Material and value flows by sdfwerte


									Management of produced water on
 offshore oil and gas production
         comparative assessment
           using flow analysis

       Paul Ekins and Robin Vanner
               Policy Studies Institute,

           Offshore Forum, London
               February 8th 2005
                           Background to study
                UKOOA                                          Policy Studies Institute
                                                           Material flow and sustainable development work
     [UK Offshore Operators Association]

                                                                    Professor Ekins & Robin Vanner
        Sustainable development work

             Collaborative two year study under DTI LINK programme
                                funded by EPSRC
Study objectives:
1.       Direct benefit to oil and gas sector
         •      Four industry issues covered
2.       Develop a generic sustainable business model
         •      Use material flow analysis combined with their values
       Approach to material flow analysis

                     Input C
                        t, £, e

    Input A        Production X             Product B
        t, £                   £                 t, £

Mass balance                                  Private values

Inputs = Outputs                        £Product(B) > [£Inputs(A,C)
                     Waste D            + £Process(Y) - £Waste(D)]
                        t (£?)

   Input F         End of pipe Y               Waste G
    e, £, e                £                     t, value

                                        Implicit social valuation
                     Waste E       -£Input waste(D) > Value[F+Y-(G+E)]
                       t, value

                                           Is D worth that?
                 Industry case studies
1. Decommissioning of offshore structures
   Material value of recycling, combined with implicit social valuation of
   non-financial outcomes

2. Produced Water
   Material implications of end-of-pipe cleanup technologies, stakeholder
   perception of harm and the precautionary principle

3. Energy use offshore
   Life of field view of energy use and material flows leading to indicators
   and ultimately efficiency measures
4. Corporate relationships
   Through a number of case studies, seek to understand stakeholder
   issues and relationships in the context of an industry in transition.
                What is produced water?

• Produced with oil
   – In the UK in 2002; 272mt produced water, 105mt oil (72% of fluids)
• Physically separated from oil to leave water with a
  dispersed oil content of typically ~20ppm (mg/l)
   – Some dissolved content (aromatics and phenols) – toxic i.e capacity for
     harm rather than actually causing harm
   – Not feasible to biologically treat offshore
• Typically discharged into the North Sea
   – Of the 272mt produced by the UK sector in 2002, 5.4kt was dispersed
     oil (represents ~6% of total oil inputs into North Sea from all sources)
   – Volumes tend to increase as fields mature
• OSPAR has recommended that total dispersed oil
  content is reduced by 15% (baseline 2000) by 2006
   – Represents a 36% reduction against expected 2006 discharges
   – Open to UK sector wide trading scheme
                  Harm and uncertainty?
          A range of stakeholder views of harm
• Some stakeholders would require an effect to be proven
  and detrimental for a produced water discharge to
  represent harm
   – What about uncertainty and the precautionary principle?
• Others stakeholders only require for produced water
  discharge to have the potential for having an effect for it
  to represent harm
   – What if an effect is not posing any impact on an organism?
   – Adams 2002; uncertainty will lead to stakeholders applying culturally
     based ‘risk filters’ to perceived ‘virtual’ risks
• DEFRA and the precautionary principle:
   – “Where there are threats of serious or irreversible damage, a lack of full
     scientific certainty must not be used as a reason for postponing cost-
     effective measures to prevent environmental degradation”
       • What is cost effective?
       • What if end of pipe wastes could cause serious or irreversible damage?
          Advanced cleanup technologies
1. Filter
   •    Produces hazardous and low grade radioactive waste
2. Re-inject into well (PWRI)
   •    Requires significant energy to power injection pumps
   a)   Inject into available well
   b)   Drill new well and inject produced water
   c)   Substitute for existing water injection required to increase
3. C-Tour – extraction of some actually dissolved
   content using solvent produced on the facility
4. Epcon – advanced tank separation
                   All require present physical pre-separation
                       Material and value flows
                            2006-2012 case study

               Inputs                                 Outcomes
                           (1) Filtration of produced water
     CAPEX/      Filter     Removed        Special       % < in max Risk    Costs
      OPEX     canisters      oil           waste            (PNEC)
t      80        450          490     =      940         BTEX       1%     £50k/t oil

£m   £7.6m/     £3.4m          -           -£4.2m        PAH        6%     £15.7m
                               (2) Re-injection (PWRI)
     CAPEX     Fuel Gas     Removed         CO2          % < in max Risk    Costs
                              oil                            (PNEC)
t     134       225,000       490     =    470,000       BTEX      None/   £78k/t oil
£m   £12.2m/    £8.5m          -           -£3.0m        PAH               £24.2m

       tCO2/t oil diverted                                  960t
                         Material and value flows
                            2006-2012 case study

                Inputs                              Outcomes
                                      (3) C-Tour
     CAPEX/      Fuel Gas   Removed        Waste    % < in max Risk     Costs
      OPEX                    oil                       (PNEC)
t       -         1,000       160      =      -     BTEX      0%       £49k/t oil

£m   £4.5m/       £40k         -              -     PAH       3%         £5m
                                      (4) EPCON
     CAPEX/    Flocculant   Removed                  % < in max Risk    Costs
      OPEX     (Chemical)     oil                        (PNEC)
t      -          210         383                   BTEX       0%      £19k/t oil
                                       =      -
£m   £4.1m/        £?          -                     PAH       5%       £4.6m

              Doing nothing may forego ~£1mt (£78m) of production
              in order to comply with the required reduction in OIW
                           Private assessment
1.       EPCON is cheapest (£19k/t oil removed)
     •     If this is enough to meet reduction target
2.       PWRI expensive (£78k/t oil removed) but provides a contingency
         against further discharge regulation
     •     Case studies operator did not value fuel gas or CO2
     •     May be as cheap as £9k/t if substituting for existing water injection
3.       C-TOUR also removes actually dissolved PAHs and phenols, the
         two groups of chemicals which are the components of most
     •     The actually dissolved content is not covered by regulation
4.       Filtration also good at reducing dispersed oil and risk
     •     Waste management costs are a pessimistic view
     •     The case study operator rejected filtration due to waste and project risk

            Operators will make their investment decisions
            based on their particular portfolio of assets and
            their view of the potential for emissions trading
   Regulatory assessment is more problematic?

1. All costs are present (2004) private values
   •   ~50% of which would likely be offset against tax
2. Waste and CO2 values are based on private valuations
   and do not represent damage costs or social values
3. Imputed values are minimum implicit valuations (in
   present terms) and therefore also do not represent a
   social valuation
4. The Predicted No Effect Concentration (PNEC) risk
   assessments are theoretical and supposedly
   •   What about the precautionary principle?
   •   Discharges of produced water are set to increase
   •   What about the threat of climate change?
       •   Oil and gas sector is in the EU ETS – Emissions from produced water
           abatement therefore imply emissions reductions in other sectors
          Regulatory assessment issues
1. In respect of the 15% sector wide reduction
   and 30ppm concentration limit:
  •   How effective are they at reducing perceived harm?
  •   Does the perceived harm justify the costs (material and
  •   What potential is there for produced water ‘hotspots’ if there is
      an unconstrained trading scheme?
2. Future regulation and continuous
   improvement/reduction management
  •   Society can’t remove all risks – where to stop?
  •   Good understanding and communication of risk required
  •   Material flow (and value chain) analysis can highlight cross
      media environmental issues and total process waste costs

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