Environment and drilling: It’s not one or the other

Industry building environmental stewardship into rigs, technologies, operations, enhancing emergency preparedness and public outreach

By Joanne Liou, associate editor

Like the path that has been taken to achieve safer operations, industry has come a long way in improving its environmental performance, taking incremental steps that are adding up to significant change. “In the last 20 years or so, we have done a tremendous job in creating safe operations, and most well-managed companies have satisfactory safety performance,” Michael Ellekjaer, head of corporate social responsibility at Maersk Drilling, told Drilling Contractor. “However, I think we, as an industry, have to give the same attention to the environment, i.e., spills and waste management. I see the industry moving more and more in this direction, and it is the right direction.”

As operations have increased in complexity and our reach expands further into sensitive environments, the need to balance between global energy security and environmental stewardship is becoming more pronounced. “What happened slowly with safety was the costs were internalized. If someone was injured, the company was aware of the associated costs in healthcare and downtime,” Natalie Wagner, cross-divisional environmental solutions at National Oilwell Varco (NOV), said. “That’s not necessarily part of the environment side, yet. People have been having difficulty getting their license to drill for permitting purposes, and once the costs are appropriately connected to the environmental impact, I think we will see more importance put on the environmental side of HSE.”

Industry maintains a record of continuous improvement, as seen in technology, safety and increasingly in the environment, David McBride, director – environment, health and safety, Anadarko Petroleum, said.

“Early engagement and transparency are keys to success in the new oil and gas world,” he said. Notable progress has been made on the environmental front, with a shift that’s just starting toward natural gas engines, the development of documentation to measure improvements in emissions and spill prevention, and emergency preparedness.

The evolution of the industry’s safety culture, which includes everything from enhanced and well-documented training to technology advances that remove workers from high-risk areas, is emblematic of the approach that the industry is also taking with the environment.

“We must manage and control our impacts as much as practically possible,” Mr Ellekjaer said. “We work hard to ensure that constant care is embedded in our organization … to include environmental perspective in our decision making and risk management.”

Technology and safety by design plays a significant role in improving safety performance, and the same approach is helping industry to enhance environmental performance as well. Industry is finding practical solutions that utilize available resources with lower costs and lower emissions.

On its land rigs, NOV is incorporating drilling packages with natural gas engines or dynamic blending systems. The Ideal Prime rig, which will officially launch in Q2 2013, features an optional dynamic gas blending (DGB) system from Caterpillar Oil and Gas. The DGB technology automatically adjusts to changes in incoming fuel quality and pressure allowing engines to run on a wide variety of fuels, from associated gas to vaporized LNG without sacrificing performance integrity, Ms Wagner said. “It could be idling; it could be full throttle. It could be 30% diesel and up to 70% natural gas. The goal would be to have better emissions and performance.”

Also featuring a dual-fuel system, Nabors’ new PACE-X rig is designed to operate with up to 70% natural gas. For each well, an average of 25% of the diesel required can be substituted with natural gas. “The engine’s natural gas usage is based on the power demand of the rig. The engine will automatically adjust the control valve that supplies natural gas to engine,” Todd Fox, vice president – engineering & technical services at Nabors, said. “If the engine needs to respond more quickly to rig power demand, it will curtail the natural gas and switch over to diesel. Dual-fuel systems provide an excellent alternative to 100% natural gas engines that must be larger due to the drop in horsepower experienced when operating on 100% natural gas.”

In addition to fuel savings, reducing diesel use translates to fewer diesel truckloads driving to location, Mr Fox said. Further, emissions are reduced with a catalytic converter that is placed on the exhaust, before the muffler. Nabors is deploying four PACE-X rigs in the Haynesville play and is ramping up to deliver more than 20 PACE-X rigs this year to reach the major plays in the US.

The Environmentally Friendly Drilling Systems Program (EFD) acknowledges the benefits of natural gas-powered engines – lower costs and lower emissions, but the group also sees an opportunity to capitalize on that benefit by quantifying it. Funded by industry, government and environmental organizations, Texas A&M University and the Houston Advanced Research Center (HARC) founded the EFD program in 2005 to provide unbiased science to identify and develop solutions to address issues associated with oil and gas development.

