Prevention technology can help drilling, service rigs to minimize environmental footprint at the source

By Melanie Clark and Quinn Holtby, Katch Kan

The oil and gas industry of today requires a social license to operate. As positive public perception diminishes, the industry must adapt to a higher standard of operation to reduce its environmental footprint and are able to fit on any rig, anywhere in the world.

On average, drilling fluid losses total on average more than 5,000 gallons per well. In Canada, industry adaptation is 98% in directing the discharge of fluid during connections. Yet only 12% of Canadian drilling rigs have systems in place to capture and recycle directed fluid. Mud costs and remediation expenses can be reduced by capturing and recycling fluid before it hits the ground.

There is a misperception that environmental stewardship involves a prohibitive price tag. This article will illustrate the adverse effects of noncontainment, introduce proactive technology and demonstrate benefits of zero spill systems.

SOCIAL LICENSE

Oil companies need the support or acquiescence of the population in areas where they produce oil. Where the “social license to operate” is not forthcoming, the company becomes impaired. In North America, the perception that the oil and gas industry does not provide the proper stewardship to responsibly produce hydrocarbons in a sustainable manner results in many sensitive areas being set aside or severely restricted from oil and gas production. The protection of the fragile ecologies of arctic permafrost, semi-arid deserts, wetlands, and coastal marshes are the targeted issue in these areas.

To secure access and ensure that invested assets see a return, leading companies recognize the need for improving and maintaining positive public perception of the industry while minimizing the effects of E&P operations.

Drilling operations have come a long way in improving the safety of the crew and protection of the environment. Operating companies today recognize the benefits of providing a safer work environment and minimizing their environmental impact. However, in many cases, safety and environmental performance can hit a ceiling without a fundamental change in the “fit, form or function” of the traditional rotary drilling operation.

Unfortunately, many companies still believe that being proactive with fluid capture is cost-prohibitive. But systems are available today that make it easy to minimize drilling’s environmental footprint while improving rig safety and providing a positive ROI.

THE PROBLEM

Before 1994, the industry was faced with three major problems without readily available solutions:

1. Poor public perception resulting in restriction of E&P activity.
2. Substantial environmental contamination and water loss resulting from uncontrolled discharge of drilling fluid into the environment.
3. Economic losses caused by expensive drilling fluids, environmental reclamation costs, and time lost in inefficient production practices.

Efforts were made to manage the uncontrolled discharge of drilling fluids on rigs, with some headway made. Yet the problems remained.

Today, oil and gas developments around the world continue to experience opposition from local communities, as well as local, national, and international non-governmental organizations. Companies are also attracting the wrong kind of attention from the media and investors. In some cases, companies have been forced to sever exploration and abandon significant investments of time and resources.

In the Alberta province, oil sands deposits have been described by Time Magazine as “Canada’s greatest buried energy treasure” and “could satisfy the world’s demand for petroleum for the next century”.” In 2006, Alberta’s oil sands were the source of about 62% of the province’s total crude oil and equivalent production and about 47% of all crude oil and equivalent produced in Canada (www.energy.gov.ab.ca).

But there remain challenges to public perception with the development of these deposits, as illustrated by an article published in the Calgary Herald in April 2008, titled “Alberta fights ‘dirty oil’ stigma.”

It has also been revealed that the province will spend $25 million over three years on an advertising and marketing campaign to boost the Alberta “brand.” That is $25 million taken from taxpayers because of negative public perception.

Companies have learned it is critical to their success that they earn a social license to operate – the unwritten social contract among companies, society and communities for industry to operate in tune with community needs and expectations. In fact, industry itself has little patience for members that are not pulling their weight. A generation has grown up since the environmental movement began. Some of these young people, steeped in environmental sensitivity, work for oil companies, regulators or environmental watchdog organizations.

The triple bottom line is becoming entrenched in business thinking: measuring corporate performance in terms of environmental sustainability and social responsibility, as well as profits.

CONTAMINATION

In order to ensure environmental sustainability for future generations, we need to remain conscious at all times of how we develop our resources in relation to the impact on the land and the environment. A continuing effort is also needed by regulators to encourage improvements in the management of exploration and production wastes. Historically, management of large quantities of produced water, as well as drilling fluids and associated wastes, was perceived as unavoidable in the oilfield.

