Oilfield and Municipal Water Recovery and Reuse in SE Alberta

Water Management in Alberta’s Oilfields - APEGGA PD Seminar

April 17, 2008

PRESENTATION OVERVIEW

Water Scarcity in SE Alberta & Relevant Policies Implications for Oilfield Water Supplies Conservation & Innovation Developments to

Improve Efficiency of Oilfield Water Use A Case History Summary

Southern Alberta’s Rivers

South Saskatchewan River Basin (SSRB) includes:

• Bow River

• Oldman River

• Red Deer River

Water Scarcity in SE Alberta

Water-Short Areas

Fresh Water Use in SE Alberta for Oil & Gas Exploration & Production

Uses:» Drilling» Completions (hydraulic fracturing)» Enhanced/secondary recovery (waterflood)

Sources» Surface water (lakes, rivers, canals, sloughs, etc.) » Municipal water (potable)» Source water wells

Water Use Perception & Reality

Reality» Water allocated to O&G

industry in SE AB is small compared to other uses

» Water is consumed

Public Perception» The O&G industry can and should reduce its

consumption of fresh water

Bow R Basin Water Allocations

Key Provincial Policies Influencing Industry Access to Water

Alberta Water for Life Strategy – November 2003 Water Conservation and Allocation Policy &

Guideline for Oilfield Injection – January 2006 South Saskatchewan River Basin (SSRB)

Water Management Plan – August 2006

Water for Life Strategy

Goals & Outcomes» Safe, secure drinking water supply» Healthy aquatic ecosystems» Reliable, quality supplies for a sustainable economy

Key Directions and Actions» Knowledge & Research» Partnerships» Water conservation (30% efficiency improvement)

Policy & Guideline for Oilfield Injection

“The ultimate goal of the policy is to reduce or eliminate allocation of non-saline water for oilfield injection”

“New projects within water-short areas that propose to use non-saline water must demonstrate that every feasible option has been evaluated”

Policy applies to all new licence applications and licence renewals

AB ENV also requesting voluntary review of permanent licences; Permanent licence holders encouraged to cooperate with the intent of the policy

Policy & Guideline for Oilfield Injection Alternative Water Sources

Existing projects in water-short areas encouraged to reduce or eliminate non-saline water use through conjunctive use of alternative supplies

Possible Water SourcesProduced water

Saline groundwater

Non-water fluids and methods

Industrial wastewater

Municipal wastewater

Potential offset water supplies

Water from coalbed methane

SSRB Water Management Plan (Aug 2006)

AB ENV not accepting applications for new water allocations in the Bow, Oldman and South Saskatchewan River sub-basins

Water may still be obtained through transfer of allocations from existing licence holders; Director authorized to withhold up to 10% of volume transferred as a conservation holdback

Goals:» Protect watersheds, while sustaining the economy» Encourage Albertans to become more efficient and innovative

in their use of water

Water Supply Implications for Oil and Gas Development in SE Alberta

Municipalities – are becoming concerned about meeting community needs and more reluctant to supply industry outside immediate service area

New Diversions – not an option with SSRB closure Existing Licence Holders – under scrutiny and

pressure from public and government to find alternatives and reduce fresh water usage

Efficiency & Innovation Developmentsin Oilfield Water Use in SE Alberta

Recycling & Reuse of hydraulic fracturing blowback fluids

Reduction of fresh water use by Replacement with Recycled municipal wastewater

Recycling & Reuse of Frac Blowback Fluid

Hydraulic fracturing is used to improve the productivity of low permeability reservoirs

Water is used to prepare high viscosity polymeric gels which transport proppant (sand)

Once sand is placed into fractures, viscosity of the fluid is broken, pressure is relieved and “blowback” water is returned to surface for disposal

Shallow Gas Fracturing

Water Use for Fracturing

Typical water use: 20 - 25 m3 per zone & multiple zones usually fractured per well

Average fresh water use estimated at 100 to 150 m3 per well

5000 – 7000 wells/yr drilled in SE AB & SW SK Estimated water consumption: 1M m3/yr Cost of water supply & transportation represents

<1.5% of well completion cost (PSAC 2007 Well Cost Study)

Fate of Hydraulic Fracturing Fluids

100% of fresh water used for hydraulic fracturing is consumed

Blowback can be Recycled and Reused to Prepare New Fracturing Fluids

Linear and Crosslinked Gels – Water quality requirements demand membrane filtration

Surfactant Gels – Water quality is less critical, allowing direct reuse or conventional filtration

Blowback Recycling is Cost-Competitive with Disposal

Lifecycle cost for frac water supply and blowback disposal can be $30 - $50 per m3, depending upon transportation distance

Transportation represents approx. 50% of cost Over 80% of blowback can be recycled

and reused, reducing fresh water consumption by >40%

Onsite treatment reduces costs of water supply, blowback disposal and transportation

Fresh Water can be Replaced with Recycled Municipal Wastewater Effluent

Even with 100% recycling of blowback, 50 to 60% makeup is required to replace reservoir losses

Although potable water is typically used for frac fluid makeup, municipal wastewater can be recycled to supply this requirement

Membrane filtration and disinfection provides water quality suitable for preparing frac fluids

Municipal Effluent Reuse is Not New

Municipal effluent is commonly treated and reused for industrial and agricultural purposes in semi-arid regions throughout the world (Southwestern US, Mexico, Middle East, Singapore, Australia)

In Alberta, recycled municipal effluent has been used to supply water for energy industry projects in Bonnyville, Medicine Hat and Edmonton

Membrane Filtration Development has Facilitated Effluent Recycling

Market Adoption of Membrane Technology has Driven Cost Competitiveness

Zenon, 2004

Normalized Cost of Membrane Treatment

0

10

20

30

40

50

60

70

80

90

100

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Conventional Treatment

Frac Water Quality Specifications

Parameter 

Concentration

Make-up Water Quality Spec.

Recycled Municipal Wastewater Quality

Suspended Solids <1 <1

Iron <10 <0.1

Alkalinity <500 <500

Hardness <500 <500

pH 6 - 8 7 – 8.5

Dissolved Solids Not Specified <1500

Bacteria <105/mL <105/mL

Recycled Wastewater for Waterfloods

Municipal wastewater effluent represents a viable alternative water resource for enhanced oil recovery

Replaces use of high quality fresh water with suitable quality recycled effluent, reducing salt, nutrient and organic loadings to receiving streams

0

200

400

600

800

1000

1200

1400

1600

Sodium Sulfate Dissolved Solids

Raw Water

Lagoon Effluent

0

5

10

15

20

25

Phosphorus Ammonia TOC

Raw Water

Lagoon Effluent

Motivation for Replacing Fresh Water with Recycled Effluent

Lack of alternatives in SE Alberta Demonstrate industry initiative towards achieving

conservation, efficiency and productivity goals Public and community relations benefits Economic – transferability of water diversion

licences has created market value for existing licences and influenced the price of securing fresh water

Market Value of Water Diversion Rights

Sales Price of Water Licences in 12 Western States ($/acre-ft)

$0.00

$2,000.00

$4,000.00

$6,000.00

$8,000.00

$10,000.00

$12,000.00

1985 1990 1995 2000 2005 2010

WID/MD

Rockyview

Historical Oil Price ($/bbl)

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

1985 1990 1995 2000 2005 2010

As a tradable entity, the value of water diversion rights responds to supply & demand

Creates economic incentive to conserve & replace fresh water w/ alternate supplies of lower cost or lower value

Brooks Water Supply Situation

Licensed diversion from Lake Newell = 4.9 M m3/yr Current average water use = 3.7 M m3/yr Population growth from 1997 to 2007 = 33%

Aug 2006 - No increased water diversions from Bow River

More efficient use of existing water allocation will be required to support future growth

A Cooperative Industry/Community Water Conservation Opportunity

Brooks’ bulk water sales for oilfield use ~ 90,000 m3/year Lagoon effluent can be treated and recycled to supply this

demand, freeing up fresh water for community growth

Proposed Effluent Recycling/Reuse Model

Location Plan

City of Brooks

Brooks Sewage Lagoons

Newalta

Effluent Recycling Process

Project Potential

Initial project expected to conserve ~ 90,000 m3/yr Proposed infrastructure will provide 200,000 m3/yr

of recycling capacity Capacity can be further expanded in modular

fashion to recycle all wastewater and replace other uses of fresh water: other industrial uses, enhanced oil recovery, irrigation.

Benefits of Wastewater Recycling

Ensures priority access to drinking water for residents and secure supply for industrial users in water-short areas

Provides water supply to support community growth Potentially reduces or defers municipal expenditures for

wastewater treatment expansion Alleviates water quality concerns with effluent discharges Presents a positive example of industry/community

cooperation to achieve water conservation objectives

Summary

Water scarcity has the potential to limit oil & gas development in SE Alberta

Practical conservation opportunities exist to improve the efficiency of oilfield water use through reuse and recycling of fracturing fluids

Recycling and reuse of municipal wastewater effluent provides benefits to industry, municipalities & environment

Developments in membrane technology have made use of recycled wastewater practical and competitive with securing and using fresh water

QUESTIONS?