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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.

5 Nov 2015

Beyond the Headlines: What Is All This Talk About Emissions?

Emissions are in the air and in the headlines every day. Whether the discussion is on human health effects of pollution, greenhouse gas (GHG) emissions and their effect on climate change, or the misleading performance of a diesel engine, the bottom line is there is a global focus on emissions.

Emission discussions are also in the forefront of the oil and gas industry. In 2012, the US Environmental Protection Agency (EPA) mandated new emission rules for our industry dealing with volatile organic hydrocarbons (VOCs), hazardous air pollutants (HAPs), and, most recently, methane. On 18 August, the agency proposed additional measures (EPA 2015) that supplement the earlier regulations and that “together will help combat climate change, reduce air pollution that harms public health, and provide greater certainty about Clean Air Act permitting requirements for the oil and natural gas industry.”

The rules have set limits on emissions. If they cannot be captured, the emissions must be combusted at a 95% destruction efficiency at a minimum. Destruction efficiency is not as extensive a measure of performance as combustion efficiency; however, the move to performance-based legislation is a positive one and will most certainly lead to improved air quality and a healthier relationship with communities in close proximity to oil and gas development. Within the US, various states have or are in the process of enacting legislation specific to their local situation, on the proviso that their requirements are not weaker than the federal rules.

In Colorado, for example, much of the industry activity occurs in the vicinity of communities. The state regulator is moving toward mandating de­vices that not only combust efficiently, but also fully enclose the combustion to eliminate the visibility of the flare. It is also spot inspecting facilities with special cameras that detect uncombusted hydrocarbons, which are a clear indicator of poor performance. Companies that are emitting uncombusted hydrocarbons will be subject to considerable fines.

North Dakota has put a rule in place that the industry must find an acceptable method of using a significant, measurable portion of a well’s associated gas or oil production from that well will be capped.

There are other situations in which the new EPA requirements, combined with state rules, will result in improved operations.

The existing 2012 EPA legislation covered natural gas wellsites, production gathering and boosting stations, natural gas processing plants, and natural gas compressor stations. The proposed EPA legislation requires the reductions of methane and VOC emissions from hydraulically fractured oil wells and extends the emission reduction targets downstream covering equipment in the natural gas transmission segment.

In view of this regulation, two questions are central to the emissions issue.

  • Is there a technology that can deliver results cost-effectively and address the community concerns about emissions?
  • Is it possible to comply with the new rules in the current low oil and natural gas price environment?

Venting and Flaring
In the early days of petroleum exploration, associated gas was not considered a useful product because of the difficulties in transporting it to markets and the low price it received. As a result, gas was simply burned off at the well or vented into the atmosphere. Unsophisticated means for combustion continued from the early years and well after the first patent for the flare stack was submitted by Exxon Research in 1951.

Even today, flaring and venting continue in locations where local markets and gas transportation infrastructure are lacking, or where the gas itself is of low volume or contaminated with other incombustible gases and therefore uneconomic and impractical to conserve. We are unfortunately again in a period of low oil and gas prices, hence any technology solutions have to make economic sense.

Venting of natural gas, especially methane, the key constituent of natural gas, has a significant effect on air quality and climate change. Natural gas contains VOCs and HAPs, which affect air quality and human health. According to the EPA, methane is the second most prevalent GHG emitted from human activities in the US, and nearly 30% of these emissions come from oil production and the production, transmission, and distribution of natural gas.

The global warming potential (GWP) of methane is 25 times greater than that of carbon dioxide, and the venting of methane releases more than nine times as much carbon dioxide equivalent GHG on a tonnage basis, as shown in Table 1.

Table 1 also shows the effect of combustion efficiency on the amount of GHG emitted from methane combustion, especially poorly combusted gas. Quantification of the GHG emissions during gas flaring is difficult because the measurement of the efficiency of a flare is problematic. The ultimate efficiency of a flare is governed by many factors: composition and heat content of the gas; size of the entrained liquid droplets in the gas stream; direction of the wind, especially if the gas is blown away from the ignition source; velocity of the gas at the flare tip, etc. All these factors are continuously changing, hence there is no single efficiency number that can be applied universally.

For this reason, the EPA has taken the approach of encouraging improved and measurable combustion technology that can be tested to show a destruction efficiency of 95%. The ability to measure performance and address the problem with facts creates a comfort level for communities that express concerns about the health effects of oil and gas emissions. Public concerns have delayed industry activity or caused requests for moratoriums on oil and gas activity. Measurable performance standards create clarity and help develop the social license to operate.

