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CUTTINGS MANAGEMENT -- Reinjection or Ship-to-Shore?by Mike Montgomery, Director Brandt Applied Technology Group©

March, 2000

10-second summary: Exploration and production (E&P) activities generate a variety of

waste. According to one API report, 98% of onshore E&P waste is produced water; 2%

is composed of drilling waste, such as drill cuttings and waste drilling mud, and

production waste -- tank bottoms, oily emulsions, and the like.1 On the other hand,

another source suggests 89% of all oil discharged to sea was from oil base mud (OBM)

losses or oil base cuttings (OBC).2

There are several methods to treat and dispose of cuttings and related waste from

offshore drilling operations. Currently, reinjection is the only disposal option that does

not require transport to shore. Other methods require collection and transfer of drilling

waste to shore or other platform via skips or bulk transfer.

Critical drivers: There are four major drivers of a competent waste management

program. These are:

• Health and safety

•Energy balance

• Economic balance

•Public perception

Foremost is the health and safety of the people involved in the collection and transport

process, the treatment process, and the general public. Energy balance -- the net

amount of energy gained or consumed during the treatment process -- is just now being

understood. Economic balance -- the net amount of finances gained or used during the

treatment process -- has always been an important factor, but is not always the

overriding one. Public perception of how clean, safe, and permanent a certain

methodology is can drive the process with great implications, both economic and social.

Defining the disposal problem: Drilled cuttings from the solids control separation

process typically retain 10-25% oil by weight. Techniques to reduce the amount of

OOC (oil-on-cuttings) include drying shakers, drying centrifuges, and filter-lined tanks.

Even after treatment, cuttings will retain 5-10% oil, by weight.



Cuttings Management page 2

There are no current technologies that meet the current OOC disposal requirement of

1%, by weight, for OBM and most synthetic, pseudo-oil muds (SBM). However, in light

of the 25% annual reductions in cuttings discharges, this may be a moot point. It

appears that overboard discharges of drilled cuttings, treated or not, may be eliminated

in the near future. In fact, Norway will outlaw all overboard discharges by 2005. Similar

legislation is contemplated by other countries as well.

Approximately 30-50% of all cuttings generated by drilling operations is shipped to

shore for treatment and disposal. The remainder is discharged or injected at the rig.

During 1999, approximately 75,000-80,000 tonnes were shipped ashore. There may be

another 25,000 tonnes of cuttings from North Sea operations awaiting treatment and

disposal at specific facilities.

Total cuttings estimates for Year 2000 --

assuming all planned projects move forward

as scheduled -- are 180,000 tonnes, with

50,000-90,000 being shipped to shore. This

figure is expected to increase to 200,000

tonnes generated each year -- 70,000-

100,000 tonnes shipped to shore -- over the

next five years.

Treatment / Disposal Alternatives: Treatment methodology can be classified as on-

site or off-site. The advantages of on-site treatment and disposal are little or no co-

mingling of waste types; lower transportation cost and liability; greater control of work

performed; and permitting flexibility. Disadvantages of on-site methods include limited

space; lack of preferred treatment options; higher mobilization/demobilization cost;

reduced efficiency of portable process units; and lower cost-effectiveness associated

with lower process volumes. Current on-site methods for offshore operations include

use of WBM, cuttings drying and recovery, and slurrification/reinjection.

Non-toxic, water-based mud that matches the drilling performance of OBM or SBM is

the magic bullet. However, no WBM's in current use can make this claim. Cuttings

dryers have proved of limited use as ultimate treatment methods. With dryers, the

resultant OOC is in the 3-8% range -- higher than current limits. They also return ultra-

Tonnes Generated

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On location To Shore Awaiting treatment




fine solids to the mud system and may actually increase overall waste volume by

increasing dilution requirements. While there have been some design efforts for

treatment process that use thermal desorption, enzyme washing, and solvent extraction,

these have not been proven (technically or economically) as on-site methods for

offshore operations. Today, slurrification and injection are the only viable means of

platform-based, on-site treatment and disposal.

