relevant

comparisons or

emission factors

may be used

Accuracy (medium)

An inappropriate

emission factor may

be applied.

Control: The

Responsible Party

has only used

statistically

relevant emission

factors derived by

a third party.

Control Risk: The

emission factors

may be applied

incorrectly.

Low Low Substantive Test: Recalculate

the complete emission reduction

using original data and methods

described in the approved

quantification protocol.

Low

Site-specific and

make and model-

specific emission

factors may be

applied

Accuracy (medium)

An inappropriate

emission factor may

be applied.

Control: The

Responsible Party

has documented a

“preferential

selection”

methodology for

selecting

appropriate

emission factors.

Control Risk: The

selection process

may be

implemented

incorrectly (low).

Low Low Substantive test: Assess the

emission factors applied in the

calculations to the preferential

selection method documented in

the OPP, and compare to

reference values provided in the

relevant reference documents.

Low


15

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Preferential order of

methods for

baseline and project

activity

quantification for

certain project types

Accuracy (low)

An inappropriate

quantification

methodology may

be used.

Control: The

Performance

Standard

approach to

baseline

quantification will

be used, as

presented in

Section 2.0 of the

Protocol.

Control Risk: The

Performance

Standard

approach may not

be implemented

correctly (low).

High Low Substantive Test: Recalculate

the complete emission reduction

using original data and methods



Low


16

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

QUANTIFICATION DATA

Gas analysis

(% CH4 and % CO2)

Accuracy (low)

Reported gas

compositions may

not accurately

represent the gas

composition.

Control: Gas

analysis is

conducted by an

independent lab.

An internal

process is used to

validate results.

Control Risk:

Validation process

may not be

properly

implemented (low).

High Low Substantive test: Analyze gas

compositions for significant

fluctuations or abnormal gas

concentrations.

Low

Accuracy (low)

Reported gas

compositions may

be incorrectly

transcribed into the

emission reduction

calculation.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

High Medium Substantive test: Confirm the

accurate transcription of the gas

analyses into the emission

reduction calculation.

Low


17

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Completeness (low)

The gas

compositions may

not include a valid

gas composition for

each period at the

required frequency.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

High Low Substantive test: Review

completeness of gas

composition data.

Low

Operating hours Accuracy (medium)

Inaccurate or

incomplete

operating hours.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

Low Low Substantive test: Compare

operating hours used in

calculations with government

reported values.

Low

Device vent rates Accuracy (low)

An incorrect value

may be used in the

calculation.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

High Low Substantive test: Review and

confirm selected specified vent

rate values using recalculation

spreadsheet.

Low


18

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Medium Substantive test: Review and

confirm transcription of device

specifications from supporting

documentation (field technician

installation record) into the Lukla

data management system.

Low

Emission factors –

natural gas

extraction and

processing

Accuracy (low)

Incorrect emission

factors may be

applied in the

calculation.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

High Low Substantive test: Compare the


calculations to the values

provided in the relevant

reference documents.

Low

Reference density of

methane and

carbon dioxide at

STP conditions

Accuracy (low)

The densities of

methane and

carbon dioxide

applied in the

calculation may not

represent the

densities at STP

conditions.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.


densities of methane and carbon

dioxide applied in the

calculations to the values

provided in the relevant

reference documents.

Low


19

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

EMISSION REDUCTION QUANTIFICATION

Application of the

approved

quantification

protocol

Accuracy (medium)

The project

developer may not

have implemented

approved

quantification

methodologies or

applied additional

methodologies.

Control: The

Responsible Party

has developed an

Offset Project Plan

that is intended to

conform to the

requirements of

the approved

quantification

protocol.

Control Risk: The

protocol

requirements may

not have been

implemented

correctly (medium).

Low Low Controls test: Compare the

methodologies described in the

Responsible Party’s Offset

Project Plan to the

methodologies described in the

approved quantification protocol.

Low

Substantive test: Recalculate the

emission reduction using original

metered data and methods



Low


20

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Quantification of

emission reduction

Accuracy (medium)

Emission reduction

calculation may

contain arithmetic

errors.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.

Low Low Substantive test: Recalculate the

emission reduction using original

metered data.

Low

DATA INTEGRITY

Activity data and

emission factor data

integrity

Accuracy (medium)

Data may not have

been accurately

transferred between

electronic systems

and calculation

sheets.

Control: The

Responsible Party

uses electronic

data transfers

whenever possible

to maintain data

integrity.

Control Risk:

Electronic data

transfers may

result in errors or

may not be

available for all

data (medium).

