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Produced Water
Produced water amounts to the highest volume by-product or waste stream resulting from oil and gas exploration and production activities. Produced water volume estimates can range anywhere from 16-20 billion barrels annually in the Unites States. This equates to a volume of 1.8 to 2.3 billion gallons generated daily.
Managing produced water is a major challenge for oil and gas operators. Methods of handling produced water vary:
As shown above, 42% (8.45 billion bbl) of produced water is disposed of using injection wells or other methods. The primary costs associated with disposing of produced water consist of transportation/hauling and fees at the disposal facility. Decreasing availability of disposal wells, increasing costs of well construction, and strict regulatory guidelines are making disposal more difficult and expensive. . Average costs of disposing this water vary widely by region depending on the number of alternative disposal facilities in the area, as well as the distance (or time) it takes to transport the water to the facility. The following table represents market averages for disposal rates (hauling + disposal fees) in the main geographic areas of the U.S. based on internal research:
There are major variances in disposal rates from region to region, and within regions, is based primarily on the availability and quantity of disposal outlets in proximity to well heads. As an example, in the state of Utah, average transportation rates range between $90.00 and $100.00 / hr to haul produced water to a disposal facility. Disposal costs at evaporation facilities range between $2.50 - $4.00 / bbl. If a well were located 50 miles from a disposal facility, It is clear that the proximity to disposal facilities becomes the major factor for disposal costs as wells are generally located further and further from disposal options. In many states (ex: New York, Pennsylvania) where environmental and political regulations have been more aggressively asserted and limitations on operating existing and/or constructing new disposal facilities has been put in place, the availability of approved disposal facilities has decreased and the average distance to disposal facilities has increased dramatically. About 58% (11.65 billion bbl) of the U.S. produced water market is used in enhanced recovery efforts to stimulate production from active gas and oil wells. This produced water, rich in organic and inorganic suspended and dissolved solids must be treated prior to re-use. If not treated, or clarified, this re-injected water rich in minerals and hydrocarbons can literally kill the well it is intended to stimulate. The treatment methods employed, their costs and the end result for the water profile are varied based on well owner/operator preference. From Reverse Osmosis to filtration technology; from chemical treatment processes to mechanical separation components, the current available technologies offer many solutions at various costs. Based on internal market research, costs for Reverse Osmosis methods range from $8.00 - $10.00/bbl. Costs for mechanical separation technology are often based on monthly rental rates plus costs of operation. A 2,000 bbl/day capacity mechanical separation skid has a monthly rental rate around $8,000/month plus an additional $6,000 to $8,000 for monthly operation expense (total = $.23 - $.26/bbl). Often, the volume of water needed for these secondary recovery efforts is more than the amount of water that can be cleaned through treatment processes of produced water. When this occurs, owner/operators seek other sources for clean water supply such as municipal treatment facilities and natural fresh water sources (lakes, rivers, wells…). The costs associated with this additional supply of water entail transportation and volume pricing. It is another expense this market segment incurs in secondary recovery operations. For more information please visit the the Groundwater Protection Council website at http://gwpc.org. |
