Colorado Flooding Highlights the Role of Spill Planning in Oil and Gas Extraction
December 2, 2013
Oil and gas drilling operations came under public scrutiny during the September flooding in Colorado. The Colorado Oil and Gas Conservation Commission (COGCC) reports that, according to its most recent reckoning (Nov. 26), the flooding caused spills of 1,149 barrels of oil or natural-gas condensate (48,250 gallons) and 1,035 barrels of produced water (43,479 gallons). The largest spill at any one site was 323 barrels.
Colin Harris, environmental attorney with Boulder, Colo., law firm Bryan Cave, has worked with oil and gas firms in developing spill prevention and control plans. He told Green & Clean Journal that “while unfortunate, the fact that oil spills occurred during the one-hundred year flooding is not surprising, nor does it demonstrate a lack of reasonable planning and prevention. The important question is that, of the barrels spilled, how much actually impacted the environment outside the immediate well facility, what was the nature and severity of the impact, and what has been the response of industry to remediate and mitigate for any impacts.”
Harris stressed that the actual volume of spillage during the Colorado floods was relatively small and that “the concerns about flooding and oil and gas facilities were grossly overstated in the media and by anti-industry groups.” He said that “the Colorado Department of Public Health and Environment sampled water bodies and did not detect any oil and gas related contamination.” In addition, “for context, all regulatory authorities agreed that the discharge of raw sewage during the flood presented the only public health concern.”Preventing Spillage
What steps does the oil and gas extraction industry take to prevent and minimize such spills and their environmental impact?
According to a report from the American Petroleum Institute (API), “Total petroleum industry spillage has decreased consistently over the last 40 years.” The organization said that spillage has declined 77 percent since the 1970s. The decrease is due in part to the use of “advanced materials and techniques, with multiple back-up safety systems” in exploration and production facilities, as well as the employment of “computers, electromagnetic instruments, and ultrasonic devices to detect weak spots” in pipelines “so they can be repaired before a leak develops.” New designs for oil tankers and storage tanks have reduced spillage as well.
The API stresses that “Minimizing oil spills begins with preventing spills in the first place.” Harris told Green & Clean Journal that “The first line of defense in spill plan is prevention. This involves measures to assure that tanks and other equipment are properly designed and maintained, and that containment structures such as berms are in place to prevent a spill from spreading.”
According to API,
Equipment for spill prevention includes dikes, berms, or other forms of secondary containment installed around tanks and other processing vessels, to retain oil in the event of a release. Spill prevention procedures include tank integrity testing and leak testing to ensure that oil storage and process vessels are in sound operating condition.
Under the U.S. Clean Water Act of 1972, the country’s primary law concerning water pollution, the Environmental Protection Agency (EPA) issued in 1973 its Oil Pollution Regulation, which includes a requirement for Spill Prevention, Control, and Countermeasure Plans (SPCC) for certain facilities. Designed to prevent oil discharges into navigable waters and shorelines, SPCC plans encompass prevention, preparedness, and response to oil discharges.
The kind of oil covered by the regulation isn’t limited to petroleum. According to EPA, it applies to “oil of any kind or in any form including, but not limited to, petroleum, fuel oil, sludge, oil refuse, and oil mixed with wastes other than dredged spoil and oily mixtures.”
The SPCC regulation applies to non-transportation operations such as oil drilling, refining, and storage facilities and can extend to industrial, commercial, agricultural, and public facilities, and even wastewater treatment plants. To require an SPCC plan, a facility “must have an aggregate aboveground storage capacity greater than 1,320 gallons or a completely buried storage capacity greater than 42,000 gallons” and there must be “a reasonable expectation of a discharge” into protected waters. An SPCC plan is the responsibility of the owner or operator but must be certified by a Professional Engineer (PE).
In practice, the SPCC planning requirement also applies to natural gas extraction such as hydraulic fracturing (fracking). Dry gas itself is not an oil under the regulation (although liquid condensate is), but law firm Edwards Wildman cautions that the EPA’s threshold “can be met by the oil required to operate shale gas drilling rigs. Diesel storage for turbine units can also bring facilities under the rule,” as well as “generator sets (Gen Sets), frack pumps and transformers.” The firm says that a drilling site might have such oils as “lubrication oils, natural gasoline, hydraulic oils, liquid condensate, and distillate.”
Produced water and flowback at oil and gas drilling sites usually contain oils that need to be separated before the water can be discharged. As discussed in Green & Clean Journal recently, underground oil and gas reservoirs frequently include layers of water, which gets pumped up to the surface along with the crude or gas. In addition, water is often injected into a reservoir to increase pressure and force more oil up to the surface. Some of this injected fluid returns as part of the produced waters and flowback. Such mixtures can be re-injected or treated, but meantime they must be stored, which could mean they fall under the SPCC plan.
Colin Harris of Bryan Cave told Green & Clean Journal that, in his experience, “spills result from defective or poorly maintained equipment, and from operational errors,” with corrosion being a primary culprit in spill incidents. He stressed, “There is no way to assure that a spill will never happen. Even the best practices cannot prevent industrial accidents.” An operator can minimize the risks, though, “by using well-designed and maintained equipment, through frequent inspections, and by compliance with regulations governing tanks and pipelines.” Employee training is a key line of defense, he said: “No amount of equipment or inspection will suffice to prevent spills in the absence of employee training in the causes of and prevention of spills.”
The SPCC regulation and similar requirements place stringent controls on practices in the oil and gas industry. But Harris believes the industry is motivated far beyond what the regulations require:
COGCC reported that, as of Nov. 26, it had evaluated or inspected all of the 1,614 oil and gas wells in the Northeast Colorado flood-impact zone, and 2,966 evaluations and inspections so far. Operators had shut-in 2,608 wells in advance of the flooding. Out of those, 2,022 (78 percent) have returned to production. The commission received a total of 50 spill reports for spills greater than its minimum reporting quantities, 14 of which are classified as “notable,’ in that they consisted of spills greater than 20 barrels.
My experience is that the industry takes these regulations very seriously and in fact “over-complies” with the rules, both because these are legal requirements but also because spills are bad for business. Spills are costly and cause reputational damage. Companies have every incentive to prevent spills.