Exclusive Content
29 Jan 2016

TeQ Shield Offers Improved Monitoring for Safer Workers

Confined-space work is one of the most challenging aspects of a maintenance project. According to the US Department of Labor, 481 fatalities occurred between 2005 and 2009. That is approximately one fatality every 4 days.

This considerable level of danger calls for extra safety measures such as constant visual and bio monitoring to ensure that incidents are managed effectively and prevented where possible.

TeQ Shield Guardian

TeQ Shield Guardian.

Launched by United Safety, TeQ Shield is an innovative technology designed to do just that. It combines gas detection, video surveillance, two-way communication, access control, permitting, quality control and assurance, personnel temperature control, and bio monitoring.

“Previously, we operated confined-space work with what you would call a blind side. The safety attendant is restricted to the outside of the vessel. Inside, accidents can occur if potential hazards such as fire, elevated temperatures, gas, fumes, vapor, or lack of oxygen are not properly managed. There was also no way to communicate directly with the workers inside,” said Sher Alizander, United Safety’s technical services manager.

With TeQ Shield Guardian, the safety operator monitors all confined-space work and gas levels, controls worker access information, and can communicate with personnel outside and inside the vessels. The TeQ Shield has a host of features, including cameras with day/night vision, two-way communication, video recorded along with gas-detection logs, and data that can be used for training or investigations.

Aside from the TeQ Shield Guardian, two other components of the TeQ Shield are the Bio and Therma. The TeQ Shield Bio is a system that can monitor vitals such as heart rate, breathing rate, and core body temperature of up to 64 workers simultaneously, thus giving operators real-time updates on the internal health of the workforce. The device can be worn conveniently by workers inside their coveralls to monitor their body functions. The device comes with rechargeable batteries that last up to 26 hours. Basic red, orange, and green alerts indicate when a worker needs attention. “If there’s an alert on a worker’s vitals, the system raises a clear warning signal for managers to take appropriate action before any incident can occur. Immediate actions can be taken to ensure that the worker gets the appropriate medical attention and support required,” said Elie Daher, executive vice president and chief marketing officer at United Safety.

TeQ Shield Therma, on the other hand, is an innovative temperature-control system based on compressed-air technology. Designed with worker safety and comfort in mind, TeQ Shield Therma vests can keep workers either cool or warm depending on their environmental needs. In hot temperatures, this prevents heat stress, while, in cold temperatures, it protects from hypothermia. In both situations, it results in safer workers with increased worker time on tools.

“The oil price crisis may have brought down profits in the oil and gas industry, but it has intensified the drive to innovate and bring cost-efficient technologies to the market. By monitoring a worker’s actual physiological state, innovations such as these can effectively prevent workplace injuries such as heat stress and heat stroke while increasing productivity,” Daher said.

Find more information on TeQ Shield here.

Read more about United Safety here.

 

 

18 Jan 2016

Panelist: Project Planning Must Consider Above-Ground Risks

In December 2015, HSE Now initiated a series of articles highlighting presentations from a panel of global experts at the 2015 SPE Annual Technical Conference and Exhibition in Houston, wherein the experts shared their perspectives on a topic of increasing strategic importance to the society’s global members: sustainable development. Titled “Value Preservation: Sustainability and Management of Above-Ground Risk,” the session was led by Alex James, global sustainability manager at Halliburton, and introduced by Helge Hove Haldorsen of Statoil, 2015 SPE president. The panelists were RoseAnne Franco of Verisk Maplecroft/Wood Mackenzie, Michael Oxman of Acorn International, Dan Domeracki of Schlumberger, and Alex Hohmann of Anadarko.

image002The first article featured remarks by Franco, director for oil and gas risk at Verisk Maplecroft, who addressed how gaining an understanding of holistic risks was critical for sound risk management. The next featured panelist is Michael Oxman. Oxman is a partner at Acorn International, where he helps clients achieve and preserve value through management of above-ground risk. He specializes in social performance, local content, reporting, and alignment with key international extractive industry good practices and standards. Oxman formerly was the director of energy and mining at BSR and has extensive economic and commercial experience through prior roles at Chevron, Price Waterhouse, and the Overseas Private Investment Corporation. He holds two masters degrees, in international affairs and business, from Columbia University and Rice University, respectively.

In his presentation, Oxman discusses recommendations and challenges associated with the application of sustainability principles across the asset life cycle.


Michael Oxman, Acorn International

  • In contrast to above-ground issues, technical risks (subsurface and facilities) are routinely analyzed with the support of advanced tools, techniques, and protocols.
  • Above-ground risks receive proportionately less attention and fewer resources devoted to understanding impacts on commercial planning and value realization.
  • Local knowledge of community and of site-specific social dynamics is not fully integrated into business planning and risk management.
    AGR_Fig1

    Fig. 1

    (Fig. 1 offers an example of a project that properly invested significant time and energy in government relations but did not adequately map key local stakeholders to understand potential impacts on project approvals.)

As a result of the preceding points, project schedules and forecasted budgets are often optimistic (at least in part because of not adequately factoring in political, commercial, social, or environmental risk). See Fig. 2.

Fig. 2

Fig. 2

  • Optimistic schedules and budgets create pressures on project managers that, in turn, may force reactive, under-resourced, or “siloed” actions between functions or departments, thereby exacerbating the original challenge or problem.
  • As a consequence of these (and other) factors, cost/schedule overruns and net present value underperformance frequently characterize project outcomes.

While many of the preceding challenges remain today, there has been visible progress over the last decade in managing above-ground risk.

  • Evidence of above-ground risk impacts on commercial value is clearer, both qualitatively and quantitatively [e.g., International Finance Corporation and other cost/benefit estimates of community consultation value in both oil/gas and mining (www.fvtool.com/case-studies)].
  • Technology and communication support company innovation in above-ground risk management and engagement (at the same time, however, communication platforms also “raise the bar” on above-ground risk performance as stakeholders with different perspectives or in opposition to industry developments can connect more readily than ever before).
  • Availability of resources, guidelines, experts, and standards for assessing and managing above-ground risks as they pertain to capital and operating projects has steadily increased.
  • Tools and processes [e.g., decision quality frameworks, multidisciplinary expert teams, assurance protocols [see the Acorn International EHSS Assurance Tool for an example (www.acornintl.net/ehss_assurance.html)] for assessing and integrating above ground risks into project economics and risk management have advanced significantly (though they remain underdeveloped relative to technical issues).
  • Increased pressure on localizing benefits (e.g., local content via jobs, economic multiplier impacts, community investments, and capacity building) is pervasive and has resulted in greater company human resource investments at the local level focused on social and environmental performance.
AGR_Fig3

Fig. 3

Fig. 3 summarizes these trends with specific examples.