Certain industry participants have also taken the initiative to find the best way of conducting their projects that exceed regulatory requirements by using the best available technology or best practices. In all cases, new technologies are used to effect performance changes, gradually replacing practices that have a negative effect on the environment and/or the communities that live in close proximity to oil and gas developments.

Increasing Combustion Efficiency
Technology not only exists but is readily available that combusts at 100% combustion efficiency. This efficiency measures the device’s ability to reduce hydrocarbons to carbon dioxide and water vapor. Waste gases and associated gas with oil production that is impractical for conservation are combusted to the extent that the impact on environment is significantly reduced.

From the public perspective, this type of combustion results in no odors or visible smoke because of its high efficiency. Regulating agencies have in place a measurable technology that can be audited for performance. Although this seems a place where all jurisdictions should strive to be, only the US has incorporated such performance measures into its requirements. For example, if the 2011 uncontrolled methane emissions of 6.2 Bcf from hydraulically fractured oil well completions (EPA 2014) were cleanly burned at 100% combustion efficiency, GHG emissions from this source would be reduced by 89% at a cost of less than USD 0.40/ton.

Similarly, a business case can be made in dealing with VOC emissions and pollutants known as air toxics—in particular, benzene, toluene, ethylbenzene, and xylene (BTEX) resulting from natural gas dehydration. These pollutants are reduced to benign carbon dioxide and water vapor through clean, efficient combustion technology using 60% to 80% less fuel gas than a traditional flare, thereby significantly reducing GHG emissions and operating costs. The reduction in operating costs typically delivers a payout in fewer than 6 months on the capital investment.

Our analysis has indicated that based on the estimated 38,000 dehydrators in operation in the US, GHG emissions can be reduced by approximately 340 million tons at a cost of less than USD 1.65/ton over a 10-year period while providing an effective solution to VOC and BTEX emissions. Additionally, some ­clients are using the waste heat from the combustion process to keep the water in vapor form, thus eliminating condensing equipment, water storage, and trucking and disposal costs.

Taking a holistic approach highlights an opportunity to use the waste heat generated from clean combustion for process, building heat, or water vaporization/treatment. If the natural gas is of sufficient quality and volume, then it could also be used to generate power with reciprocating engines for the site or the grid. If the volume or quality of the gas is poor, then the waste heat from clean combustion can be used to generate site power with an organic Rankine cycle engine.

Additionally, there is an opportunity to  treat the wastewater stream thermally with the waste heat generated from the combustion of the associated gas. Typical wells that are not served by the pipeline infrastructure may produce in the order of 50 B/D of oil, 250 B/D of water, and 150–200 Mscf/D of associated gas. Even at elevated oil prices, the economic operation of such a well will be challenging. As oil prices drop to below USD 50/bbl, the water handling expense alone will exceed the oil revenue. This is the case when relying on trucking and deep well injection of the produced water.

Although there are elaborate methods to desalinate the entire stream, the economics are not yet suitable for this type of well. Using the excess thermal energy from the associated gas combustion under careful, controlled conditions, up to 85% of the produced water volume is vaporized. The remaining 15% of the original volume is carefully diverted to storage and then disposed of by deep well injection. By reducing the volume, the economics of flowing this well just became positive. This method requires combustion with a device whereby the heat is contained and able to be transferred effectively. Note that the 85% water volume in this example is returned to the ecosystem instead of being lost to deep well injection.

To rephrase, this combustion technology is able to use waste heat to drive water, a valuable resource, into the environment where it will become part of the water cycle and be available for future use.

Of course, the combined heat and power (CHP) is also readily accessible to technology providers that generate and are able to control heat. In short, a better way of doing things leads to a number of positive options.

For the sake of discussion, let us say that your oil well is burning associated gas and the landowners nearby are complaining about black smoke and odors. You have just decided to purchase a new combustion device. After 3 months of better air quality and no complaints, you decided that you would like to manage your produced water differently. You currently spend USD 2,100/day for water transportation and disposal and you can rent a vaporizer at USD 1,100/day. This well generates USD 900,000 yearly in oil revenue, and you have just added USD 300,000 yearly to this well’s bottom line without even looking into replacing the diesel generator with a CHP option.