One of EFD’s core areas is to determine the drilling footprint from site to emissions. “Several of our sponsors have a mission to convert their rigs to natural gas, and we’re working directly with them and companies that provide those services, not only to make sure it gets out into the field a little faster, but also to document the benefits,” Thomas E. Williams, senior adviser of EFD, said. “We’ll provide that data back to our sponsors and then share it with the media and hopefully encourage what needs to be done.”

Dual-fuel fracturing operation proves LNG feasibility in high-hp applications

By Katie Mazerov, contributing editor

In an Apache Corp hydraulic fracturing operation fueled by a combination of liquefied natural gas (LNG) and diesel in Oklahoma’s Granite Wash play, 60% of the diesel was replaced in the entire 12-pump, 24,000-hp fleet. The operation was engineered by Linde North America, which provided the LNG, its onsite storage and vaporization, and technical support.  Since the Apache operation, Linde has also been selected to supply LNG and related equipment and services for CONSOL Energy in the Marcellus and Utica basins, said Earl Lawson, head of Energy Solutions for Linde.

“The Granite Wash project proves the feasibility, safety, effectiveness, efficiency and logistical benefits of using economical, clean-burning LNG in the high-horsepower applications required for large-scale hydraulic fracturing operations,” Mr Lawson said. “The dual-fuel operation was essentially an evolution. We started by using LNG in a couple of engines and expanded to convert the full frac spread of 12 engines that were outfitted with conversion kits that allowed them to run on both fuels.”

As the amount of gas fed to the frac fleet and number of dual-fueled engines increased, the gas supply system and conversion kits were tested to determine how the engines performed and how much diesel could be displaced, he explained. Halliburton provided the manifold that connected the gas supply to the engines and worked with Linde engineers to properly integrate the pressure, flow and safety aspects of the operation.

Environmental, economic benefits

“Use of LNG in hydraulic fracturing operations has huge environmental benefits and provides significant economic advantages,” Mr Lawson noted. “LNG is a high-density fuel; six times as much can be stored onboard in a liquid form than in a gaseous, compressed form. In high-hp applications, where a lot of fuel is being consumed in a short period of time, the ability to economically transport the LNG, bring it onsite as a high-quality gas and store it safely is very cost-effective.”

Under the new contract with CONSOL Energy, Linde initially will supply LNG to power drilling rigs and will eventually provide fuel for hydraulic fracturing, mining and marine operations. The agreement follows a successful trial operation by the two companies using Linde’s LNG solutions to replace some of the diesel fuel used to power the engines that drive the drilling rigs.

“We are starting to see a lot of interest and demand for dual-fuel systems because of environmental concerns,” Mr Lawson said. Going forward, he believes there are no technical limitations to increasing the use of LNG in fracturing operations. “LNG is already being used to fuel the trucks that carry the water, sand and chemicals used at frac sites,” he said. “There is no reason we can’t convert the engines providing the horsepower for the fracturing operations themselves, as long as we have the infrastructure in place to ensure LNG remains a reliable and safe fuel.

“We need to focus on the safety aspect of what we’re doing by putting the right practices, procedures, people and equipment on the ground to ensure LNG can safely deliver the inherent environmental benefits and economic value for the industry,” he added.

A division of The Linde Group, Linde North America also has been supplying CO₂ and nitrogen for the gas completion process for 35 years.

Based on findings from a 2009 project focused on four main areas: energy efficiency and emissions, discharge, accidental spills and water management, Maersk Drilling has taken steps to save energy and reduce CO₂ emissions on its rigs. “Over the last two years, we have installed electronic compensators in the main engine rooms of our rigs – MAERSK GUARDIAN in 2011 and MÆRSK GIANT in 2012 – to lower diesel consumption,” Mr Ellekjaer explained. “The compensators work by limiting the power needed for the wattles, thereby improving power quality and enabling the generators to produce more active power. An additional benefit of a compensator is that it reduces the harmonics in the electrical system, which also delivers fuel savings and improves the lifetime of electrical components (e.g., florescent light fixtures).”

