US Producers Reveal More Details on Their Methane Oversight Programs 0

Many top upstream and midstream companies in the US oil and gas sector are making meaningful methane disclosures to address increasing investor concerns about the gas, according to a report by the Environmental Defense Fund.

The EDF report, The Disclosure Divide: Revisiting Rising Risk and Methane Reporting in the U.S. Oil & Gas Industry, found that nine of the top 64 upstream and midstream companies release comprehensive reports on their methane leak detection and repair programs (LDAR), with many of the remaining companies carrying out some form of methane management program.

“Bright spots in the report include Southwestern Energy, which not only has a quantitative target, but is also committed to continuous improvement,” the report found. Noble Energy was also highlighted for releasing extensive details on its LDAR program in the Denver Julesburg Basin, the Appalachian Basin and onshore Texas.

“Noble’s methodology for inspections is conducted with infrared cameras. These efforts are reported as contributing factors to Noble Energy’s 1.62 billion cubic feet (bcf) reduction in methane emissions in 2016,” the report said.

Top performers also included shale-focused US producers Consol Energy, EOG Resources, Hess, Noble Energy, and WPX Energy as well as diversified international players ConocoPhillps and ExxonMobil and North American pipeline giant TransCanada.

To receive the highest distinction, each of the companies had to disclose three key details about its LDAR program, namely: The scope of the program, the frequency of inspections, and the methodology used for methane detection.

EDF noted that LDAR is evolving rapidly with emerging technologies like continuous mon­itors being piloted by Shell and Statoil, drone-based monitors, and predictive analytics.

Methane, a key component of natural gas, is a greenhouse gas 84 times more potent than carbon dioxide that is linked to climate change, according to EDF.

Activist Shareholders Push for Disclosures

The increased disclosures come as the Trump administration is rolling back aggressive methane-reduction regulations written by the Obama administration’s Environmental Protection Agency and Interior Department, measures that were criticized by the oil and gas industry for the complexity and high cost of compliance.

Regardless, the focus on methane emissions is unlikely to abate as a growing number of investors are pressuring oil and gas companies to increase their environmental disclosures. The EDF report found that five of the seven companies that began offering more details on their LDAR practices in 2017 were targets of methane-shareholder resolutions during the past two years.

EDF bloggers Kate Gaumond and Sean Wright note that 390 investors representing more than $22 trillion in assets have signed a letter supporting the Task Force on Climate-Related Financial Disclosures, an organization that advocates for a unified set of recommendations for corporate climate disclosure.

Among those calling for these measures is CalSTRS, California’s second largest public pension fund. “As a long-term global investor, we recognize that methane emissions are one of the most financially significant environmental risks we face,” Brian Rice, portfolio manager at CalSTRS said in a press release.

The push appears to be working. Cimarex Energy started providing more information about its methane management practices after it received methane shareholder resolutions in 2016 and 2017. ExxonMobil has likewise been the target of similar shareholder action and last year unveiled a comprehensive methane emissions reduction program focused on its shale-focused subsidiary XTO Energy (SO Jan. 28’18).

Industry is Leading its Own Efforts

The oil and gas industry has created its own group to address environmental concerns. In December, a host of players joined with the American Petroleum Institute to create a partnership designed to reduce the environmental impact operations across the US (SO Dec.24’17).

The voluntary effort, called the Environmental Partnership, is comprised of 26 producers who have pledged to initially focus on reducing emissions of methane and volatile organic compounds (VOCs) from their operations.

The move is as a step in the right direction, though many environmental advocates would still like to see more.

“EDF looks forward to working with leading companies and other stakeholders to support methane regulations that build from and improve upon federal and state regulatory models and ensure that we are tapping all cost-effective solutions to comprehensively address oil and gas methane emissions,” EDF business director Ben Ratner said in a press release.

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BP Oman Achieves Significant Reduction in CO2 Emissions for the Khazzan Project 0

BP Oman Achieves Significant Reduction in CO2 Emissions for the Khazzan Project

Fit-for-basin well cleanup solution enables zero-flaring delivery of new wells to central production facility

GHG emissions reduction goal

As part of BP’s commitment to advancing a low carbon future, BP operations around the world are striving to make a meaningful contribution to reduce GHG emissions. For BP Oman, a major GHG-emitting activity is associated with flaring in cleanup operations for new wells. For this scenario, BP Oman is taking the lead to identify and implement proactive ways of reducing GHG emissions in Khazzan Field for new well cleanups.