Prior to the early 1980s, there were relatively few practical incentives to focus on reducing or eliminating wastes in oilfield processes and practices. For example, in the United States, the Resource Conservation and Recovery Act established in 1976, which controls the disposal of all solid waste, hazardous and non-hazardous, classifies produced water, drilling fluids and associated wastes as statutorily non-hazardous; this made them – the largest volume of waste in the oilfield – fully exempt from hazardous waste control (Holliday, George H. 1995).

Environmental protection efforts in Canada and the US have generally concentrated on methods for treatment and disposal of wastes after the wastes had been generated.

Each time a rig makes or breaks a connection while drilling, an average of 5 to 15 gallons of drilling fluid spills out onto the rotary table, down onto the substructure and into the ground. Drilling fluid losses total on average more than 5,000 gallons per well. Considering that 1 gallon of invert (oil-based drilling fluid) contaminates 1 cu m of soil, this is a serious issue.

Across North America, many resource plays require horizontal techniques to maximize productivity, along with drilling fluid regimes that minimize pressure differentials. This combination of factors amplifies the releases of drilling fluids, whether going in or out of the hole.

Some companies have reported average surface losses of over 8,000 gallons of drilling fluid on a typical Woodford, Fayetteville or Barnett horizontal well. On problematic wells, these amounts can balloon to more than 42,000 gallons.

Many operators consider this a cost of doing business. Lost drilling fluid costs can approach tens of thousands of dollars per well and can run into hundreds of thousands. In addition to fluid costs, this lost fluid is generally directed onto the ground, where it may sit for the remainder of the drilling time of the well.

Responsible operators pay to continually clean the site, and even go to great lengths to position vacuum trucks on location to clean up excess fluids spilled and to contain the fluid for later disposal. The well site often can get inundated with the fluid as it becomes difficult to clean up because of its viscosity or oily nature.

MEASURING INTANGIBLES

In the past decade, changes in industry perspectives have made the reactive approach to waste management much less attractive. With the public’s heightened awareness of environmental impact and protection, plus industry’s need to reduce costs and environmental liability and to comply with broadened regulations, there is a greater incentive to improve waste management processes and practices.

But how does one measure the value of an avoided cost? This is a common question when dealing with measuring the economic benefits of implementing proactive HSE and waste minimization solutions.  Generally speaking, there are three areas to evaluate.

The first approach is to identify the factors contributing to personnel injury claims and evaluate the associated expenses. Factors contributing to these accidents include:

• Uncontrolled drilling fluid discharge on the drill floor, resulting in slippery surfaces and footing.
• Uncontrolled drilling fluid discharge on the drill floor, resulting in risk for hypothermia during winter drilling.
• Worker health effects from skin contact and inhalation of airborne chemicals from drilling fluid exposure.

Direct costs are:

• Lost production from shut-downs and stop-work orders.
• Workers compensation assessments.
• Equipment repair and replacement.
• Fines and legal fees.
• Increases in insurance premiums.

Indirect costs are:

• Lower productivity and higher staff turnover due to low morale.
• Lost business due to tarnished image and failure to fill orders.
• Hiring and training time for replacement workers.
• Salaries of recovering and replacement workers.

The next area to review is drilling fluid costs. How much drilling fluid are you using during E&P activities? How much could you save by recovering and recycling your drilling fluid?

Each well has over 100 variables that can influence the price of the drilling fluid system utilized. However, there are three major types of drilling fluids: water-based, oil-based and synthetic-based.

The degree of contamination or impact that drilling fluids have on the environment depends on the type of mud used and the prevailing environmental conditions.

This directly correlates to reclamation costs. Generally speaking, offshore operations use water-based drilling fluids to avoid negative environmental impact.

In contrast, discharges of water-based drilling fluids during onshore operations can raise environmental problems with regard to its salt content and the chemicals used to change the mud’s density and viscosity properties.

Oil companies can spend between $60,000 and $80,000 or more to reclaim a land drilling site back to a functional status. In addition, there is liability associated with generated wastes within the oil and gas industry. The Alberta Environmental Protection & Enhancement Act (EPEA) requires that operators conserve and reclaim lands disturbed by their activities.

There’s currently a 25-year liability for surface reclamation issues and a lifetime liability for contamination. This alone could have astounding long-term economic impacts.

The guidelines established by the Canadian Council of Ministers of the Environment are used for determining the degree of contamination allowed before remediation is required on sites throughout Canada.

The measurement standards used are milligrams of contaminant / kilogram of soil. This equals 1 milligram for every 1,000 grams of soil or 1 milligram for 1 million milligrams of soil. The numbers for allowable contamination vary from 130 mg/kg to 6600 mg/kg depending on the type of soil usage, structure, nearness to water and type of contaminant.

We often use the expression of 1 ounce of prevention being worth a pound of cure. Since 130 mg/kg equals 1 oz/481 lbs of soil, we should change the expression to: “An ounce of prevention is worth 481 pounds of cure.”

SOLUTION

A new standard in environmental protection and health and safety has become a reality through the zero spill technology (Figure 1). This equipment system directly supports the protection and preservation of the land and water in which the industry operates, by reducing drilling fluid releases and increasing operational safety.

Each component addresses a specific problem encountered from cradle to grave, i.e., solutions for the exploratory drilling rig to the service rig to the abandoned wellhead. This article will review solutions for drilling rig operations.

The system’s components work together to address the 4 R’s: Reduce, Reuse, Recover and Recycle. They all interconnect and operate together and will provide optimal results as a system. When fully installed and used correctly, full containment of drilling fluids can be achieved.

New-style mud bucket composed of super polymers

The main purpose of a mud bucket is to control and redirect drilling fluids during drill floor procedures, like tripping, to keep the fluid in the circulation system. This helps to keep the fluids off of the drill floor, reducing slip hazards, and off of personnel, reducing potentially hazardous exposure.

Evolved solution: The traditional steel mud bucket designed in 1939 fits onto drill pipe and weighs around 260 lbs.  The fluids caught within the bucket are carried back into the rig system through a large hose.

The new-style mud bucket, composed of super polymers, weighs 27 lbs; installation requires only one person. It controls and redirects fluids down through the slips/rotary table instead of through a large hose. This eliminates dangerous trip hazards on the drill floor.

Quick-exchange seals (2 in. to 8 in.) allow the bucket to fit most drillstrings in its entirety, i.e. the Kelly, drill pipe, heavy weight, drill collars, test tools, core barrels, service tubing, or casing. These seals remain supple in extreme temperatures and fit tightly around the tool joint. Its locking handles are also designed to eliminate crush injuries during operations.

Safety, traction and containment mat

The constant activity on a rig floor can make for a hazardous environment. Matting systems have existed for over 20 years and have become more comprehensive with each new product.

Evolved solution: This fully adaptable Lego-style mat (Figure 2) is the only safety mat that also provides containment. It was designed to reduce rig floor accidents, including lost-time incidents and fatalities due to slips and tong-handling procedures. It also channels fluid to the containment system. The key benefits of this temperature- and invert-resistant matting are:

• Fluid containment: Channels between the buttons coupled with the yellow/safe border redirect fluids to a containment system beneath the work floor.
• Anti-slip: provides traction with protruding “buttons” without the use of dangerous steel studs.
• Anti-fatigue: absorbs shock and is durable, therapeutic and ergonomic.
• Safety: can be color-coordinated for different zones (i.e., safe zones = green, danger zones = red, caution zones = yellow, etc).
• Adaptable: The Lego-style design allows it to be expanded and configured to accommodate any shape.

Drilling fluid splash guard/slip handle guard

Although drilling fluid is being redirected through the rotary table by the super polymer-based mud bucket, the performance is highly dependent on the height it is being used at on the drillstring. If it is being used too high up the string, some splashing may occur at the foot level.

Evolved solution: A conical super polymer-based splash guard (Figure 1) is used to aid the mud bucket in redirecting any low fluid splashes into the slips/rotary table. Other benefits are:

• Installs quickly without tools, easily connecting to the mat.
• Keeps hoses and other foreign objects out of Kelly/master bushings while drilling.
• Prevents injuries by keeping floorhands’ feet off of master bushings and out of slip handles.
• Durable but flexible: will bend over when stepped on but pops back up after pressure is taken off. Personnel can lift the slips at the same height as usual when pulling or inserting slips.

New-style tray composed of super polymers

It was established that an object was needed to catch the drilling fluid before it has the opportunity to dirty the stack and substructure, as well as result in environmental contamination. Collection trays were introduced just below the rig floor in an effort to collect these fluids.

