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2 Dec 2014

Beyond the Headlines: How Safe Is Our Drinking Water?

Do shale oil and gas drilling present a real threat to drinking water supplies? This is likely the single greatest concern in the minds of those opposed to the exploitation of this resource. Can oil and gas wells leak fluids into the Earth? Yes. Can it be prevented? Yes, again.

In this essay, we will discuss the mechanisms involved, the measures to prevent these occurrences, and the most recent scientific studies on the topic. On the last point, I am happy to report that, to date, the news is uniformly very good. Happy because this resource must be developed in a sustainable fashion. It has transformed the United States economy and improved the lot of every US citizen. We have a duty to get it done right. Other countries with similar resources need the US to succeed.

There are two potential sources for contaminating fluids. One is the hydraulically fractured zone in the reservoir and the other is the vertical portion of the wellbore. Microseismic monitoring involves “listening” to the minor tremors generated by the hydraulic fracturing operation. Thousands of such operations have been monitored and fractures do not extend more than 1,000 ft in a vertical direction. Leaving a margin of error, 2,000 ft of vertical separation ought to be sufficient. Most producing zones are at vertical depths greater than 4,000 ft, and fresh water rarely extends beyond a few hundred feet.

2 Dec 2014

Aging Offshore Fields Demand New Thinking

When he started his firm focused on removing obsolete offshore structures, Brian Twomey chose the name: Reverse Engineering Services. The thinking was that taking out a structure is like building it, but in reverse.

Based on a career spent planning, managing, analyzing, and teaching classes on decommissioning, the managing director of Reverse Engineering has concluded: “It is the wrong name.”

“I started out thinking decommissioning is the reverse of installation; it is not,” Twomey said. “The first thing to know about decommissioning is there is a lot of uncertainty and unknowns that have developed over time due to wear and tear, changes, the environment, and loading all this other stuff” on the structure.

Those complications can lead to costly jobs and budget overruns when plugging wells and removing platforms. That adds to the pain of an obligation with no return on the investment.

“You are not really making money taking the platform out. You have made the money already,” said Jon Khachaturian, president and chief executive officer of Versabar. “We constantly hear: ‘We are going to take it out but we are going to do one more thing.’ ”

2 Dec 2014

Stakeholder Issues Play Key Role in Shale Future

As the shale revolution changes the map of oil and natural gas development and shifts the balance of production between regions, public acceptance is an increasing challenge. The unconventional resource boom has brought intensive drilling and production operations to areas often unaccustomed to these activities and frequently more populous than traditional petroleum development areas.

A variety of public concerns have assumed a high profile, including the environmental issues of water use; perceived risk to groundwater aquifers; waste disposal; truck traffic, dust, and noise; and emissions.

While the success of production from shales and other tight-rock formations draws attention nationally and globally, its future depends much on the attention and reception it receives locally. As shale drilling has surged, public eyes may be more focused on the community impacts of oil and gas operations than ever before.

2 Dec 2014

Report: New Details, Lessons Learned From Macondo

Introducing his analysis on the Macondo incident in the US Gulf of Mexico (GOM), Stan Christman quoted, “Complex systems almost always fail in complex ways.” The line came from the Columbia Accident Investigation Board’s report of the space shuttle Columbia explosion in 2003, but it could easily describe the explosion and resultant spill that devastated the GOM in 2010.

In a presentation hosted by the SPE Flow Assurance Technical Section, Christman, a member of the United States Chemical Safety and Hazard Investigation Board (CSB), outlined the failures of barriers and tests, and the problems within the Deepwater Horizon’s blowout preventer (BOP) system that led to the accident. The findings were the result of a 4-year investigation conducted by the CSB, which released its report in June. The federal independent agency had access to the full set of test data in real time, some of which were unavailable at the time of the publications of other reports on Macondo.

2 Dec 2014

A Comparison of Methods for Boron Removal From Flowback and Produced Waters

While storage and logistics are critical elements of the viability of water reuse, if the water chemistry is not fit for gel fracturing formulations, it will not matter how much is stored in centrally located impoundments.

Millions of barrels of flowback, produced, and fresh water or brackish waters are available daily for any number of uses, but only a select few exploration and production companies have taken the necessary steps to implement a quality program that works effectively. In addition, the commitment to instituting such a program is far more simplistic than most producers believe it to be. What is required, however, is a desire to manage for the long term, not just for a period of drought or in a reactionary way because of government regulatory rhetoric.