These trends have led to more robust management frameworks to identify, mitigate, manage, and monitor above-ground risks and their underlying root causes. A simplified example of such a framework may be found in Fig. 4 (reading from bottom up, starting with impact management and leading to contributions and benefits). For effective risk management, all three of these elements are equally important; one without the other creates unanticipated risks (e.g., failure to effectively mitigate or communicate actual or perceived environmental or social impacts compromises otherwise promising benefit “levers” that might help secure social or legal license to operate; similarly, failure to demonstrate benefits may result in a lack of project support despite strong impact management).

AGR_Fig4

Fig. 4

In years past, it was a commonly held view that planning for above-ground risks was impractical because they were so uncertain or difficult to anticipate. Fortunately, this view has changed substantially, and companies now use frameworks that have been tested in other arenas (e.g., Plan, Do, Check, Act) to manage above-ground risks.  Examples include

  • Scoping and screening tools (Fig. 5) to identify key issues efficiently and early in the life cycle

    AGR_Fig5

    Fig. 5

  • Formal social and environmental impact assessments to detail and communicate impacts and benefits, as well as environmental and social management plans to mitigate impacts and enhance benefits
  • Stakeholder/community engagement approaches and strategies that ensure disclosure and communication to mitigate overall risk
  • Tested local content and social investment approaches that establish clear baselines for developing objectives and measuring progress on benefits delivery
AGR_Fig6

Fig. 6

Building on early risk identification and management, the IFC Performance Standards (Fig. 6) have helped oil/gas and mining companies tailor their own management systems through a checklist of recurring extractives-related issue categories, as well as an overall process for identifying, managing, and mitigating these above-ground risk topics.

Other tools, standards, and guidance documents are increasingly available from industry associations such as IPIECA as well as the International Council on Metals and Mining. These toolkits help to formalize the management of above-ground risks in a manner that saves time, effort, and value over the long term. (Fig. 7 is a sample publication from IPIECA on grievance mechanism design and implementation.)

Fig. 7

Fig. 7

In summary, while substantial progress has been made in the identification and management of above-ground risks, the bar continues to rise as key stakeholders, such as host governments, nongovernmental organizations, and local communities, readily connect on perceived/actual project impacts as well as on benefit expectations. The current commodity price downturn and corresponding budget/staff consolidations up the ante even further as local stakeholders see reduced benefits (e.g., lower taxes and royalties and fewer investments in local economy), and companies are left with fewer resources with which to manage above-ground risks.

In 2016, successful above-ground risk management will be fostered by companies that are able to balance these challenges by

  • Dedicating requisite competencies efficiently through technology and multidisciplinary teams
  • Incorporating local knowledge and insights early and regularly
  • Anticipating changes in risk factors throughout different stages of the project life cycle
  • Integrating internal and external best practices and standards into decision making
  • Broadening engagement beyond regulatory requirements to establish early warning and develop key stakeholder relationships

Questions or comments about this article may be emailed to Michael Oxman.

Watch the full presentation here:

 

14 Jan 2016

Growing Expectations Prompt New Edition of Guidance for Sustainability Reporting

Louise Tyson, Head of Corporate Reporting, BP
Mark Granquist, Corporate Safety, Health, and Environment Reporting and Analysis Advisor, ExxonMobil

This year, IPIECA, the global oil and gas industry association for environmental and social issues; the American Petroleum Institute (API); and the International Association of Oil and Gas Producers (IOGP) released the third edition of the Oil and Gas Industry Guidance on Voluntary Sustainability Reporting. What follows are questions and answer about the new edition, why it was necessary, and what is new in it.

Panel Members

As a result, a cross-company task force was set up and the external stakeholder panel that had been involved with the development of the 2010 edition of the Guidance was re-engaged. After discussion with the panel and input from industry specialists and technical groups in IPIECA, API, and IOGP, it became very clear that the scale of the proposed changes justified undertaking a new edition of the Guidance and not just an update. The outcome was a 2-plus-year effort involving experts from across the IPIECA, API, and IOGP membership, which represent more than 60% of global oil and gas productions.

What were the overall objectives for updating the Guidance?
Primarily, the task force wanted to ensure that the guidance provided to the oil and gas industry was reflecting the most recent international, regional, or national guidelines relevant to reporting. These include the UN Guiding Principles on Business and Human Rights, the Intergovernmental Panel on Climate Change’s fourth and fifth assessment reports on climate-change risks, and the Global Reporting Initiative’s (GRI’s) G4 Guidelines, together with alignment improvements in areas such as fresh water, biodiversity, cultural heritage, facility decommissioning, process safety, and transparency of payments to governments.

The task force also wanted to provide guidance that focused on issues, not just indicators. It could be seen that the industry’s stakeholders were looking for more strategic and forward-looking reporting, as well as more transparency on management systems, impacts, and performance. Significant effort was put into this new aspect of the Guidance, and it will be interesting to see how it affects reporting.

It was important to ensure that companies covered the breadth of issues and effects related to their activities, such as nonconventional energy sources, the supply chain, and other indirect or lifecycle factors. Users will see further guidance on reporting across the value chain in the new edition.

Furthermore, materiality has been a key part of the evolving external standards. Therefore, this Guidance goes into more depth about the process for companies to determine what the issues of the most strategic importance and greatest impact are. More detail has also been provided on how to give these issues appropriate attention and prominence in reporting.

Finally, it was important to keep the same structure as the 2010 edition. This would encourage companies to strengthen their reporting practices and not focus their efforts on responding to ever-changing approaches as has been seen from some of the external frameworks. This continuity also allows stakeholders to follow a company’s progress over time.

What is new about the 2015 Guidance?
The 2015 edition of the Guidance is unique in that it provides both the background building blocks of good process in reporting as well as a set of issues and indicators that can be incorporated by any level of reporter. This reflects the different degrees of experience in sustainability reporting and practice within the industry. The importance of the engagement process for sustainability reporting has been emphasized, encouraging companies to report on those issues most important to their stakeholders.

Changes Summary

The Guidance focuses on 12 broad issues that are likely to be important for oil and gas companies and, therefore, have higher priority in terms of materiality for reporting. In the 2015 edition, water was separated out as an issue in its own right.

In order to encourage consistency of reporting, each issue is provided with guidance and one or more supporting performance indicators. A new indicator was added on decommissioning, and many of the existing indicators were improved.

The Guidance continues to take a three-tiered approach; each indicator has three levels of reporting—common, supplemental, and other—which allow for differences in materiality and reporting maturity for individual companies. With the 2015 edition, several of the indicators were upgraded from “other” to “supplemental” or from “supplemental” to “common.” The opportunity was also taken to further ensure increased alignment of the indicators to international industry standards and expected norms, as well as to issue-specific international guidelines.

What are the benefits of sustainability reporting?
Reporting can bring companies recognizable business benefits. Through communication on its most important sustainability issues, a company’s report becomes a reliable source of information for its stakeholders. By transparently describing its biggest challenges, reporting underpins stakeholder engagement and represents the company’s values in action.

