MEC&F Expert Engineers

Sunday, May 10, 2015

Managing Earthquake Risks in Oil and Gas Production


Published in Oil Industry News on Saturday, 9 May 2015

Graphic for Managing Earthquake Risks in Oil and Gas Production in Oil and Gas News
Underground disposal of waste water produced from oil and natural gas wells has been blamed for triggering thousands of small earthquakes in Oklahoma and a number of other U.S. states since 2009.

Heightened seismic activity corresponds closely with the timeframe and location of increased drilling and hydraulic fracturing across the southwest United States, according to the U.S. Geological Survey (“Incorporating induced seismicity in the 2014 United States national seismic hazard model”, 2015).

Most tremors have been barely perceptible to humans, but one at Prague in Oklahoma was recorded at magnitude 5.6, enough to cause severe shaking and damage to buildings.

The quake swarms have sparked a debate about safety and economic opportunity in states and communities that depend heavily on oil and natural gas production for jobs and income.


WASTE WATER INJECTION

Most tremors seem to have been caused by re-injection of waste water brought to the surface along with oil and gas back underground into deep rock formations, rather than by the hydraulic fracturing itself.

Water, contaminated with salt, hydrocarbons and even traces of naturally occurring radioactive material picked up from formations underground where oil and gas are found, is actually the largest single output of the oil and gas industry.

U.S. oil and gas wells produced over 57 million barrels per day of waste water in 2007, according to researchers (“Produced water volumes and management practices in the United States”, 2009).

Since then, natural gas production has risen by 30 percent and oil production is up 80 percent, so the amount of produced waste water is almost certainly much higher.

According to researchers, 95 percent of the produced water is disposed of underground by reinjecting it into the oil- and gas-bearing formation to maintain reservoir pressure or into other rock formations.

But it has long been known that the removal or injection of a large volume of fluid into rock formations can trigger earthquakes.

The first and most famous example of man-made earthquakes or “induced seismicity” due to fluid injection was reported at the Rocky Mountain Arsenal in the 1960s and 1970s.

Contaminated liquid waste from a chemical weapons plant injected underground triggered thousands of tremors near Denver, the largest of which measured magnitude 4.8.

Man-made earthquakes have also been linked to the impoundment of large volumes of water for hydroelectric power dams, geothermal energy plants, conventional oil and gas fields, enhanced oil recovery programmes and mining.
The magnitude and destructiveness of earthquakes are directly related to the surface area of the rock that ruptures by a sudden slip.

The magnitude of naturally occurring earthquakes follows a well understood distribution. Most are very small, with progressively fewer occurrences of tremors at higher magnitudes.

Below magnitude 2.0, they are unlikely to be felt by humans. Those between magnitudes 3.0 and 5.0 will be felt. Those over magnitude 5.0 are likely to be damaging.

In general, the bigger the volume of fluid injected or removed from a formation, the bigger the maximum potential earthquake, according to the U.S. National Research Council (“Induced seismicity and energy technologies”, 2013).

THE MAGNITUDE SCALE

Hundreds of quakes are induced by energy production (oil, gas, geothermal, hydro) every year in the United States and probably thousands around the world.

Most are very small at magnitude 2 or lower, with a small number ranging up to magnitudes 3 and 4, which are felt, and very rarely to magnitude 5.

The potential for hydraulic fracturing to cause earthquakes has caused concern among local communities and been seized on by environmental groups and climate campaigners to call for curbs on the practice.

But it is vital to put the risk into perspective. Most of these induced seismic events pose little risk of damage to buildings or humans.

They are better described as tremors or more neutrally as seismic events rather than the more emotive - though common - term earthquake.

The magnitude scale is logarithmic so a magnitude 2.0 or 3.0 seismic event releases a very different amount of energy than a magnitude 5.0 or 6.0 one.

The energy released by a magnitude 3.0 tremor, the sort that might be associated with oil and gas field operations, is roughly 15 million times smaller than the Nepal earthquake on April 25.