Low Low Controls test: Analyze all activity

data for abnormal data (zeros,

missing data, values outside

range).

Low


21

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Substantive test: Recalculate the

complete emission reduction

using original data.

Low

Transcription of final

emission reduction

into Offset Project

Report

Accuracy (Low)

Final emission

reduction may not

have been

transcribed

accurately from

calculation

spreadsheets into

the Offset Project

Report.

The Responsible

Party does not

have a control

specifically

designed to

address this

inherent risk.


final emission reduction quantity

reported by the Responsible

Party to the quantity reported in

the Offset Project Report. Also,

compare these quantities to the

recalculated quantity in previous

verification procedures.

Low


22

Sampling Plan

The verification procedures that could apply sampling of the project data are listed in the following table.

The sampling size, the sampling methodology and their respective justifications are also described in the following table.

Table 4: Sampling Plan

Activity Data /

Inventory

Component

Detection

Risk

Design


Procedure

Sampling Methodology and

Justification

Sample Size

Gas analysis

(% CH4 and %

CO2)

Low Substantive test: Analyze gas

compositions for significant

fluctuations or abnormal gas

concentrations.

There is only one sample per site.

Review of full dataset has lower

detection risk than sampling.

Annual sample for each site

Medium Confirm the accurate transcription

of the gas analysis into the

emission reduction calculation.

Stratification of subproject

participants; random sampling;

discrepancies are normally

distributed

70 records in aggregated assertion

(85% confidence level, 92.5%

confidence interval; appropriate for

the defined detection risk)

If error rate is greater than 5%,

sample size will be expanded.

Low Substantive test: Review

completeness of gas composition

data.

There is only one sample per site.



Annual sample for each site


23

Activity Data /

Inventory

Component

Detection

Risk

Design


Procedure


Justification

Sample Size

Operating hours Low Substantive test: Compare

operating hours used in

calculations with government

reported values.




distributed







Device vent rates Low Substantive test: Review and

confirm selected specified vent rate

values using recalculation

spreadsheet.



All values

Medium Substantive test: Review and

confirm transcription of device

specifications from supporting

documentation (work orders,

invoices, photos, etc) into Lukla

data management system.




distributed







Emission factors –

natural gas

extraction and

processing

Low Substantive test: Compare the


calculations to the values provided

in the relevant reference

documents.



All values


24

Activity Data /

Inventory

Component

Detection

Risk

Design


Procedure


Justification

Sample Size

Reference

densities of

methane and

carbon dioxide at

STP conditions

Low Substantive test: Compare the

densities of methane and carbon

dioxide applied in the calculations

to the values provided in the

relevant reference documents.

There are only two values, to be

applied throughout the

quantification.

Two values

of 86

Appendix B: Statement of Qualifications

of 86

Statement of Qualifications Offset Report Project Name Offset Project ID

Bluesource Methane Reduction Program Pool Alpha 3215-1606

Reporting Company Legal Name Report Type Reporting Period

Blue Source Methane ULC Offset Report from

July 1, 2018 to December 31, 2018

to Signature of Third Party Verifier

I, Aaron Schroeder

(Third Party Verifier), meet or exceed the qualifications of third-party verifiers described in Section 29 of the Carbon Competitiveness Incentive Regulation.

Verifying Company Name

Brightspot Climate Inc. Per: Aaron Schroeder

Signature of Third Party Verifier Date:

Training Received Under ISO 14064 Part 3

• Greenhouse Gas Verification – ISO 14064-3, Canadian Standards Association, 2012 • Instructor – Greenhouse Gas Verification – ISO 14064-3, University of Toronto, 2015 – 2018

First Name Last Name

Aaron Schroeder Professional Designation E-mail Address Phone Number

Professional Engineer [email protected] (604) 353-0264

Lead Verifier

� Same as third party verifier??

First Name Last Name Professional Designation E-mail Address Phone Number Training Received Under ISO 14064 Part 3

February 27, 2019

of 86

Peer Reviewer First Name Last Name Hector Sanchez E-mail Address Phone Number [email protected] (416) 300-2661 Training Received Under ISO 14064 Part 3

• Greenhouse Gas Verification – ISO 14064-3, Canadian Standards Association, 2012

of 86

Appendix C: Findings and Issues

of 86

Table 8: Detailed Findings and Issues Log

Number the issue with the year and provide a unique # for the issue. If the issue resolved during the verification, indicate that in the resolution column. If the issue is not resolved during the verification, or if the issue was material (whether resolved or not) record it as a finding in Table 2 and provide a cross reference to the finding # in the resolution column. Describe the issues investigated. State the verification criteria that are not met. Provide a description of how it is not met and provide the evidence. Indicate the Source Category (for facilities) or the Source/Sink (for offsets). Indicate if the finding is an understatement or overstatement. Summarize information between verifier and client. Provide a conclusion including % discrepancy, if applicable.

