EPA s Clean Water Act Review of the Coalbed Methane (CBM) Industrial Sector. Stakeholder Teleconferences June 2007

Transcription

1 EPA s Clean Water Act Review of the Coalbed Methane (CBM) Industrial Sector Stakeholder Teleconferences June 2007

2 Purpose of Stakeholder Teleconferences Provide background on EPA s Detailed Study on the coalbed methane (CBM) industry sector. EPA will survey a wide range of CBM operations to gather technical, economic, and environmental data in order to evaluate available and affordable CBM produced water treatment technology options. Scope and schedule for the CBM Detailed Study. Explore existing data sources for EPA s potential use in developing the Information Collection Request (ICR). Provide stakeholders an initial opportunity for input into EPA s development of the CBM ICR. Provide overview on how stakeholders can provide future input to EPA s development of the CBM ICR. June 2007 CBM Stakeholder Teleconferences (EPA) Page 2 of 30

3 EPA Regulation of Discharges to Surface Waters The major environmental law governing surface water discharges is the Clean Water Act (CWA). Goals of the Clean Water Act are: - Restore and maintain the chemical, physical and biological integrity of the Nation's waters; - Water quality which provides for the protection and propagation of fish, shellfish, and wildlife and provides for protection of human health and recreation in and on the water (e.g., fishing, swimming, boating); and - Zero discharge of pollutants to navigable (surface) waters. EPA implements the CWA by through publication of regulations and discharge permits for point sources of wastewater pollution. Any discharge to the surface waters must comply with the more stringent of technology-based and water-quality based effluent limits. June 2007 CBM Stakeholder Teleconferences (EPA) Page 3 of 30

4 EPA Regulation of Discharges to Surface Waters Set Standards Technology-Based Approach Effluent limitation guidelines (ELG) (national standards) Best professional judgment (BPJ) (site specific) Water Quality-Based Approach EPA and States develops water quality standards: Designated uses, Criteria to protect those uses, Anti-degradation policy Implement Permit Issue individual permit for a single facility or a general permit for a broad group of similar facilities across a geographic area. Permits must include the most stringent requirements based on water quality and/or technology-based approach. Ensure permits limits are met through compliance assistance, inspections, audits, environmental studies, and review of discharge monitoring reports. NPDES permits should be renewed every five years. June 2007 CBM Stakeholder Teleconferences (EPA) Page 4 of 30

5 Technology-based Approach: Effluent Guidelines EPA establishes effluent limitations guidelines (ELGs) for categories of U.S. industry. These ELGs are based on technologies that are available and economically achievable. There are ELGs for 56 industrial categories (450 subcategories) covering more that 60,000 direct and indirect dischargers. The ELGs for the oil and gas extraction industry are located in 40 CFR 435. EPA issued effluent guidelines for this industry in 1979, 1993, and 1996 with new limits on synthetic-based drilling fluids (SBF) issued in The Oil and Gas Extraction ELGs do not currently regulate pollutant discharges from CBM extraction operations. As required by EPA regulations, NPDES Permit writers used their best professional judgment to establish technology-based effluent limits. See 40 CFR (a)(1) and 40 CFR 125.3(d). June 2007 CBM Stakeholder Teleconferences (EPA) Page 5 of 30

6 Technology-based Approach: Effluent Guidelines None of these oil and gas extraction rulemakings considered CBM extraction in any of the supporting analyses or records. EPA did not consider CBM production in developing the 1979 national technology-based ELGs for Subpart C: Onshore Subcategory and Subpart E: Agricultural and Wildlife Water Use Subcategory of the Oil and Gas Extraction Category, because there was no significant CBM production in 1979 (O Farrell, 1989). Additionally, EPA did not consider CBM production in developing the Coal Mining ELGs (40 CFR 434). EPA considers CBM extraction a potential new subcategory of the Oil and Gas Extraction Category (2004 and 2006 effluent guidelines reviews). June 2007 CBM Stakeholder Teleconferences (EPA) Page 6 of 30

7 Effluent Guidelines Planning The 1987 Clean Water Act Amendments added Section 304(m), which required EPA to publish a biennial effluent guidelines plan. EPA must review all promulgated effluent guidelines annually. Every other year: after proposal and public comment, EPA must publish a two-year plan for the guidelines program which: - Identifies and establishes a schedule for any effluent guidelines revisions - Identifies any industrial categories that discharge non-trivial amounts of toxic pollutants and are not currently subject to effluent guidelines, for which EPA intends to conduct an effluent guidelines rulemaking; and - Establishes a schedule to take final action with respect to potential new categories within three years. More information at: June 2007 CBM Stakeholder Teleconferences (EPA) Page 7 of 30