For oil and gas companies, reporting provides a robust platform for describing how strategic issues—such as climate change and energy—are being addressed through long-term plans and current initiatives. For example, the report can explain how the company is managing the social and economic effects or environmental, health, and safety risks of operating in different locations. Once published, this information enables further communication and engagement with stakeholders. In the longer term, the benefits can provide:

  • Enhanced business value as investor confidence grows in response to evidence that the company is managing important risks and positioning itself to take advantage of emerging opportunities
  • Improved operations as employees develop a deeper understanding of a company’s sustainability values and performance indicators provide insight to support continuous improvement
  • Strengthened relationships as local community leaders, civil society representatives, government officials and regulators, and other key stakeholders learn how the company responsibly manages sustainability issues
  • Enhanced trust and credibility as customers, suppliers, and the wider society understand the company’s brand, operations, and products
  • Using an external framework to structure their reporting, such as the industry reporting guidance, or indeed those provided by the Global Reporting Initiative, allows companies to develop reliable, relevant, and comprehensive information to help inform key business decisions and communicate with external stakeholders.

I am a new reporter. How do I get started?
The 2015 Industry Guidance features front sections that set the strategic context for reporting, providing the foundation for good practice through sound principles and describing a six-step reporting process. The Guidance has been specifically developed to offer comprehensive guidance for mature reporters while imparting practical help to those just getting started.

The design of the Guidance encourages new reporters by presenting mechanisms for determining their relevant issues and impacts and then provides scalability on performance indicator reporting by offering various reporting elements depending on the level of company sophistication and maturity of data systems. Companies are encouraged to use a stepwise process for reporting by

  • Setting the context for the report by outlining the company’s high-level vision and strategy together with governance and management systems
  • Determining the most important topics that will have prominence in the report, using the concept of materiality to identify the complete set of issues and impacts of relevance to both the company and its stakeholders
  • Establishing relevant indicators and collecting complete, accurate data within the company’s reporting boundary for incorporation into the narrative

The objective of each step is to build a transparent and concise report as part of stakeholder engagement. The process helps the company to describe its strategic intent, management approach, and current performance on all important issues and impacts while avoiding unnecessary and time-consuming reporting of extraneous text and data, which can obscure relevant information.

Further Information
You can download the Guidance here and can learn more about this emerging domain at the SPE Sustainable Development Technical Section website and at the 2016 SPE International Conference and Exhibition on Health, Safety, Security, Environment, and Social Responsibility in Stavanger, where one of the four sustainability panels will address the topics of reporting and disclosure in relation to sustainability performance.

Please contact the IPIECA Secretariat if you have any questions relating to use of the Guidance.

12 Jan 2016

Sustainability Solutions Central to Operational Risk Management Strategies

Change is constant in the midstream and upstream oil and gas industry, and with change comes an increase in operational risk. As companies acquire and develop assets around the world, they must reduce their risk exposure by improving operational integrity, an expert said.

image002In a webinar, “Increasing Operational Integrity Through Optimal Processes and Systems Integration,” Chelsea Lackey discussed how health, safety, and environment (HSE) planning helps drive an organization’s operational risk management strategy. Lackey is a leader of corporate HSE analytics and systems at Anadarko. The webinar was hosted by the SPE Health, Safety, Security, Environment, and Social Responsibility (HSSE-SR) Study Group.

Lackey divided Anadarko’s approach to operational risk management into three groups: people, process/data, and technology. Each group presents its own set of challenges. Lackey said that, while the company strives to have people engaged in each local community in which it operates, the information and data they need to communicate with their communities are spread across many business units with varying availability. The groups’ roles within the organization, and their responsibilities in using HSE information are unclear, as is the definition of accountability for the data.

She said the processes for capturing, entering, using, and managing HSE data are informal and inconsistent and that the hierarchies and master data sources are inconsistent. One way to improve these processes is to standardize the terminology that companies use in interdepartmental communications. Lackey said the confusion caused by using interchangeable terms can dilute a company’s message, citing an example of an information technology (IT) employee and an HSE employee using the word “report” in different contexts within a conversation.

“The IT person is overhearing queries and thinking they’re building some database, and the HSE person’s thinking about some regulatory framework. They’re using the exact same word, but what they never picked up on in the conversation is that it had two different meanings, and they never got to an end result. We need to standardize language, make it transparent, and ensure and validate that the other person is truly on the same playing field,” Lackey said.

Technological developments also may face a consistency problem. Lackey said information systems are poorly leveraged across regions and both the acquisitions of software for compiling HSE data and the requests made by HSE groups are disjointed. Companies must account for the hidden costs of managing new technology.

She said that technology is only as useful as the processes a company develops to utilize it and that it is important for new technology to help companies acquire HSE data and understand the trends in the data.

“You can have the best technology, but if no one uses it, or if it’s too complicated for the end user, the technology just sits there,” Lackey said. “So how do we, as an organization, bridge that? We have geologists. We have scientists. We have engineers. We are an industry that thrives on technology. But now we have to take that technology and turn it into value.”

Lackey said a primary goal for any company’s operational risk management strategy is to develop a central enterprise resource planning (ERP) system that incorporates operational data. The system should allow for flexible data reporting so that any department can use it for its needs.

Anadarko’s proposed ERP system would use data and analytics reporting to connect its worldwide business to its accounting, asset management, human capital management, procurement, HSE, and regulatory systems. However, Lackey said each company should tailor its system design to its specific needs.

“The frame of the question changes the deliverable, so understanding the demands of your organization and the different ways in which you need to see your data establishes that framework to get it into a central system,” she said.

7 Jan 2016

Training, Procedures Essential to Cybersecurity Efforts

More than 45% of energy organizations fell victim to a cyberattack in 2014, a higher percentage than in any other corporate sector. With the industry facing constant hacking threats, companies must place a greater emphasis on developing strong cybersecurity strategies, an expert said.

In a presentation, “The Rising Threat—Guarding Against the New Generation of Cyberattacks,” hosted by the SPE Gulf Coast Section, Mario Chiock discussed the key elements of cybersecurity and outlined steps companies can take to reduce potential exposure to cyberattacks. Chiock is a security and technology executive adviser at Schlumberger.

Chiock said a major problem energy companies face is a lack of fragmentation in their enterprise resource planning (ERP) systems. Most ERP systems are connected either to a cloud computing network or mobile devices, leaving significant holes in their firewalls.

With no fragmentation, hackers can access an entire network through one outlet, and oftentimes that outlet is a phishing email. Most major cyberattacks begin with a hacker phishing employees for information such as logins and passwords. Chiock said Schlumberger regularly sends phishing emails to its employees to help raise awareness of the issue. However, even the most diligent companies can have their networks compromised by a single successful phishing attempt.