Item (YR-##)

Description of the Issues Investigated During the Verification

Summary of information exchanged between Verifier and Responsible Party

Resolution Conclusion

18-01 Supporting documentation was requested for gas composition data for a number of sites.

The Responsible Party provided the requested gas composition lab analysis reports.

Resolved Resolved, no discrepancy

18-02 For a number of sites, the gas composition values (%CO2 and %CH4) were manually transcribed by the Responsible Party from lab reports into a spreadsheet.

The verifier requested a sample of gas analysis laboratory reports which the Responsible Party provided. No discrepancies were detected in the transcription of gas analysis data reviewed by the verifier.


18-03 For a number of sites, operating hours were entered manually rather than extracted from Petrinex.

The Responsible Party confirmed that these operating hours were taken from the operator’s SCADA system for facility uptime (versus well production hours).


18-04 The operating hours data for each site were compared against government reported values and/or raw data from the subproject participant’s SCADA systems. One error was identified for one of the sites.

The error was corrected by the Responsible Party. No other discrepancies were identified in the operating hours data used in the quantification.


of 86

18-05 For three subprojects, the supply pressure on the installation record was found to differ from the one used in the quantification. This affects the device vent rate.

The Responsible Party investigated and corrected these discrepancies. An expanded sample of installation records was reviewed and no further discrepancies were identified.


18-06 For one subproject, the high bleed device make/model was found to differ from the one used in the quantification. This affects the device vent rate.

The Responsible Party investigated and corrected this discrepancy. An expanded sample of installation records was reviewed and no further discrepancies were identified.


18-07 For four subprojects, the site location was recorded incorrectly on the installation records.

The Responsible Party investigated and acknowledged these discrepancies as errors in recording. An expanded sample of installation records was reviewed and no further discrepancies were identified.


of 86

Appendix D: Statement of Verification


of 86

Statement of Verification Associated SGER Submission

Offset Project Protocol Project ID #


Quantification Protocol for Greenhouse Gas Emission Reductions from Pneumatic Devices, Version 20, January 2017 3215-1606

Project Developer Serial Range Start Report Period

Blue Source Methane ULC TBD


Serial Range End

TBD

Statement of Verification

GHG Assertion

Value Units

Total Baseline Emissions 16,481 tonnes CO2e

Total Project Emissions 1,872 tonnes CO2e

Other 0 tonnes CO2e

Net Reductions 14,609 tonnes CO2e

Statement of Assertion

The Responsible Party’s GHG Assertion is comprised of the Offset Project Plan, Offset Project Report and supporting documentation.

The GHG Assertion covers the reporting period July 1, 2018 to December 31, 2018 and states an emission reduction and removal claim of 14,609 tonnes CO2e over this period.


of 86

The emission reduction and removal claim consists of 2018 vintage credits.

Responsibilities of Project Developer and Third Party Verifier

Our responsibility as the Verifier is to express an opinion as to whether the GHG Assertion is materially correct, in accordance with approved Protocol, the Carbon Competitiveness Incentive Regulation (the “Regulation”), and the Alberta Climate Change Office – Standard for Greenhouse Gas Emission Offset Project Developers, Version 2.0, July 2018.

We completed our review in accordance with the ISO 14064 Part 3: Greenhouse Gases: Specification with Guidance for the Validation and Verification of Greenhouse Gas Assertions (ISO, 2006). As such, we planned and performed our work in order to provide positive, but not absolute assurance with respect to the GHG Assertion.

The verification procedures that were performed through the course of the verification were developed based on the results of a risk assessment that was completed during the verification planning stage. These verification procedures are described in the Verification Plan. Certain verification procedures included data sampling. The sampling type, sample size and the justification for the planned sampling type and size are detailed in a Sampling Plan, which is included in the Verification Plan.

Conclusion

I believe our work provides a reasonable basis for my conclusion.

There were no unresolved misstatements in the final GHG Assertion.

Based on our review, it is my opinion at a reasonable level of assurance that the GHG Assertion is materially correct and presented fairly in accordance with the relevant criteria.

