Beneficial Use of Produced Water Selling this Valuable Asset A Case Study of Projects in Colorado and Wyoming

Transcription

1 Beneficial Use of Produced Water Selling this Valuable Asset A Case Study of Projects in Colorado and Wyoming David R. Stewart, PhD, PE Chief Technical Officer Produced Water Development 16th Annual Petroleum & Biofuels Environmental Conference November 3-5, 2009 Houston, TX

2 Presentation Outline Introduction Energy Water Nexus of Produced Water Produced Water Ownership Volumes of produced water Costs for treatment Beneficial use of produced water Case Studies and Projects by Produced Water Development Conclusions

3 Introduction

4 Big Picture Tale of Two Problems CBM and Oil E&P industry have an environmental and energy waste problem disposing of huge amounts of produced water The arid Western US has a problem drought, climate change and increasing demand for water

5 Overview The billions of barrels of oil and gas waste water produced annually can be treated, thereby mitigating an environmental problem, and used to augment water supplies Population growth, drought and climate change have substantially increased the demand for water in the arid West and are creating crisis conditions in many urban areas resulting in rapidly escalating water prices - Water 2025 Study Energy producers benefit through cost savings on wastewater disposal, increased recoverable reserves, reduced energy costs for disposal and reduced environmental exposure Agricultural, household and other users benefit from a new water source

6 Projected Water Shortages Note the overlay of produced water and water shortages

7 Water Energy Nexus Produced Water Energy Interaction 20% to 30% of the energy that is produced is consumed through re-injection to a deep aquifer Produced water is the constraint to more domestic energy production if the constraint to produced water is removed, then more domestic energy production is possible Treatment of produced water uses 5% to 8% of the energy produced, depending on the type of treatment employed Produced water can be another asset that can be maximized if treated properly

8 Volumes of Produced Water

9 Projected Produced Water Volumes

10 Estimated Volumes of CBM Powder River 2.75 to 4 bbl s/mcf Raton (Southern Colorado) 1.3 to 2 bbl s /MCF Atlantic Rim 2 to 4 bbl s/ MCF (discrepancy with USGS on amount of water needs additional research Federal Funding through WRDA 2008) In general, we have found that these estimates are lower than anticipated and that the amount of water available is much higher than anticipated resulting in higher water resource potential

11 Beneficial Use of Produced Water Upper Colorado River Basin at 2 bbl s/mcf 70,000,000 AF or potentially 500,000 to 1,000,000 AF per year Potential users are entities on the lower Colorado River Basin Need all entities within the Colorado River Basin to cooperate Discussions with State Engineers of the Upper Colorado River Basin Proposed Projects

12 Beneficial Use of Produced Water Proposed Projects Aquifer Storage CBM Delivery Raton basin Arkansas River Aurora, Southern Denver, Colorado Springs, Pueblo are potential users Aquifer Storage Recharge opportunities

13 Production Water Ownership Who Owns this water resource?

14 A New Water Resource Produced Water Highly contaminated water produced concurrently with the pumping of CBM or oil and gas operations Conventional Thinking Waste Product High Disposal Costs Environmental Concerns New Reality New source water Treatable for beneficial use Substantial quantities

15 Produced Water as an Asset Historically, produced water has been treated as a waste product Current methods of disposal reinjection (Class II Injection Wells), evaporation ponds and direct discharge are being challenged due to adverse environmental impacts Plan to turn this wastewater into an asset - a marketable product - by: Treating for surface discharge Conceiving a unique water delivery system - augmenting tributary water supplies with non-tributary water Pioneering a path through the numerous legal and regulatory obstacles

16 Ownership of Produced Water Colorado Example Tributary Non-Tributary Groundwater HB 1303 how does this apply in Colorado COGCC Rules (907) State Engineer Agreement on non-tributary status (Fossil water in other states) CDPHE Technical Review, Permit and approval Landowner issue Water Rights & Court Other Western States Prior appropriation First in Use First in Right

17 State Engineer Beneficial use permit Vance vs. Simpson/Wolfe Water Court Case Wellington Water Works vs. Dumont Case Colorado HB 1303 beneficial use of produced water Result need to obtain permits and concurrence regarding the nontributary status

