Water Sourcing and Recycling in Oil & Gas Operations. Michael Sims, P.E. Technical Permitting, Oil &Gas Division Main Line:

Transcription

1 Railroad Commission of Texas Water Sourcing and Recycling in Oil & Gas Operations Michael Sims, P.E. Technical Permitting, Oil &Gas Division Main Line:

2 RRC Background Founded in 1891 to regulate the rail industry Regulates oil and gas, surface mining, crude and natural gas pipelines, gas utilities, and alternative fuels Presently, has nothing to do with railroads

3 Oil and Gas Division Mission Primary directives: Prevent waste Promote conservation Protect correlative rights Protect environment Protect human health

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5 Shale Drilling Overview Use a combination of horizontal drilling and hydraulic fracturing Hydraulic fracturing is a method of pumping water, sand, and chemicals at a high pressure to fracture the shale to allow the hydrocarbons to flow Shale drilling requires large volumes of water

6 Sample Well

7 Eagle Ford Shale Monthly Oil Production bbl/day bbl/day ,149 bbl/day ,993 bbl/day ,727 bbl/day ,432 bbl/day 7

8 Drought 8

9 Water Usage TWDB estimates there will be a water deficit in the state in 50 years if action is not taken Voters being asked to consider approving $2 billion to be used to establish a water infrastructure bank

10 Agencies Involved in Water Use Texas Commission on Environmental Quality Texas Water Development Board Groundwater Conservation Districts Railroad Commission

11 TCEQ Administers surface water rights in Texas Surface water is owned by the state and held in trust for the citizens of the state The state grants the right to use this water, through a permit, to people, industries, businesses, and cities Domestic, livestock, wildlife, and emergency use are exempt from the need for a permit 11

12 TCEQ Watermaster Program Includes areas of the state needing more active management of water rights, including most of Eagle Ford Shale play Monitors stream flows, reservoir levels, and water use

13 Texas Water Development Board Provides leadership, planning financial assistance, information, and education for the conservation and responsible development of water Supports regions in developing water plans Collects data and conducts studies on water Projects the water needs of the state 13

14 Groundwater Conservation Districts Created by the Texas Legislature or by TCEQ Currently 99 GCDs in the state Draft groundwater management plan describing the district s groundwater management goals Plans must be submitted to TWDB for approval 14

15 Limitations on GCDs Water well used solely to supply water to a rig drilling for oil and gas is exempt from obtaining a drilling permit from GCD (Texas Water Code) Unclear if exemption also applied to a water well supplying water for hydraulic fracturing fluid Some operators have obtained a permit from GCD for this purpose 15

16 Railroad Commission Saline/Brackish Water Reuse of Hydraulic Fracture Fluid Flowback/Produced Water 16

17 Saline/Brackish Water Operators have approached Commission about installing wells to draw deep brackish water for use in drilling operations RRC requests a drilling permit for such wells to ensure it is properly constructed to protect fresh water resources Permit may also be needed from GCD

18 Fluid Recycling Commission rules amended in March to streamline the permitting process and encourage fluid recycling instead of disposal Recycling sector is growing Various water treatment technologies are utilized

19 RULE 8 AMENDMENTS 19

20 New Authorized Fluid Recycling Non-commercial Fluid Recycling The recycling of fluid produced from an oil or gas well including produced formation fluid, work over fluid, and completion fluid, including [frac fluids] on an existing commission-designated lease or drilling unit... or upon land leased or owned by the operator for the purposes of operation of [a noncommercial disposal well ( 3.9) or a noncommercial injection well ( 3.46)] where the operator treats or contracts for treatment, and may accept such fluid from other leases or operators. 20

21 New Authorized Fluid Recycling Non-commercial Fluid Recycling The recycling of fluid produced from an oil or gas well including produced formation fluid, work over fluid, and completion fluid, including [frac fluids] on an existing commission-designated lease or drilling unit... or upon land leased or owned by the operator for the purposes of operation of [a noncommercial disposal well ( 3.9) or a noncommercial injection well ( 3.46)] where the operator treats or contracts for treatment, and may accept such fluid from other leases or operators. 21

22 New Authorized Fluid Recycling Non-commercial Fluid Recycling The recycling of fluid produced from an oil or gas well including produced formation fluid, work over fluid, and completion fluid, including [frac fluids] on an existing commission-designated lease or drilling unit... or upon land leased or owned by the operator for the purposes of operation of [a noncommercial disposal well ( 3.9) or a noncommercial injection well ( 3.46)] where the operator treats or contracts for treatment, and may accept such fluid from other leases or operators. 22

23 New Authorized Fluid Recycling Non-commercial Fluid Recycling The recycling of fluid produced from an oil or gas well including produced formation fluid, work over fluid, and completion fluid, including [frac fluids] on an existing commission-designated lease or drilling unit... or upon land leased or owned by the operator for the purposes of operation of [a noncommercial disposal well ( 3.9) or a noncommercial injection well ( 3.46)] where the operator treats or contracts for treatment, and may accept such fluid from other leases or operators. 23

