Water management

As we close the door or slam the door on 2020, I’m grateful that it is behind us. The question is what will 2021 bring? Will oil demand return, will our economy continue to recover from the pandemic or has the pandemic forever damaged our economy. With this uncertainty we will certainly see less investment in unconventional oil and gas. Oil price and completion activity will be most critical for oilfield water management as oil price drives well completion activity which drives water demand and produced water recycling demand. New completions also generate more produced water, which ultimately means more business for disposal wells. As completions go so goes the unconventional oilfield water management industry. So, the stability of OPEC + or how will a new administration treat Iran, and will their sanctions be lifted are darks clouds hovering over the oil demand question which can linger throughout 2021.

The good news is that oil prices have been stable and OPEC + is holding its production cuts and we have seen numerous weeks of continued frac spread growth resulting in a growing number of completions. We aren’t yet back to early 2019 levels and we may return to 50% of what we saw in terms of frac crews in early 2019. That may seem like bad news, but after what we went through at the end of 2019 and throughout 2020, this is a welcome sign.

We are starting to see the consolidation we expected as the mergers and acquisitions develop larger operators, but we will likely not see the capital spending return to the oilfield. In a sense this may be good news as it may help drive more business to commercial disposal wells and water supply as operators spend less money on new disposal wells and water supply wells.

What about recycling? Produced water recycling requires completion activity to consume the recycled product, so recycling’s future lies with the stability and growth of well completion activity. But there are so many other things that people don’t consider when talking about produced water recycling. In order to have an effective recycling program you need scale, an effective produced water gathering system and consistent and reliable completion activity. Without these things you can still recycle, but you may not see the economic benefits depending on the cost of your water supply and disposal wells cost.

What then makes for a good recycling program? Well let’s start with what do you have to do to recycle produced water. This becomes a few simple steps, which are oil control, solids control, bacteria control and iron and sulfide control. I’m going to skip scaling issues for now.

In a conventional water gathering systems your produced water is first managed at the well head, where you have oil/water/gas/solids separation taking place. This water passes on to tank batteries, where you again recover oil and separate solids. Your tank batteries are then connected typically via pipelines to disposal wells. At the disposal well you have gun barrel separators where you are again recovering oil and solids.

At this point you can tie in your recycling program after your gun barrels and add some form of storage to aggregate enough water for your completions program. In this type of recycling program, you have leveraged your existing assets to manage oil and solids and with a combination of aeration and an oxidizer you can manage bacteria, iron and sulfides. These types of recycling facilities will cost you less than $0.15/ barrel for all of your CAPEX and OPEX. If it doesn’t, you’re doing something wrong, we see plenty below the $0.10/bbl threshold.

The case for solids control. One departure from this strategy is the need for more solids control. In the process above the storage system, whether tanks or pits to provide any additional solids control by gravity settling. Remember you have solids separation and settling occurring at the wellhead, the tank batteries and again at the gun barrels. For most operations this will give them a nice clear water good enough for recycling.

Some believe they need even clearer water with less solids. They will add coagulants, filtration and dissolved air flotation to develop an even cleaner, clearer water, but why? It will cost you more and it will generate more solids for disposal. Most people will say they are worried about formation damage or core flow or accumulating too much solids in their pits.

Let’s take a closer look at these concerns, but first let’s understand what is recycled produced water used for. It will be a completion fluid used to carry sand; clearer water doesn’t mean it carries sand better. What about formation damage or core flow? There have been studies that show you need at least 5-micron filtration to obtain good core flow, the problem is these studies assume your completion fluid is the clear recycled water, but it isn’t. It’s produced water with sand and sand comes with fines or dust.

What does this mean? Well, the fines in West Texas sand for example can be up to 10 to 20% and in terms of solids, based on today’s proppant or sand concentrations will generate 7,500 to 15,000 ppm of solids. When we settle solids, the results are 80-120 ppm or we can get aggressive and drop this number to <50 ppm at a higher cost. When you consider that your end product will have 7,500-15,000 ppm and there are the dust storms, which can create an additional 300-400 ppm solids in your water. Your base fluid is not clear water, but murky water. Don’t spend the extra money.

Let me finish with this thought, keep it simple and reap the economic benefits of a low-cost recycling program by leveraging your existing assets. You’ll be happy you did and so will your management and investors.

About the Authors

Mark Patton

Hydrozonix

Mark Patton is president of Hydrozonix and has more than 30 years of experience developing water and waste treatment systems for the oil and gas industry. This includes design, permitting and operation of commercial and private treatment systems, both nationally and internationally. He has seven produced water patents and two patents pending. He earned his B.S. in chemical engineering from the University of Southern California (USC) in 1985.