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Hamling, John

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EERC Final Topical Report – Findings on Subtask 3.2 – Produced Water Management Through Geologic Homogenization, Conditions, and Reuse

The Energy & Environmental Research Center (EERC) was awarded a contract by the North Dakota Industrial Commission (NDIC) Oil and Gas Research Program (NDIC No. G-051-101) to conduct a study on the recycling of water used in oil and gas operations, also known as produced water, from oil- and gas-producing regions of North Dakota as directed by Section 19 of North Dakota House Bill 1014. This final report provides a compilation of results of the study, which include regulatory, scientific, technological, and feasibility methods and considerations associated with North Dakota produced water management. The report provides a synopsis of this project’s previously submitted produced water assessment report entitled “Produced Water Management and Recycling Options in North Dakota” (Energy & Environmental Research Center, 2020), with updated values provided as appropriate. The report provides the results from the investigation of a novel produced water management strategy, referred to as geologic homogenization, conditioning, and reuse (GHCR), which aims to use a subsurface geologic formation as a natural medium for managing produced water recycling and reuse. Water management is a significant technical and economic challenge for sustainable oil and gas production, and water volumes are intrinsically linked to oil production volumes. North Dakota oil production rose to over 1.5 million barrels (MMbbl)/day in 2019, and despite a downturn in oil price in early 2020, North Dakota oil production has recovered to 1.1 MMbbl/day as of August 2021. Bakken petroleum system development between 2008 and 2020 has resulted in a nearly fourfold increase in produced water volumes to 642 MMbbl/yr in 2020 after peaking at 740 MMbbl/yr in 2019 and a fivefold increase in saltwater disposal (SWD) volumes to 565 MMbbl/yr in 2020 after a peak of 682 MMbbl/yr in 2019. Produced water and SWD volumes are forecasted to double by 2030. SWD is the primary method of produced water management used in North Dakota, with approximately 95% of the SWD volume occurring through subsurface injection into sandstones of the Dakota Group (Dakota). Localized pressurization of the Dakota resulting from SWD and projected increases in produced water volumes could impact the economics of North Dakota oil production. As a result, there is an emerging need to pursue alternative produced water management approaches, including recycling and reuse. While produced water recycling is not yet widespread, commercial operators are making strides in overcoming the technical challenges of using high salinity produced water in completion operations (Marathon Oil, 2020). As water management continues to be a key focal point in companies’ environmental, social, and governance (ESG) initiatives, focus on water management, including recycling, will likely continue to increase. Laboratory column testing, field sample collection, geologic modeling and numerical simulation, and techno-economic analysis all indicate that GHCR could feasibly be implemented as a potential water management option. Laboratory column testing and field sample collection indicate that the Inyan Kara sandstone and native formation fluid are capable of homogenizing with the Bakken produced water to a point where the fluid composition appears to stabilize. Extracting that stabilized fluid could be considered homogeneous and capable of providing individual batches of hydraulic fracturing fluid. Numerical simulation results indicate that extraction of fluids from the Inyan Kara in a GHCR implementation scenario is capable of reducing formation pressure, which would help ease localized pressurization of the Inyan Kara and extend the available capacity for nearby existing SWD wells. Economic analysis indicates that there are scenarios where GHCR implementation can be a competitive or even lower-cost option than a conventional water management approach. Site-specific conditions will dictate the economic potential of GHCR, but potentially attractive sites for GHCR implementation will be those that are located above a pressurized zone of the Inyan Kara, need six or more Bakken infill wells, and face high costs for conventional SWD and/or freshwater. Based on the regulatory review, drilling into the Inyan Kara for SWD and to harness as a source water for industrial use have precedent in North Dakota, and a workable regulatory solution for GHCR seems likely. However, restrictions in the state regarding surface storage and transport of produced fluids may limit some activities, which will affect how GHCR could ultimately be implemented. In summary, this study reveals pursuing GHCR can be a viable approach to water management in North Dakota. The GHCR concept addresses some of the challenges that hinder the more traditional approaches to recycling in the industry. Furthermore, an assessment of the current landscape of water management within the state reveals the ongoing trend of increasing volumes of produced water and SWD. Projections reveal that the volumes of produced water that need to be managed are expected to double over the next decade (Energy & Environmental Research Center, 2020). With the continued development of the Bakken and continuing driving factors related to ESG initiatives, implementing a practice such as GHCR is a feasible approach to adding recycling of produced water to industry within the state. This subtask was cofunded through the EERC–U.S. Department of Energy Joint Program on Research and Development for Fossil Energy-Related Resources Cooperative Agreement No. DE-FE0024233. Nonfederal funding was provided by the North Dakota Industrial Commission Oil and Gas Research Program. References Energy & Environmental Research Center, 2020, Produced water management and recycling options in North Dakota: Final Report for North Dakota Legislative Management Energy Development and Transmission Committee and North Dakota Industrial Commission. Marathon Oil, 2020, Sustainability report: https://cdn.sanity.io/files/ghcnw9z2/website/ 91744eb6ef8fbe59505a911c6b8d2e8dd9a537fa.pdf?dl (accessed November 2021).