Even the worst earthquake in Oklahoma’s current swarm, at Prague, released 2,000 times less energy than the one near Lamjung in Nepal.

While some tremors have been directly traced to the pumping of fracking fluid at higher pressure into undetected fault zones, such as the one at Preese Hall in Britain, most are associated with the disposal of waste water.

Induced seismicity is a side-effect of all oil and gas production rather than the fracking process. Some of the largest recorded seismic events have taken place at conventional fields which have been waterflooded to boost oil recovery.

And induced seismicity is not limited to oil and gas production. Some of the largest earthquakes that may have been triggered by man have been linked to dam projects in India (M6.3) and China (M7.9).

The most frequent induced seismicity in the United States has occurred at the Geysers geothermal power plant in northern California, which triggers 300-400 tremors per year, with one to three of them rated at magnitude 4.0 or higher.

The Geysers has a well-established programme to pay for damage to property (such as broken tiles or cracked walls) linked to its operations.

Communities in mining areas and near oil and gas fields have long experienced induced tremors: an average of 15 due to underground works are reported each year in the United Kingdom.

Most induced quakes around the world are limited to between magnitudes 2.0 and 5.0, where they may be felt but are unlikely to do much damage according to researchers at Britain’s Durham University (“What size of earthquakes can be caused by fracking?”, 2013).

CARBON DIOXIDE STORAGE

Because the amount of fluid involved in hydraulic fracturing itself is relatively small, just a few million gallons, it is unlikely to generate a large tremor, unless injected into a heavily faulted area. The volumes involved in waste water injection are much larger and pose a greater potential danger.

The risk of activating a large fault system provides a strong case for regulating both fracking and waste water injection and ensuring that operators have an adequate understanding of local geology and that their operations are monitored to detect any seismicity due to undetected faults.

The biggest danger comes from proposals to lock away carbon dioxide underground as part of carbon capture and storage (CCS) schemes.

CCS has been identified as essential if the world is to continue using energy from fossil fuels such as coal and gas while curbing carbon dioxide emissions and limiting the rise in global temperatures to two degrees Celsius.

To have an impact on climate change, however, CCS would have to pump billions of tonnes of supercritical CO2 under intense pressure into deep rock formations. The scale of the injections would pose an earthquake risk far greater than anything currently associated with oil and gas production.

For some climate campaigners and environmental groups, the threat of earthquakes is another reason to ban or severely regulate fracking, and ultimately leave the oil and gas in the ground.

But that response would be neither practical nor proportionate; the risk of earthquakes is associated with plenty of energy technologies that environmentalists like, such as dams, geothermal and CCS.

Unfortunately, the response from some executives linked to the oil and gas industry has been to deny that any link exists and attack the scientific studies, which while not conclusive are strongly suggestive.

A more sensible course would be to accept that there is a strong likelihood of a causal link between oil and gas production and seismic events and work towards sensible and proportionate regulations, recognising that the quake risks are moderate and that oil and gas production remains essential.
Source: www.reuters.com

BP Wins Right to Appeal Gulf Spill Damages Claims


Published in Oil Industry News on Saturday, 9 May 2015

Graphic for BP Wins Right to Appeal Gulf Spill Damages Claims in Oil and Gas News
A U.S. federal appeals court said on Friday BP Plc deserves the right to appellate review of some damage claims awarded to people and businesses in connection with the 2010 Gulf of Mexico oil spill.

The decision by the 5th U.S. Circuit Court of Appeals in New Orleans could help BP limit its payout to victims of the explosion of the Deepwater Horizon drilling rig, which killed 11 workers and caused the largest U.S. offshore oil spill.

BP originally expected to pay $7.8 billion to resolve claims under a 2012 settlement, but by late April it had boosted its estimate to $10.3 billion, according to a regulatory filing.

About $5.13 billion has been paid out so far to 63,597 claimants, according to a website maintained by claims administrator Patrick Juneau.

In its appeal, BP complained that rules adopted by U.S. District Judge Carl Barbier compromised its right to appeal awards he approved and which the company did not like to the 5th Circuit.