“All it really takes is one person clicking on something to start an attack,” Chiock said. “[At Schlumberger], we phish our employees once per quarter, and sometimes we think we’re going in the right direction. But all we have to do is change the phishing email and then [the number of breaches] go up again.”

Cloud infrastructures offer benefits and disadvantages. Chiock said storing data in the cloud is safer for companies than storing data on their own servers, but the risk for a security breach is higher because the servers are hosted to the Internet. An additional concern with companies looking to migrate to a cloud infrastructure is that they will likely assume financial responsibility for any data lost on its servers in a breach. Most cloud providers, he said, are only responsible for protecting their own servers and not that of their clients.

“When you do things in the cloud, the people who sell you cloud services will promise you everything. They’ll tell you that they’re going to be responsible for handling security. In reality, they’re responsible for the security of their infrastructure and their data, not for the infrastructure of your application,” Chiock said.

Combating cyberthreats is not just a matter of finding a technological solution. Chiock said it is important to promote a culture of responsibility and accountability. Employee training is one step in promoting such a culture, as is the development of policies and standards that can be audited, enforced, and measured. Additionally, companies must constantly update their cybersecurity policies to account for new threats.

“We cannot just have policies and standards that are 10 years old and expect them to protect us today. There is a lot of new technology that opens up holes into our networks, and we need to make sure our policies get updated to protect us,” Chiock said.

While the establishment of proper policies and procedures is important, technology should still play a significant role in cybersecurity. Chiock suggested that companies acquire next-generation security software and automate its protocol in handling cyberattacks. He said hackers will often target companies after hours and a quick response is critical.

“When you start getting information intel, if it needs to go to a human and that human needs to make a decision, by that point it’s too late. We cannot do that anymore. If there is [intelligence] in the middle of the night, I want it fixed by the time I wake up. All it takes is a little window of opportunity for the bad guys to get in,” Chiock said.

Machine learning, or the development of computer programs that can teach themselves to adapt to new data, is a strategy that has already taken hold in the technology industry. Chiock said Schlumberger develops such programs to help detect false positives in its security systems. But, he said, the technology is still not mature enough to use as the basis of a security strategy.

“I think [machine learning] is the future, but I’m also a big believer that there is no silver bullet that fixes everything. You have to create a strategy, and, based on your strategy and your needs, you have to use multiple tools and technologies to resolve specific issues,” Chiock said.

7 Jan 2016

Guest Editorial: Treating Produced Water With Understanding

The American Petroleum Institute estimates that oil and gas exploration and production in the US generates approximately 20 billion bbl of produced water annually. And, because the production life of wells is usually advanced, the ratio of barrels of produced water to hydrocarbons recovered can be as high as 9:1.

Accordingly, in the past several decades, produced water has become the largest byproduct in the oil and gas industry. Managing all this produced water includes injecting the water into the formation to maintain formation pressure, thereby increasing hydrocarbon production, or disposing of the water in deep wells. Before the water can be injected, disposed of, or discharged offshore, it is necessary to remove oil, suspended solids, or both to protect formation rheology or to meet discharge regulations.

If you ask an experienced produced water process engineer working in the oil and gas industry—they are getting harder to find these days—how to treat produced water, be prepared to answer a lot of questions. And, these are likely to be on a range of topics such as local operating conditions, characteristics of the produced water, water treatment requirements, and available treating options. It is also important to understand that produced water contains chemical characteristics of the formation and its associated hydrocarbons. Plus, the properties of produced water and its volume vary considerably depending on the location of the field, its geologic formation, the type of hydrocarbon product being produced, and the reservoir’s age.

Fig. 1—A water process engineer’s initial approach to produced water treatment applications and options.

For those new to produced water, the information in Fig. 1 can be overwhelming. But for produced water experts, it is the basis for developing an effective and efficient produced water treatment strategy.

While an initial analysis could begin with a number of variables, contaminants in the water and the water quality requirements determine the treatment process. Contaminants are generally categorized into three types: suspended oil droplets/particles, dissolved organics and inorganics, and biological matter.

Free Oil and Suspended Solids
Free oil and suspended solids represent the most common challenges to treating produced water. For offshore discharge, oil removal is necessary to meet local regulations. When water is injected, both onshore and offshore, the particulate threatens the formation rheology, well productivity, and well life. Left to separate from the water naturally, the process could take years, making the method impractical.

The rate of separation of free oil and suspended solids from produced water can be accelerated using the following methods:

  • Increasing oil droplet/solid particle size
  • Changing water flow direction
  • Decreasing water flow velocity
  • Decreasing oil droplet/particle density

Increasing the size of droplets/particles is effected through charge neutralization by adding cations such as iron or aluminum. Once neutralized, the oil droplets/particles collide and stick together in what is termed the agglomeration process. As the particles coalesce and form larger aggregates, their separation speed from the water increases geometrically.

Changing the direction of a produced water stream containing oil droplets, particles, or both causes these entrained contaminants to separate from the water. By using coalescing media, a stream of produced water can be forced to change direction multiple times. This process can separate the heavier particles and the lighter oil droplets from the water. The resulting high coalescence of droplets and particles increases the collision rate, causing agglomeration.

Decreasing the velocity of a produced water stream promotes the separation of solids and oil. The rate and efficiency at which this process occurs is dependent on the droplet/particle size, density, and the velocity of water.

Decreasing the density of oil droplets/particles can be accomplished by attaching them to gas bubbles. Decreasing their densities to a point that is substantially lower than the produced water in which they are suspended allows the particles to rise and separate. It can be done by injecting gas, producing bubbles that range in size from 100 and 200 microns, or by causing a pressure drop that releases dissolved gas bubbles as small as 10 to 20 microns. The oil droplets/particles entrained in the water will attach to gas bubbles or be drawn up by the bubbles’ lift and rise to the water’s surface where they can be removed with a skimming or overflow device.

Dissolved Organics and Inorganics
Dissolved organics and inorganics include hydrocarbons such as aromatics and inorganic salts such as calcium carbonate. These contaminants must be removed for discharging into the environment or upcycling into agricultural or upstream applications, such as steam-assisted gravity drainage. Dissolved organic contaminants can be removed from produced water by destabilization and precipitation prior to fine particulate removal.

Desalination is the process by which inorganic salts are removed. Desalination process technologies are generally categorized into two types: thermal and membrane. For produced water with total dissolved solids ≥40,000 mg/L, thermal desalination technologies, including multistage evaporators and vapor recompression, are used. For produced water with total dissolved solids ≤40,000 mg/L, membrane systems are used.

Biological Matter
Biological matter includes bacteria and all their metabolic byproducts. Bacteria develop in produced water as a result of contamination during exploration and production. Bacteria and their metabolic activity can cause equipment fouling and failure as well as reservoir damage. Control of the microbiological community in a water system can be sustained through “good housekeeping,” which can substantially reduce the use and expense of biocides that must also be applied.