8 Effluent Guidelines Planning: Goals Involve stakeholders from the start of the Plan. Assure transparent decisionmaking. Evaluate sound information against broad and balanced decision criteria. June 2007 CBM Stakeholder Teleconferences (EPA) Page 8 of 30

9 Review of Existing Effluent Guidelines: Factors Pollutant discharges by industrial category Current and potential technology and pollution prevention options by industrial category Economic considerations growth, affordability Implementation/efficiency considerations of revising existing effluent guidelines or publishing new effluent guidelines June 2007 CBM Stakeholder Teleconferences (EPA) Page 9 of 30

10 Review of Existing Effluent Guidelines: Phased Process Screening level review to identify categories needing further investigation Prioritizing candidates using selection criteria In-depth review to characterize industry categories Decide on course of action Present findings in final Plan Options can include no further action necessary, continue study, identify for ELG rulemaking. June 2007 CBM Stakeholder Teleconferences (EPA) Page 10 of 30

11 304(m) Review of CBM Sector EPA s two national databases for estimating pollutant discharges contain very little data for this industrial sector. Discharge Monitoring Data (PCS & ICIS): Most data held at the State level. Toxics Release Inventory: O&G extraction (SIC 1311) is exempt from reporting. Consequently, EPA has focused on identifying other sources of discharge data, potential new technology options for this industry, and stakeholder issues (DOE/EIA, Industry). EPA received comments from public interest groups on this industry sector in the 2004 and 2006 Plans. Tongue River Water Users Association requested protection of the Tongue River s existing sodium levels so that it can continue to be used for irrigation. NRDC cited the need for consistent, national regulations instead of statedetermined permitting based on BPJ. Cook Inlet Keeper commented on the 2003 annual review that EPA should expand its examination of available data on the impacts of CBM-produced water discharges. June 2007 CBM Stakeholder Teleconferences (EPA) Page 11 of 30

12 304(m) Review of Coalbed Methane Higher natural gas prices and advances in drilling technology have helped prompt recent CBM development. In 2004, CBM accounted for about 10.4% of the total U.S. natural gas production and is expanding in multiple basin across the U.S. Current National Production (2004) w/ +25,000 wells = 1.7TCF/yr New Mexico: TCF/yr Colorado: TCF/yr Wyoming: TCF/yr Alabama: TCF/yr Utah: TCF/yr Eastern States (PA, VA, WV): TCF/yr Western States (KS, MT, OK): TCF/yr DOE/EIA expects CBM production to remain an important source of the domestic natural gas: 1.81 TCF/yr (2015) and 1.88 TCF/yr (2025). Based on BLM and States projections this will likely involve over 100,000 CBM wells. For example, ~ 5% of WY CBM reserves have been produced Source: Annual Energy Outlook 2006 (DOE/EIA) June 2007 CBM Stakeholder Teleconferences (EPA) Page 12 of 30

13 U.S. Coalbed Methane Reservoirs* *Note: Alaska also has significant CBM reservoirs. Source: Evaluation of Impacts to Underground Sources of Drinking Water by Hydraulic Fracturing of Coalbed Methane Reservoirs, EPA 816-R , June June 2007 CBM Stakeholder Teleconferences (EPA) Page 13 of 30

14 304(m) Review of Coalbed Methane Produced water volumes can vary greatly over time, between and within CBM basins, and may be very large. Production volumes range from 1,000 to 17,000 gal/day/well in the San Juan and Powder River Basins, respectively. The pollutants of greatest concern are typically total dissolved solids (TDS) and the sodium adsorption ratio (SAR). Eastern U.S.: TDS concentrations typically range from 500 to 27,000 mg/l with some wells over 50,000 mg/l. Western U.S.: TDS concentrations range from 400 to 2,000 mg/l (Powder River Basin), 9,000 to 11,000 mg/l (Wind River), to approximately 50,000 mg/l (San Juan Basin). CBM produced water contains small amounts of metals and some volatile and semi-volatile organic compounds. June 2007 CBM Stakeholder Teleconferences (EPA) Page 14 of 30

15 Example of CBM Produced Water Chemistry Changing with Geographic Location: Powder River Basin (MT/WY) Source: USGS Open-File Report pubs.usgs.gov/of/2000/ofr /of pdf June 2007 CBM Stakeholder Teleconferences (EPA) Page 15 of 30