2 Dec 2014

New SPE Technical Section—Carbon Dioxide Capture, Utilization, and Storage

SPE has formed a technical section to give members the opportunity to focus on carbon dioxide capture, utilization, and storage (CCUS), an area of interest for petroleum engineers worldwide. Industry interest in CCUS as a way to reduce emissions and for sequestering or storing carbon dioxide has increased over the past decade. In response, SPE has stepped up programming in this area.

CCUS involves capturing CO2 emissions from large point sources such as power plants and either reutilizing or storing the emissions to keep them from entering the atmosphere.

Expanded Career Opportunities for Petroleum Engineers

Possessing the know-how for evaluation, selection, and monitoring of underground storage sites garnered through decades of experience in the fields of CO2-enhanced oil recovery (EOR) and gas storage operations, the exploration and production segment of the oil and gas industry is anticipated to play a major role in the advancement of CCUS, including broader application of CO2-EOR.

Moreover, lessons learned in the ongoing commercial activities within the oil and gas disciplines of underground gas storage and CO2-EOR are directly transferrable to CCUS, thus expanding career opportunities for petroleum engineers.

Join the CCUS Technical Section
This SPE group seeks to bring these activities together in one place for those interested in this developing subject. Members will have opportunities to deepen their learning and share their insights through online discussions, Web events, virtual meetings, forums, and workshops and enjoy the benefits of at least one face-to-face meeting a year.

Learn more and join the technical session here.

4 Nov 2014

Panelists Urge Industry To Take Sustainability Seriously

The oil and gas industry has to intensify its efforts in terms of sustainability and integrating sustainability factors into the industry’s daily operations, according to panelists at the Sustainability Task Force special session at SPE’s Annual Technical Conference and Exhibition in Amsterdam.

The session, titled People, Profit, Planet: Advancing Practices That Balance Economic Growth, Social Development, and Environmental Protection Today and in the Future, featured panelists who touted the importance of sustainability for the world and particularly for the oil and gas industry.

2014 SPE President Jeff Spath speaks at the Sustainability Task Force special session. Credit: Conference Photography.

Jeff Spath, 2014 SPE President, said in his presentation entitled Sustainability—Why SPE Has Begun Work in This Area, that the oil and gas industry has been thinking about and “doing” sustainability for nearly 20 years, since the Shell Brent Spar decommissioning event in 1995 when both social and environmental incidents gave the industry a sustainability wake up call, much like Piper Alpha gave oil and gas professionals a safety wake up call just more than 25 years ago.

But, unlike Piper Alpha, the decommissioning of the Brent Spar and the
execution of Ogoni activists in Nigeria in the same period did not lead to a commission being formed and regulations being drafted and enacted. Instead, activists outside the industry led campaigns to which industry at first responded through public-relations campaigns and then, increasingly, with efforts to understand the concerns and improve performance. “In other words, our industry did not initially take control of its own performance,” Spath said.

Twenty years after the incident, the industry is still struggling with how to define sustainability performance, who would define it, and how it could be measured in the absence of regulation.

“Over time, practices emerged, industry groups formed, sustainability disciplines matured, best practices emerged, and sustainability professionals joined the industry,” Spath said.

Moreover, the industry still has not “moved the needle,” or integrated sustainability factors into daily operations, processes, or business models. “We are still struggling with aboveground risk in a significant way,” he said.

But, in 2010, SPE decided this activity was not a passing fad and that it was time to start contributing more proactively. “We formed a strategic task force and began to analyze how we could best accelerate the integration of sustainability practices to the operations of our industry,” Spath said.

The SPE Task Force of more than 20 sustainability professionals homed in on a gap for which the SPE mission is a perfect fit—that of competency development. “We have the ambition to be the go-to place for sustainability training in our industry,” Spath said.

A competency program business plan has been approved by the SPE Board of Directors and will be piloted at the SPE E&P Health, Safety, Security, and Environmental Conference—Americas in Denver next March. “The initial audience is sustainability professionals, but, by 2016, our ambition is to have an offering for nonpractitioners—operational decision makers like many of yourselves,” Spath said. “In the meantime, we are bringing you sustainability content and practitioners to our core SPE events—like ATCE today,” he added.

Alyson Warhurst, founder and CEO of Maplecroft, analyzed risk, opportunity, and sustainability in the global growth landscape and how to get them to flourish long term. Warhurst blamed governments for political instability because of an unequal distribution of wealth, which leads to social unrest and instability. “Countries where disparity between relatively high social gains with oppressive governance create potential for societally forced regime change and resource nationalism and depicts areas of business risk,” she said.