Summary
The fundamental principles covering the treatment of produced water are becoming increasingly important in the production of hydrocarbon resources. Understanding how produced water contaminants and water quality determine mechanical and chemical treatment options, along with capital and operating costs, is essential. Removing contaminants is crucial to maintaining well productivity, well life, equipment integrity, and sustaining environmental compliance. Expert water process engineers provide a core competency in the development of an effective produced water management program that optimizes costs and water quality.

Daniel Shannon is the produced water product manager for Cameron’s Process Systems division. During his 35-year career, Shannon has held senior product management, commercial, and engineering management positions in water treatment at Calgon, Baker Petrolite, GE Water & Process Technologies, and Halliburton.

5 Jan 2016

SPE Seeks Nominees for HSSE-SR Award

The Society of Petroleum Engineers (SPE) Health, Safety, Security, Environment, and Social Responsibility (HSSE-SR) Award recognizes outstanding accomplishments in the field of environmental protection, health, or safety in oil and gas exploration, drilling, or production operations. The award was formerly known as the Health, Safety, and Environment Award.

Nominations are due by 15 February. Nominees must be living professional members of SPE or of a group with a lead who is a member of SPE. Nominees are not eligible if they have received the John Franklin Carll Award, the Lester C. Uren Award, the DeGolyer Distinguished Service Medal, or the Anthony F. Lucas Gold Medal. Nominees also must not be on the current SPE Board of Directors or the SPE Health, Safety, Security, Environment, and Social Responsibility Award Committee, nor can they have been in those positions in the past 2 years.

Nominations are also being accepted for regional technical awards, including the Regional Health, Safety, Security, Environment, and Social Responsibility Award. SPE regional technical awards acknowledge exceptional contributions to the society at the section or regional level and recognize singular devotion of time and effort to the programs and development of technical expertise in eight disciplines: completions optimization and technology; drilling engineering; formation evaluation; health, safety, social responsibility, and environment; management and information; production and operations; projects, facilities, and construction; and reservoir description and dynamics.

Nominees for regional awards must be paid, professional members of SPE and must have lived in their region for the most recent 12 months before the award is given. Their region is determined by the section the nominee belongs to.

For questions about SPE International and Regional Awards, please contact awards@spe.org.

Click here to learn more about the HSSE-SR award and to nominate someone.

Click here to learn more about SPE’s regional technical awards and to nominate someone.

22 Dec 2015

Mexico City Symposium Focuses on Collaboration for Future Growth

HSE Mexico

One of Mexico’s most important HSE event will take place on 30–31 March 2016 in Mexico City. With the theme of Collaboration for Future Growth, the SPE Mexico Health, Safety, Environment, and Sustainability Symposium will gather established operators, regulators, and exploration and production professionals working in and beyond the oil and gas sector.

Keynote speakers will be Jack Hinton, vice president for health, safety, and environment (HSE) for Baker Hughes, and Carlos de Regules, executive director for ASEA. The speakers are expected to share process improvements, technological advancements, and innovative applications to enhance HSE performance in Mexico’s emerging market.

The symposium will feature technical sessions and panel sessions that cover the following topics:

  • Regional approach for improvement in safety and environmental performance in the Gulf of Mexico
  • Impacts and risks of offshore development in the Gulf of Mexico
  • Sustainable development
  • Establishing safe operations
  • Growing importance of health, safety, security, environment, and social responsibility (HSSE-SR)

View the complete technical agenda here.

Register here by 29 February and save USD 100.

14 Dec 2015

Understanding Above-Ground Risks To Realize Below-Ground Potential

At the 2015 SPE Annual Technical Conference and Exhibition (ATCE), a panel of global experts led a session dedicated to exploring one of the key strategic and operational impacts of sustainable development—managing and mitigating above-ground risks. Entitled Value Preservation: Sustainability and Management of Above-Ground Risk, the session was led by Alex James, global sustainability manager at Halliburton, and introduced by Helge Hove Haldorsen of Statoil, 2015 SPE president. The panelists were RoseAnne Franco of Verisk Maplecroft/Wood Mackenzie, Michael Oxman of Acorn International, Dan Domeracki of Schlumberger, and Alex Hohmann of Anadarko.

The session focused on the ways that sustainability and the management of above-ground risks add value to projects. Sustainable development issues provide an opportunity to innovate, an opportunity to find more efficiencies, and an opportunity to reduce risks. By proactively addressing sustainability across the project life cycle and engaging diverse stakeholder groups, above-ground risks can be incorporated into operational decision-making. This will safeguard and enhance project performance and, ultimately, shareholder value.

HSE Now will feature each of the panelists in a short series to give their perspectives and key lessons learned in an important emerging area for value creation across the project life cycle.

The first article in this series will highlights comments by RoseAnne Franco, who serves as director and head of oil and gas risk at Verisk Maplecroft. She previously spearheaded Wood Mackenzie’s efforts in country and risk assessment and was involved in launching the Asset Risk Index (ARI), which assesses country risk across the asset life cycle. Her country and research experience spans a client base that supports industry (including national oil companies), government, and financial sectors.

RoseAnne’s presentation at ATCE, Understanding Above-Ground Risks To Realize Below-Ground Potential: The Emerging Risk Landscape for Oil and Gas, addressed how gaining an understanding of holistic risks was critical for sound risk management. Historically, above-ground risk has focused on political and economic risk, but Verisk Maplecroft goes deeper and broader, encompassing environmental and social risks. The information discussed here draws from the data analytics and country risk analyses from Verisk Maplecroft and the upstream intelligence from Wood Mackenzie. These data and risk tools can be used by companies to identify risks, which is the first step to successful risk mitigation.


 

Fig. 1

Fig. 1

As a case in point, the combined effects of politics and geopolitics are not to be underestimated. For example, the agreement between Iran and the PF+1 in July 2015 will begin to unwind some of the toughest sanctions ever applied against an oil and gas sector. Some of the most onerous sanctions were applied between 2010 and 2012, substantially affecting Iran’s crude oil exports. Sanctions related to the energy sector include:

  • Limiting investment in the country
  • EU oil embargo which prohibited oil imports from Iran (2012 EU)
  • Prohibition on insurance related to transport
  • Ban on purchase of Iranian crude oil and products (2012 EU)
  • Prohibition on banking, which stopped services to Iranian financial institutions (Iran cannot repatriate its oil export revenues)

The application of these sanctions removed approximately 1.4 million B/D of crude oil out of the market between 2011 and 2015. Nuclear talks between Iran, P5+1 (US, Russia, China, France, and UK + Germany) finally reached an agreement in mid-2015, kicking off the gradual process where sanctions are to be lifted by mid-2016. The question that is now front and center is “how quickly will Iran come back?” Wood Mackenzie is forecasting a moderate increase in output, while Iran’s oil minister is claiming a quicker ramp up in supply (2.7 million B/D in 2015 to 3.4 million B/D in 2020). This gradual rate of growth (260,000 B/D in 2016) is not expected to have a downward effect on prices; however, this could be exceeded with new international oil company investments by 2017. Over a longer period, Iran will have a material effect, given that the country has the third largest remaining hydrocarbon liquids reserves in the world and is poised to become a key source of global oil supply post 2020.