Emission regulation will continue as the public becomes increasingly concerned with the potential health impact. The rules continue to get more stringent. The challenge for our industry is to find ways to effectively comply with the measures, especially in this low oil price environment. We believe the rules ­create clarity for both the industry and the community and will enable meaningful discussions toward creating the social license to operate.

There is a strong business case for change. Doing things more efficiently will cost less, and moving projects forward without public delays will also see oil production flowing sooner. It is a matter of knowing which technologies are available to resolve these new challenges. Technology is already here to provide for regulatory compliance, improved air quality, social acceptance, and true economic value.

References
EPA. 2014. Oil and Natural Gas Sector: Hydraulically Fractured Oil Well Completions and Associated Gas during Ongoing Production. US Environmental Protection Agency, Office for Air Quality Planning and Standards, Washington, D.C. (April 2014).

EPA. 2015. EPA’s Air Rules for the Oil & Gas Industry. Proposed Climate, Air Quality and Permitting Rules for the Oil and Natural Gas Industry: Fact Sheet. US Environmental Protection Agency, Washington, D.C. (18 August 2015).

Audrey M. Mascarenhas is president and chief executive officer of Questor Technology. She has worked in the energy and environment industry for more than 33 years, starting her career with Gulf Canada Resources. At Questor, she has focused on technology solutions to eliminate flaring and venting and the opportunity to utilize the energy for power generation and water treatment. Mascarenhas served as an SPE Distinguished Lecturer during 2010–2011 and currently serves on SPE’s Distinguished Lecturer Committee and Communication & Energy Education Committee. She holds a BS degree in chemical engineering from the University of Toronto and an MS degree in petroleum engineering from the University of Calgary.

John Sutherland is chief operating officer (COO) of Questor Technology. He joined Questor in 2008 and was instrumental in developing the company’s engineering and technical solutions team. Sutherland became COO in 2014 and, prior to that, held technical and managerial positions during his 26-year career with various exploration and production companies and the Alberta provincial energy regulator, AER. He is a graduate of the British Columbia Institute of Technology and the University of Calgary with degrees in mechanical engineering.

5 Nov 2015

SPE Effluent Discharge Management Workshop Addresses Standards and Regulations

The SPE Trinidad and Tobago Section recently hosted an Applied Technology Workshop (ATW) on oil and gas effluent discharge management in Port of Spain, Trinidad and Tobago.

The event brought together petroleum and petrochemical industry professionals involved in generating effluent discharges to the receiving environment, regulators, and those involved in the design, construction, operation, and maintenance of treatment systems for effluent discharge.

The goals of the workshop were to

  • Explore regional and international legislation as applied to effluent discharge in the oil and gas industry and compare with the local regulatory framework in Trinidad and Tobago.
  • Define the compliance issues of water pollution rules in Trinidad and Tobago specific to the oil and gas industry.
  • Obtain the industry best practice for effluent treatment and disposal with emphasis on large oil and gas drilling and production operations both onshore and offshore.
  • Explore the available technology and its applicability to achieve compliance.

There was a consensus that urgent collaborative action is needed among all stakeholders. The path forward received endorsement from the country’s regulators (the Ministry of Energy and Energy Affairs [MEEA] and the Environmental Management Authority [EMA]), operators, and service providers. The areas of focus in the workshop included legislative reform, use of applicable technology, and availability of resources.

Legislative Reform
Participants discussed the Trinidad and Tobago legislation pertaining to effluent discharges. There were also presentations on experiences setting effluent discharge standards in the North Sea using the Convention for the Protection of the Marine Environment of the Northeast Atlantic or OSPAR Convention, for possible use as a framework.

The topics of discussion about legislative reform centered on the following:

Are our current water pollution rules relevant and appropriately framed in the current environment?
The consensus was that there is an opportunity for the review of the current Water Pollution Rules created in 2001 and amended in 2006. For example, there is the need for ambient water-quality standards coupled with discharge standards. Current discharge standards were deemed to be stringent by some presenters compared with other jurisdictions such as OSPAR. OSPAR is using a holistic or risk-based approach in regulating effluent by the use of mixing zones and impact-based ambient water-quality standards vs. technology-based discharge parameters. To develop new ambient water-quality standards, a baseline study must be conducted on the receiving environment of Trinidad and Tobago.

