by Jonathan Wills, M.A., Ph.D., M.Inst.Pet.,
for Ekologicheskaya Vahkta Sakhalina
(Sakhalin Environment Watch); 25th May 2000
Minimising Waste Discharges and Their Effects (continued)
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Re-injection Offshore (continued)
The development of CRI may have solved some problems but it could create others. It quickly became clear that, in the absence of regulatory oversight and responsible management, what appeared to be an environmentally benign method of waste disposal in Alaska could easily be used to dump toxic wastes illegally (Alaska Forum for Environmental Responsibility. 1997. Poisoning the Well: Whistleblower Disclosures of Illegal Hazardous Waste Disposal on Alaska's North Slope. AFER, Valdez, Alaska). In 1998 a widely publicised case led to a fine of a million dollars on Doyon Drilling, Inc., a drilling contractor for BP Exploration, Alaska (BPXA), fines of $25,000 dollars on three Doyon employees, and a year in jail for a fourth. The case raised serious questions about waste re-injection and emphasized the requirement for independent policing.
Investigations by the Alaska Oil and Gas Commission, the Environmental Protection Agency, the US Departments of Labor and Justice, and BPXA showed that a "whistleblower" employee had been telling the truth when he complained that, on 16 January 1995, Doyon illegally ordered him to dump two dozen 55-gallon barrels of Class I waste, including used oil, solvents, paints, paint thinners, hydraulic fluid, and glycol, into a Class II waste disposal well on the Endicott oilfield in northern Alaska.
In the US, underground injection wells are regulated by the Environmental Protection Agency (EPA). Class I wells are for disposal of industrial hazardous materials and have a steel casing surrounded by cement that extends to the bottom of the well, which is subject to sophisticated and continuous monitoring. Class II wells are specific to the oil and gas industry, under the general rule that nothing may be injected back down the well that has not originated from it. Thus, Class II fluids are generally mud, water and additives. Acceptable Class II wastes include crude oil, condensate from crude oil lines, well treatment fluids, and produced water.
The whistleblower refused this order, and others that continued until August 1995. He was victimized by his fellow workers, received death threats and was fired illegally. After the Department of Labor's investigator concluded that Doyon management had largely ignored the whistleblower's concerns, that he was harassed and intimidated by his co-workers, and that management did little to stop the harassment, Doyon settled out of court, paid the victim's legal fees and later agreed to spend $2 million on "developing a model environmental compliance program and comprehensive environmental training program for employees".
Commenting on the case, the Alaska Forum for Environmental Responsibility said: "Despite key differences between Class I and Class II wells, the first of two separate but related incidents at Endicott indicates that BPXA managers and staff did not have a firm grasp of the distinction. This apparent 'confusion' was fostered by a lack of record-keeping and lax regulatory oversight. Despite its assurances to the contrary, evidence suggests that BPXA and/or its contractors had, in fact, been disposing of Class I industrial wastes down Class II wells for at least two years, and possibly up to five years."
On 25 September 1995, BPXA's own investigation of one of the Endicott incidents found as follows:
- Used oil, solvents, glycol, paint thinners and possible Chevron 325 stoddard solvent... were disposed of via annular injection from 1993 to August 1995.
- [rig] crew members understood the practice to be waste disposal, not freeze protection. The practice only occurred at night.
- BPXA and Doyon maintained inadequate documentation of injected materials.
- BPXA personnel claimed they were not aware of the improper disposal practices.
In February 2000, over seven years after the illegal dumping began, a federal judge imposed a $500,000 criminal fine on BPXA and put it on probation for five years for failing immediately to report the dumping. The judge also agreed a deal with prosecutors that BP should pay $15 million for a five-year "environmental management program" to oversee its US exploration and production. BP had already paid $6.5 million in civil penalties for what the Anchorage Daily News described as "one of the worst environmental crimes in the history of North Slope oil development". The scandal had thus cost BP some $22 million, in addition to its own administration costs. The federal investigation continues. (Spiess, B. 2000. BP Settles for $15.5 Million: Company Also Faces Probation in Dumping of Toxic Waste. Anchorage Daily News 2 February 2000, Anchorage AK.)
The Alaska Forum concluded that the malpractice might never have come to light but for the courageous employee, a respectable, conscientious man who suffered severe stress and lost a 22-year career in the oil industry as a result. The forum was concerned about how long it took to prosecute the case and feared that improper disposal of solvents and other toxic materials might be "standard operating procedure" on the North Slope. The Endicott incidents showed that "industry self-monitoring" did not work and suggested "a failure of regulatory oversight by state and federal agencies charged with enforcing environmental laws".
In 1995, at the same time as the Endicott whistleblower was trying to get Doyon Drilling to take his concerns seriously, the company's general manager, Randy Ruedrich, testified to the US Senate Energy and Natural Resources Committee about how improvements in drilling technology allowed Arctic oil development in an environmentally sound manner. Ruedrich made no mention of hazardous waste disposal. Representatives of ARCO and BPXA made similar statements. In a press release after the 1998 fine and plea-bargain with the US Department of Justice, Doyon said: "As a Native corporation, Doyon has a deep reverence for the land and a cultural philosophy that treasures the environment."