Fig. 2

Fig. 2

Turning our attention now to economics and the oil markets, Fig. 2 plots West Texas intermediate (WTI) oil prices (annual average) in real terms in 2015 US dollars over the last 4 decades. Note that, when there is an acute risk in oil prices, it tends to trigger 1) fiscal volatility and 2) state intervention as the host government feels that they are not capturing as much of the upside. In addition, there was often no fiscal mechanism in place to account for the steep change in prices. Venezuela is an excellent text book case, where the Chavez government did not begin to apply its more onerous 2001 hydrocarbon law in a piecemeal basis until 2005 (3 years after WTI had begun an upward trend). Governments seek to reach a new equilibrium with operators; however, in this new, lower oil price environment, there is some “stickiness” to improvements in fiscal terms. Many governments have adopted a “wait and see” approach before modifying terms.

As alluded to earlier, human rights and related risks open the door to reputational risks. Verisk Maplecroft has developed 37 social and human rights indices, including:

  • Working conditions
  • Human trafficking
  • Child labor
  • Indigenous rights
  • Occupational Safety
  • Labor rights

This type of data can help operators and service companies address issues relating to responsible sourcing as they assess their supply chain. How might they be exposed, and could they be subject to reputational risk?

Similarly, Verisk Maplecroft maintains 26 environment and climate change indices to help companies better understand the future risk landscape. Three important aspects for oil and gas industry to consider are

  • Costs to the industry from regulation to reduce greenhouse-gas emissions
  • Risk of stranded assets (more in the longer term, particularly with regard to larger reserves)
  • Institutional investors considering divestment in companies that do not have sustainable practices that could contribute to climate change

Continuing the focus on the environment, limited water availability poses a hindrance to shale development. Verisk Maplecroft’s Water Stress Index (WSI), which evaluates the ratio of total water usage to renewable water supply down to 20 km2, is valuable in anticipating local responses to new unconventional projects in the country. China is home to almost 20% of the world’s population but only 7% of the freshwater supplies. Globally, a significant percentage of discovered shale deposits is in areas of high water stress. This, then, contributes to a heightened public awareness of environmental issues. Undertaking stakeholder engagement at the beginning of the asset life cycle can help to facilitate these risks to a certain extent. Ultimately, the initial investment at the beginning can help lower the risk of cost overruns in the future because of local communities slowing down the pace of development. An example of possible local resistance to shale may come from farmers who are concerned about the long-term effect on their agriculture efforts. Areas such as the Sichuan shale development in China are not only subject to concerns about water stress, but the frequency of seismic activity is also a potential source of opposition and reputational risk in light of the 2008 Sichuan earthquake. Therefore, the industry must cross check with other natural hazard indices to assess how any seismic activity may be received by the local community. As companies seek to secure a social license to operate, a thorough understanding of these multiple risk variables is key.

An example of how the ARI can be used is shown in Fig. 3, which compares Brazil and other selected peer countries for the years 2015 and 2020. The framework identifies 21 risk factors across the three stages, and a country is given a score between 0 and 1 for each. The higher the score, the higher the risk.

Franco_Fig3

Fig. 3

In 2015, note that most risk lies in the development stage. The longer the bar suggests high risk because of onerous local content requirements as compared with other countries and a domestic supply chain that is not able to meet the industry needs, which is being further compromised by a recent corruption scandal. It is also difficult to secure environmental permits, with delays of up 2 years for seismic in recently awarded equatorial margin blocks. Improvements in each of these areas are expected by 2020, which translates to a better rating. Political and economic considerations are urgent, but a number of the current Brazilian oil and gas measures are unsustainable. The question is the timeline and signposts.

In closing, I wanted to leave you with some key messages to ponder as you consider future global opportunities.

  • Resource-rich acreage tends to be located in politically volatile areas of the world.
  • Holistic risk analytics can identify major political, social, economic, and environmental risk and gauge relevant stakeholders.
  • Risk identification is critical for adequate risk mitigation and reduction in risk to reputation over the life of a project.
  • Solid risk analytics coupled with an oil and gas lens and subnational risk intelligence (“basin level”) can take country risk analysis to the next level.

Questions or comments about this article may be emailed to RoseAnne Franco.

11 Dec 2015

The Perfect Day

What constitutes a perfect day? It depends. To a surfer, it is a day of warm sunshine and perfect waves. To sports fans, perhaps a great win by their favorite team. We each have our own idea of what makes a perfect day.

Meehan

Meehan

Another aspect of a perfect day may not be a conscious thought but is of utmost importance: arriving home safely at the end of the day.

Last month, I wrote about how the Society of Petroleum Engineers’ (SPE) mission statement reflects the role of the Society and its members in serving the public benefit. This month, let us discuss how we are going beyond statements to actions to improve people’s lives by not only enabling affordable energy, but also by doing it in the healthiest, safest, and most environmentally responsible way possible.

HSE: An Evolving Approach
When I started my career, the topic of health, safety, and environment (HSE) was often seen as a regulatory obligation to meet government requirements. HSE is now recognized as the “right thing to do” for two very important reasons.

  1. It is part of our moral and ethical responsibility to our employees, customers, contractors, the communities in which we work, and to the future of our planet.
  2. HSE is good for business. There is no downside to good HSE practices. Conversely, the cost of poor practices can drive companies out of business.

More organizations are striving to eliminate or significantly reduce HSE incident occurrences. This trend in performance improvements over the past decade has plateaued. We need a breakthrough. This will not occur overnight; it will require a journey.

Getting to Zero
SPE has a long commitment to HSE and I strongly encourage you to visit HSE Now. This free website for HSE professionals is an informative public resource. HSE is a growing discipline within SPE globally. OnePetro now has 6,000 published HSE papers. As the number of professionals sharing knowledge on HSE increases, SPE offers the ideal place where they can gather, access resources, increase learning, and collaborate to improve industry practices.

The SPE journey to an incident-free workplace began with a forum titled “Getting to Zero—An Incident-Free Workplace: How Do We Get There?” Sessions addressed defining “zero” as zero HSE incident occurrences, management systems and metrics; understanding and developing a safety culture; stakeholders and their roles and importance; and taking the risk out of the work process.