Are our standards applicable to all sectors?
The discussions highlighted the need for industry-specific effluent discharge standards. There are different challenges and available technologies within the various industrial sectors that require specific regulations. The consensus was that one set of regulations is ineffective for all industrial sectors. The Trinidad and Tobago Bureau of Standards’ “Specification for the Effluent from Industrial Processes Discharged into the Environment” can be used in the development of oil industry-specific regulations.

Is compliance monitoring and reporting efficient and effective?
Participants suggested an opportunity for improvement with regard to compliance monitoring and reporting. Current environmental impact assessments focus on specific project sites (for example, a single well) rather than a cumulative assessment of an affected area. The use of strategic environmental assessments vs. specific environmental impact assessments under existing legislation should be considered.

How do we repair the disconnect between the certificate of environmental clearance (CEC) rules and water pollution rules?
Operators cited inconsistencies in recent CEC rules regarding which effluent discharge parameters are to be regulated. In the past, the CEC rules specified the effluent parameters to be regulated. In recent times, the rules require all parameters in Schedule II to be met, which may pose a challenge to attaining the goals with the existing technology by using the “end-of-pipe” discharge criteria.

Is there room for fiscal incentive for onshore and offshore operators?
Operators shared technical and financial issues associated with effluent treatment. With the retrofitting of offshore operations, for example, there are space restrictions, high cost of new technology, and logistical challenges. Bringing existing waste onshore for treatment also poses logistical and operational challenges. It was suggested that financial incentives be made available to operators for treating effluent closer to the source.

How can we speed the implementation of legislation?
Changing legislation can be a lengthy process in Trinidad and Tobago. However, representatives of the Bureau of Standards suggested that regulations may be used as a viable option instead of changing the legislation.

Should drill fluids and cuttings be regulated under the water pollution or waste management rules?
The discussions suggested that this is an area for further work because there were two aspects for consideration: offshore discharge and onshore treatment of drill cuttings.

Use of Available Technology
Participants gave presentations on existing and emerging technologies for effluent treatment by service providers. In summary, available technologies may be selected on the basis of the quantification of toxic components in the effluent and treatment goals. There were presentations on the use of ceramic membrane technologies and macro porous polymer extraction (MPPE) technology as examples with international case studies in different regulatory regimes.

The MPPE case study was presented as an option for treating both dispersed and dissolved hydrocarbons in produced water streams with limited pre- and post-treatment requirements. A case study was also presented on the treatment and reuse of black and gray water for onshore drilling.

The following summarizes the discussions on technology:

  • Best available technology should be used in the development of standards.
  • Operators should indicate what technologies are currently in place and what can work through shared lessons learned.
  • There is potential to reuse and recycle liquid effluent (produced water and onshore drilling waste water).

Availability of Resources
There were discussions about infrastructure challenges such as laboratory services and availability of human resources.

The following summarizes the discussions about resourcing:

  • Laboratory accreditation. There is a requirement for the infrastructure to be available to support the legislation with regard to effluent sampling and testing. Attendees shared concerns with the repeatability of effluent test results provided by various laboratories in Trinidad and Tobago. There is an opportunity to improve laboratory testing and reliability of results through a coordinated quality assurance program by an appropriate body such as the Bureau of Standards.
  • Human resources competency. There is a need for qualified and competent effluent treatment professionals at the operator and regulatory levels. Discussions revealed a gap in the competencies and skills of professionals. There is a need for specialists in industrial ecology and water treatment. Most of the local graduates are environmental management professionals. It was suggested that the local universities play a role by offering programs based on the needs of the industry.
  • Staffing levels. A concern of regulatory bodies, the level of staffing needs attention to support legislation related to permitting and enforcement.
  • Use of data resources. The EMA is the repository for all environmental data. It was suggested that these data be made available in a database to be more effectively used and incorporated into geographic information systems and mapping.

Recommendations
A committee or technical working group should be established to set the framework for managing future processes by incorporating the workshop’s recommendations. The group should be formally set up at a governmental level by a cabinet-appointed committee. Representatives of the committee and working group should comprise regulators, industry representatives, the Bureau of Standards, the Institute of Marine Affairs, environmental consultants, and service providers. A technical working group that was formed in 2013 should be expanded to include new focus areas explored in the workshop.

The terms of reference for the committee should be established to include targets and milestones. OSPAR, for example, has a template for which a covenant was signed by company leaders and regulators in environmental management.