Economic growth is sustainable when it meets the needs of the present without compromising the ability of future generations to meet their own needs. For business, sustainability refers to “an organization’s activities that demonstrate the inclusion of social, environmental, and corporate responsibility concerns in business operations and interactions with stakeholders,” she said.

Warhurst said that corruption and poor governance are sources of instability, highlighting the experience of several oil and gas producing countries where corruption hinders all efforts of investment.

“When government is corrupt, this means that they don’t invest back into the society,
which leads to instability,” she said.

Stephen Newton, chief executive officer of Equitable Origin, said in his presentation that the oil and gas industry has made incredible technical advancement where the biggest investor concern is the industry’s ability to manage aboveground risk. Newton said that problems at the beginning translate to issues over the life of a project.

“About two-thirds of projects worldwide are late and over budget,” Newton said. “Communities including indigenous people have increasing power by virtue of obligatory and extensive consultation processes,” he added.

For future success, Newton said that managing aboveground risks through transparent communication with all stakeholders, particularly local communities, is very important. “Being open to third-party certification as a way to independently verify best operating practices and gain the trust of all stakeholders is also critical for future success,” he said.

Egbert Imomoh, nonexecutive chairman and cofounder of Afren and 2013 SPE President, discussed the opportunities and challenges related to the local content. Imomoh said that the local content emerged because natural resources belonged to the state, where national government has no leverage or wherewithal to change the thrust of policy.

“Progressively, capital flight, slower than expected economic growth, increase in trained local manpower, and high unemployment made a case for change,” he said.

Speaking about stakeholders and what they bring, Imomoh said that government brings resources, laws, security and fiscal terms, while community brings land, local customs, and people. “The industry bring knowledge, capital, people, and equipment,” he said. “In return, government wants maximum economic growth, while community wants employment and minimum impact on their environment,” he said. “The industry wants maximizing value, and sanctity of contracts, as well as access to local staff,” Imomoh said.

Despite all the challenges, many international service companies have formed alliances with local companies.

“Banks are more ready to grant loans as they understand the risks and opportunities better, which leads IOCs (international oil companies) to accept paying a premium to accommodate local companies,” he said.

15 Oct 2014

The Role of Sustainable Development Planning in Our Industry

Sustainability, nontechnical risk, environmental and social performance, as well as corporate (social) responsibility are interrelated terms that refer to an important set of competencies viewed as increasingly strategic in value for the oil and gas industry. Over the past 15 years, sustainability as a term has matured from its initial “green” scope to embrace social agendas and has evolved from being an external force to become a set of organizational values and operating principles that govern development and operations in the oil and gas sector. A plethora of standards, guidelines, and good and best practices have been created by various sectors with the oil and gas industry being one of the most active in evolving its own guidelines. Both corporate strategy and corporate risk management have identified opportunities and risks and built in new checkpoints in their processes.

Elements of a sustainability management system.

Consequently, securing and maintaining a license to operate (as well as growing the commercial value beyond this threshold) extends well beyond legislative and regulatory permitting to encompass both the mitigation of adverse social and environmental effects as well as the advancement of financial, societal, and environmental benefits by the execution of strong sustainability performance. Significant to this is the new organizational refinements on, not just the license to operate, but also new phrasing such as “social license to operate” and “permission to operate” with the accompanying strategic financial benefits of becoming a preferred developer or operator.

Given the increasing prominence of sustainability in the oil and gas industry, SPE embarked on a path in 2010 when it created a Sustainability Task Force to

  • Explore SPE’s role and strategy in addressing sustainability.
  • Explore SPE’s role in encouraging a methodical approach to sustainability for our industry.
  • Generate proposals for the SPE Board to direct resources to address identified needs and opportunities.
  • Fully participate in global sustainability discussions as an enthusiastic participant and contributor and not as a passive observer.

1 Oct 2014

Automated Well Ignition Increases Safety for Well Blowouts

As demand and footprint of the oil and gas industry increases, the distance between facilities and populated areas diminishes. Companies also have to move into critical fields (high pressure and high hydrogen sulfide concentration). This means that special hydrogen sulfide protection measures need to be in place not only to ensure the safety of onsite workers but also to protect nearby communities.

The United Safety VulQan is a unique product designed to perform well blowout ignition.