Although equipment upgrades can provide incremental improvements in environmental performance, Maersk Drilling believes bigger gains can be made in the design of new rigs. “Our drillships will deliver 8.5% minimum reduction of energy, and the XLE jackups deliver 10%,” compared with the average

emission of the 16 rigs in Maersk Drilling’s fleet today, Mr Ellekjaer stated. Additionally, Maersk manages a constant but changing catalogue of projects from harmonic filters to removing leaks on the rigs, which saves energy and reduces NOx emissions. A challenge is identifying a metric to benchmark performance. “Part of the strategy is to ensure we have a full understanding of the energy footprint of our rigs and will use an Energy Efficiency Management Plan to monitor, control and document where we are using our fuel,” he noted.

In 2012, the company’s number of spills increased from 18 in 2011 to 34 in 2012. Despite the overall increase, the volume spilled remained level at 20,000 liters (5,283 gallons). Approximately 44% of spills in 2012 were caused by or related to a failure, burst or rupture of hoses. Maersk Drilling is actively implementing programs on hose management, overboard work and increased focus on maintenance and the relation to spills.

Rating systems

An EFD project, Scorecard, began about four years ago and is based on US Green Building Councils’ LEED program. The Scorecard assesses land-based drilling operations and technologies with respect to air, site, water, waste management, biodiversity and societal issues, from the time a permit is obtained to completion. Led by Dr Richard Haut, senior research scientist at the HARC, service providers such as Halliburton and more than 40 other organizations, including IADC, the Environmental Defense Fund, the Nature Conservancy, operators and regulators, were among participants who helped define specific attributes to assess operational systems applied by drilling contractors and operators. A scorecard created under the project assists operating companies in planning and implementing practices to manage operational risks, while landowners, regulators and the public can use the scorecard to objectively assess the operator’s performance.

“The challenge is in the geographical and geological differences. A process that you do in the Rockies may not be the same thing you do in the wetlands or Appalachia,” Mr Williams said. “This is still a learning process. We’ve defined ecosystems as a way to make adjustments based on the different areas.” Sponsors of the initiative are beta-testing the scorecard on a site-specific basis, and EFD expects to fully launch it later this year.

Targeting the needs of customers and to help meet regulatory requirements, many of which are constantly changing, NOV began an initiative about a year ago to create a report card focused on environmental performance. Along the same lines of the US Environmental Protection Agency’s ENERGY STAR ratings for energy efficient products and practices, NOV is creating a rating system for drilling equipment. “The ultimate objective is to improve the performance and reduce the impact on the environment for oil and gas wherever you are, specifically for drilling,” Ms Wagner stated.

The NOV reporting initiative is based on existing approaches or established standards, such as ISO. Under a controlled boundary, “we are thinking of the things we can influence versus the things drilling contractors or operators can. We can really only employ things to the manufacturing and operational lives of our equipment. We can’t dictate how they will be used, but we can say what should happen over their lifetime,” she said. NOV has applied the report card internally to iron roughnecks to improve their performance in terms of environmental protection. An issue for offshore equipment is whether they are compatible with environmentally friendly hydraulic fluids, and “that’s something we have to go back to the OEMs for in terms of filters, seals and cylinders to see if they can show it’s compatible,” Ms Wagner noted.

Still in the research and development stage, the report card is on the agenda with the IADC Environmental Subcommittee that is meeting in April. A workgroup will be started to solicit input from IADC. “We’re looking to propose it to other members of the Petroleum Equipment Suppliers Association to see if it would be something that could be applied to industry manufacturers for oilfield equipment across the board.”

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Ken Murphy, CEO of Enviro Clean Products & Services, talks about spill prevention, control and countermeasure (SPCC) plans with Drilling Contractor associate editor Joanne Liou at the 2013 IADC HSE & Training Conference last week in Houston. Understanding the federal regulation, which became effective in 1974 but has become a greater concern in recent years, is important in order to implement a practical plan covering the three key areas of prevention, control and countermeasures.

Offshore emergency preparedness

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In recent years, industry has significantly expanded its capability to quickly and comprehensively respond to an uncontrolled deepwater well blowout or spill. Groups, such as Wild Well Control, the Subsea Well Response Project, Marine Well Containment Company (MWCC) and Helix Well Containment Group (HWCG), stand ready to respond should an incident occur.

