CHAPTER 1 PETROLEUM EXTRACTION AND ENVIRONMENTAL CONTROLS INTERFACE
| Jurisdiction | United States |
(Feb 1994)
PETROLEUM EXTRACTION AND ENVIRONMENTAL CONTROLS INTERFACE
Cornerstone Environmental Resources, Inc.
Dallas, Texas
I.INTRODUCTION
The oil and gas industry is faced with a dilemma as it tries to operate in a world of changing environmental rules and regulations. The operating practices from the past may have been appropriate for their time, but when judged in the light of today's knowledge they may not have provided adequate protection of the environment. Past practices may also contribute to environmental problems and technical failures as enhanced recovery operations are initiated.
Operating decisions today are often made in apprehension of tomorrow when a new set of rules and regulations will be in force. Citations and fines may be the reward for actions made in good faith using the technology of today.
The purpose of this paper is to review how operators are dealing with this dilemma by interfacing their petroleum extraction activities with current and anticipated environmental requirements over the life cycle of a producing property. The life cycle of properties typically can be grouped into three phases — Acquisition, Operation, and Divestiture. Each phase has its own environmental concerns and these concerns flow from one phase to the other.
II.DISCUSSION
A.Acquisition Phase
The acquisition phase includes the acquisition of land to conduct exploration activities such as seismic operations and exploration drilling or acquisition of producing properties. In either case, the environmental conditions must be evaluated to determine if or how operations can be conducted that will result in a positive case flow, protect the environment, and reduce tomorrows environmental labilities. Environmental regulations
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associated with the area of operations must be evaluated to estimate the cost of monitoring and other compliance requirements.
Environmental regulations at times may impose conditions that go beyond reasonable protection of the environment. An example is areas containing Naturally Occurring Radioactive Material (NORM) where data concerning the health and safety effect on humans is scarce. Regulators have tended to be conservative when writing policy on NORM. Because of the strict regulations, clean up and disposal costs can be excessive. The question "What do I have to do to comply with the environmental regulations of today and what can I anticipate that they may be in the future?" must be evaluated prior to commitment to a project.
Some of the issues that must be addressed in the Acquisition Phase include:
1. The environmental setting
2. Previous operational practices in drilling and production
3. Special regulatory issues — NORM, mercury, asbestos, PCB,s
4. Proposed future regulations
The environmental setting is important in all phases of a property's life cycle. The presence of wetlands, environmentally sensitive areas and populated areas are important from the time that seismic operations are to be conducted until the last well is plugged. How operations are to be conducted and the cost of operations will depend largely on the environmental setting.
Another environmental concern during the acquisition phase is past operational practices. One operational practice to consider is the drilling practices that were used on the property. The type of mud and lost circulation material used can effect remediation costs. Oil base mud and muds which were heavy in metal content may have left drilling reserve pits which will have to be cleaned.
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Lost circulation material can also be a problem. One of the materials used in the past as a lost circulation material was cottonseed hulls. If these cottonseed hulls came from a crop that had been defoliated with a product containing arsenic, the arsenic could still be present on the cottonseed hulls. When this material was used to prevent lost circulation in zones which could communicate with water zones, arsenic contamination of the water could occur.
Past production operations must also be considered. A common practice was to use earthen pits for the disposal of produced water. Water was produced into evaporation pits which allowed the water to be evaporated leaving the salts behind. The ground through the years became saturated with salt. The salt may have either migrated down into the groundwater or into a permeable zone which would allow salt water to flow through the zone until the water reached an exit point to the surface. Contamination of soils and surface waters resulted when these salts ultimately reached the surface.
Produced water often contaminated soils and surface waters as the result of overflow or leaks of storage tanks with inadequate secondary containment. Produced water also caused damage as a result of breaks in flowlines or injection lines. These saltwater spills in many cases left areas void of any vegetation. Where the top soil was very thin or there was a steep slope, this loss of vegetation lead to rapid erosion of the soil. An operator acquiring one of these properties is faced with the cost of stopping erosion and possibly rebuilding or replacing top soil.
The cost of remediating past oil spills must also be evaluated. Common causes of these oil spills include leaks at wellheads, leaks and overflow of tanks at tank batteries and from breaks in flow lines. The oil contaminated soil through the years may have become asphaltic and the soil, in many cases, has become like rock.
NORM may be present on the property. Operators must determine if the material is present and then determine what is required today and what
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will be required in the future to store, handle, remove and dispose of equipment and soil contaminated with NORM. NORM is not a new discovery. NORM was initially detected with oil and gas operations in Canada in 1904 and elevated radium levels were discovered in Russian oil fields in the 1930's2 . Old perforations in some fields in the United States could be identified on radioactive logs as scale built up around the perforations. The radioactive scale built up on the perforations was NORM. The NORM that was building up on the perforations was also building up as scale in surface vessels and piping. As scale and sediment were removed from surface equipment, soil at the facility often became contaminated with NORM. Substantial costs may be required to store, clean, and dispose of this material.
Types of equipment that were used in the past can cause increased costs. Mercury filled flow meters used to measure gas flow may have resulted in contamination of soils with elemental mercury3 . Asbestos used...
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