Whatever the concerns about record keeping, supervision and auditing of downhole disposal, continuing research in the 1990s confirmed the feasibility and suitability of properly organized and regulated CRI, both onshore and offshore, with several important papers published on the detailed techniques required (See, for example: Bruno, M.S., Bilak, R.A., Dusseault, M.B., and Rothenburg, L. 1995. Economic disposal of oil field wastes through Slurry Fracture Injection, IADC/SPE 29646, Proc. West. Reg. Mtg. SPE, Bakersfield, CA, March 8-10, 1995, pp. 313-320. Society of Petroleum Engineers, Richardson, Texas; and Cripps, S.J. 1998 Disposal of Oil-based Drill Cuttings. Report for UKOOA. Rogaland Research, Stavanger.).
In November 1997 senior representatives of the American Petroleum Institute, the Exploration & Production forum, the major oil companies and their drilling, geophysical and shipping contractors met in the Dutch city of Leiden, under the auspices of the United Nations Commission on Sustainable Development, and debated offshore environmental practices with Greenpeace and the World Wide Fund for Nature, under the chairmanship of Cynthia Quarterman, Director of the US Minerals Management Service. After what the trade magazine Drilling Contractor (Drilling Contractor, Jan. 1998. pp. 68-69.) described as "sometimes contentious" discussions, the meeting agreed a "remarkably benign conclusion":
Each drilling project should be considered on a case-by-case basis to determine the appropriate drilling techniques to be used according to the environmental sensitivity of the area, the health and safety issues raised, the project economics, the potential effects on the local community and any other relevant considerations. Once a drilling technique has been identified, the drilling fluids and disposal method and, if necessary, disposal treatment should also reflect these considerations. Under no circumstances should one consideration outweigh all others [emphasis added. JWGW].
Having thus excluded the possibility of choosing a drilling waste disposal method on purely environmental grounds, the session on drilling practices went on to agree to the equally benign proposition that "industry should promote improvements of drilling techniques, which minimize waste production; of drilling fluids, which improve drilling performance and lower toxicity; and of drilling fluids and cuttings treatment and disposal methodologies".
The "overall conclusion" of this expensive, four-day international conference might serve as a classic example of fine-sounding but empty management-speak, the kind of pious, politically-correct language which makes it hard to have what a normal person might recognise as a thought, let alone formulate concrete, practical ways to achieve the desired object:
Incentives should be given to the industry to take responsibility in achieving agreed environmental goals. A goal-based approach requires the identification of environmental impacts from E[xploration] & P[roduction] activities, agreement on environmental objectives for a specific area or region and the establishment of plans on how the objectives should be reached. This approach provides industry with more flexibility, responsibility and accountability. Some complementary prescriptive measures are still required in order to address some specific issues. Measures in one country may not necessarily be appropriate in other areas or countries [emphasis added. JWGW].
Interestingly, while the companies continuously lobby and campaign for a "level playing field" in the global economy, allowing them to move capital freely to wherever labour and resources are least expensive, they emphatically do not want a level playing field for global environmental standards on drilling waste disposal and other sensitive topics. Acknowledging that they may have to spend money to ensure they make less mess in the seas around richer countries with politically influential environmental movements (In the UK, for example, the Royal Society for the Protection of Birds has over one million members - considerably more than all the British political parties put together - and is a political force to be reckoned with), the oil companies apparently hope to continue saving money by causing more pollution in poorer countries, where environmentalists tend to be less numerous, less effective and less popular - and where the western media are not particularly interested. When BP is criticised for its environmental record in Colombia, or Shell for its performance in Nigeria, the answer given by their public relations officers is invariably that the companies are obliged only to observe and obey the laws of the country in which they are operating. If those laws are less stringent than those applying to the coastal waters of the UK, the Netherlands or the USA, they argue that is a matter for local politicians, not for the oil companies. Significantly, perhaps, this argument has not been deployed so readily in the case of the oil industry's resistance to the Russian Federation's strict laws limiting environmental pollution on the Sakhalin Shelf.
When faced with firm decisions by host governments to clean up their act, the oil companies have the skills and resources to move very quickly, as seen in the discussion above about BP's onshore experience with the Alaska North Slope reserve pits. About six months before the Leiden meeting, Shell UK Exploration & Production (Shell Expro) had commissioned a well-known drilling contractor, KCA Drilling, to identify and install "the best and most economical method of total containment", to meet the UK Department of Trade and Industry's target of ending the discharge of drilling muds based on mineral oil (OBMs) by 31 December 2000.
As Drilling Contractor reported in September 1999 (Secoy, B. 1999. Installing Cuttings Reinjection Systems on Shell/Esso Platforms. Drilling Contractor, Sept./Oct. 1999:40-41), KCA quickly found that cuttings re-injection (CRI) (The process of grinding up drill cuttings into a slurry with other wastes has various names, depending on the manufacturer and type of the equipment used. In Alberta, Canada, Terralog Technologies Inc. (TTI) calls it Slurry Fracture Injection (SFI). In this paper, CRI is the preferred acronym.) was the preferred option, compared with the more expensive and polluting method of shipping cuttings ashore for treatment and disposal. In July 1997 an engineering team visited the Cormorant, Tern Alpha and Dunlin Alpha oil and gas production platforms in the North Sea, midway between Shetland and Norway. Their design took into account the anticipated problems with the size, weight and power requirements of equipment to grind drill cuttings into a fine slurry and to pump the resulting liquid into sandstone far beneath the seabed. The UK Government approved the project and contractors Swaco were hired in December 1997. By January 1999 the CRI equipment, based on designs originally developed by the Atlantic Richfield Corporation (ARCO), had been installed on all three platforms. Cormorant and Tern Alpha were operational more than a year before the UK Government deadline, using existing wells, while at Dunlin a dedicated well for slurrified drilling wastes will be drilled early in 2001, after tests showed no existing well was suitable for conversion to re-injection.
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