A federal government mandate issued after the Macondo incident requires oil and gas companies operating in deepwater, defined as 500 ft or more, to have adequate spill response and well containment resources under contract. MWCC and the HWCG were founded in 2010 to fulfill requirement in the US Gulf of Mexico (GOM). Now, essentially all deepwater operators operating in the GOM are a member of either the MWCC or HWCG; 10 companies belong to MWCC, while HWCG has 24 members. Both groups have solutions to operate in water depths up to 10,000 ft and can handle well pressures up to 15,000 psi.

“We developed our whole system to be able to minimize the effects of a well blowout,” Roger Scheuermann, commercial director at HWCG, explained, “and we feel that we can cap a well for shut-in within six days.” HWCG has two dual-ram capping stacks available – the first is a 13 ^5/8-in., 10,000-psi capping stack located in Ingleside, Texas, and the second is an 18 ¾-in., 15,000-psi unit located in north Houston. “They’re separated because we didn’t want to put both of them in a hurricane area,” he noted. Once called out, the capping stack would be tested and loaded onto a boat within 24 hrs to 36 hrs and deployed to the well location.

The 13 ^5/8-in. capping stack is part of the Helix Fast Response System (HFRS), which is owned and operated by Helix Energy Solutions Group and utilized by HWCG. The HFRS also includes the Q4000 semisubmersible well-servicing vessel and the Helix Producer 1 (HP1) floating production unit (FPU), which were part of the response solution in the Macondo incident. The vessels, which are required to stay in the GOM in case of an emergency, are operated daily to ensure immediate mechanical readiness. The 13 ^5/8-in. capping stack and HWCG’s response processes will be deployed in the first half of 2013 in an exercise overseen by the Bureau of Safety and Environmental Enforcement (BSEE).

HWCG has developed a well containment plan addressing three scenarios: 1) a rig that sinks and goes off to the side of the well, 2) a rig that sinks and falls directly on the well, or 3) a well blowout that occurs while the rig is still attached to the well. “Our initial process will require site assessment with remote-operated vehicles, so we know whether we have access to the well,” Mr Scheuermann explained. “If we don’t have vertical access, we’ll have to call out debris removal equipment so we can latch the capping stack on top of the BOP or the wellhead.”

If it is not possible to shut in a well due to pressure integrity, which may cause casing to burst or broaching around the well, the system would follow a flow and capture strategy. “We would have to run an intervention riser system and initially take flow back to the Q4000. From there, we would offload to our HP1 FPU, process the oil and gas and then discharge oil to a storage vessel,” he said. The system has the capacity to handle 55,000 bbls of oil/day and 95 million cu ft of gas/day. HWCG is working on an expanded system that will be capable of handling 75,000 bbls of oil/day.

Under HWCG’s response system, dedicated equipment is required to work only in the GOM and be available in case of an emergency. The primary equipment – the Q4000, HP1 and HFRS – is maintained daily in the GOM, and crews are trained and ready to respond to an emergency. “HWCG’s member companies have received approval for over 50 drilling permits, and HWCG has participated in more than 50 drills with our members,” Mr Scheuermann noted.

All 24 members of the HWCG have signed a mutual aid agreement, which allows each company to share equipment, resources and personnel in an emergency situation. “In our database, we have over 250 people we can reach out to with a single notification,” he said. “While an overall response, including surface spill removal would require substantially more people, during HWCG drills, on average, we receive over 100 responses of members able to respond to the well containment event.” The communication system sends notifications to office phones, cell phones, emails and by text message. People have the opportunity to respond whether they are available, which allows the source control team to set up day shifts, night shifts and long-term transition teams.

HWCG also has established a Deepwater Intervention Technical Committee (DITC) made up of members of the consortium, which includes technical experts who meet once a month to discuss engineering challenges and to develop solutions. The group is looking to expand the response system to ensure that adequate equipment, processes and procedures are in place. Ongoing studies also are being considered with effects of HPHT on specific pieces of equipment.