The terms of reference should contain the following at a high level:

  • Review of legislation and recommendations for changes and improvements
  • Risk-based rather than end-of-pipe discharge standards
  • Use of strategic impact assessments vs. environmental impact assessments
  • Development of industry-specific water-quality standards (impact-based rather than parameter-based)
  • Identification of best available technology and lessons learned for effluent management
  • Laboratory accreditation standards
  • Resourcing (increasing competency standards)

It is recommended that the MEEA be the lead facilitator of the working group because it regulates the country’s energy industry and is well poised to bring all stakeholders together.

5 Nov 2015

Paper Chronicles Advancements in Derivation of Occupation Exposure Limits

A paper published recently in the Journal of Occupational and Environmental Hygiene examined how exposure-response estimation has been used to derive occupational exposure limits. What follows are two reviews from ExxonMobil scientists of the paper “Historical Context and Recent Advances in Exposure-Response Estimation for Deriving Occupation Exposure Limits” by M.W. Wheeler, A.J. Bailer, and C. Whittaker.

The first review is by Min Chen, an associate biostatistician, and the second is by Silvia I. Maberti, an industrial hygienist and exposure scientist, both of whom are with ExxonMobil.

Comments and review are welcome. Please send your comments to the HSE Now editor.


 

Quantitative risk assessment is required to characterize and disclose risks so that the resulting occupational exposure limit (OEL) better reflects the hazards involved and achieves an explicit low level of residual risk. This paper reviews several exposure/response modeling methods available for quantitative risk assessment (QRA). The recommendations are appropriate. I agree with the authors that the benchmark-dose (BMD) approach may get more information from the data when the BMD analysis is suitable for the data. However, it is likely that there are some endpoints and data sets that are not amenable to modeling with the BMD approach. In such instances, a no-adverse-effect-level/lowest-adverse-effect-level (NOAEL/LOAEL) approach must be used.

In animal toxicology studies, the exposure/response relationship is generally well-characterized. The sources of significant uncertainty include differences in species, routes and duration of exposure, and the relative potency of similar exposures in humans.

In epidemiology studies, no species extrapolation is needed when conducting risk estimation. However, the exposure concentrations may need to be reconstructed historically and estimated. Confounders and effect modifiers may need to be included in exposure/response models. The model uncertainty and exposure uncertainty would need to be considered.

Various exposure/response assessment techniques are used to select the point of departure (POD), the exposure associated with observed risks within or just below the range of observed data. Once the POD and target risk estimate are determined, the approach used for establishing the OEL will depend on organizational policies and other considerations.

NOAEL/LOAEL-Based PODs
The NOAEL is the highest experimental exposure at which there is no statistically or biologically significant change in the outcome of interest relative to responses in unexposed individuals. The LOAEL is the lowest dose or concentration that has been shown biologically or statistically to change the outcome of interest relative to responses in unexposed individuals.

NOAEL/LOAEL ignores the shape of the exposure/response curve, is constrained to be one of the levels of exposure selected in the experiment, and depends on the number of replications at each level.

Generally, NOAEL/LOAELs should only be used for OELs if the data are not adequate for exposure/response analyses.

PODs From Exposure/Response Models and the BMD Approach
Exposure/response models use all of the information in the exposure/response relationship to predict risks. Models that do not fit the data adequately should not be used. Dichotomous data requires at least one dose group whose response is different from the background rate and 100%. If the BMD, the dose associated with a specified change in the response, far exceeds the maximum experimental dose, the NOAEL may be the only viable option.

POD From Model Averaging of the BMD
The average-model method accounts for uncertainty in model selection. The average-model approach creates a weighted average of the exposure/response curve from the candidate models in which weights are based on how well each model fits the data. The average-dose approach takes the weights formed from the Akaike information criterion and the Bayesian information criterion, the model selection criteria. The average-model approach has better statistical properties than the average-dose model. To set the OEL when using the average-model approach, the exposure concentration should be chosen directly at the level of risk specified for the OEL.

POD From Semiparametric/Nonparametric Models and the BMD
The Bayesian semiparametric method in the paper uses a flexible spline construction for BMD analyses. One can include prior information on the incidence of the response in historical controls. The informed choices should be addressed. It also requires the choice of spline basis functions located at specific knot locations. To set the OEL when using the semiparametric approach, the exposure concentration should be chosen directly at the level of risk specified for the OEL.