Evolved solution: The first attempt was the use of steel pans, which were found to be cumbersome and dangerous. The installation and removal process of the steel pans resulted in an increased injury and fatality rate. Installation also required a time-consuming welding process.

In 1994, a new-style tray composed of super polymers was introduced (Figures 1 and 3). Its composition made its weight approximately 10% of previous steel trays. Installation occurs quickly and without tools directly below the work floor with the help of over-center latches. The drilling fluids are collected and recirculated into the system as they are redirected into the annulus. A 5-in. telescopic action was also incorporated to allow the tray to be installed tightly beneath the floor without problems during rig settling.

Junk basket

Incidents of tools or objects falling down the annulus are common on drilling rigs. These objects must then be fished out. Fishing trips require drilling to stop and may even require the drillstring to be pulled out of the hole.

Evolved solution: The junk basket is an integral component of the super polymer-based collection tray. After the flow nipple is modified with the junk basket, the collection tray is clamped onto the blue seal on the junk basket so that it is directly under the rotary table (Figure 3).

The junk basket also allows for the 5-in.telescopic action. In conjunction with the window stripper, the horizontal slots of the basket allow fluids, not foreign objects, back into the flow nipple for recirculation. Those items that do fall down the annulus are now caught within the catch tray, thus eliminating costly fishing trips.

Window stripper

As mentioned, fishing trips are costly and time-consuming. Keeping the stack and substructure clean is also an issue.

Evolved solution: Placed on top of the junk basket, the window stripper strips fluid off the drill pipe and redirects it into the flow nipple and the collection tray.

Other benefits include:

• A radial split enables installation onto the drillstring without needing to break the string apart.
• Openings through the window stripper allow flow checks to occur without needing to pull the master bushing.
• Composed of self-lubricating composite.
• Allows bi-directional fluid movement.
• Reduces the chance of master bushings being blown out of rotary table under kick conditions.

Lower collection tray

After introducing the first two components of the zero spill technology, it was determined that approximately 80-85% of the fluids were being contained. What can we do to catch the remaining 15-20%?

Evolved solution: Working in conjunction with all components above it, the lower collection tray “catches” any additional fluids that come though the drill floor. This is especially important under kick conditions. The tray can be retrofitted to fit anywhere on the stack (Figure 4). Its tongue and groove design with over-center latches allows for easy installation without tools.

With four hangers attached to the BOPs, it can be used as a work platform, making it ideal for underbalanced work and servicing rotating heads. It has four 4-in. drain boxes and hoses that return the captured fluid to the holding tank or mud tanks.

Reducer collar

With any efficient spill containment or waste minimization system, a major problem is finding a system that can outfit the multi-diversification of sub and stack configurations. Normally, each rig needs to undergo costly modifications in order to ensure the effectiveness of the containment system.

Evolved solution: The reducer collar seals the lower collection tray to all BOP applications (Figure 4). Along with its multi-fitting options, the collar allows fitting to all rotating head applications.

Adjustable containment enclosure

Weather can impact the fluid containment role of zero spill technology, especially under windy conditions that can be found on offshore rigs.

Evolved solution: The adjustable containment enclosure catches any fluids escaping the other components of the system.  Features include:

• Fits any application. It is adjustable from 1 ft to 10 ft in height and from 10 ft to 16 ft in diameter.
• Composed of cross-stitched anti-rip material.
• Designed with access doors and H₂S warning signs.
• Designed for windy conditions.

OVERALL BENEFITS

Placing a measurable value on a preventive mechanism is a tricky endeavor. Every drilling and service rig is unique and operates under different conditions. However, by stopping pollution from occurring at the source, zero spill technology takes a number of variables out of the equation. Keeping this in mind, the benefits are telling but intangible: You can’t measure waste when you don’t lose anything.

When zero spill technology is properly utilized in its entirety, the result is a successfully implemented waste minimization plan that also optimizes the health, safety and operational performance of oil and gas operations. These best practices will raise the performance level of oil companies and contractors, as well as employee and public perceptions of the company and the industry at large.

Two independent third-party assessment reports have helped to record the tangible impacts of the technology. The first assessment was conducted over a period of five months by a national oil company. The benefits measured included only three of the numerous possible areas for cost savings: time gained in installation, time gained in dismantling, and the direct cost savings in the recovery of drilling fluids.