In summer 2012, at the request of the US Department of the Interior and BSEE, MWCC mobilized its containment system, including the deployment of its 15,000-psi, single-ram capping stack, which stands roughly 30 ft tall, 14 ft wide and weighs about 100 tons, and provides a dual barrier for containment – a BOP ram and a containment cap. The capping stack was lowered approximately 6,900 ft into the GOM and latched to a simulated wellhead, where all necessary functions and pressure testing were completed, and equipment performed as expected, Marty Massey, chief executive officer of MWCC, told Drilling Contractor. After the demonstration, MWCC hosted information sessions with its member companies to educate and share key learnings and to open a dialogue about how procedures could be enhanced.

The MWCC system has the capacity to contain 60,000

bbls of oil/day and 120 million cu ft of gas/day. Much of the system is housed at ASCO on the Houston ship channel. Other components are stored at vendor facilities in Fourchon, La., and Houston. MWCC is currently working on an expanded containment system with the capacity to contain up to 100,000 bbls of liquid/day, as well as handle up to 200 million standard cu ft of gas/day. Members have committed more than $1 billion to build the expanded containment system, which will be available later this year, Mr Massey stated.

MWCC is currently accepting a 10,000-psi capping stack from the contractor and completing final function testing for regulators. The capping stack will be used in tension leg platform and spar applications with tighter well spacing, which will bring MWCC’s capping stack count to two.

Recognizing industry’s relationship with and impact on the environment is cultivating a cultural shift as well as leading to more actions being taken, not only internally within the industry but externally in the public’s eye. Through public outreach and coalitions, such as the Marcellus Shale Coalition (MSC), industry is actively engaging communities and promoting its operational transparency with fact-based communication. “That’s what differentiates us from those on the other side of the issue, who resort to fear rather than facts,” Steve Forde, vice president of policy and communications for the MSC, noted. The MSC, founded in 2008, comprises more than 300 member companies operating in the Marcellus and Utica Shale plays.

The coalition has published recommended practices (RPs) specific to the region, ranging from site planning, development and restoration to water pipelines. “You’re only as strong as your weakest link when you’re an organization as large as ours,” Mr Forde said. “We want to make sure all those links are strong, and by raising the bar in the way these RPs do, we’re certain that we’re staying ahead of regulations that we’ll be responsible for complying with.” The coalition has several sister organizations across the US, such as the Ohio Oil and Gas Association, the Pennsylvania Independent Oil and Gas Association, and the West Virginia Oil and Natural Gas Association.

To ensure that wide-ranging perspectives are included, environmental and conservancy groups have participated in the development of the MSC’s RPs. For example, for site development and restoration, the American Chestnut Foundation, which supports the heritage of the chestnut tree common to parts of Pennsylvania, worked with the coalition to reintroduce the species to areas where development occurred, Mr Forde explained. “We can restore these development locations as closely to the way they originally looked before.”

The coalition realizes that its message is only as effective as the number of people it reaches. In 2012, the group launched the LearnAboutShale.org project to provide information to the public in the greater Philadelphia area, where there is not any active drilling. “However, there is a huge population base, a number of influential policymakers, and it was very clear our industry needed to do a better job of communications to that particular part of Pennsylvania,” Mr Forde said. “The more that we can show Pennsylvania that their land and our land are safe, their water and our water is safe, and we’re residents of this community as well, the more confidence we’ll continue to see.”

The website is just one example of how industry continues to respond to the public’s need  for more transparency, and the coalition recognizes legitimate questions exist across a variety of different stakeholders. “The best way to relate to the largest amount of people is to be straight with them. We give them the facts to describe the process, which has been perfected in the last decades, in hydraulic fracturing – exactly what takes place and what steps are in place to protect ground water. We’re responsible for participating in an honest conversation with them.”

Company initiatives

Although industry often solves problems on its own, Mr McBride of Anadarko urged that companies also should not overlook the opportunity to engage the public when an issue arises. “When dealing with community impacts, community engagement is a key aspect for people to feel included. Their voices are heard, and you’re listening to them. You understand what their concerns are,” he explained. “You’re going to solve that problem with them instead of for them.” In the US, Anadarko operates in shale and resource plays in the Rocky Mountains region, the Southern Region and the Appalachian Basin. The company also operates in deepwater GOM and has production in Alaska, Algeria and Ghana.

