Oil and Gas Producers Seek New Water Solutions

Ben Hinman works at the new Red Desert Water Reclamation facility just west of Rawlins, assisting drivers who haul in produced water from the natural gas fields.

When a tanker pulls onto a large concrete pad, Hinman attaches a short hose with a hood at the end, and within four minutes more than 5,000 gallons of water flows into a metal grate.

The water goes to a concrete pool where oil is skimmed, then the water is pumped to either a temporary holding pond or goes directly to the treatment plant. The water is cleaned to meet standards for use in drilling and hydraulic fracturing, or it can be cleaned further for agricultural use.

Oil and natural gas wells within about a 100-mile radius of Rawlins produce more than 400 million barrels of water annually, according to industry estimates. Most all of that water is either dumped into ponds to evaporate (adding to the greenhouse effect) or is injected into deep hydrologic “waste” zones.

Hinman used to work as a pumper for one of the major natural gas producers in the Wamsutter gas field. “It was frustrating seeing them waste this water,” said Hinman.

Hinman said he was proud to work in the oil and gas industry. He cherished the lifestyle it afforded him to spend in Wyoming’s outdoors hunting and hiking. But working at the water reclamation plant is even more gratifying because he believes the process helps strike the balance most Wyomingites seek between energy development and environmental conservation.

“That’s why when I heard what Red Desert was doing, I said I’m on-board,” said Hinman.

There’s no such thing as underground bladders of pure oil or chambers of natural gas. Most all oil and natural gas wells produce a mixture of hydrocarbons and water. A lot of water.

The U.S. Department of Energy estimates the nation’s oil and gas wells produce 15-20 billion barrels of water annually. In 1993, the oil and gas industry produced enough water worldwide to flow over Niagara Falls for nine days, according to the Produced Water Society, an industry trade group.

The volume of water produced with oil and gas trends with the amount of oil and gas produced. In Wyoming, the trend has been on a steep incline for the past decade.

RED DESERT WATER RECLAMATION

Red Desert gets paid for providing three services: Taking the water, selling the oil skimmed from the water, and selling the treated water back to oil and gas operators for use in drilling and hydraulic fracturing. Plans are underway to use a small portion of the reclaimed water to grow a variety of native grasses to produce seed mixtures needed to reclaim drilling locations — another potential revenue source.

To clean the water, Red Desert uses the PetroCleanse process owned by Clean Runner. The process uses an electric charge to coagulate contaminates, a clarification process to isolate oils, water and solids, then reverse osmosis to clear out dissolved contaminates.

“This treatment plant is not driven by technology. It’s driven by process. If a different technology can do it better, we’ll switch,” said Richard M. Cyr.

Cyr is senior vice president of Cate Street Capital, which owns the Red Desert Water Reclamation plant. He said the company’s two main clients don’t want to be named just yet. Some of the biggest players in south-central Wyoming are BP America Production Co., Anadarko Exploration and Production Co., Devon Energy Production Co., and Samson Resources Co.

Initial processing capacity of the plant is 20,000 barrels per day — a small fraction compared to the volume of produced water in the region.

“There’s so much (produced) water out there that if one more big operator signs on, we’ll have to expand,” said Cyr.

He said the company can add multiple treatment units to the location as needed. Already, plans are underway to open similar water treatment plants elsewhere in Wyoming. The company may also deploy a mobile produced water treatment service in Wyoming.

WATER QUALITY

“Produced water is a unique fluid,” said Colin Tyrie, secretary of the Houston-based Produced Water Society.

Produced water is not freshwater. It comes from deep oil- and gas-bearing formations that naturally consist of some nasty constituents such as acids, heavy metals and volatile organic compounds. The water is usually highly saline – sometimes six or seven times more saline than sea water.

The salinity concentration alone precludes dumping the water on the surface in south-central Wyoming where the Colorado River Salinity Control Program prohibits even minor salinity increases in surface waters. Left untreated, produced water doesn’t even meet standards for use in drilling and hydraulic fracturing – the process of injecting a mixture of water, sand and chemicals under pressure to crack open rock and shale deep underground to stimulate the flow of hydrocarbons.