16 Example of CBM Produced Water Discharge Volumes Changing with Time This graph shows the increased production of water in the early life of a CBM well. Well Shut-in Source: Handbook on Coal Bed Methane Produced Water: Management and Beneficial Use Alternatives, ALL Consulting, July June 2007 CBM Stakeholder Teleconferences (EPA) Page 16 of 30

17 Coalbed Methane Technology Options CBM produced water of a suitable quality can be used for irrigation and livestock watering. TDS concentrations identified as protective of these uses range from ~ 500 to 5,000 mg/l. Treatment options include iron oxidation (aeration), reverse osmosis (RO), countercurrent ion exchange (CCIX), precipitation, freeze/thaw evaporation, surface impoundments, downhole separation, and re-injection. Reduces TDS, SAR, and metals content. Iron oxidation is typically performed at discharge locations as part of BMPs to reduce discoloration of discharge point. Piping is a significant portion of the costs but is needed regardless of disposal method to transport the produced water to the disposal location. This fact is significant as it is much easier to plan and minimize piping costs for new CBM projects than to try and retro-fit CBM projects. The $/bbl capital and operating costs decrease as more wells are tied together into a single project. CBM Produced Water Gathering Pipes June 2007 CBM Stakeholder Teleconferences (EPA) Page 17 of 30

18 Potential Environmental Impacts from Coalbed Methane Produced Water Discharges Impacts to surface water from discharge of CBM produced water can be severe depending upon the quantity and quality of the CBM produced water. Saline discharges have variable effects depending on the biology of the receiving stream and the in-stream pollutant concentrations. Some waterbodies and watersheds may be able to absorb the discharged CBM produced water while others are sensitive to large amounts of lowquality CBM produced water. Aquatic and benthic communities can be adversely impacted (e.g., decrease in species diversity, density) by the constituents in CBM produced water (e.g., TDS, sodium, chloride, metals, organics). Uncontrolled discharge of CBM produced water may also cause erosion and in some cases soil damage from high sodic and saline discharges. This may limit irrigation (agricultural) and livestock uses of the surface waters. June 2007 CBM Stakeholder Teleconferences (EPA) Page 18 of 30

19 EPA CBM Information Collection Request (ICR) In the final 2006 Plan (21 December 2006; 71 FR 76644) EPA identified that it will need to gather more specific information to determine whether it would be appropriate to conduct a rulemaking to potentially revise the Oil and Gas Extraction ELGs to include limits for CBM. EPA needs more technical, economic, and environmental data to evaluate available and affordable technology options for CBM produced water discharges. To aid in a better industrial profile of the CBM sector, EPA intends to submit an information collection request (ICR) to OMB for their review and approval under the Paperwork Reduction Act, 33 U.S.C. 3501, et seq. EPA will use this ICR to collect technical, economic, and environmental data from a wide range of CBM operations (e.g., geographical differences in the characteristics of CBM-produced waters, current regulatory controls, potential environmental impacts, availability and affordability of treatment technology options). June 2007 CBM Stakeholder Teleconferences (EPA) Page 19 of 30

20 EPA CBM Information Collection Request (ICR) In designing this industry survey EPA expects to work closely with CBM industry representatives and other affected stakeholders. EPA solicits comment on the potential scope of this ICR. EPA may also supplement the survey data collection with CBM site visits and produced water sampling. Survey questionnaires solicit detailed information specific to individual facilities that is used to assess the statutory rulemaking factors, particularly technological and economic achievability of available controls, production processes, potential environmental impacts, and wastewater treatment residuals disposal practices. To develop a useful survey questionnaire, EPA typically selects the methodology it would use for estimating the costs of installing or upgrading pollution control equipment and for financial and economic analyses, and defines the data it would need to conduct these studies. Survey methodology will likely involve a sample of CBM operations (not census) that can reasonably be extrapolated to all CBM operations. June 2007 CBM Stakeholder Teleconferences (EPA) Page 20 of 30

21 EPA CBM Information Collection Request (ICR) The necessary data for the CBM ICR will include, among other things: NPDES permit information and other regulatory controls; Information about CBM formations, CBM production levels and produced water characteristics, types of CBM drilling, CBM-produced water treatment and disposal options and practices (including beneficial use), and environmental data; The design, capacity, and operation of current CBM-produced water treatment technologies and practices; The types, amounts, composition, and destination of CBM-produced waters and wastes generated by the facility and associated costs of treatment, management, and disposal; and Detailed facility and well specific economic and financial data, such as statements of production, revenues and net income, assets and liabilities, operating costs and expenses (e.g., depreciation, royalty payments, severance tax payments), and internal rates of return. June 2007 CBM Stakeholder Teleconferences (EPA) Page 21 of 30

