How to manage waste on offshore oil rigs
There are more than 4,000 offshore oil rigs in the Gulf of Mexico and during the exploration and production of oil a lot of waste – from industrial to human – is generated that must be managed. What options do offshore rigs have to manage waste?
In the United States, offshore oil and gas companies have three main options for waste disposal – discharge to the sea, underground injection or encapsulation, and onshore disposal. A fourth option, incineration, has rarely been used, according to the report “Offshore Waste Management – Discharge, Inject, or Haul to Shore?” written by John A. Veil, Argonne National Laboratory, Washington, D.C.,for the Integrated Petroleum Environmental Consortium.
The American Petroleum Institute surveyed the U.S. onshore oil and gas industry in 1995 to estimate the volume of E&P wastes that were generated. Almost 18 billion barrels of produced water, about 150 million barrels of drilling waste, and about 20 million barrels of other types of exploration and production waste were generated from onshore oil and gas facilities in 1995, the report states.
The wastes most commonly associated with offshore E&P activities include: Drilling fluids, drill cuttings, produced water, treatment, workover, and completion fluids, deck drainage, produced sand, naturally occurring radioactive materials (NORM), hydrostatic test water, and other assorted wastes, including sanitary.
The U.S. government does not dictate a specific disposal option that must be used. The U.S. legal system establishes requirements for each disposal option, and companies decide for themselves which of the options they will follow. Numerous potential waste management options exist, but many of those potential options are precluded by regulatory requirements, according to Veil’s report.
The U.S. Environmental Protection Agency prohibits the practice of discharging oil-based drilling fluids in the sea, so that option, which may be cost effective, is eliminated. Other potential options are discarded for legal or technical reasons and offshore operators usually have a strict catalog of legal and technical options. Operators will choose from these remaining waste management options on the basis of total costs.
Wastes that are in compliance with permits and other regulatory requirements will mostly be discharged at sea. Those wastes that cannot be discharged are injected or are brought to shore for disposal. The industry has developed an effective infrastructure for collection, transportation, and onshore disposal of wastes that are not suitable for on-site discharge or injection, according to the report.
In the Gulf of Mexico, nearly all of the other wastes are brought to shore for disposal. Injection of E&P wastes occurs only occasionally in the Gulf of Mexico. In California, small volumes of drilling wastes and treatment, workover, and completion fluids are disposed through annular injection. Other types of wastes are brought to shore and disposed of in accordance with state rules, the report states.
Technology revolution for water retailers
In April 2017, the UK’s water retail market in the world opened for business – the single biggest change to the water sector since privatisation. This development allowed businesses, charities and public sector organisations to shop around for the best deal.
However, like any industry, this change hasn’t been without its sticking points; here, Paul Williams, CTO at Everflow Tech (pictured far right), discusses how retailers can harness technology to their advantage
Quotations could take up to a week to produce, billing software had to be manually updated and brokers were unable to manage the complete customer journey in one place – all of which took time, cost money and allowed for human error.
The more complexity that was involved in billing or quoting, the more contact end customers needed to have with their retailers, pushing up the cost to serve for every SPID. This meant retailers – ourselves included – found themselves in a situation where profits were simply eaten up by service costs.
We also note that it can traditionally be hard for retailers to stay on top of balancing what they are charging their customers with what they are being charged by the market. To further exacerbate this, the longer a change goes unnoticed, the more trouble it can be to balance the issue.
It was these issues that Josh and his (at the time) small team wanted to ameliorate, creating their own technology in the absence of anything else.
This technology evolved into our award-winning retail sales, billing and customer management platform for the water retail market, and Everflow Tech was launched as a standalone venture in 2018, selling the software externally for other water retailers and their customers to benefit from.
What retailers want
As a relatively new entrant to the world of utilities competition, the water market could be seen to be lagging behind, particularly when it comes to innovation.
In fact, as recently as 2019, Ofwat said it expected the industry to be making technological advances and to be working with a culture of innovation, collaborating with companies both within and outside of the sector.
And with cost-savings for consumers traditionally lower than for other utilities, retailers need to be offering something more – whether that’s better support, energy-efficiency advice or more accurate data.
What’s more, consumers have had a taste of the power of technology, and they’ve come to expect nothing less from retailers across the board.
Another key issue – thrown into sharp relief during the past 12 months (and counting) of a pandemic – is rising levels of arrears, which are likely to increase bad debt beyond margins that retailers originally allowed for when the market was created.
In such a low-margin industry, there is a limit to the amount of debt retailers can take on, especially as recovering costs can be a very slow process. Ofwat has signalled that this issue could be addressed as early as this year, with a mechanism for recovering bad debt to be established during 2021/22.
The market needs simple solutions to better serve the end user, and we were perfectly placed to develop those solutions. At Everflow, our software is designed for the water retail market, by the water retail market.
As well as simple billing, clear-to-understand workflows, and a revenue assurance system to allow retailers to quickly compare market charges, Everflow has also introduced a complete debt solution, allowing missed payment dates to drive late payment charges and escalations automatically.
Retailers are able to design and put out their own bill and quotes, tailoring customer journey and overall experience – whatever the circumstances.
What does the future hold?
Automation is key to any industry; we’re heading into an age of driverless cars and smart homes, and this drive for tech will filter through to our industry, and we need to catch up.
The Internet of Things – a network of physical objects connected to each other – means human error (and effort) can effectively be removed from many everyday tasks, which goes for meter readings too. However, in the 21st century, the water market is still not leveraging previously emerged technology in the form of smart meters to provide accurate billing.
Consumers are also becoming more empowered, both to ask for information and change their preferences if they don’t like what they learn. Retailers need to be armed with this information, not next week, not tomorrow, but now – and, at Everflow Tech, we’re putting that information at their fingertips.
But the retailers themselves need to speak up too, and we will always work with them to get the best ideas on what needs to be developed and when.
Our strong bond with Everflow Water, along with other key customers, means we have a direct interest in making sure our systems serve the water market in the best way they can.
For us, the goal is to make sure retailers on our platform can grow as much as possible, leaving behind laborious daily processes to focus on their own strategic growth and, most importantly, helping their customers.