Based on the success of the forum, a workshop was held in Houston in 2011 to enable more open sharing of information with 90 attendees from 10 countries and 55 companies. Outcomes of this workshop included identifying the top three influencing factors for getting to zero:

  • Having leadership commitment and engagement
  • Creating a culture of perfection
  • Having a common language of communication

Identifying these factors focused efforts on the desired outcome. It also provided a framework for ongoing discussion on three provoking questions for shaping exploration and production (E&P) industry HSE management going forward.

  1. How can leadership be effected and implemented?
  2. What is a culture of perfection? How can it be achieved?
  3. What does a common HSE language consist of and how does it gain acceptance?

On 30 June, the journey to zero was re-energized with the first in a series of global interactive sessions called “Getting to Zero—The Road to Stavanger.” I participated in this event via the web and was impressed at how well the web event and the live presentation in Houston were integrated. A second session was conducted in September in Stavanger, a third in October in Kuala Lumpur, and a fourth in Rio de Janeiro in December. Conversations will also take place in the Middle East, along with follow-up sessions in the United States. These sessions will culminate with an interactive workshop in April 2016 in Stavanger, prior to the biennial SPE International Conference and Exhibition on Health, Safety, Security, Environment, and Social Responsibility.

These interactive sessions include in-room and online presentations and questions and answers with real-time polling of all participants. They will address the following questions:

  • Is getting to zero achievable?
  • What are the most critical values to achieving zero?
  • Which issues need more time?

We have an early consensus that achieving zero HSE incident occurrences is possible. The most critical core values, as identified in the initial sessions, are visible leadership, teamwork, and openness to change. Top influencing components needing more time and effort include a total alignment of all stakeholders in relation to a vision of zero, human behaviors and a common language of communication.

Getting From Words to Action
Lao Tzu was an ancient Chinese philosopher who is credited with writing the classic text, the Tao Te Ching. In it, he wrote,  “The journey of a thousand miles begins with a single step.” Many cultures share the recognition that significant change cannot take place until action is taken to bring it about.

My employer has taken that first step on the journey to zero by revolutionizing the way the company manages HSE with the concept of a “perfect day” which equates to no injuries, no accidents, and no spills. Jack Hinton, vice president of HSE at Baker Hughes, participates in all of the “Getting to Zero” interactive sessions. When Hinton introduces his section of the program, he asks the audience to reconsider the concept of needing more time to address issues critical to achieving zero.

“We talk about needing more time, but do we really need more time, or is it more about needing to do something different, and needing to do it now?” asks Hinton.

This was the question facing Baker Hughes in 2009. We had made significant progress in standard HSE measures but it is hard for an employee to relate to a total recordable injury rate. What we did redefined who we were and how we did business, including how we manage HSE. We made a decision to reorganize from a number of companies made up of product lines and services to a single company with an interdependent culture. As part of this culture, we stated our purpose: enabling safe, affordable energy, and improving people’s lives. This purpose is defining; it is within the “DNA” of the people who make up the company.

As Hinton says, “When you have a purpose, you really do not have more time. The time is now.”

Safety is as much our purpose as energy is, so we made it integral to the company and outlined a business framework for it, as we did for other key aspects of the business.

The Perfect HSE Day
Like most companies, Baker Hughes was comfortable measuring HSE performance incrementally. Our journey caused us to fundamentally shift such that we were no longer happy with incremental improvement. Our employees wanted more, and our leadership supported it. Getting to zero became a reflection of who we already were, rather than a new initiative.

The perfect HSE day embodied our definition of zero and all that was necessary to achieve it: engaged and visible leadership, teamwork, trust, willingness to change, a culture of perfection, and—extremely important—a common vocabulary of HSE. The perfect HSE day that everyone throughout the organization could understand would require changing the conversation and changing the vocabulary.

We began with an internal communications campaign that included videos, testimonials, conversations, posters, a Web page, and resource materials designed to make getting to zero more meaningful and to help employees at all levels embrace it as much as possible. The perfect HSE day was defined as a day in which everyone in the company goes home safe, with no recordable injuries, no serious motor vehicle accidents, and no significant environmental spills. We began to measure and track perfect HSE days.

Everyone shares one simple metric for measuring success—no acronyms, no jargon, and no incident rates. There is one simple number: zero. Each day is a new opportunity to achieve it. Everyone in the company can see how their actions impact the company and its outcomes. On every day that we record a perfect day, each employee receives an email from our chief executive officer. It is the email I most look forward to each day.

Results have been remarkable. In 2012, the company logged 22 perfect HSE days. In 2013, the number improved to 42. In 2014, the total was 92, the equivalent of a perfect quarter. On 6 October 2015 we crossed the 100 perfect HSE Days milestone. Many of our operating units have recorded a year or more of consecutive perfect days.

Uncertainty and anxiety surrounding market conditions and other potential distractions have historically resulted in HSE incident rates trending up. We are seeing the opposite.

Moving Forward on the Journey
As part of our goal of making every day a perfect HSE day, we mine the wealth of information we have on any incident that occurs. We have identified five basic issues common to every incident, regardless of classification.

  1. Hazard identification: What hazards might I face while performing this task?
  2. Hazard control: How can I control the hazards to avoid being injured?
  3. Process education: Am I properly trained and do I understand the task?
  4. Change management: What is outside my normal scope of work?
  5. Sharing lessons learned: How can I share what I have learned with my coworkers?

Learnings are fed back into the HSE incident management system for future use. We are unsatisfied with being able to classify incidents and determine why they happened; we must fix them so they do not happen again.

This is not a campaign; it is a progression in our thinking. It has evolved into the way we do business. It can become the way business is done throughout the E&P sector. That is where we are heading. That is what we can accomplish when we envision every employee as an HSE professional. That is how we will get to zero.

That is the perfect day.

5 Nov 2015

Column: An Environmental Perspective on Risk Management and Water

There is no denying that the oil and gas industry, as well as the agencies that regulate its activities, have significantly improved many aspects of environmental performance in recent years. Standards and practices have changed, in some cases drastically, leading to risk reductions in a number of areas.

Despite this progress, there is always more to be done to identify and manage risks associated with oil and gas development. As industry continues to evolve through technical advances, so should leading practices and regulations. This is particularly important given that the broader public is increasingly aware of and concerned about potential effects on the environment and their communities from development, especially where those effects involve water. Fortunately, improved understanding of risks and newly emerging risk control options make continual improvement possible.

Where should industry and its technical advisers concentrate at this juncture? A number of noteworthy, long-awaited reports on the environmental effects of oil and gas development have been published over the past year or are awaiting publication. To a significant degree, these reports coalesce into a few major areas of concern and endeavor to provide guidance on how governments and industry can achieve additional risk reductions to minimize or eliminate potential effects on water.