18 COGCC Permit Issues Was hesitant to issue discharge permit CDPHE vs. COGCC permit Surface discharge CDPHE Subsurface discharge COGCC Monitoring requirements COGCC State Engineer CDPHE coordination

19 Water Rights Court Filed water rights application in Wellington Case December 2005 Court case January 2007 Final Determination March 2007 Produced water can be used beneficially as a vested water right

20 Permitting Requirements

21 Treatment of Produced Water

22 From Produced Water to Beneficial Use

23 Quality Of Produced Water TDS range between 1,000 and 50,000 mg/l typically need to reduce to a level between 500 to 2,500 mg/l Lower for Colo. River basin SAR s (Sodium Adsorption Ratio) can range from 0.5 to 30 Need to reduce to less than 5 Heavy metals can be a factor some fields will require heavy metal removal Removal of organics, such as benzene, toluene, xylene typically the limiting factor

24 Proven CBM Produced Water Treatment Technologies Toolbox CBM Field Silica Hot/warm softening Hardness Hot/warm softening IX Microorganism Removal Volatile VOCs Aeration Air stripping Desalting EDR RO Thermal Freeze-Thaw DOC GAC Membranes Wetlands Soil Aquifer Treatment Sodium Adsorption Ratio Amend soil gypsum or lime/acid Add Ca to water Membranes Na removal Dilution Beneficial Use

25 Typical Unit Operations Oil Produced Water Oil/Water Separation * Softening * VOC Removal * Desalting & Metals Removal * Dissolved Organic Removal * SAR Adjustment * More than likely Possibly likely Skid Mounted Equipment *

26 Costs Associated with CBM Treatment Plant typically consists of pretreatment and membrane processes AF per year $1.5M in capital costs $2,000 per AF 10,000 AF per year $5M in capital costs $500 per AF $1.80 per 1,000 gallons O&M Disposal fee of $0.05/bbl Beneficial use of produced water municipal use $10,000 to $35,000 per AF perpetual basis $500 to $3,500 per AF annual lease

27 Wellington Facility First Plant for Beneficial Use of Produced Water

28 Wellington, Colorado Project First produced water treatment plant to apply our concepts Increase the water supply for the Town of Wellington and small towns in Northern Colorado Process Obtain approval of non-tributary water designation from Colorado State Engineer Discharge permit from COGCC and technical review by CDPHE Water court ruling Facility has been running for approximately 3 years with constant production and no permit violations

29 Wellington Project Wellington Water Works LLC Treatment facility South battery Filtration system

30 Proposed Colorado, Wyoming and Utah Projects for Beneficial Use Planning and Financial Funding Stages Pilot plants for 4 different fields have been completed Current Proposed CBM Projects 2 on western slope and 2 on the eastern slope of Colorado, 1 in southwestern Wyoming and 1 in eastern Utah Current Proposed Oil Produced Water Facilities 2 in the DJ basin of the front range of Colorado

31 What are we finding in these case studies Each energy field is different Water quality issues both influent and effluent values Extensive education on how this process works and why energy companies should be interested Our patent pending process has worked in each case so far need for a robust treatment technology

32 Why should an Energy Company be Interested in this Process? Economic The cost of disposal is lowered by this process The sale of this water can result in an Internal Rate of Return in Excess of 50% Production Removal of the constraint will result in higher production rates Guaranteed Contracts Water providers are willing to look at futures contracts for development of water resource

33 Programs by Colorado School of Mines Computer programs are an asset in this produced water program The presentations by CSM are leading edge technologies and should be useful to our projects

34 How Can Research Assist in Produced Water Beneficial Use RPSEA research program at CSM Development of data base of water volumes estimates have been shown to be low Determination of water resource verses energy resource should water development continue after energy play is over

35 How Can Research Assist in Produced Water Beneficial Use Environmental Regulations Pending regulations by EPA for categorical discharge Very large concern of energy companies Is treatment a barrier to environmental regulations Paradigm shift in thinking of produced water as a water resource

36 Conclusions Produced Water is a viable water resource Colorado River basin transfers potential Need for cooperation Produced Water treatment is cost effective Produced Water should be pursued as a new water resource for the western United States

37 Questions?