Total cost savings were estimated to be over $500,000, which comes to an almost 700% return on investment. The intangible benefits would boost ROI further. The following is an excerpt from their results summary:

The above-mentioned technology test was conducted on the Puerto Ceiba well 135, rig 339 of the South Division. According with the technical-economical analysis conducted by personnel of Comalcalco Operation Unit and the South Division Engineering Sub-manager’s office, the following advantages are emphasized in comparison to the conventional collecting pans.

Safety: Minimized accident risk during installation and dismantling because of its lightweight plastic material. The anti-slip mat used on the rotary table reduced the risk of slip accidents on the floor. The system prevents foreign objects from falling down the annulus.

Environmental protection: A reduced risk of contamination on the cellar and the surrounding environment since the system operates as an enclosed system.

Operation: Reduced up to 70% of the installation and dismantling time.  Improved efficiency in fluids recollection.

Economical: An estimated savings of US$78,540 in installation and dismantling time during the technology test calculated as follows:

Cost per hour of drilling rig No. 339                = US$595

Number of jobs during the test                           = 4

Time savings per installation                             = 24 hours per job

Time savings per dismantling                            = 9 hours per job

Savings per installation                                        = 24 x 4 x $595 = US$57,120

Savings per dismantling                                       = 9 x 4 x $595 = US$21,420

Total savings                                                             = US$78,540

Savings of US$483,740 in fluid costs were reported (Table 1).

The second zero spill technology assessment was conducted in partnership with Akita Drilling and Talisman Energy on a drilling rig assessed over the majority of its drilling program. Jacques Whitford Environment was contracted to provide an independent environmental, health and safety assessment of the system. The following is an excerpt from the assessment report (trade names have been removed):

“This assessment is qualitative in nature and uses a scoring system developed by Jacques Whitford Environment Limited to reflect technical input from the field drillers and consultants using the equipment, as well as an independent audit conducted by Jacques Whitford Environment Limited.

In general the Katch Kan Zero Spill System rated extremely well in all three areas. All of the scores were marked out of 100 with 100% being the Maximum Attainable Score in any category. In addition, each component was weighted according to its significance in each of the three assessment categories.

Jacques Whitford rated the Zero Spill System as follows:

• Environmental protection: 99%
• Health and safety: 98%
• Economic benefits: 94%

Akita Drilling and the consultants rated the zero spill system as follows:

• Environmental protection: 97%
• Health and safety: 85%
• Economic benefits: 72%

The environmental protection component was rated very high by all parties, indicating that the system achieved its goal of capturing drilling fluids on the drill rig. Health and safety was also rated high by all parties with main differences occurring with the Katch Mat, the Adjustable Containment Enclosure, and the Second Stage Low Profile Katch Kan where the drillers and consultant scored these components lower than Jacques Whitford.”

Another positive, long-term achievement of zero spill technology continues to be the overall progression of the industry toward sustainable development. The implementation of the technology into best practices in pollution prevention and health and safety standards continues to direct upstream oil and gas activity to minimizing waste, not just managing it. The more oil and gas companies and drilling contractors that go “zero spill,” the more significant the strides will be toward the protection and enhancement of the environment and the communities where these activities occur.

This article is based on “Minimizing Environmental Footprint by Utilizing Prevention Technology,” SPE 124235, copyrighted by SPE and presented at the 2009 SPE Annual Technical Conference and Exhibition, New Orleans, La., 4–7 October.

References:

Alberts, S. (2008, June 24). Obama’s fight against ‘dirty oil’ could hurt oil sands. The National Post. Retrieved from http://www.nationalpost.com.

The Ethical Funds Company. (2008). Winning the Social License to Operate Resource Extraction with Free, Prior, and Informed Community Consent. Retrieved June, 2009, from https://www.ethicalfunds.com/SiteCollectionDocuments/docs/FPIC.pdf.

Holliday, George H., “Environmental/Safety Regulatory Compliance for the Oil & Gas Industry’; p. 146. PenWell Publishing Company, Tulsa, Oklahoma, United States; 1995.

Schlumberger Excellence in Educational Development (SEEDS): Science Watch, “Drilling Fluid Environmental Case Study: The Hibernia Project”; Retrieved June, 2009, from http://www.seed.slb.com/subcontent.aspx?id=3092.

Alberta Environment, “Upstream Oil & Gas Reclamation & Remediation Program’; R&R/03-1, Edmonton, Alberta, Canada; August 2003.