Introducing green completions

Supergiant Khazzan Field is characterized by tight reservoirs that require hydraulic fracturing to release the gas. After fracturing, wells are tested and cleaned up by the conventional method of flaring and burning the well fluids, which are gas and produced condensate. This results in the release of GHG to the atmosphere. To eliminate these emissions, BP Oman introduced green completions to Khazzan Field. The green completions technique redefines well testing from a GHG-producing activity to one that prevents GHG emissions by routing the hydrocarbons to the production facility.

BP’s ambition is to be a net zero company by 2050 or sooner and to help the world get to net zero. Schlumberger shares BP’s commitment to low carbon and is committed to set a science-based target by 2021 and update the CO2 emissions footprint ambition accordingly.

Collaborative design for challenging conditions

BP Oman engaged with Schlumberger to develop a fit-for-basin solution to clean up and produce gas from Khazzan Field after fracturing. All modifications and designs were performed through the Schlumberger RapidResponse customer-driven product development process to enable solids-free produced hydrocarbons at optimal conditions for combination with the processing facility pipeline.

Photograph of fit-for-basin zero-flaring solution for the Khazzan Field.
Schlumberger and BP Oman collaborated to deliver a fit-for-basin zero-flaring solution for the Khazzan Field

Project success contributes to low carbon goals

The residual solids from stimulation operations that are often present in the fluid flowstream pose a risk to system integrity and can compromise process lines and production facility equipment. To address this risk, Schlumberger designed and installed an integrated separation, filtration, and acoustic monitoring system for the well testing solution.

One challenge was the relatively high separating process pressure needed, which demanded a specific well test design that didn’t exceed the process facility gathering system design pressure. A solution was developed by combining large-bore temporary pipelines and manifolds with a digitally enabled, high-capacity four-phase horizontal separator equipped with autonomous meters providing real-time measurements and monitoring efficient separation of the well effluent phases to deliver hydrocarbons at export specifications.

The design also enhanced process safety by incorporating 6-in safety valves in the electronic emergency shutdown system to address the high volume of hydrocarbons in the pipelines.

Project success contributes to low carbon goals

Schlumberger well testing solutions continue to operate at Khazzan Field and have set a new bar for operational efficiency and service delivery by improving customer performance. In 2019, the green completions well cleanup technique has been applied to 10 wells for flowback to clean up for production and reservoir testing. The result is more than 80,000 t of CO2 emission reduction. This is equivalent to taking nearly 18,000 cars off the road for a year.

Study: Filtration a Viable Option for Produced Water from the Marcellus Shale 0

The rising production of natural gas from hydraulically fractured wells in Appalachia generates along with it contaminated produced water that must be carefully disposed of. Researchers at Pennsylvania State University say that producers would be wise to consider the environmental risks associated with the most commonly used disposal practice of underground injection, and instead adopt more environmentally friendly and sustainable innovations in water filtration.

The study, Sustainability in Marcellus Shale Development, published by Penn State’s College of Engineering in conjunction with Chevron, notes that produced and flowback water from the prolific Marcellus Shale in Pennsylvania is most commonly disposed of through injection into saltwater injection wells drilled far below the deepest known aquifer.

But although this method is the cheapest available and most frequently used, it brings with it the potential for surface spills and casing leaks that can contaminate freshwater, as well as the risk of activating dormant faults and causing earthquakes.

Disposing Fracked Water

“During the hydraulic fracturing process, water and chemicals are used to stimulate the fissures in the rock in order to extract the natural gas. Water is mixed with sand and other chemicals and then injected into the well. After creating cracks in the Marcellus Shale, flowback water, a brine solution with heavy metals and chemicals, quickly comes back. Typically, this flowback water is stored in tanks or pits before treatment, recycling, or disposal,” according to the report, co-written by Kyle Bambu, Mike Spero, and Harry Polychronopoulos.