Average-model and semiparametric/nonparametric methods are recommended for estimating risks at low levels if the data are adequate for exposure/response analyses. However, I would like to point out the importance of model checking for the average-model method. If all the models considered for averaging were poor, combining them would not do much good. The average-model method addresses model uncertainty within the selected class, but it does not address the uncertainty of model class selection. The average-model method can never completely avoid the selection dilemma even if model averaging is a wonderful approach to the problem of accounting for model uncertainty.

 


 

The reviewed document is part of a series of manuscripts discussing the various aspects of the process to develop OELs, including description and selection of the dose/response curve, selection of uncertainty factors, risk assessment, OEL setting, and their use in risk management. The manuscript is centered on the estimation of the dose/response relationship. It briefly describes and compares traditional and new methodologies used in dose/response modeling of data from animal and human data and advocates for the application of QRA and the BMD approach.

The first step in the OEL-setting process is to develop a dose/response curve on the basis of the available data for the health effect of interest. This curve is used to estimate a threshold dose or POD below which toxicity is not expected. Various dose/response assessment techniques are used to select a POD, the exposure associated with observed risks within or just below the range of observed data. Accounting for human sensitivity and responses on the basis of extrapolation of such data has proved to be difficult and is the source of inconsistencies in the approach to setting OELs.

Advances in analytical methods applied in toxicological and epidemiological studies have allowed for increased understanding of the basis for human variability in sensitivity. On the other hand, more powerful statistical analysis tools allow for better data selection and description of the selection process for the POD, uncertainty factors, and risk levels in a quantitative manner. The quantitative approaches described by the authors can enable a more-transparent and -systematic way to set OELs.

Approaches to POD Estimation
The authors describe the estimation of the POD on the basis of the NOAEL/LOAEL approach, where the lowest exposure without significant effect is selected as the NOAEL. Because of this, this approach is highly dependent on the design of the study (e.g., number of test subjects used, dose spacing, endpoint) to incorporate biological information in the curve. If the doses are properly chosen, one of them will represent the NOAEL and another will represent the LOAEL. If the number of individuals is limited, the adverse effect might not be observed at all, thus yielding an artificially high POD.

As opposed to the traditional NOAEL approach to select the POD, the authors propose the BMD approach, which uses data from the entire dose/response curve for the critical effect. The selection of a dose/response curve is limited by the type of data in addition to the need for more-realistic dose/response models, such as biologically based models and mode-of-action or semiparametric models. In the BMD method, a mathematical model is fitted to all the dose/response data, allowing for incorporation of biological information in the estimation of the POD that is associated with a predefined level of response. Because POD is not based on one experimental dose, the BMD approach is not as dependent on the study design and can be calculated for doses outside of the observed range. On the other hand, the BMD analysis is considered inappropriate for data sets with small dosing groups.

The authors describe the application of sophisticated statistical tools to estimate BMD. When multiple models are used, their ability to describe the data may be compared and the best model can be selected; an average dose can be estimated from all the models, or an average model of can be estimated with goodness-of-fit weights. One of the advantages of using average-dose models is the ability to take into consideration model uncertainty; however, the selection of the models to be included is crucial to obtain an estimate representative of the data. A detailed and transparent approach must be presented when applying highly sophisticated computational tools that require input on priors and selection criteria, for example.

Strengths and Limitations
The paper discusses the different approaches used to estimate the POD and provides examples of application of such models in setting OELs. The background section briefly describes some of the methods used and the challenges of applying these models to toxicological or epidemiological studies with continuous or dichotomous exposures. It provides information on common biases present in epidemiological studies, their consequences, and how to address them. However, the authors limited the description of the models used for BMD estimation and the key considerations for their application to toxicological or epidemiological data with continuous or dichotomous endpoints. The authors did not address other approaches such as the threshold of toxicological concern, the T25, the TD50, or the margin of exposure approaches. It must be noted that the BMD approach is the most widely used and accepted method, after the NOAEL.

The paper provides two hypothetical data sets and uses four different modeling approaches (i.e., BMD, Bayesian model average, and semiparametric modeling) to estimate the OEL for a particular endpoint. The POD based on the NOAEL approach is used as a baseline comparison for the quantitative models contrasted in this study. When compared with the NOAELs, the estimated BMDs were similar, in general, but higher, while the BMDL10s were closer, if not lower than the NOAEL. These results are within the expected outcomes discussed in similar studies. The authors reiterate the importance of the decisions along each step of the modeling process but provide little discussion or guidance on the application of the various approaches for different types of data or any of the data requirements to apply the models used.