22 EPA CBM Economic Analysis The economic analysis for the CBM Detailed Study will use a financial model based on a discounted cash-flow approach similar to the model that EPA has used for the economic analyses of several oil and gas industryrelated effluent guidelines. Offshore Subcategory (40 CFR 435, Subpart A) 1993 Coastal Subcategory (40 CFR 435, Subpart D) 1996 Synthetic-based Drilling Fluids (40 CFR 435, Subparts A and D) 2001 The general approach uses a number of model projects that are specified on the basis of gas and water production volumes. Data and assumptions about costs of gas production, royalty and severance tax rates, price of gas, costs of project construction, number of wells per project, and other information are used to estimate costs. EPA used costs of CBM-produced water treatment and disposal in the model to prepare a number of scenarios, including a baseline (current practice) scenario against which all other scenarios are compared. June 2007 CBM Stakeholder Teleconferences (EPA) Page 22 of 30

23 Identification of Schedule and Next Steps Final 2006 Plan Published 21 December 2006 Stakeholder Teleconferences (June 2007) Site Visits and Meetings (Summer 2007) First Federal Register notice (Dec. 2007) Second Federal Register notice (Spring 2008) Conduct Survey (August 2008) Present Preliminary Results (October 2009) June 2007 CBM Stakeholder Teleconferences (EPA) Page 23 of 30

24 For More Information Further updates on the CBM ICR and EPA s effluent guidelines program plan can be found at: EPA CBM ICR contacts are: Name Lead Phone Carey Johnston Project Manager, Engineering (202) johnston.carey@epa.gov James Covington Economist (202) covington.james@epa.gov Amy Upgren Environmental Assessment (202) upgren.amy@epa.gpv June 2007 CBM Stakeholder Teleconferences (EPA) Page 24 of 30

25 APPENDIX: Overview of Coalbed Methane Land Application of CBM Produced Water Powder River Basin, WY June 2007 CBM Stakeholder Teleconferences (EPA) Page 25 of 30

26 Overview of Coalbed Methane Diagram illustrating movement of methane through coal June 2007 CBM Stakeholder Teleconferences (EPA) Page 26 of 30

27 June 2007 CBM Stakeholder Teleconferences (EPA) Page 27 of 30

28 Conventional & CBM Well Behavior Conventional Gas Sand Grains GAS Rate Pore Space Producing Time CBM Coal Matrix WATER Face Cleat Water filled Cleats Rate GAS Producing Time June 2007 CBM Stakeholder Teleconferences (EPA) Page 28 of 30

29 National Criteria for Chlorides and TDS National criteria for Chlorides were published in 1988 Ambient Water Quality Criteria for Chloride, EPA 440/ , February It is important to note that EPA identified the numerical values in the national criteria as protective of freshwater aquatic organisms for specific exposure periods. Except possibly where a locally important species is very sensitive, freshwater aquatic organisms and their uses should not be affected unacceptably if-the four-day average concentration of dissolved chloride, when associated with sodium, does not exceed 230 mg/l more than once every three years on the average and if the onehour average concentration does not exceed 860 mg/l more than once every three years on the average. Page 8. [emphasis added] In addition, this criterion needs to be considered along with other dissolved inorganics and may require additional stringency. This criterion probably will not be adequately protective when the chloride is associated with potassium, calcium, or magnesium, rather than sodium. In addition, because freshwater animals have a narrow range of acute susceptibilities to chloride, excursions above this criterion might affect a substantial number of species. Page 8. EPA's recommended drinking water maximum contaminant levels for chlorides and TDS are 250 and 500 mg/l, respectively, and are based on human health concerns (40 CFR 143.3). June 2007 CBM Stakeholder Teleconferences (EPA) Page 29 of 30

30 Relationship Between Sodium Adsorption Ratio (SAR) and Electrical Conductivity (EC) (and TDS) Assessment of Water Quality for Irrigation (after Hansen et al, 1999) Severe Reduction in Infiltration Slight to Moderate Reduction in Infiltration SAR Suitable for Irrigation No Reduction in Infiltration EC (us/cm) Irrigation water containing large amounts of sodium is of special concern due to sodium's effects on the soil and poses a sodium hazard (an elevated SAR value). Continued use of water having a high SAR leads to a breakdown in the physical structure of the soil. Sodium is adsorbed and becomes attached to soil particles. The soil then becomes hard and compact when dry and increasingly impervious to water penetration. June 2007 CBM Stakeholder Teleconferences (EPA) Page 30 of 30