CALCULATING COST

Individual oil and gas producers have attempted various water treatment methods in Wyoming, but few — if any — have proven economic, according to industry officials.

Dick Stockdale served as Wyoming State Engineer and is now vice president and director of Big Cat Energy Corp. The company developed a tool to reduce the volume of produced water in the coal-bed methane gas industry. The tool allows operators to separate water and gas within the wellbore so only gas comes to the surface.

Stockdale said the reason the process is not widely-used in coal-bed methane development comes down to what options are available, and which of those options is most affordable. In the Powder River Basin, the state commonly allows the industry to dump the water on the surface — the cheapest option.

The low price of natural gas in recent years hasn’t helped the water services industry either.

“It’s mostly economic reasons, and the fact that the price for natural gas is so doggone low,” said Stockdale.

But water treatment becomes an economically viable option when operators produce a large volume of water, and there’s a centrally-located facility to handle that volume from multiple operators, according to Cyr.

The estimated cost of treatment at the Red Desert Water Reclamation plant is $3 per barrel, depending on the salinity concentration, according to Cyr. That may not seem competitive to evaporation ponds or injection, but it is when you consider there’s a limit to how many ponds can be constructed and to how much untreated water can be pumped into a waste zone.

Tyrie said it’s not so much the actual cost of treatment that makes water reclamation economically viable. It’s avoiding the escalating cost of environmental controls and the time it takes to meet them.

Trucking is a big expense, too. If an operator has the choice of trucking produced water to an evaporation pond for disposal or trucking it to a treatment plant where the truck can also pickup a load of treated water for drilling, it makes sense to use the treatment option.

“The economics are forcing them to look at other things because you’ve got to clean the water to re-use it, and it’s much better to re-use if you can,” said Tyrie.

LIMITATIONS

Companies must acquire a Class II injection well permit to inject the water into underground waste zones. There are about 4,954 Class II injection wells in the state, administered by the Wyoming Oil and Gas Conservation Commission. Another 168 Class II injection wells are located within the Wind River Indian Reservation, administered by the U.S Environmental Protection Agency’s Region 8 office in Denver.

But injection isn’t a cost-free endeavor; it requires electric pumps to force the water into deeper geologic zones. And there’s a limit to how much and fast water can be injected into those zones. Despite the large number of injection wells in the state, not every operator has enough injection capacity to match its water production. Cyr said these types of injection well limitations have helped make water treatment an economically viable option.

Dumping the water into evaporation ponds comes with its own set of problems. Though the ponds are lined, they sometimes leak. Evaporation only adds to the greenhouse gas effect, and the process can emit large volumes of other gases and volatile organic compounds. A handful of Wyoming and Colorado oil and gas producers are working with EPA to better understand emissions from produced water ponds and how to minimize the emissions.

SLOW TO CHANGE

While natural gas producers in the Wamsutter area have excess water, drillers in the Niobrara oil exploration play 150 miles away near Cheyenne are in need of water to drill their wells. Some are even buying water from crop irrigation operations.

While there seem to be myriad opportunities to link needs between those who need water and those who need to get rid of water, the actual logistics are complicated and expensive. And coordination is lacking.

“People think in kind of a linear fashion. They’re just trying to get their job done,” said Steve Degenfelder, senior vice president of exploration and new ventures for Casper-based Double Eagle Petroleum Co.

Double Eagle produces about 27 million cubic feet of gas per day from coalbeds in the Atlantic Rim area southwest of Rawlins. Degenfelder said the company uses 14 Class II injection wells to get rid of all its produced water — about 45,000 barrels of water per day.

“We do have a treated water discharge permit, but it’s not economic at this time. We mothballed it because we can’t justify running it in comparison with that re-injection cost,” said Degenfelder.

Contact Dustin Bleizeffer at 307-577-6069 or dustin@wyofile.com.