Regardless of the approach followed, model selection must be consistent with the mechanistic considerations about carcinogenicity or the endpoint of interest. The authors describe some of the challenges presented when choosing models that are not biologically relevant, which might lead to the selection of an unrealistically low (or high) BMDs. This underscores the importance of proper selection of model and statistical tools to be used, as well as following a predefined selection process.

Discussion and Conclusions
For noncarcinogen substances, the BMD method is proposed as a preferred alternative to the NOAEL/LOAEL approach because it allows for calculation of a specific and measurable response rate. Similarly, BMD is preferred for threshold dose carcinogens where the concentration or dose that induced tumors derived from chronic studies are typically used. On the other hand, for nonthreshold carcinogens, where the endpoint is not dichotomous, modeling data from animal or epidemiological studies may be preferable.

Several software packages are available for BMD calculations. Although using the models may seem to be an easy task, the interpretation of the results is not trivial, requiring engagement of subject-matter experts in toxicology and statistics. Most importantly, expert judgment is still required to address the hazard-characterization issues in risk assessment, such as selection of the applicable uncertainty factors for the calculation of an OEL.

QRA allows for better characterization and discloses risks so that the resulting OEL reflects the hazards better because it can provide information on uncertainties associated with the data and identify factors contributing to uncertainties in risk estimates. Furthermore, consistent application of the models allows for comparison across experiments and effects. A standardized approach allows for effective processing of toxicological and epidemiological data for multiple data sets as well as comparisons across exposures and outcomes. On the other hand, these approaches can be cost prohibitive because they require significant amounts of data, computational ability, and information to correctly interpret results.

There is a need for the development of improved guidance for risk communication on the basis of probabilistic assessment techniques applying the wide variety of models and approaches available. This should include communication of the types of uncertainty and the relation to statistical variability, imprecision, and the use of confidence intervals. Additional guidance will enable an improved and proper utilization of benchmark response by the various science disciplines using OEL for risk management.

 

5 Nov 2015

PetroTalks Collection Continues To Grow

In a further advancement of SPE’s core mission to disseminate information, three new videos have been added to the PetroTalks collection. Modeled after the popular TED Talks format, PetroTalks are videos of speeches and talks presented by industry leaders on topics at the forefront of current discussion.

The continuing growth comes as the SPE Foundation (SPEF), which is tasked with financially supporting the mission of SPE International (SPEI), has committed to support PetroTalks as part of its Distinguished Lecturer webinar efforts.

“Among the offerings the foundation supports are the traditional Distinguished Lecturer section visits and the Distinguished Lecturer Web events. Recently, SPEI approached the foundation to ask whether funds set aside for the latter purpose could also be used for PetroTalks,” said Kate H. Baker, SPE Foundation president and 2004 SPE president. “The foundation trustees were pleased to say yes.”

The PetroTalks currently available address the issues of sustainability, social responsibility, and risk assessment. “In the moment, and perhaps because of SPEI’s desire to emphasize the HSSE-SR agenda, PetroTalks are weighted toward health, safety, social responsibility, and subjects in the water/energy nexus relative to topics covered by the Distinguished Lecturer programs,” Baker said. “But there is no reason why that content distinction should persist. PetroTalks are expected to offer SPE members the opportunity to hear from subject-matter experts on topics of current concern to the industry, whatever those might be.”

DeAnn Craig, SPEF past president, was president when the foundation made the decision to fund webinars. “The SPEF has long been a supporter of the Distinguished Lecturer program, and webinars, including PetroTalks, are a more-efficient and -cost-effective way of delivering the latest technology to our members in their offices,” she said. “With the archived material, the latest technology is delivered on the engineer’s schedule. And, there is no cost to the member.”

The three new PetroTalks now available are by Michael Oxman, partner and consultant for Acorn International; Kevin Preister of the Center for Social Ecology and Public Policy; and Doug Bannerman, head of corporate responsibility at Statoil North America.


Watch Oxman speak about the management of above-ground risks here.


Watch Preister speak about the importance of community engagement here.


Watch Bannerman speak about corporate social responsibility here.

23 Oct 2015

The Growth of the HSE Discipline and Its Role in SPE