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Recycling black gold: North Slope oil firms foster new plan of "waste not, want not." (North Slope Burough, Alaska; waste management at BP Exploration (Alaska) Inc. and Arco Alaska Inc.)

North Slope field operators are learning that prevention in controlling wastes from oil production can avert big liability headaches down the road while furthering their cause in the political arena.

Steven Taylor, manager of environmental and regulatory affairs for BP Exploration (Alaska), believes it's just a matter of time before many of the waste control methods used in the Alaska Arctic are adopted worldwide.

Says Taylor, "This is a pioneer technology, and I anticipate seeing other companies picking up on it any place where habitat is a concern. If you eliminate surface disposal, you eliminate the loss of habitat and the long-term liability associated with that."

During the past few years, Alaska's oil industry has made significant progress in developing new technologies to handle the mountains of drilling muds and cuttings and related hydrocarbon wastes being generated on the North Slope.

Drilling Wastes "Recycled"

Rather than dispose of drilling wastes in surface reserve pits, which was the common practice on the North Slope, the cuttings are now ground up in a machine and injected, along with muds, into the non-oil producing cretaceous formation 4,000 to 7,000 feet below the surface.

Engineers also learned that cuttings from the first several thousand feet of drilling were essentially alluvial gravel and could be washed and reused for building roads and in other construction projects. In 1990, the Prudhoe Bay field alone produced about 612,500 barrels of muds and cuttings.

Taylor played a key role in the effort. After transferring to Alaska from BP's mineral business in Salt Lake City, Utah, he concluded some six years ago that the same grinding concepts used to process copper ore could be used to break down drilling cuttings. Though management supported him, he says, the drilling engineers resisted.

Recalls Taylor, "They said there was no way to grind that much material. I said I just came from an operation that grinds 120,000 tons a day, and we can't grind 30,000 to 40,000 tons."

Taylor concedes that he was a bit "underhanded" in getting his way. When BP sought government approvals to develop the Hurl State accumulation on the western fringe of Prudhoe Bay, Taylor left reserve pits out of the application.

"They had no choice because they had no reserve pits to put it in. I had management's support, but the drilling department was not very happy with me," he says.

Long-term Costs Lower

While initial costs to grind and inject are higher than conventional methods, the long-term costs are lower. In the early 1960s, for example, BP drilled an exploratory well in what is now Glacier Bay National Park. When the U.S. Congress changed the area's classification from a forest to a national park, BP was forced to remove the wastes at a cost of about $2 million. Taylor says the material could have been removed (by grinding) for only a few thousand dollars 30 years ago.

North Slope operators are still faced with closing out more than 100 reserve pits that were used for the disposal of muds and cuttings prior to introduction of the grinder. There also remains a number of unknowns about the technology itself, including how long those wastes can be injected into a well before plugging it up.

The elimination of reserve pits to store current muds and cuttings has reduced the size of drilling pads by about 70 percent. "That is significant where habitat loss is a concern," notes Taylor. But the less toxic muds and cuttings, the so-called associated wastes, represent a bigger problem because of expected major changes in the federal Resource Conservation Recovery Act (RCRA) the materials would be classified hazardous waste.

"Those are the ones that more closely resemble true hazardous wastes than say muds and cuttings. They are probably the biggest headache facing us on the North Slope," says Bob Lipchak, ARCO Alaska's senior science consultant for waste management.

Goal: No Surface Disposal

Associated wastes are generated from oil-production operations such as the workover of wells, cleaning of tanks and vessels at gathering centers and spill cleanups. They also include rinse water from cleaning tanks, vehicles and drums. While the liquids are separated and injected deep into the ground, the solids are being stored temporarily in a lined impoundment until a suitable means of disposal can be found for the 850,000 barrels of associated wastes generated each year at Prudhoe Bay.

Initially, North Slope producers spent millions designing and testing equipment that would meet three objectives: treat wastes to the point where the solids could be recycled; satisfy current and future regulatory requirements; and maximize use of the recycled material.

"The technology was not there to achieve our No. 1 objective, eliminating surface disposal. We could treat these associated waste solids, but we couldn't guarantee that they would be clean enough for reuse," says BP's Taylor.

Taylor says the current plan is to grind up the solids and inject them back into the same oil-bearing formation from where the hydrocarbons originally came, thereby eliminating the need for any surface disposal.

Explains Taylor, "Over the three years we were doing these engineering studies, grinding and injection technology evolved substantially, far enough along that it became a viable option. We know the technology will work, it's just a matter of working out where the best place is to build a central facility."

The other major source of hydrocarbon waste comes from so-called produced water, or the water that rises to the surface along with oil and gas during production. Most of the water and gas is reinjected into the oil formation to help maintain reservoir pressure. However, some produced water is unsuitable for use in recovery oil and is being disposed of by injecting it into the Cretaceous zone just below the permafrost.

Benchmarks Change

Arco's Lipchak says he "operates in a continual shade of gray" when it comes to federal regulations and that sometimes it takes him up to six months to get an answer from the government. One of the biggest problems lies with the inspectors, he notes, because they rarely stick around long enough to learn the ropes.

Says Lipchak, "Once they get good at their job they get hired by industry. I've gotten to the point where I would rather have the same bad inspector every year than have them change inspectors on me, because you learn how to deal with somebody and develop a rapport of what they're going to expect."

North Slope operators are concerned about the volumes of additional paperwork the new RCRA regulations will require. Simply mislabeling a drum, for example, could draw a $25,000 fine.

Says Lipchak, "The environment will not benefit by us doing this. We already have a tracking system for the wastes we generate on the slope. This is putting much more regulation into an area that we feel is already adequately addressed."

The "Mother of Invention"

New technologies for disposing wastes were at least partly motivated by politics, BP's Taylor says, especially when it comes to lobbying Congress to open the Arctic National Wildlife Refuge to exploration and development.

"We approached the ANWR debate by saying we can develop ANWR and protect the environment. Look at Prudhoe Bay, Kuparuk and Endicott as examples. We knew (also) that if Congress allowed us into ANWR, they would not allow any (surface) waste disposal," he adds. In fact, Taylor says it's BP's goal to eliminate the need for any surface waste disposal on the North Slope.

"When you start talking about environmental costs, you have to take care of what the long-term liability is going to be. And if you can eliminate long-term liability, for the most part you come out cost effective," says Taylor.

The Ultimate Challenge

Lipchak adds that a "bigger goal" is not to produce waste in the first place. "The key is to process them, to reuse them, to extract the hydrocarbons as fluids and reuse the sands. But once you put it into a pit it becomes blended with everything else," he says.

The two largest field operators on the North Slope, ARCO and BP point out that the high cost of operating on the slope, coupled with decreasing profits from declining oilfields, presents a major challenge for Alaska's oil industry in the future.

Says Lipchak, "We're going to be faced with a very serious situation. We have to spend the money now to reduce the generation of these wastes, because the cost of handling them isn't going to get any cheaper. We definitely have the engineering talent. We should be able to minimize and handle our own wastes, if we are allowed to do it without a lot of bureaucracy that goes along with being regulated as a hazardous waste industry."
COPYRIGHT 1992 Alaska Business Publishing Company, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Author:Tyson, Ray
Publication:Alaska Business Monthly
Date:Oct 1, 1992
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