Economic Impacts Of Alternative Produced Water Treatment And Disposal Practices On Oil And Gas Resources In The Gulf Of Mexico

ABSTRACT The high potential costs of compliance associated with new effluent guidelines for offshore and coastal oil and gas operations could significantly affect the economics of finding, developing, and producing oil and gas in the Gulf of Mexico. This paper characterizes the potential impacts of alternative treatment and discharge regulations on reserves and production in Gulf of Mexico coastal, territorial and outer continental shelf (OCS) waters, quantifying the impacts of both recent regulatory changes and possible more stringent requirements. The treatment technologies capable of meeting these requirements are characterized in terms of cost, performance, and applicability to coastal and offshore situations. As part of this analysis, an extensive database was constructed that includes oil and gas production forecasts by field, data on existing platforms, and the current treatment methods in place for produced water treatment and disposal on offshore facilities. This work provides the first comprehensive evaluation of the impacts of alternative regulatory requirements for produced water management and disposal in coastal and offshore areas of the Gulf of Mexico. INTRODUCTION More stringent requirements for produced water discharges from coastal and offshore oil and gas facilities worldwide are compelling operators to assess and implement new processes for produced water treatment and disposal. Alternatives are considered relative to gas flotation and plate coalescer systems, long the industry mainstays for removing oil and grease from produced water. Alternatives include diffusion membranes, hydrocyclones, centrifuges, and media filtration units. tn some areas considered environmentally sensitive, discharges of produced water have been severely restricted or prohibited, requiring that produced water be reinjected or transported by pipeline to shore for disposal. Many in industry and government have begun questioning whether the costs associated with the increasingly stringent environmental compliance requirements being imposed on offshore oil and gas producer are justifiable relative to the environmental benefits that result. In the U.S., the Department of Energy (DOE) is sponsoring a study to assess the environmental and economic impacts associated with produced water discharges in the Gulf of Mexico. The objective of the DOE-sponsored effort is to increase scientific knowledge concerning:the fate and environmental effects of organics, trace metals, and naturally occurring radioactive materials (NORM) in water, sediment, and biota near several oil and gas facilities;the characteristics of produced water and sand discharges as they pertain to organics, trace metals, and radionuclide variability;the ecological recovery of the seabed near terminated produced water discharge sites in wetlands and open bays of Louisianathe economic and energy supply impacts of existing and anticipated federal and state offshore and coastal discharge regulations;the catch, consumption and human use patterns of seafood species collected from coastal and offshore waters. This paper addresses only one aspect of this complex problem, i.e., it focuses only on the economic impacts of recently enacted and potential future requirements on produced water discharges on the U.S. petroleum industry and on U.S. supplies of oil and gas.