Waste disposal: what comes up must go down

April 1, 2020 by

More than 2.9 billion barrels (465 million m3) of wastewater were disposed of in Western Canada in 2019. That’s the equivalent of more than 42,000 dispatched truck loads per day. Waste disposal, and associated trucking, is one of the largest operating expenses (from 5 to >50%) facing the oil and gas industry. Verdazo works with clients to analyse their operating costs & target achievable efficiencies. In today’s blog we’ve partnered up with local startups Galatea Technologies & Labsite who work with some of our clients. Galatea has waste disposal decision optimization software and brings waste disposal domain expertise to this blog. Labsite works with clients to optimize completion effectiveness and helped us answer some questions about frac fluid recycling challenges. Go to the end of this blog to learn more about these startups.

Our last blog “The White Elephant in the Room” outlined the massive volumes of wastewater that are produced in Western Canada. In this blog we dig into how much wastewater we inject back into the subsurface and the challenges that operators face.

Waste Disposal

In 2019 North American oil and gas producers spent approximately $41 billion annually on oilfield waste transportation and disposal. $37 billion is spent in the US (Sources: IHS Markit), and an estimated $4 billion is spent in Western Canada. This includes varying waste products over the life of a well: the drilling stage produces drilling mud and cuttings that require disposal; completing a well produces a rapid and large demand for recovered frac fluid disposal that now averages 9,000 m³ of flowback per well (Note: flowback is comprised of water with varied friction reduction and surfactant chemistries, proppant and reservoir fines); and wastewater is produced along with oil and gas and may contain harmful contaminants such as H2S, heavy metals and radioactive waste. Each waste facility is engineered to accept specific waste types and has varied costs for disposal (varied by waste type and by facility). In Western Canada there are over 200,000 producing wells and over 7,000 new wells being completed each year. This results in highly variable volumes of waste over time and by region. Compounding this, facilities can also experience unscheduled downtime that can unexpectedly divert waste to other facilities, dramatically affecting wait times and capacities. This variability, and unpredictability, can result in long wait times, limited available capacity, and increased hauling distances, all of which can add costs, complexity and environmental impacts to the disposal of a single load of waste. Typical wastewater loads, which make up the bulk of waste disposal, are 30 m3. In 2019, total waste disposal volumes in Western Canada were 465 million m3 (source: IHS Market), which is 38.5 million m3/month or 1.3 million m3/day. With an average load being 30 m3, that is the equivalent of more than 42,000 waste disposal decisions needing to be made per day. While some operators handle wastewater through pipelines, the vast majority of wastewater is still trucked.

In 2019 there were 2,776 active oilfield waste disposal facilities in Western Canada, 128 of which are licensed commercial facilities and 2,648 are proprietary disposal facilities owned by oil and gas producers. Each facility is licensed to accept specific waste codes. Facilities also face regulatory disposal capacity limits as to the amount of waste that they can process and inject daily.

The following map shows commercial disposal facilities in green, proprietary disposal facilities in red, with a light transparency applied to help illustrate where facilities are clustered. The size of the bubble represents the total 2019 disposal volume.

There are many inefficiencies in the waste disposal market, and many opportunities to either minimize costs or generate new revenue. There are many client anecdotes that speak of lengthy wait times (I’ve heard of numbers as high as 12 hours) or having to go to another facility because there is no remaining capacity. What’s been missing is the right combination of technology and data. I asked Chad Hayden from Galatea Technologies what they’re doing to help companies find waste disposal efficiencies… “We’ve built a platform that aggregates facility wait times, capacity and disposal fees and uses advanced geospatial algorithms to calculate the optimal (cheapest) waste disposal option. The platform is also used to market excess disposal capacity for proprietary facilities. The cost savings combined with new revenue, from selling excess disposal capacity, will help the industry drive less, wait less and ultimately be more profitable. Verdazo can help companies benchmark where their current trucking and disposal costs are at, and quantify the improvements that our technology can provide.

In my interview with Chad it became clear that making an “optimal” waste load decision can be complicated. The process of selecting a facility for a single waste load requires consideration of many factors. These factors are always in flux and can change very quickly over the course of a day. The result is that many companies use limited data to make a decision or make decisions based on convenience, rather than value-based criteria. These inefficiencies in the decision-making process erode profitability and increase environmental impacts including GHG emissions.

I was surprised at how many factors should, ideally, be part of a cost-focused waste disposal decision:

  1. Waste type (including special disposal requirements such as sour fluid or radioactive waste material)
  2. Waste volume, or weight for drilling-related waste
  3. Disposal facility options
    • Can the facility accept the waste type?
    • Does the facility have remaining capacity for my waste load volume?
  4. Facility costs
    • Disposal costs (based on composition; water %, oil %, solids %)
    • Wait time at the facility (this impacts the overall trucking cost)
    • Oil recovery credits (Note: if the wastewater contains some oil, it can be skimmed/separated and sold by the facility resulting in a credit that is taken off the waste disposal cost)
  5. Trucking company selection
    • Base location of the truck
    • Truck type according to waste type and profile (Tank, Vac, End Dump)
    • Waste site layout (this impacts the size of the load and whether it can properly maneuver at the well site)
    • Truck and driver availability
    • Safety standard requirements of the waste generator
  6. Optimal route selection: Travel Times for:
    • Empty truck from truck base to waste-site
    • Loaded truck from waste-site to disposal facility
    • Empty truck from disposal facility back to truck base, or waste site for multiple loads
  7.  Time, and cost, implications of
    • Seasonal road bans
    • Road-use agreements
    • Road surface
    • Road topography
    • Weather

Ideally more than a dozen facilities should be compared and analyzed to find the optimal selection. These decisions need to be made in a timely manner (minutes, not hours). Given the complexity of informing and assessing all of these factors, it is not surprising that decisions are made with limited data and driven by convenience (e.g. let the trucking company decide). That’s where Galatea helps.


Frac Fluid Recycling

The pursuit of waste disposal efficiencies always brings up the question about recycling frac fluid. In discussions with several fracking experts, including Charles Wrightson at Labsite, about why, or why not, frac fluid is recycled, or why saline produced water isn’t more commonly used for fracking, the common element in all conversations was… “it is complicated”. I’ll try to summarize the main themes of these conversations:

Economics: the number one obstacle for recycling (i.e. treating, frac or produced water for reuse) is cost. If it is cheaper to acquire water than recycle it, then producers are going for the most cost-effective option. Also, the development of treatment facilities & infrastructure requires upfront capital outlay, which eats into already choked capital programs.

Chemistry:  Fluid that is going to be used for a frac, or injected into a disposal well, should be engineered or filtered to minimize formation or fracture permeability damage. Any fluid can have chemical reactions that can result in a loss of permeability. Compatibility of whatever fluid used is typically part of the due diligence prior to all frac or water injection projects.  Slickwater systems are predominantly used to fracture low permeability formations. Understanding your water chemistry is important for selecting which type of friction reducer to use (anionic or cationic) as an incorrect selection can greatly reduce pumping efficiency. Polyacrylamide’s (the most common friction reducer) are large molecules and are difficult to break creating some concern among experts regarding friction reducer cleanup. For hydraulic fracturing, the primary objective is to create fracture conductivity (high perm) or formation contact area (low perm). Chemical additives should enhance either of these properties and the results should be quantitative. Any fluid can contain molecules or contaminants that may react adversely with the chemical additives. Simple lab quality testing can help resolve compatibility issues prior to commencing fluid injection.  Fresh frac fluid is more commonly used because it is less likely to introduce contaminants that could cause permeability losses, the chemistries are simpler, and they behave more predictably downhole. Some suggest that clean frac fluid imbibes into the formation during the shut-in which can help clean up the fracture tips and maintain effective fracture length which is critical for production in low permeability formations, yielding better production results (see JPT Want More Production? Try Taking a Break). Needless to say, it’s complicated and there are many opinions in the industry.

Risk: Environmental health and safety also play into the decision.  The more produced water and recovered frac water is handled, stored and transported the greater the risk to the environment. There is a desire to remove that risk quickly by disposing of it responsibly at a regulated waste facility.

Regulatory: any recycling of water requires some form of storage (=cost + risk), often in the form of ponds. These ponds hold massive amounts of water and impose risk of leakage and contamination of wildlife. The regulations around storage vary by province. Alberta’s regulatory constraints are amongst the highest.

That sums up today’s blog about waste disposal and frac water recycling. Thank you to Chad and Charles for sharing their expertise. I learned a lot… I hope you did too. Let me know if there are any topics you would like to learn more about.


About Galatea Technologies:

Galatea Technologies’ Waste Coordinator (WC) software continuously aggregates disposal facility data that is used to determine the real-time optimal decision for every waste load. It also opens up the disposal market to producer-owned proprietary disposal facilities with excess disposal capacity. We help companies achieve maximum cost savings and reduce environmental impacts.


About Labsite:

Labsite provides hands on chemical and rheological testing during the hydraulic fracturing operations to ensure the treatment is being performed to the operator’s engineered specifications. Collecting accurate data on location can facilitate post frac analysis by removing the veil from the field component of the operation. We help companies understand what’s occurring with their chemicals, sand and fluid during the treatment of their wells.


Data sources used: IHS Markit’s production data, geoLOGIC’s Well Completion & Frac Database