Post on 09-May-2015
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SUSTAINABLE WATER AND ENERGY SOLUTIONSBLACK & VEATCH CORP.STEVE TARALLO
SUSTAINABLE SOLUTIONS FOR OIL & GAS PRODUCED WATER
24 Ju
ne 2
013
AGENDA• Dealing with Oil & Gas Produced Water:
Now vs. Then• Fresh Look at Collaborative vs. Singular
Wastewater Solutions• Earlier Barriers to Collaborative
Wastewater Solutions are Starting to Ease• Recent Developments Offer a New Forward
Look for Wastewater Handling
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1. Oil & gas development no longer is “remote”
• Fields are being developed in more heavily populated areas
• Need to mitigate tensions between economic growth and residential life
DEALING WITH OIL & GAS PRODUCED WATER: NOW VS. THEN
24 June 2013
Produced water is not invisible to modern stakeholders - as it might have been 60 years ago
Upper photo: Preparing well site on Daniel Mast's Newcomb Road farm in Parkman Township, Ohio, 2011.http://www.geaugamapleleaf.com/freestory/lack-of-gas-ol-well-driling-control-concerns-commissioners-12-8
Lower photo: Postcard of Amarillo, Texas, ca. 1930s.http://www.allacrosstexas.com/uncovered-texas-postcard-detail?image=OilWell.jpg&city=Amarillo
Then …
Now …
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2. Water no longer can be considered “cheap”
• The natural supply of drinkable water is limited and is in demand by a growing population
• Droughts are impacting sensitive regions, including shale oil & gas developments
DEALING WITH OIL & GAS PRODUCED WATER: NOW VS. THEN
24 June 2013
Produced water must be considered in the context of overall water supply and economics for multiple users
Upper image: Water auction prices before and after Eagle Ford shale oil & gas development, south Texas.http://fuelfix.com/blog/2013/06/16/fracking-fuels-water-fights-in-nations-dry-spots/
Lower image: Three shale oil & gas plays encountering drought conditions.http://www.droughtmonitor.unl.edu/
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3. Disposal of wastewater through underground injection no longer is a “given”
• Geology is not supportive everywhere
• Public concerns about environmental consequences
• Questions about possibilities for re-use – why throw it away forever?
DEALING WITH OIL & GAS PRODUCED WATER: NOW VS. THEN
24 June 2013
Underground injection of wastewater cannot be done everywhere and the issue now is … should it be done
Upper image: Unusual earthquake activity surrounding oil & gas wastewater disposal wells in Ohio.http://thinkprogress.org/wp-content/uploads/2012/01/cnnaerialearthquake.jpg/
Lower image: Pictorial simulation of progressive treatment of oil & gas produced “graywater”.http://www.spe.org/industry/docs/reusingwater.pdf
Produced
Treated for Re-Use
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• Traditional approach to handling produced water emphasized singular solutions• Each producer
implemented an individual solution• Injection well
(conventional oil & gas)• Water treatment
modules delivered to the well pad (shale gas)
• Water recycling within a single producer portfolio
FRESH LOOK AT COLLABORATIVE VS. SINGULAR WASTEWATER SOLUTIONS
24 June 2013
Emphasis on fastest solution available to an individual portfolio – almost always a singular fix
Producer A
Injection Well 1
Producer B
Injection Well 2
Producer C
Modular Water
Treatment at Wellpad 3
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• Sustainable approach must consider collaborative solutions• Several producers in the
same play cooperate in centralized solutions• Shared wastewater
treatment facility connecting multiple wellpads
• Efforts toward beneficial re-use of treated wastewater
FRESH LOOK AT COLLABORATIVE VS. SINGULAR WASTEWATER SOLUTIONS
24 June 2013
Efficiencies of scale can offer advantages both in cost control and regulatory compliance
Producer A
Producer B
Producer C
Disposal | Re-Use
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• Mergers & acquisitions provide operational streamlining• Some independent producers now are part of
majors (XTO/ExxonMobil, Petrohawk/BHP Billiton)• Larger water infrastructure investments now are
more feasible• State regulatory changes are encouraging
recycling & re-use which favor collaboration• Lightening of liabilities formerly associated with
“pooled” wastewater reduces risks of shared solutions
• Ad hoc water markets in resource plays provide transparency needed for collaboration• Water auction bid/ask activity create benchmarks
for “market value” of water operations
EARLIER BARRIERS TO COLLABORATIVE WASTEWATER SOLUTIONS ARE STARTING TO EASE
24 June 2013
Collaborative solutions are more compelling in 2013 than they were in 2007-2008
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• Pennsylvania• Beginning 2007, in absence of disposal wells, wastewater
from Marcellus development was trucked to Ohio for underground injection
• Since 2011, wastewater must be reused and recycled, or collected and treated at an authorized wastewater treatment facility• State approval is required before the receiving treatment facility
can accept the wastewater for processing and/or disposal• Modular treatment at wellpads became popular as a way
around insufficient capacity at fixed treatment facilities• State now an excellent candidate for more centralized
treatment facilities designed to accommodate high-TDS wastewater from multiple oil & gas developers
RECENT DEVELOPMENTS OFFER A NEW FORWARD LOOK FOR WASTEWATER HANDLING
24 June 2013
Regulatory requirement for recycling provides a motivation for collaborative solutions – economy of scale
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• Texas• Since the 1900s, abundant disposal wells have been the
default solution for wastewater – now including the Barnett, Eagle Ford and Permian Basin developments• Disposal wells operated by individual developers• Commercial disposal wells used by multiple developers
• In March 2013, State rules for wastewater recycling were amended to make collaborative recycling solutions easier• Recycle defined as “To process and/or use or re-use oil and gas
wastes as a product for which there is a legitimate commercial use and the actual use of the recyclable product.”
• Waives recycling permit if operators are recycling fluid on their own leases or transferring their fluids to another operator’s lease for recycling
• Centralized Commercial Solid Oil and Gas Waste Recycling is defined as a specific option
RECENT DEVELOPMENTS OFFER A NEW FORWARD LOOK FOR WASTEWATER HANDLING
24 June 2013
Lowering of regulatory hurdles encourages developers to cooperate and move toward centralized solutions
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• Summary• Sustainable solutions for oil & gas produced water are more
important than ever• Disposal wells no longer can be considered the universal
solution• Situationally useful but geologically not feasible everywhere• Permanently removes water from the hydrologic cycle• Some bothersome side effects (i.e., earthquakes)
• Modular treatment at individual wellpads is not a long-term solution• Situationally useful but challenged with high volumes in large
developments• Regulatory progress at the State level is recognizing the
importance of recycling and the value of having centralized solutions
RECENT DEVELOPMENTS OFFER A NEW FORWARD LOOK FOR WASTEWATER HANDLING
24 June 2013
The time is right to explore ways to facilitate collaborative wastewater solutions among multiple developers