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Executive Summary
Industry Analysis: Kuipers/NPRC Coalbed
Natural Gas Produced Water Management Study
CDM, Inc. and Kevin C. Harvey, Inc. (collectively CDM) completed a detailed
technical review of the Kuipers and Associates (Kuipers) CBNG water
management reports commissioned by the Northern Plains Resource Council
(NPRC). The reports incorrectly conclude that the exclusive use of injection
and treatment are technically and economically feasible produced water
management options in the Powder River Basin (PRB) of Montana and Wyoming.
This CDM technical review focused on evaluation of several key issues
related to management of CBNG produced water including: 1) injection/reinjection;
2) treatment; 3) beneficial use; and 4) CBNG economics.
Key Findings
CDM determined that the information and analyses the reports presented
to justify their conclusions and recommendations to require injection
and treatment are misleading, incomplete, and inaccurate. The reports
failed to present data to support their key assertions that the current
water management practices in the PRB are harmful to the environment
and put agricultural water resources at risk. The reports also failed
to present sufficient data justifying the exclusive use of injection
and treatment for CBNG produced water management as both practical and
affordable to industry. The base economics used in the reports were
extracted from a dated, internal EPA working draft that was never peer
reviewed or released to the public. Key findings from CDM’s review
include:
- Injection/Reinjection. Based on actual data from CBNG operators
in the PRB, CDM found that injection/reinjection is not technically
and/or geologically feasible in most formations within the basin.
Where injection was tested, approximately four times as many injection
well locations were required to handle the necessary volume of water
produced than was considered in the reports. Consequently, the environmental
impact of surface disturbance and costs to implement would be much
higher than Kuipers projected. CDM also found that CBNG production
in the PRB will not cause subsidence and therefore, injection will
not alleviate non-existent subsidence problems as the reports indicated.
- Treatment. Although the reports concludes that reverse osmosis (RO)
is the most common form of produced water treatment being used, a
survey of industry participants indicated that only one known reverse
osmosis system is currently being operated in the PRB. The more prevalent
treatment option, ion exchange, was not adequately considered in the
reports. Even so, when considering RO technology, the Kuipers reports
failed to accurately account for many of the costs associated with
the use of this technology, namely the cost of equipment installation,
RO pretreatment and disposal of the concentrated waste brine. Adding
in these costs increases the reports overall treatment cost estimate
by a factor of about 2.4.
- Beneficial Use. Produced water quality in the PRB is much better
quality than other basins and has a high potential for use as a beneficial
water resource. Injection of produced water represents a loss of a
valuable resource to landowners in the semi-arid PRB, particularly
during the current period of extended drought. The reports did not
address these issues or analyze the process of managed irrigation
for beneficial use.
- CBNG Economics. The reports’ water management cost estimates
erroneously assume that one barrel of water is produced with one unit
(1000 cubic feet or MCF) of gas production. As The reports mentioned,
but failed to use in their economic projections, historic CBNG water
production in the PRB has been on the order of 2.7 barrels of water
per MCF produced. The water-to-gas ratio error alone resulted in an
underestimate of the reports’ economics by a factor of almost
3.
Conclusions
The reports are misleading as they utilizes data from unpublished literature
(versus current production and technical information) to support their
conclusion that injection and treatment are both practical and affordable
to industry as exclusive CBNG produced water management options. CDM’s
evaluation indicates that many of the cost estimates and key assertions
in the reports were either inaccurate or without sufficient basis to
complete a full technical review.
In addition the reports fail to acknowledge the site-specific factors
affecting CBNG water production (eg, variations in flow and water quality,
site location, and landowner desires, etc.) that must be considered
to ensure sustainable CBNG development. Instead of requiring the use
of only a few water management options, industry believes that the best
approach to ensuring responsible development of natural gas resources
is to apply a more flexible water management approach that takes into
account site specific factors. In doing so, operators can work together
with both landowners and regulatory agencies to maximize protection
of the environment, provide and protect beneficial use of valuable water
resources, and provide positive project economics to enhance the sustainable
development of CBNG resources.
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