24 New Authorized Fluid Recycling Non-commercial Fluid Recycling The recycling of fluid produced from an oil or gas well including produced formation fluid, work over fluid, and completion fluid, including [frac fluids] on an existing commission-designated lease or drilling unit... or upon land leased or owned by the operator for the purposes of operation of [a noncommercial disposal well ( 3.9) or a noncommercial injection well ( 3.46)] is authorized by Chapter 4, Subchapter B where the operator treats or contracts for treatment, and may accept such fluid from other leases or operators. 24

25 What s Recycling? Recycle- To process and/or use or re-use oil and gas wastes as a product for which there is a legitimate commercial use and the actual use of the recyclable product. Injection is not recycling. 25

26 Authorized Reuse Reuse as makeup water, or other use in the wellbore of an oil, gas or geothermal well. Reuse in any other manner pursuant to a permit issued by another state or federal agency Any reuse if the water is distilled No discharge to waters of the state without permit 26

27 Rule 8 Authorized Pits Authorized pits include: Non-commercial Fluid Recycling Pit Reserve pit Completion/Workover pit (including frac flow-back) Mud circulation pit Fresh makeup water pit Authorized pits must be dewatered and backfilled in accordance with schedules found in Rule 8 Rule 3.8(b) No pollution ALWAYS applies. 27

28 Authorized Fluid Recycling Pit Non-commercial Fluid Recycling Pit - Pit for the storage of fluid for the purpose of Non-commercial Fluid Recycling or for the storage of treated fluid. 28

29 Non-com. Fluid Recycling Pit requirements Authorizes Non-com. Fluid Recycling Pits to store fluid from an oil or gas well that will be treated and reused if: Pit is lined Liner has a hydraulic conductivity of 1x10-7 cm/s or less Two feet of freeboard is maintained, and Pit is emptied and inspected annually or it has a leak detection system (LDS) that is monitored monthly District registration and landowner permission 29

30 Rule 8 - Permitted Pits If a pit is not authorized by Rule 8, a Form H-11 must be filed with Environmental Permits and a permit issued before use of the pit can begin. Examples of types of pits that require a permit: Commercial Fluid Recycling Pit Disposal Pit Collecting Pit Emergency Saltwater Storage Pit Brine Pit Washout Pit Skimming Pit Gas Plant Evaporation/Retention Pit 30

31 New Rule 8 Amendments for Pits & Recycling Completion/Workover pits frac flowback storage clarification Clarifies that no authorized pits may be placed in the 100-year flood plain Can be approved by District Director May request hearing if denied 31

32 What s authorized, again? Non-Com. Fluid Recycling: On-Lease fluid treatment for reuse Downhole Other State/Federal Permit As distilled water Pit for storage and treatment Burial of dewatered recycling wastes in pit Transport of waste and treated fluid Must Be Permitted: Commercial Recycling under Chapter 4, Subchapter B Waste Hauling under Ch.4, Sub.B Reuses not authorized by Rule 8 Discharge 32

33 New Commercial Recycling Rules CHAPTER 4, SUBCHAPTER B 33

34 New Chapter 4, Subchapter B Divisions Six Divisions for Commercial Recycling Rules 1. General Requirements 2. On-Lease Solid Waste Recycling 3. Off-Lease or Centralized Solid Waste Recycling 4. Stationary Solid Waste Recycling 5. Off-Lease Fluid Recycling 6. Stationary Fluid Recycling (Non-com. Fluid Recycling authorized by Rule 8) 34

35 General Requirements (highlights) Permit will prohibit speculative waste accumulation Engineering and geological work products must be signed by their respective Texas-registered professionals All oil and gas waste and recyclable product should be stored in lined permitted or authorized pits, or above-ground storage tanks. 35

36 Fluid Recycling Divisions 5 & 6 Set standards for fluid recycling that occurs off lease Commission has not established minimum standards for water quality because requirements for reuse varies Standards will be dictated by permit or by authorized reuse ( 3.8): No standard for reuse downhole Other State or Federal authorities Distilled water 36

37 Off-Lease Fluid Recycling Clarification Fluid recycling at a commercial disposal well (SWD) or commercial injection well is authorized without permit by Ch.4, Sub.B, if The Operator of the well has Financial Security ( 3.78) and responsibility for all activities at the facility, and registers w/ the District Office, but A Commercial Fluid Recycling Pit permit is required. 37

38 Summary Oil and gas drilling is booming in Texas With increased drilling comes an increased need for water RRC has limited jurisdiction over the sourcing of water New rules have been established to encourage recycling of fluids

39 Thank you. Questions?! Michael Sims, P.E. Main Line: