Holly Johnson Churman, P.E.

November 16, 2018

Advancing produced water reuse through infrastructure

logistics and economics

Agenda

• Produced Water Overview

• Challenges and Opportunities

• Oilfield Water Management

• Decision-making

• Case Example

• Conclusions

• Questions

Produced Water in New Mexico

Zemlick 2018

Oil production occurs in key regions

of New Mexico, and generates

significant volumes of produced

water that must be managed.

Produced Water

• Complex composition

• Flows and volumes vary

• Impacts infrastructure

• Scaling

• Corrosion

• Erosion

• Fouling

• Hydrogen sulfide gas production

Candia 2015

Produced water originates in underground formations and is brought to the

surface during oil and gas production.

Reuse and Water Resource Conservation

Large water volumes are needed for hydraulic fracturing.

Reusing produced water for fracking reduces demand on local water supplies.

Reuse and Transportation Costs

• 50% reduction in water-related

truck travel (10 million fewer miles

per year)

• Average reduction of 30,000 tons

of greenhouse gases per year

• Treatment of 95% of water on site

minimizes need for disposal wells

Antero 2018, Rassenfoss 2017

Effective produced water management could reduce truck traffic, preserve

roadways, and minimize greenhouse gas emissions.

Example: Antero Clearwater Facility & Landfill, Pennsboro, WV

Disposal and Induced Seismicity Risk

Snee and Zoback 2018

Minimizing produced water disposal reduces induced seismicity risk.

Produced Water Reuse

Reuse Opportunities

• Oilfield operations

• Industrial operations

• Agriculture

• Hydrological use

• Roadways

• Domestic/drinking water

• Secondary use

Implementation Challenges

• Engineering

• Logistics

• Economics

• Perception

• Health and safety risk

There are many options for produced water reuse, but important challenges

are impeding their implementation.

Oilfield Water Cycle

U.S. EPA 2016, Walsh 2013

Field Development

(Walsh 2013)

Stage 1:

Remote, isolated wells.

Stage 2:

Well clusters with some

infield drilling and

completions.

Stage 3:

Extensive in-field

development.

Water affects oilfield logistics, and becomes more complex as fields develop.

Water Management Decision-making

Source

Store

Treat

Convey

Reuse

Dispose

All produced water management decisions come with costs.

Economics enables options comparison and arrival at appropriate solutions.

What have we done before?

Trade-off evaluations can be time-consuming, cumbersome, and incomplete.

Methods

• Rigorous designs

• In-house models

• Consulting studies

Challenges

• Quality of information

• Geographic specificity

• Operating time horizons

• Integration of disparate factors

Sensitivities

• Oil price

• Drilling Schedule

• Good and service cost fluctuations

What can we accomplish today?

Wells to Central - Trucking Wells to SWDs - Trucking Central to SWD - TruckingWells to Central - Pipeline

Economic modeling allows for rapid, equivalent, and relevant options analysis.

Assets:

• 12 Production Wells

• 3 Salt water disposal wells

(SWDs)

• 1 Centralized Treatment Plant

Treatment Assumptions:

• 50% uncertainty applied

• Mobile $2 - $6 per barrel

• Centralized $0.75 - $2.25/bbl

Other Logistics Assumptions:

• 30-year project lifespan

• Injection Cost $0.30/bbl

• Trucking Cost $75 per hour

• Reuse savings $0.65/bbl

Example: Infield Development

Results

Years 0 – 5:• SWDs are most economical for

produced water disposal.

• Centralized + pipe < mobile.

Years 5 – 15:• Centralized + pipe < mobile.

• Centralized + pipeline competes

with SWDs when trucking costs

are low.

Strategy:• Phased approach

• Year 1 – 5: SWDs

• Shift to centralized treatment.

• Consider options to reduce

desalination costs.

A phased approach will enable holistic, cost-effective field development.

Conclusion

• Produced water management is

challenging in New Mexico.

• Infrastructure development can achieve

operational, economic, safety,

environmental, and sustainability goals.

• Sourcing, storage, treatment,

transportation, reuse and disposal

comprise key decisions.

• Current methods are time-consuming,

cumbersome, and incomplete.

• Economic modeling enables rapid,

equivalent, and relevant analysis.

• Economics can drive creative solutions.

www.ghd.com

Questions?

Holly Churman

holly.churman@ghd.com

(832) 485-5242

References

Antero Resources. (2018). Antero Clearwater Facility & Landfill.

http://www.anteroresources.com/environmental-safety/antero-clearwater

Candia, E., & Seth, K. (2015). Water Recycling Enhances Well Economics. Retrieved

from https://www.aogr.com/web-exclusives/exclusive-story/water-recycling-enhances-

well-economics.

Rassenfoss, Stephen. (2017). Turning Dirty Produced Water Into Fresh Water and Salt to

Sell. JPT. https://www.spe.org/en/jpt/jpt-article-detail/?art=3519.

Snee, Jens-Erik Lund and Mark D. Zoback (2018). ”State of stress in the Permian Basin,

Texas and New Mexico: Implications for induced seismicity.” The Leading Edge, 37(2),

127–134. https://doi.org/10.1190/tle37020127.1

U.S. Drought Monitor: New Mexico (2018). Retrieved from

https://droughtmonitor.unl.edu/Maps/MapArchive.aspx.

U.S. EPA (2016). Hydraulic Fracturing for Oil and Gas: Impacts from the Hydraulic

Fracturing Water Cycle on Drinking Water Resources in the United States (Final Report).

U.S. Environmental Protection Agency, Washington, DC, EPA/600/R-16/236F.

Zemlick, Katie et al. (2018) Environ. Res. Lett. 13 024008.

http://iopscience.iop.org/article/10.1088/1748-9326/aa9e54.