Signature of Third Party Verifier




Date:

First Name Last Name

Aaron S Schroeder

Professional Designation E-mail Address Phone Number

Professional Engineer [email protected] (604) 353-0264

February 27, 2019

of 86

Appendix E: Conflict of Interest Checklist


of 86

Conflict of Interest Checklist

Associated SGER Submission

Offset Project Protocol


Quantification Protocol for Greenhouse Gas Emission Reductions from Pneumatic Devices, Version 20, January 2017

Project Developer Report Type Report Period

Blue Source Methane ULC Offset Report


Checklist Respond either "True" or "False" to each of the following statements:

1. The relationship between my firm and this reporting company poses

unacceptable threat to or compromises the impartiality of my firm.

False

2. The finances and sources of income of my firm compromise the

impartiality of my firm.

False

3. The personnel my firm has scheduled to participate in the verification

may have an actual or potential conflict of interest.

False

4. My firm participated in some manner in the development or completion

of the associated offset submission for this reporting company.

False

5. My firm provided greenhouse gas consultancy services to this

reporting company.

False

6. My firm will use personnel that have, are, or will be engaged or

previously employed by the reporting company.

False

7. My firm will outsource the Statement of Verification for the associated

offset submission.

False

8. My firm offers products or services that pose an unacceptable risk to

impartiality.

False

Important: If you have checked "True" to any of the above, you may not fulfill the "independence" requirement for third party verifiers. Please contact Alberta Environment and Parks for further instruction. If the potential conflict of interest is a sufficient threat to impartiality (perceived or actual), or cannot be effectively managed, you Third Party Verification Report will not be acceptable to Alberta Environment and Parks.


of 86


I , Aaron Schroeder (Third Party Verifier), have personally examined and am familiar

with the information contained in this Conflict-of Interest Checklist, and can demonstrate freedom from any conflict of interest related to the reporting company for which the verification was performed. I hereby warrant that the information submitted in this Conflict-of Interest Checklist is true, accurate and complete to the best of my knowledge, and that all matters affecting the validity of this Conflict-of-Interest Checklist have been fully disclosed. Impartiality shall be monitored over the duration of the verification and any identified actual or potential conflict-of-interest situations will be communicated to AEP directly.



Signature of Third Party Verifier Date:

First Name Last Name Aaron Schroeder Professional Designation E-mail Address Phone Number Professional Engineer [email protected] (604) 353-0264

February 27, 2019

of 86

Appendix F: Supplemental Diagrams/Tables/Figures

of 86

Table 9: Supporting Documentation Reviewed

File Name Description

Project Report Form_BMRP_Pool Alpha_V1_2019-02-25_yc-executed.pdf

Offset Project Report

BluesourcePoolAlpha 3215-1606_APRS Pneumatics_v3_20190225_v2.xlsm

Aggregated Project Planning Sheet

Bluesource_Alpha ProjectPlan_v2.0_20180528_app.pdf

Offset Project Report

BMRP_Alpha RP2_Pine Cliff_v3_20190222.xlsx BMRP_Alpha RP2_Tangle Creek_v3_20190220.xlsx BMRP_Alpha_RP2_Clearview Calculator_V3_20190128.xlsx BMRP_Alpha_RP2_NAL_V3_20190215.xlsx

Emission reduction calculation worksheets

MDR spreadsheets, various Device inventories

Installation records, various Third party records indicating details of device conversions (device specification, conversion date, supply and output pressures, etc.)

Gas analysis reports, various Gas analysis laboratory reports for a sample of sites included in the aggregated project

SCADA exports, various Operating hours data exported from operators’ field data capture systems

Manufacturer bulletins, various Documentation from device manufacturer’s indicating device specifications such as vent rates.

BSM Methodologies Appendix_V4_2019-02-05.pdf

Supplementary document providing detailed explanation of the Responsible Party’s approach to quantification methodologies

01 BMRP Data QAQC Procedure 2018-10-01.pdf

Responsible Party’s information management and data QAQC procedure

160055-QMS-(D)QA-001(0~C0)_DRAKKEN QAQC policy.pdf

Third party device installer’s quality procedures

Bluesource Canada Backup Procedure_Calitso.lnk

Responsible Party’s data and file back-up procedures

Document Retention Policy v1-4_2017_08_02.pdf

Responsible Party’s document retention policy

of 86

Limitation of Liability

This report is intended for the responsible party and the intended user as defined in the attached verification report. The sole intention of the report is to verify the GHG assertion made by the responsible party named in the report and is not intended to provide assurance of any kind for any purpose other than for reporting under the GHG program as defined in the scope of the attached report.

Brightspot Climate disclaims liability for use by any other party and for any other purpose.

verification report for: prepared by: prepared for: version · bluesource methane reduction program...

Documents