Off-site methods include disposal in a permitted facility, treatment in a centralized

process facility, and landfarming. The advantages of off-site treatment are reduced on-

site storage and process space requirements; reduced on-site exposure to potentially

toxic materials; greater process control and efficiency of fixed treatment facility; lower

mob/demob cost; and inspection of facility before contract award. Disadvantages of off-

site methods include potential long-term liability; potential co-mingling of waste types;

increased transportation cost and liability; limited number of treatment facilities; capacity

of existing facilities, and permit issues.

Previous off-site cuttings treatment and disposal methods included bioremediation and

landfilling, fixation and stabilization, and soil washing with surfactants or enzyme

solutions. For the most part, these methods are no longer used in the North Sea for

various reasons, including:

• Uncertainty about health and safety, long-term liability, and contaminant migration.

• Bioremediation takes too long, requires too much space, and is often not effective

due to soil types and weather.

• Salinity is not affected by bioremediation, burial, or stabilization. Future land use for

agriculture, residential, or commercial purposes may be limited or excluded.

• Soil washing with surfactants or enzyme solutions reduces salt content in the soil,

but creates a large volume, liquid waste stream. Surfactants may be toxic, and

enzymes have not proved effective at removing contaminants from solids that

contain large amounts of silt or claystone.

Two off-site methods -- solvent extraction and thermal desorption -- have shown

promise. Solvent extraction uses light oil, hexane, or other solvent to reduce oil content.

Heat is often used to increase oil removal. For the most part, solvent extraction




systems have been limited to laboratory use due to cost, operational, and safety

concerns. On the other hand, thermal desorption has rapidly become a potentially

viable method to clean drilled cuttings in the North Sea.

Thermal desorption uses heat to volatize contaminants. Thermal units fall into twocategories: low temperature units operating between 500o and 2000o F and high

temperature units operating at 2000+o F. Throughput is directly affected by several

factors including soil moisture, type and levels of contaminant, and amount of debris.

Thermal desorption removes all organics and reduces long term liability. Some thermal

methods also allow the recovery and recycling of oils or pseudo-oils with little change to

the base fluid. However, the salt content remains unaffected, so future land use for

agriculture, residential, or commercial purposes may be limited or excluded.

Where we are: There are various methods -- vacuum transfer systems, conveyors, and

the like -- to collect the cuttings and transfer them to a common collection point such as

cuttings skips, slurrification system, or bulk bags. Some of these methods tie the waste

treatment process to the bit; that is, any interruption in waste handling will slow down or

stop drilling activities. Weather also plays a factor, especially in the North Sea.

In the North Sea, platform-based slurrification and reinjection (CRI) remains the

preferred option for multi-well installations. CRI is the only platform-based solution that

processes material as fast as it is generated by the bit. There is no long-term liability,

no transportation cost, excellent public perception, and a strong potential to increase

operational efficiency. On the downside, there must be an annulus available to inject

into, and mobile rigs require additional subsea components for injection. There is also a

perceived negative about the cost, especially the engineering/interface costs.

Thermal treatment may be viable for shore-based treatment. There appears to be no

long-term liability and the possibility of recovering / recycling base oils is attractive. On

the other hand, there are transportation costs / liabilities and a negative public

perception of shore-based facilities. There is also a question about salt content in

thermally treated soils.




The future: The critical drivers -- health and safety, energy balance, economic balance,

and public perception -- will dictate future direction. The results will be economic growth,

a cleaner world, and a better standard of life.

First, we must reduce waste volume. Water-based muds do not appear to be anacceptable from a drilling efficiency standpoint. So, the most critical aspect to waste

minimization during drilling operations is through proper selection and use of effective

solids removal and oil recovery equipment -- high performance shale shakers,

centrifuges, and fluid recovery systems3 -- to reduce total sludge volume, liquid waste,

and overall clean-up costs. A pre-well checklist can help simplify this process.4

Second, we must determine the true energy balance of treatment and disposal options.

Part of the energy balance issue is the use of fuel; another is the amount of air

emissions. Most of these problems are incurred during transportation. On-site

treatment and disposal requires no transportation and thus eliminates that cost entirely.