The presence of hydrogen sulfide creates unique challenges for oil and gas operators, including the specialized drilling systems required and the health problems caused when hydrogen sulfide is released into the atmosphere.

A multitude of mechanical and procedural measures are in place to prevent any release. The standard hydrogen sulfide safety systems on the work site consist of detection measures to give early warning of hydrogen sulfide presence and breathing air equipment that the workers can put on for escape or to work safely in the presence of the gas.

“There is a long history of learning and progress with these onsite systems, and, overall, they are very effective when operated and maintained properly,” said Mike Gilbert, vice president, Middle East, for United Safety.

However, despite safety measures in place, accidents may happen. A blowout, for instance, occurs when the crew loses control of the well because of complications during drilling, allowing a free flow of gas or oil from the wellbore into the atmosphere. A large volume of hydrogen sulfide toxic gas can be released hundreds of feet in the air in a very short time. This gas cloud, or plume, is carried by the wind and will settle on lower grounds (hydrogen sulfide is heavier than air), creating very immediate health hazards or even death for anyone in its path. For example, a hydrogen sulfide blowout in Chuandongbei gas field in central China in 2003 resulted in an area of more than 25 km² being covered with high concentrations of hydrogen sulfide, killing 243 people, seriously injuring 9,000, and displacing more than 64,000 from their homes.

To avoid the consequences of a blowout, a combination of gas detection, safe evacuation, and well ignition (when necessary) is the best solution. Elie Daher, executive vice president for United Safety, explains “not one single safety measure can be ultimately effective in addressing hydrogen sulfide protection. There needs to be comprehensive planning and continuity in the measures taken from start to finish of these challenging projects.”

Depending on the magnitude of the blowout, the well may need to be ignited. When the hydrogen sulfide gas is burned, the byproduct, sulfur dioxide, is carried higher into the atmosphere by the heat and, therefore, disperses more readily, resulting in lower ground concentrations.

Therefore, a safe well-ignition solution needs to be part of any comprehensive critical well safety management system. Traditionally, this is done by a trained individual using a flare pistol from an estimated safe distance.

“As you can imagine, a blowout is an extremely dangerous, messy, and violent event. We’ve responded to many of them in our time. To put a human being in harm’s way to ignite these blowouts is becoming a thing of the past and is unnecessary with today’s modern technology” Gilbert said.

In order to ignite the well safely, companies can rely on automated well ignition systems. In the event of a blowout, once the work site is evacuated, the designated person will activate the well ignition from a control unit, placed in a safe area. Once activated, there is a variable delay before the system discharges into the gas cloud, allowing time for personnel to retreat to a safe distance. The system will continue to discharge flaming gel at preset intervals to ensure continued and complete ignition of the well.

“There is no question, safely igniting the well release as soon as possible is the fastest and most effective way to reduce immediate danger to the communities and workers” Daher said.

18 Sep 2014

Seminar Examines Global Decommissioning

How do you go about decommissioning three interconnected offshore platforms in the UK North Sea, composed of almost 100,000 t of topsides and 40,000 t of jackets, together with abandoning more than 100 wells and hundreds of kilometers of pipelines? Carefully, and unless you want to break the bank, differently.

Christie

The Global Decommissioning seminar will be from 1130 to 1300 hours on 16 October at the Petroleum Club in Houston. Registration to attend the event in person is USD 40, but the seminar will be presented live online for free.

Speaker Jim Christie will talk about the three important C’s to consider in decommissioning—compliance, collaboration, and contracting.

Christie is global decommissioning projects manager for Marathon Oil, responsible for the company’s asset-retirement portfolio. He joined Marathon in 1984 and has worked mostly on upstream and downstream capital construction projects in the Middle East, southeast Asia, Japan, Africa, India, Europe, and North America.

Before assuming his current position, Christie was responsible for project assurance for capital construction and decommissioning projects.

He holds a BS degree in construction from Robert Gordon University, a BA degree in management from The Open University, an MBA degree from Heriot-Watt University, and an MS degree in project management from Aberdeen University.

2 Sep 2014

Health, Safety, and Environment Study Group Examines Vent Gas Management

A new federal air quality rule governing midstream and upstream activity is in effect, and an SPE seminar is set to discuss the opportunities, technologies, and solutions involved.

Jeff Voorhis from Hy-Bon Engineering and Audrey Mascarenhas, president and chief executive officer of Questor Technology, are scheduled to speak at the seminar from 1130 to 1300 hours on 23 September at the Petroleum Club in Houston. The seminar also will be streamed live on the Internet for free.