Writing for the appeals court, Judge Fortunato Benavides said BP deserved that right to appeal because it did not expressly waive it.

"Where a settlement agreement does not resolve claims itself but instead establishes a mechanism pursuant to which the district court will resolve claims, parties must expressly waive what is otherwise a right to appeal from claim determination decisions by a district court," the judge wrote.

"The point at which a party seeks the district court's discretionary review is the point at which further review by this court becomes a possibility."

The 5th Circuit separately rejected BP's appeal of awards to three non-profit groups. Lawyers for spill victims accused BP of appealing the awards as a means to relitigate the entire settlement.

Samuel Issacharoff, a lawyer for the victims, declined immediate comment.
BP spokesman Geoff Morrell said the company is pleased with the ruling on appeals of individual claims determinations.

BP is awaiting a decision from Barbier assessing penalties under the federal Clean Water Act over the spill.

London-based BP has already taken $43.8 billion in pre-tax charges for clean-up and other costs.

The cases are In re: Deepwater Horizon, 5th U.S. Circuit Court of Appeals, Nos. 13-30843, 13-31296, 13-31299, 13-31302.
Source: www.reuters.com

America’s Oil Drilling Boom Is Sputtering Back to Life - Probably not for Long


Published in Oil Industry News on Saturday, 9 May 2015

Graphic for America’s Oil Drilling Boom Is Sputtering Back to Life in Oil and Gas News
The oil boom isn’t dead after all.
For the first time in five months, a rig in the Williston Basin, where North Dakota’s Bakken shale formation lies, sputtered back to life and started drilling for crude once again. And then one returned to the Permian Basin, the nation’s biggest oil play, field services contractor Baker Hughes Inc. said Friday.

Shale explorers including EOG Resources Inc. and Pioneer Natural Resources Co. say they’re preparing to bounce back from the deepest and most prolonged slowdown in U.S. oil drilling on record. The country has lost more than half its rigs since October, casualties of a 49 percent slide in crude prices during the last half of 2014. Futures rallied above $60 a barrel earlier this week, and a sudden return to oil fields would threaten to end this fragile recovery.

“You’re inviting a lot of pent-up supply to come back into the market -- not only do you have people drilling again, but you have this fracklog of over 4,000 uncompleted wells,” Harry Tchilinguirian, the head of commodity markets strategy at BNP Paribas SA in London, said by phone. “And then we’re in a situation where the market could easily go back into the mid- $50’s.”

While rigs are returning to some fields, the total U.S. count has continued to decline, falling 11 this week to a four-year low on Friday. The drilling slowdown won’t reach a real bottom for about another month, James Williams, president of energy consultant WTRG Economics, said by phone from London, Arkansas.

Nearing End

“This is an indicator that we’re nearing the end of the bust,” he said. “What we’re going to see now are mixed signals from the different basins as we near the bottom of the cycle.”

Carrizo Oil & Gas Inc., Devon Energy Corp. and Chesapeake Energy Corp. all lifted their full-year production outlooks this week. EOG said on May 5 that it plans to increase drilling as soon as crude stabilizes around $65 a barrel, while Pioneer has said it is preparing to deploy more rigs as soon as July.

Morgan Stanley said underlying data show drilling is already picking up in some counties within Texas’s Eagle Ford shale formation and the Permian Basin of Texas and New Mexico.

“Prices are triggering activity that could undermine the U.S. recovery, especially in 2016,” Morgan Stanley analysts including Adam Longson said in an April 27 research note.

The U.S. benchmark West Texas Intermediate oil for June delivery rose 45 cents on Friday to settle at $59.39 a barrel on the New York Mercantile Exchange. Prices advanced 25 percent in April alone, the biggest monthly gain since May 2009.

Permian Basin

The Permian will probably be the first basin to bounce back because it’s home to multiple producing zones stacked on top of each other, allowing drillers to tap oil at different depths with the same well, said David Zusman, managing director at Talara Capital Management, which handles $400 million in energy investments.