There have been some discussions about regulations regarding inter-field transfer of

cuttings to allow injection from existing production platforms. While this suggestion

would not eliminate transportation fuel use or emissions, they would be reduced

considerably. Inter-field transfer and disposal would also eliminate public concern over

shore-based transportation, storage, treatment, and disposal. Some thermal treatment

methods do provide for the recovery of hydrocarbons. There have also been

discussions about the use of raw drill cuttings as fuel for power stations. Either of these

could reduce the net amount of fuel burned, reduce air emissions and improve the

energy balance.

Third, we must improve the economic balance.

CRI is the most cost-effective process for multi-

well programs, but there is growing concern over

the installed cost of permanent systems. A

permanent CRI system will cost about 800K-1MM

pds. for the unit, and an additional like sum for

engineering control interfaces and compliance

with all regulatory concerns. In one instance, this

total figure was over 3.5 MM pds when the installation was complete.

Cost comparison

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CRI Inter-field CRI Ship to shore




Obviously, this sum will preclude a permanent installation for a single well, but when

three or more wells are planned, CRI is the most cost-effective alternative when

compared to ship to shore. For smaller installations, there is major emphasis on mobile

CRI units, with rental / purchase options and standard, modular design. Another

approach is better interface engineering and fit-for-purpose designs that include

redundant processing and smaller slurry and storage systems.

Current thermal treatment capacity is estimated

at 93,000 tonnes. New facilities, planned and

permitted, suggest the near-term theoretical

capacity may be between 130,000 and 170,000

tonnes. Given this estimate, the onshore

treatment capacity will quickly eliminate the

stockpiled backlog and could reach over-

capacity sometime this year. This suggests that

the price for thermal treatment will continue to

decrease over time.

Due to the large capital requirements to build and permit a thermal process facility, this

may make the investment return unattractive to service companies. We have already

seen price reductions and pullback from some of the initial players -- this trend will

continue over the short term until there is an equilibrium between capacity and

generated waste volume.

Finally, we must consider public perception. The

public must believe that these solutions are safe,

clean, and permanent. The public expects that any

process will result in clean solids, clean water, and

clean air. Further, to most citizens, there is an

environmental lifestyle cost associated with any

shore-based treatment option, especially if the

process is close to, or the waste must travel through

populated areas -- "not in my backyard".

Excess Thermal Process Capacity

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Solids H2O

Air Cuttings

Oil

Process

system




In conclusion: There is a growing question: "Are economics driving the standards or

are standards driving the economics?" At this point, nobody really knows. There are

some that believe the bottom line must determine the direction that treatment and

disposal options will take. And certainly, financial returns are important.

However, the growing understanding about the long-term impacts of drilling operations,

about the real cost of ship to shore transportation, and the growing concern about

overall quality of life suggest change. If we determine which standards are important,

and how to achieve a balance between energy, the environment, and lifestyle, we can

begin to determine the economics required to maintain those standards.

Shore-based options may be economically attractive on a short-term basis, but well-

designed, fit-for-purpose solutions may cost less over the long haul, especially if inter-

field transfers are part of the equation. CRI may not be the cheapest, but it may be the

most affordable when energy balance and public perception are factored in.

The key question is "What do oil companies want, and what will they commit to?"

Author Profile:

Mike Montgomery is the Director for Brandt's Applied Technology Group. A 1976 graduate from Texas

A&M University, he is a member of SPE, AADE, and IADC, with over twenty years experience in

solid/liquid separation, waste minimization, and site remediation. He is completed many successful

closed loop, dewatering, and remediation projects throughout the world, and serves on industry

committees for solids control and environmental technology. He has also been a speaker at numerous

conferences on solids/liquid separation and system optimization.

1 American Petroleum Institute. "Oil and gas Industry Exploration and Production Wastes'", Document

No. 471-01-09, July, 1987.

2Kwant, J.W.H. and R.O.H. Grant. "Environmental Performance Management: The next step," SPEPaper No. 23317, November, 1991.

3Montgomery, Mike. "Low Pressure Mud Systems for Deepwater Operations", Petroleum Engineer,December, 1997.

4Montgomery, Mike. "The Handbook on Solids Control and Waste Management, 4

thEdition, 1996.

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