The most common way to dispose of this produced water is by pumping it into saltwater disposal wells that are drilled hundreds below the deepest known aquifers. But Pennsylvania’s unique geology is not well suited for such wells. At the time the study was published in Fall 2016, there were 144,000 Class II injection wells in the US and only eight of them were Class II salt water disposal wells in Pennsylvania. These eight wells combined accepted 8,667 barrels per day of brine, while similar wells operated in Texas can each dispose of more than 26,000 b/d of brine.

According to the report, the average cost to dispose of one bbl of fluid can range from as low as 25¢/bbl if the oil company operates its own disposal well, to anywhere from 50¢/bbl to $2.50/bbl if a commercial saltwater disposal well is used. The cost of using disposal is further increased by the cost of transportation.

“In northern Pennsylvania, where commercial disposal wells aren’t plentiful, the brine water may have to be transported to Ohio or West Virginia. This can increase costs by $4.00 to $6.00 a barrel, bringing the net cost of disposal in the Marcellus Shale region to $4.50/bbl to $8.50/bbl,” the study said.

The use of underground disposal wells is not without risk, and frequent concerns include the potential for groundwater contamination and induced seismic activity. In Youngstown, Ohio, the researchers noted that a Class II disposal well for fracking wastewater was linked to seismic activity after it activated a previously unknown fault line. That well was blamed for 10 minor earthquakes, the largest of which is a magnitude of 3.9. A spate of earthquakes in Oklahoma in recent years has likewise been linked to the increased injection of water into disposal wells.

The need to dispose of produced water in Pennsylvania has become more pressing in recent years as natural gas production from the prolific Marcellus and neighboring Utica shales has taken off.  Data from the federal Energy Information (EIA) Administration show that output from the shale formations more than tripled Appalachian gas production from 7.8 billion cubic feet per day in 2012 to 23.8 Bcf/d in 2017 (EIA). These plays are credited for driving growth in US natural gas production since 2012 and have played a critical role in enabling low domestic prices and increasing exports.

The Water Filtration Alternative

Researchers note that a number of alternatives to disposal wells are emerging at varying levels of cost. These largely involve treating the produced water to remove its various contaminants, which can include radioactive substances, heavy metals, and high concentrations of salt. Traditional wastewater treatment plants cannot be used because they lack the sufficient processes needed to clean this water.

The most cost competitive alternative to underground injection highlighted by researchers is the option of using a membrane to clean the brine produced water. The company Oasys Water offers a system that drives the brine solution through a series of semi-permeable membranes at a cost of nearly $2/bbl of water. The water that emerges from this process is clean enough to be discharged into streams or drainage systems.

Other potential treatments on the horizon that require further research include the option of boiling the water. However, researchers note that the cost of using this process can run upwards of $17/bbl and the heavy salt causes extreme wear and tear to the requisite industrial boilers, resulting in massive equipment replacement costs.

Lastly, the study says the process of electrodialysis could be used to separate water from contaminants. Researchers at the Massachusetts Institute of Technology have found that an electrical current can be used to separate fresh water from a salty solution. Salt is an effective conductor of electricity and successive stages of electrodialysis can remove most contaminates. But this process has not been tested in the oil and gas industry and there are not commercial treatment options available.

Researchers ultimately concluded that while the common practice of injecting produced water into disposal wells is relatively cheap, this practice comes with high environmental risks. These risks include the potential for groundwater contamination that is caused by surface spills or breaks in the tubing for saltwater disposal wells and even induced seismic activity.

At present, the impetus for improving produced water disposal practices is driven primarily by the sustainability practices of each producer and not government regulations. Researchers found that the oil and gas industry is exempt from some of the most stringent federal environmental regulations, like the Safe Drinking Water Act the Clean Water Act, but noted that states have been working to impose their own rules to address areas of concern. For instance, Pennsylvania in recent years adopted new guidelines intended to prevent spills and releases of harmful substances.

Today’s Best Option

The study ultimately recommends Oasys Water’s membrane filtration as the best option for disposing of produced water today. Researchers said that while using this method can result in slightly higher costs for water treatment and transportation, it appears to be the most sustainable solution until other technological advances are advanced in the future.

“This (membrane) system was recommended because of its relatively cheap cost yet adherence to sustainability and environmentally friendly concerns,” the study said.

To read a PDF of the Penn State study, click here.

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