“There are multistacked pay zones and sweet spots across the basin that make economic sense,” he said by phone. “There’s more optionality associated with the Permian and more likelihood of completing those wells.”

The U.S. rig count may recover to 1,200 to 1,300 should prices rally past $70 a barrel, Allen Gilmer, chief executive officer of the Austin-based energy data provider Drillinginfo, said by phone on May 1. The total rose for three straight days in late April, he said.

“The service companies have responded very quickly in regards to dropping prices, and it has become very attractive, especially for companies with hedged positions, to come back right now before those hedges fall off,” Gilmer said. “We’re a few weeks from the bottom now. You’ll start seeing it build up.”
Source: www.bloomberg.com

ENTERGY PLANS MAINTENANCE SHUTDOWN OF INDIAN POINT UNIT 3 DUE TO LEAKING STEAM LINE








MAY 7, 2015

BUCHANAN, NEW YORK

Control room operators will remove Indian Point’s Unit 3 nuclear power plant from service this morning following an identification of a leak of clean steam from a pipe on the non-nuclear side of the plant overnight. Operators began reducing power around 7:00 a.m. when it was determined the leak could be repaired only while the plant was shut down.

The plant will return to service when the maintenance work is complete. 

There was no release of radioactivity and no threat to the safety of workers or the public.

Unit 2 is currently operating at full power and has been online for 415 continuous days. Unit 3 returned to service on March 25 following a 23-day shutdown for refueling and maintenance. 

Indian Point Energy Center, in Buchanan, N.Y., is home to two operating nuclear power plants, unit 2 and unit 3, which generate approximately 2000 megawatts of electricity for homes, business and public facilities in New York City and Westchester County.

TRANSFORMER FAILURE CAUSES FIRE AT THE INDIAN POINT UNIT 3 OF THE NUCLEAR POWER PLANT IN NEW YORK













MAY 10, 2015

NEW YORK, NY (CNN)

A transformer failure at the Indian Point nuclear power plant Unit 3 caused an explosion and fire at the facility Saturday evening, sending billows of black smoke into the air near Buchanan, New York.  The Unit 3 had to be shut down.  Unit 2 remained operational.

The fire broke out on the non-nuclear side of the plant, about 200 yards away from the reactor building, according to Entergy spokesman Jerry Nappi.

The transformer at Indian Point 3 takes energy created by the plant and changes the voltage for the grid supplying power to the state. The blaze, which sent black smoke billowing into the sky Saturday, was extinguished by a sprinkler system and on-site personnel, Entergy spokesman Jerry Nappi said.  Westchester County police and fire were on site as a precaution.

It was not immediately clear what caused the failure, or whether the transformer would be repaired or replaced.  Of course the explosion and fire must have destroyed the transformer and thus must be replaced.  Dah! 

Nappi said there were no health or safety risks (how cannot be any safety risks?  They had to shut down part of the reactor – obviously there is some risk). It's unclear how long the 1,000-megawatt reactor will be down. Entergy is investigating the failure.

"The fire is out and the plant is safe and stable," Nappi said. Federal officials said one reactor unit automatically shut down.

No one was injured in the blaze. 

There was "no threat to public safety at any time," the facility said in a tweet. "All Indian Point emergency systems worked as designed."

A sprinkler system doused the fire with the help of personnel on the scene, Nappi said.

Multiple emergency services agencies responded to the explosion at the plant, located approximately 50 miles north of Manhattan, including the Westchester County and New York State Police. 

"We saw just a huge black ball of smoke right across the river," witness Gustavus Gricius told CNN. "We could smell the oily, electric burn smell."

In accordance with federal regulations, the U.S. Nuclear Regulatory Commission, state, county and local officials were notified of the event, considered the lowest of four emergency classifications for U.S. nuclear plants.

Gov. Andrew Cuomo was at the plant and received a briefing on the accident.
He called the incident "relatively minor" but added, "these situations we take very seriously. This is a nuclear-powered plant; it's nothing to be trifled with." 

The blast sent the facility into an emergency response situation classified as an "unusual event," according to Nappi.