The rule, also known by its more formal citation 40 CFR Part 60 Subpart OOOO, or “New Source Performance Standards Subpart Quad O” contains new regulations and revisions to existing statutes. This rule will have a major effect on how the oil and gas industry has been operating regarding waste-gas emissions.

Reverberations will be felt across the industry from these more stringent rules governing upstream exploration and production segment as well as the midstream segment. Air emissions from oil and gas resource development have been drawing increased attention by many concerned parties, including the Environmental Protection Agency (EPA), the states, industry, and the public. EPA regulations are being implemented to quantify the emissions from oil and gas operations and control the emissions of pollutants and contaminants. Industry is taking action to minimize emissions while the public is concerned with potential health effects. Improving well performance and operations now needs to include emission reduction as a integral function. Understanding waste emissions and turning them into possible positive cash flow assets is the opportunity.

Vent gas management is an area companies need to explore to increase their bottom line and reduce liability. The technology, techniques, and reliability has greatly improved, making it profitable in many cases. All nonproduct output going to waste needs to be put back in the product stream for profitable green production. New technologies are keeping pace to eliminate or control these emissions. Many of these technologies are economically feasible while maintaining compliance. This talk will be on opportunities, solutions, and techniques in vent gas management. The event is also a chance to ask tough questions to a former regulator and get straight answers.

Voorhis joined Hy-Bon Engineering in 2012 and has been using his oil and gas permit expertise to overcome regulatory barriers. In May 1990, he joined the Texas Natural Resource Conservation Commission, where he provided engineering and technical assistance on pollution prevention in the United States and Mexico. Voorhis holds a BS degree in petroleum and natural gas engineering from Kingsville Texas A&M University.

Mascarenhas joined Questor in 1999. Before then, she held various technical, business, and management positions during a 17-year tenure with Gulf Canada Resources, presently Conoco-Phillips. She is a graduate of the University of Toronto in chemical engineering and holds a master’s degree in petroleum engineering from the University of Calgary.

 

28 Aug 2014

Seventh Middle East HSE Conference Introduces Sustainable Development

The seventh SPE Middle East Health, Safety, Environment, and Sustainable Development Conference and Exhibition will be held 22–24 September in Doha, Qatar. In addition to an executive plenary session, the conference will feature seven panel sessions and 20 technical session.

Across the corporate world there is a growing focus on good governance and HSE performance as a source of both risk and competitive advantage. The conference will demonstrate how integrating environmental innovation and engineering services along with safety and risk management will underpin safe operations, environmental sustainability, and ultimate success of oil and gas companies. The conference will be the first of its kind to include sustainable development as one of the core discussion topics.

The opening ceremony on 22 September will include remarks by His Excellency Dr. Mohamed Bin Saleh Al-Sada, minister of energy and industry of Qatar; Saif Al Naimi, conference chairman and director for HSE regulations and enforcement for Qatar Petroleum; Barton Cahir, president and general manager in Qatar for ExxonMobil; and Jeff Spath, 2014 SPE president.

The theme of the executive plenary session, set to begin at 1100 hours on 22 September, is “Protecting People, Environment, Asset, and Reputation—Are We Prepared?” At the session, industry leaders will address the challenges of optimizing business performance, reducing risk, and protecting people and the environment.

The moderator will be Saif Al Naimi, director of HSE regulations for Qatar Petroleum, the conference’s host organization. The panelists will be Jim Zimmerman, vice president for ExxonMobil Research Qatar; Jassim Abdulla Jassim Al-Mohannadi, onshore operation manager for Qatargas; Steve Norton, general manager of health, safety, environment, and social performance for Qatar Shell; and Tom Knode, director of HSE standards and performance for Halliburton.

This plenary session will address the following questions:

  • How can we demonstrate a better management and mitigation of safety and environmental risks?
  • How can we perform more effectively and develop and implement a more efficient organization to improve environmental and safety performance?
  • How can we optimize operational efficiency across our portfolio in order to increase output from limited resource and protect our assets?

The seven panel sessions will address the topics of HSE Management (Disaster Management/Crisis Management); Business Case for Managing Health; Climate Change; Establishing Organizational Belief in HSE; Sustainability Reporting Within the Middle East; Best Practices in Water Management; and Process Safety Approach in the Middle East (Including Safety Cases and Asset Integrity).