During the last two decades, the oil & gas industry has experienced significant swings in petroleum hydrocarbon drilling and production. Technological advances – including horizontal drilling capabilities and widespread hydraulic fracturing (“fracking”) of shales – have greatly expanded domestic oil & gas exploration and production.
Oil production can take place in areas where stakeholders (including landowners, regulators, investors, insurers, and the general public) are unfamiliar with oil & gas operations. Under these conditions, regulations for management and response to environmental risks often lag behind rapidly-expanding drilling and production.
In general, the oil & gas industry is made up of the following segments:
- Upstream: Includes property leasing; exploratory and production well drilling; and construction of surface production facilities, field lines, and saltwater disposal wells.
- Midstream: Transporting crude oil and natural gas from production fields to refineries. Facilities include pipelines, crude oil terminals, and booster stations/pumping stations.
- Downstream: Refining of crude oil into refined products (fuels, petrochemicals, etc.). Facilities include refineries, petrochemical plants, refined-product terminals, and distribution pipelines.
In general, the upstream segment experiences the most spills/releases due to the number of facilities in each segment (about 970,000 active wells 1 compared to only 185 oil pipelines, 175 gas pipelines, and 129 active refineries 2). This newsletter focuses on the most frequent types of environmental incidents identified in the upstream segment.
Materials Spilled
Most spills and accidental releases in the upstream segment involve either produced water (also known as brine, flowback water, or saltwater) or crude oil. Spills of acid, hydraulic fracturing fluid, and other materials are much less common.
Oil and gas wells produce a mixture of hydrocarbons and water from the geologic formation. The mixture is usually routed from the well through piping to a surface production facility equipped with separation tanks and oil and/or produced water storage tanks. Oil and water are separated at the production facility and pumped into dedicated storage tanks.
Produced water is delivered either by field pipeline or tanker truck to a saltwater disposal well, where the water is pumped downhole into a geologic formation. A permit is required to inject produced water into formations. It is generally too salty to be suitable for reuse; however, some oil or gas fields produce water that is less salty and can be used for fracking fluid. Produced water spills with moderate to high concentrations of salt tend to resist biodegradation and can have long-lasting deleterious effects on soils and vegetation.
The actual annual number of spills of crude oil or produced water in the U.S. is unknown, because each state has different reporting requirements. However, one study 3 indicated that there were approximately 55 reported oilfield spills per 1,000 wells per year. Assuming 970,000 active oil & gas wells, it may be reasonable to anticipate that as many as 53,000 spills occur annually.
Most spills of oil and produced water are relatively small – from a few tens of gallons (less than one 42-gallon oilfield barrel) to perhaps 1,000 gallons (about 24 barrels) 2. Produced water is the substance most often released 2, because wells typically produce more water (usually saltwater) from geologic formations than oil or gas. It is estimated that, on average, wells produce 10 barrels of water for each barrel of oil produced – resulting in 20-30 billion barrels of produced water generated each year by oil & gas operations in the U.S.
Where and How Spills Occur
Relatively few spills or environmental incidents are associated with oil & gas well drilling or completion (including fracking). A 2015 Environmental Protection Agency study of 36,000 spills at hydraulically-fractured wells indicated that less than 500 of them were related to hydraulic fracturing 4.
Most spills are associated with movement of crude oil or produced water and can occur:
- At or near the wellhead, from piping used to transfer produced fluids to a production facility (also called a “tank battery”;
- Along the field line routes to the production facility;
- At the tank battery/production facility itself, where trucks unload crude oil or produced water;
- At any point along the field lines that transport produced water to a saltwater disposal well or another produced water management facility; or
- At either the crude oil unloading station or the saltwater disposal well.
Field flowlines for produced water can either be buried a few feet beneath the ground surface, or placed on top of the ground. These produced water lines can be either rigid material (generally polypropylene) or “lay-flat” lines made of tough, canvas-like materials. Surface installation of lay-flat lines is becoming the favored method due to faster installation and elimination of trenching costs.
The most frequent cause of spills/releases from oil or saltwater lines is line strikes by third parties, due to human error. Buried lines may be marked incorrectly, or installed at shallower depths than called for in plans. Surface lines are often laid adjacent to field roads and can be struck by vehicles. Lay-flat surface lines may also be laid across sharp rocks, and movement during active pumping of saltwater can cause wear or puncturing of the fabric. In addition, poor quality control during line installation can lead to failure of the flanges that connect line segments.
Potential Cleanup Costs
There is no “average” cleanup cost for a spill of crude oil or produced water. The cost depends on many factors – including area and depth of soil impacted, volume and type of contaminant released, location of the spill, speed of initial spill response, and method of remediation selected. Even minor spills can result in costs between $100,000 and $250,000. The largest cost reported for cleaning up a produced water spill was approximately $50 million for an incident involving 29 million gallons (more than 690,000 barrels) in North Dakota. That spill was reportedly undetected for 143 days. Fines and civil penalties of nearly $35 million were also levied in this case 5.
HETI…Helping Mitigate Environmental Impacts
HETI has significant experience in responding to spills of crude oil, produced water, and refined products nationwide. Our seasoned professionals provide workable, real-time solutions to spill response and remediation – on projects ranging from truck rollovers to major pipeline spills. HETI has a proven track record of helping clients maintain effective technical and financial control of response activities and costs.
References:
1 U.S. Energy Information Administration (2020). “The Distribution of U.S. Oil and Natural Gas Wells by Production Rate”. Online publication: EIA: Distribution of US Oil & Natural Gas Wells by Production Rate
2 Sonnichsen, N. (2021). “Number of operational and planned oil pipelines by country 2020”. Statista (online), Chemicals & Resources, Petroleum & Refinery Global-oil-pipelines-by-country-and-status
3 Allison, E., and Mandler, B. (2018). “Spills in Oil and Natural Gas Fields”, in Petroleum and the Environment, Part 14/24, American Geosciences Institute, 14-1 – 14-4.
4 U.S. Environmental Protection Agency (2015). “Review of State and Industry Spill Data: Characterization of Hydraulic Fracturing-Related Spills”. Office of Research and Development, Washington, DC. EPA/601/R-14/001. EPA Hydraulic Fracturing Spills Report, 5-12-15, 508
5 U.S. Department of Justice (2021). “Pipeline Company to Pay $35 Million in Criminal Fines and Civil Penalties for Largest-Ever Inland Spill of Produced Water from Oil Drilling”. Press release, USDOJ Office of Public Affairs, August 5, 2021.