The event was declared at 5:50 p.m. and the fire was out by 6:15 p.m.
Neil Sheehan, a spokesman for the federal Nuclear Regulatory Commission, said the agency had three inspectors respond.

"They're cooling down the reactor and we'll have to investigate the cause of the fire," he said. 

The facility houses two nuclear reactor units and produces approximately 25% of the electricity for New York City and Westchester County, according to its website.  It is a very old plant (built in the 1950s) and has not been updated much.  Leaks happen all the time, based on the public announcements over the years. 

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INDIAN POINT UNIT 3 SAFELY SHUTDOWN FOLLOWING FAILURE OF TRANSFORMER

MAY 9, 2015

BUCHANAN, N.Y.

Indian Point unit 3 safely and automatically shut down as designed following a failure of one of two main electrical transformers at the plant around 6:00p.m. The plant is currently in a safe,stable shutdown condition.

Following the transformer failure an automatic sprinkler system, along with trained onsite personnel, extinguished the fire. 

There was no release of radioactivity and no threat to the safety of workers or the public.

The cause of the failure is under investigation. There were no injuries reported as a result of the transformer failure. 

The unaffected unit, Indian Point 2 nuclear power plant, continues to operate at 100% power.

In accordance with federal regulations and emergency plant procedures, the NRC, state, county and local officials were notified. A Notice of Unusual Event is the lowest of four emergency classifications for U. S. nuclear power plants, as outlined by the NRC.

//----------------////

Indian Point Energy Center



Entergy is a cornerstone in the state’s deregulated energy marketplace and represents a large portion of the electricity provided to the New York Power Authority and Consolidated Edison, which is then resold to thousands of retail, government, and institutional customers. Entergy employs approximately 2,000 people in New York state.

Entergy and Indian Point Energy Center have a tradition of deep and lasting corporate contributions Indian Point generously contributing to non-profit organizations, schools, and universities in New York. Specific initiatives include the Food Pantry at Zion Episcopal Church, St. Phillips Church food program, Community Food Pantry of St. Mary’s, Meals on Wheels of Rockland County and St. Francis Food Pantries.

In addition, dedicated Indian Point employees contribute thousands of volunteer hours throughout the communities is the region.

Several long-standing traditions for Indian Point include the support of the popular Peekskill Celebration culminating with the “Entergy Fireworks Extravaganza” along with the Indian Point’s longest running tradition of giving – the employee-led Gifts for Rosary Hill.


Indian Point Energy Center
Buchanan, N.Y.
Unit 2
Unit 3
Owner:
Entergy Nuclear Indian Point 2, LLC
Entergy Nuclear Indian Point 3, LLC
Maximum Dependable Capacity:
1,028 MW
1,041 MW
Reactor Type:
Pressurized Water Reactor
Pressurized Water Reactor
Reactor Manufacturer:
Westinghouse
Westinghouse
Turbine Generator Manufacturer:
General Electric
Westinghouse
Architect/Engineer:
United Engineers and Constructors
United Engineers and Constructors
Commercial Operation Date:
8/01/1974
8/30/1976
License Expiration Date:
9/28/2013
12/12/2015 
Cooling Water Source:
Hudson River
Number of Employees:
1,050 (Units 2 and 3)
Counties included in Emergency Planning Zone:
Westchester, Rockland, Putnam and Orange




Environmental Impact

Generating electricity with nuclear energy prevents the emission of pollutants like sulfur dioxide (SO2) and nitrogen oxides (NOx) and greenhouse gases like carbon dioxide (CO2) associated with burning fossil fuels. It does generate, however, spent nuclear fuel that must be deposited in underground depositories forever.

During 2011, environmental emissions avoided due to nuclear power plant operation in New York State included 25,000 tons of sulfur dioxide, 14,000 tons of nitrogen oxide and 23 million metric tons of carbon dioxide.* 

Emissions of SO2 lead to the formation of acid rain. NOx is a key precursor of both ground-level ozone and smog. Greenhouse gases like CO2 contribute to global warming.