There is a strong focus in this industry on safety first, Mr McBride said, and the importance of environmental protection is also essential in addressing concerns from the public and regulatory communities. The chemicals used in fracturing fluids have been a recent public concern, and operators, such as Anadarko, have worked to improve the transparency of such operations by disclosing those fluid ingredients on the national hydraulic fracturing chemical registry, FracFocus.org. Launched in April 2011, the site has approximately 350 reporting companies that have registered more than 37,000 hydraulically fractured well sites, along with the chemicals used in their fracturing.

In retrospect, looking at where the debate was headed a few years ago on frac disclosures versus what the industry has proactively put in place and where it is headed today, it is an illustration of the effectiveness of communication on a local level, Mr McBride said. “Industry has been very successful at meeting the expectations of many citizens and stakeholders. We’re seeing more localized attention to FracFocus and to frac disclosures, but we’re not seeing massive federal efforts to try to regulate frac fluid disclosures,” he noted. The collaborative effort between industry and local communities exemplifies how states are best equipped to deal with oil and natural gas issues on behalf of their communities.

Internally, companies have implemented programs integrated within safety initiatives to enhance employees’ environmental awareness and responsibility. Anadarko’s LiveSafe program, launched in 2009, addresses cultural alignment among employees, including drilling contractors on location. New-hires and contractors complete training as they come to work for Anadarko. “It addresses the man or woman in the mirror to make sure when he or she shows up for work, it’s eyes on task – understanding their role, responsibilities, stop work authority and not being afraid to use it,” Mr McBride explained. “It’s understanding the mechanical integrity of equipment operations, which can be an environmental component and ensures our ability to operate responsibly.”

At Maersk Drilling, environmental issues are systematically integrated into its operational processes and are reiterated in safety procedures, i.e., job safety analysis, report cards and toolbox talk. Environment awareness is also monitored through the company’s annual employee engagement survey. “We ask two questions about 1) if your manager encourages you to
consider environmental aspects in your work, and 2) if the company is making genuine efforts to protect the environment,” Mr Ellekjaer stated. Based on feedback, senior management must work on improvements if targets, in which 80% is favorable, are not met.

In simple terms, industry’s mantra can be put as, “do my job, be safe and don’t hurt the environment,” Mr Williams of the EFD said. “They figured the safety part out – training and extremely good documentation. There’s still an evolution on how we consider environmental performance and how we document those things. Everybody has the same goal; there’s just a lack of the same types of tools to get there that we have in safety.” The common challenge is gaining leadership support, defining practical goals and how to account for them. “The environmental culture is just like safety culture; it starts at the top. If the CEO and the board of directors are totally committed, that company will develop that environmental culture of safety,” Mr Williams added. “The only way you can really judge it is by documenting.”

Companies, such as Maersk Drilling and NOV, have recently begun to publish sustainability reports, and more companies are starting to follow suit. Sustainability reports address environmental, social and energy performance and typically provide qualitative and quantitative metrics to detail progress made and opportunities for improvement. “It’s all about developing that culture. That momentum, the leaders of the world who really understand the value of getting out beyond our walls of the oil and gas industry are still needed,” Mr Williams stated.

As industry continues to operate under the public’s critical eye, advances in rig technology and lessons learned in emergency preparedness and community involvement is setting a foundation for a prosperous future. “Part of the operating philosophy applies overseas as well,” Mr McBride noted. “(Anadarko) has a very easy way of applying those lessons as we see the potential growth of shale development internationally. We are engaging early and often to explain how we do our business.”

Everyone has a role to play until there is zero impact from drilling and resources are developed without a measurable impact or change in the surrounding environment, Ms Wagner of NOV said. “I say we have come quite a ways. I don’t think we are there, yet. I’m not sure we know how to say when we’ll get there. We have a long future in front of us, and we’re making improvements.”

“Transparency and honest fact-based communication is really the best way to inspire confidence with the public, regulators, legislators and a variety of stakeholders,” Mr Forde said. “It’s human nature to be skeptical on the outset of any issue that is relatively new to the community. The greatest testament to our commitment has been safe development of a resource over time.”