The Reports
US Environmental Protection Agency (EPA), “Assessment of the Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources,” Draft, June 2015

The EPA report highlights potential vulnerabilities to drinking water and confirmed pollution events. Vulnerabilities include (1) inadequately cased or cemented wells resulting in below- ground migration of gases and liquids, (2) inadequately treated waste water discharged into drinking water resources, and (3) spills of hydraulic fracturing fluids, flowback, and produced water. Given these vulnerabilities and knowledge gaps highlighted by EPA, industry should not take too much comfort in the widely reported conclusion that the EPA found no evidence of widespread, systemic effects.

California Council on Science and Technology (CCST), SB4 Commissioned Report for the California Natural Resources Agency, “An Independent Scientific Assessment of Well Stimulation in California,” July 2015

The CCST summary report contains an appendix summarizing the “most concerning risk issues” including (1) the number and toxicity of chemicals in hydraulic fracturing and acid stimulation fluids, (2) hydraulic fracturing in reservoirs with a long history of oil and gas production, (3) spills and leaks, (4) beneficial use of produced water, and (5) disposal of water in percolation pits.

Ground Water Protection Council (GWPC), “State Oil & Gas Regulations Designed to Protect Water Resources,” 2014 Edition

The GWPC report highlights state regulatory trends and presents related considerations for regulators and policymakers, including ideas regarding well integrity (e.g., comprehensive integrity testing during construction, isolation of flow zones, standards for reconditioned casing), storage in pits and tanks (e.g., design, construction, spill containment, and leak detection), transportation of produced water for disposal (e.g., permitting transporters and recording volumes), produced water recycling and reuse (e.g., chemical characterization and management of side streams, and careful regulation of alternative uses of produced water), and spill response (e.g., cleanup standards relative to characteristics of material spilled).

Health Effects Institute (HEI), “Strategic Research Agenda on the Potential Impacts of 21st Century Oil and Gas Development in the Appalachian Region and Beyond,” Draft, July 2015

The HEI’s research agenda prioritizes 13 topics of overarching importance. These include research in the field of chemical toxicity and evaluation of the most effective practices for accidental waste release, permitted waste management, and wellbore integrity.

Risks and Risk Reduction
These reports coalesce into three major areas in which risk management improvements would be beneficial: well integrity, spills and leaks, and treatment and final disposition of produced water. It is not surprising that these concerns center on water effects because the public has been raising similar issues in recent years, particularly in regions plagued by drought. Making genuine strides in these areas of vulnerability will increase industry resilience in the long term.

Well Integrity. Regulatory oversight of well construction has come a long way in the past few years. Wyoming, Pennsylvania, and Ohio are notable examples. And in the mere 2 years since Texas adopted sweeping well construction changes in 2013, more than a dozen states have extended well integrity rule improvements to a wide range of issues.

Despite achievements of industry and regulators in improving management of well construction risks over the past years (Texas’s 2013 rule package resulted in a 40% decrease in well blowouts last year), a number of well integrity issues deserve more widespread attention.

Risk reduction options with regard to well integrity include: conducting an “area of review” analysis to ensure that nearby wells are not affected by hydraulic fracturing, taking special precautions in unusually shallow fracturing jobs in close proximity to protected water, and carrying out more rigorous efforts to isolate corrosive zones and flow zones that have the potential to compromise cement jobs. American Petroleum Institute’s API RP 100‑1, forthcoming 2015, will offer much on such topics.

Spills and Leaks of Produced Water. By some estimates, close to 70% of groundwater effects from oil and gas development come from spills and leaks at the surface, not containment failure downhole. Spills are not a novel problem. But spill-related issues are evolving along with industry practices. For example, as alternative management options such as recycling become more common, the need to handle large volumes of waste water at the surface for longer periods of time will require advanced spill and leak prevention technologies and improved handling practices.

To reduce the frequency and severity of surface leaks and spills, operators and regulators will need to tighten rules and operational practices for wastewater storage and transportation. Risk reductions will stem from improvements in design, construction, and operation requirements for pits and tanks; advanced siting restrictions; and detailed closure requirements.

Similarly, pipeline design, construction, operation, and siting requirements deserve scrutiny as the need to move untreated or minimally treated water from site to site increases. Finally, requirements for waste haulers should be advanced to improve wastewater tracking and minimize the risk of illegal or accidental dumping.

Treatment and Final Disposition of Produced Water. By some estimates, the oil and gas industry uses more than 90 billion gal of water to fracture wells each year, and produces more than 800 billion gal of waste water. Even if industry were to completely transition to recycled water for drilling and fracturing operations, hundreds of billions of gallons of water would still need to be disposed of each year. In some areas of the country, there are signs of a trend away from disposal in underground injection wells toward treatment and discharge to surface waters and reuse in sectors such as agriculture.

Although many of these laudable alternatives are pursued in an effort to conserve freshwater resources, it is vital that new practices not create more environmental risks than they solve. EPA reports that more than 1,000 chemicals are used in hydraulic fracturing operations, with hundreds found or expected to be found in produced water. The composition and toxicity of this waste water is not well understood.

In pursuing alternative treatment and disposal options, the character and potential effect of waste water on the receiving media, such as surface water, soil, and crops, should be extensively understood before permitting. Treatment technologies should be proven capable of removing all constituents of concern including inorganics, organics, and radionuclides.

Treated water that is applied or discharged to the surface should be extensively tested and potential long-term effects of novel uses should be monitored and investigated. Not to be forgotten, the solid or solidified residual waste streams created from these practices should be analyzed and disposed of properly given their potentially toxic character.

Where To Go From Here?
The Environmental Defense Fund (EDF) is working to better understand new and existing risks and is collaborating with a range of stakeholders to ensure that protective risk management practices are developed and implemented. This includes improvements in rules and policies at the state and federal level, the development of leading industry practices, and scientific initiatives to fill knowledge gaps on emerging issues such as wastewater characterization and treatment.

EDF believes that successful risk management requires a process of continual improvement (both in regulations and in leading practices) that endures indefinitely. To be successful, this process must function at a steady high gear, and achieve efficient results on pace with changing circumstances.

What are the risks? What are the risk options? Where are rules or practices lacking? Efforts to answer these questions may often lead to change that is incremental, but it is meaningful change nonetheless. EDF looks forward to finding additional opportunities to work on these issues with like-minded colleagues.

Scott Anderson is senior policy director of the US Climate and Energy Program at the Environmental Defense Fund (EDF). Since 2005, he has served as the EDF’s point person on policies regarding the effect of oil and gas development on land, water, and communities. Anderson spent many years in the oil and gas industry before joining EDF. He was executive vice president and general counsel of the Texas Independent Producers & Royalty Owners Association, and longtime secretary of the Liaison Committee of Cooperating Oil & Gas Associations. Anderson is a member of the Visiting Committee of the Bureau of Economic Geology at the University of Texas at Austin (UT). He holds a degree in English from UT and a law degree from the UT School of Law.