New whitepaper demonstrates how China can take a world class approach to underground gas storage

By Dan Mueller and Hanling Yang 


As China replaces high-polluting coal with cleaner burning natural gas to address its air quality concerns, natural gas demand in the country has undergone rapid growth. China is charting a course to aggressively increase its underground gas storage (UGS) capacity over the next two decades.

Though UGS brings benefits to the gas supply system, including operational flexibility and efficiency, it can also bring significant risk to human health, safety and the environment. Here in the United States, we’ve seen first-hand what can happen when things go wrong with UGS. Aliso Canyon in California, where a nearly 50-year old depleted reservoir gas storage facility lost containment, leaked 100,000 tonnes of methane over four months and forced the evacuation of 11,000 residents from an adjacent neighborhood.

As China draws upon leading technical and regulatory guidance addressing UGS facilities, it is critical that it develop and institute a management framework throughout all phases of UGS operation, from planning and construction through operation and, ultimately, closure.

In an effort to provide a vision of UGS management best practices, EDF is releasing Underground Gas Storage in China: Developing a World Class Program, a whitepaper outlining a management framework that works in concert with existing leading technical practices and provides insight into how technical excellence, regulatory oversight, and internal procedures and culture interact to reduce and manage risks to health, safety and the environment. Properly developed and deployed, the framework outlined in this paper will help protect against a broad spectrum of vulnerabilities related to UGS.

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The framework is organized around four cornerstones:

Cornerstone 1 – Proper risk management

A comprehensive risk management program provides a foundation for designing, implementing, monitoring, reviewing and continually improving the management of uncertainty inherent to any operation. At a minimum, the program should address operational accountability and responsibility, key performance indicators (KPIs), identify and allocate sufficient resources, provide the training and skills necessary to achieve organizational performance goals and include social and corporate responsibility and accountability. Successful risk management programs are established jointly by organizational executives and staff, and its mandate must be understood, accepted and executed at all levels of the organization.

Cornerstone 2 – A health, safety and environment (HSE) management system

An HSE management system is a systematic approach and set of principles, working in parallel with a risk management program, by which an organization efficiently manages risk with respect to industrial health and hygiene, the safety of its employees, contractors and public, and the integrity of the environment within which it operates. Our whitepaper outlines seven elements that should be included in a strong HSE management system; hazard analysis, incident investigation, emergency preparedness and response, training, contractor management, management review and management of change, and document and data control/management and retention.

Cornerstone 3 – Technically competent operations

A sound UGS management system mandates excellence in technical execution for all four stages of the facility’s lifespan: planning and designing, construction, operation, and closure.
For each phase, vendors, partners, practices and activities must be vetted through the risk management program (Cornerstone 1) and performed in a manner that adheres to all aspects of the organization’s HSE management system (Cornerstone 2). The whitepaper examines each of these phases in detail and provides specific recommendations for what criteria should be included.

Cornerstone 4 – Informed and enforceable regulations

In addition to robust internal management as outlined in the first three cornerstones, the fourth cornerstone of a world class UGS program is informed and enforceable regulations. For a regulatory program to be successful, it must be universally understood, adopted, and enforceable. Rules only work if everyone knows them and someone checks that they are followed. Organizations should foster an environment wherein employees and vendors want to follow the rules, as opposed to having to follow them. Indeed, establishing a culture of voluntary and cooperative compliance is a key predictor of success.

For external regulatory bodies, creating a cooperative relationship with companies and demonstrating consistent and fair enforcement helps foster trust in and compliance with the rules and overall regulatory processes.

With China initiating a wave of UGS projects, the importance developing and instituting a world class UGS program is paramount. If faithfully developed and executed in China, a framework that includes these four cornerstones will reduce accidents, enhance public health and safety, provide cost and operational efficiencies, significantly reduce uncertainty, protect the environment through reduced methane emissions and prevention of pollution of surface and subsurface water systems, prevent waste, conserve natural resources, and fulfill broad energy policies.

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