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Subtask 1.5 – CO2 Injection Monitoring with an Optimized Scalable, Automated, Semipermanent Seismic Array

The scalable, automated, semipermanent seismic array (SASSA) method is a flexible and relatively cost-effective surface geophysical method for regular time-lapse monitoring of the movement of injected carbon dioxide (CO2) in a reservoir for CO2 enhanced oil recovery (EOR) or geologic CO2 storage operations. It has the advantages of a low-environmental-footprint while monitoring regions of a reservoir from the surface without the need for a regular grid distribution of receivers. Automated data collection is possible. As only time-lapse amplitude changes at the reservoir level due to CO2 movement within the reservoir are monitored, the turnaround time to deliver results from the SASSA method can be short, without the need for long, time-consuming data-processing workflows. As data is collected and processed, incremental information can be provided to the field operator. The Energy & Environmental Research Center (EERC) conducted a SASSA field test from September 2018 to November 2020 in a portion of the Bell Creek Field in Montana, which implemented new CO2 EOR field activities during the study period. Lessons learned from a proof-of-concept study were incorporated to improve the data quality of the SASSA method and demonstrate the viability of the technology. The EERC implemented several enhancements to improve data quality, including 1) an iterative survey design, which allowed placing the receivers in strategic locations where the movement of the CO2 in the reservoir could be tracked with minimum interference by the cultural noise in the study area; 2) the use of powerful seismic sources in the form of surface orbital vibrators, and 3) data acquisition during optimal periods. History-matched reservoir simulation was performed to predict gas saturation and pressure response induced by CO2 injection in the study area. The results were compared with the SASSA-measured responses to CO2 injection as a partial validation technique. A match between the two methods was observed for most of the SASSA points predicted to have intersected a CO2 saturation change. The validated results provide confidence that the SASSA method can be used independently as a CO2 saturation monitoring technique. As data are collected and processed, incremental information can be provided to the field operator. The critical components of the SASSA workflow for a successful application of the method are the following: Iterative survey design with information about CO2 injection activities from the oilfield operator. A detailed CO2 injection plan is the key driver to select the strategic monitoring location of the SASSA sensors. After this information is incorporated in the initial distribution of sources and receivers in the study area, high-resolution satellite images are used to identify ground locations not affected by cultural noise sources, such as power lines, pipelines/flow lines, or roadways. In the next iteration of the survey design, a scouting trip to the study area is needed to understand more details of the noise sources identified in the previous step and the intensity of the field activities that can also generate noise during the monitoring. Integrating the information from the scouting trip into the survey design to select the optimum source and receiver locations is the final step. Noise attenuation. The variety of noise types during seismic monitoring of an oil field is enormous. Tailored noise characterization and processing at a node-by-node level can enhance the performance and sensitivity of the SASSA technique. Future advancements that could improve the efficiency and application of the SASSA technology include: Gaining a better understanding of the noise field produced by the seismic source to aid the choice of receiver location. Surface noise from the source can overwhelm the small signal changes due to CO2 that the SASSA method measures. Improved data-processing workflow to automatically analyze and adapt to dynamic noise conditions associated with industrial settings. This subtask was funded through the EERC–DOE Joint Program on Research and Development for Fossil Energy-Related Resources Cooperative Agreement No. DE- FE0024233.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Subtask 1.3 – Integrated Carbon Capture and Storage for North Dakota Ethanol Production

The Energy & Environmental Research Center (EERC), in partnership with Red Trail Energy, LLC (RTE), a North Dakota ethanol producer; the North Dakota Industrial Commission (NDIC) Renewable Energy Program (REP); and the U.S. Department of Energy (DOE), conducted a feasibility and implementation study for a commercial carbon capture and storage (CCS) effort. This subtask provided technical support and developed recommended practices of how small-scale industrial CO2 emitters (<1,000,000 tonnes of CO2 emitted annually) may economically deploy CCS. The 64-million-gallon dry mill RTE ethanol facility, emitting an average 180,000 tonnes of CO2 annually, was the subject of the case study. The positive outcome of this research, which shows technical and economic potential for ethanol–CCS in North Dakota, has resulted in RTE acquiring an approved Permit to Drill on December 2, 2019, for a stratigraphic test well in early 2020, a necessary step toward a North Dakota CO2 Storage Facility Permit (SFP) for the RTE CCS effort. Outcomes include 1) validating the Broom Creek Formation as a regional target for CCS, 2) determining the full carbon life cycle of an industrial fuel production facility with CCS, 3) developing a field implementation plan (FIP) for small-scale CCS, and 4) determining the validity and pathway for using CCS to meet low-carbon fuel (LCF) standards. The technical team included the EERC, RTE, Trimeric Corporation, Schlumberger Carbon Services, and Computer Modelling Group (CMG). Findings from activities conducted November 2016 – May 2020 are summarized as follows. Several key steps have been accomplished toward validating the Broom Creek Formation as a CO2 injection and storage target at the RTE CCS site, including verification of the presence and structure of sandstone layers that may comprise the potential CO2 storage reservoir and the several thousand feet of overlying confining zone. Work included site characterization using existing data, interpretation of seismic data within the study area, and geologic modeling simulation of CO2 injection. Interpreted results estimate 3000 feet of confining zone between the Broom Creek Formation (storage target) and the lowermost underground source of drinking water (e.g., the Fox Hills Formation). The thickness of the Broom Creek injection target varies 230–420 ft within the survey area. Results were used to inform the location of a stratigraphic test well and associated characterization test program. No impediments were identified within the targeted CO2 storage complex that would prevent the project from moving forward. A stratigraphic test well is the next step to validate these results and to acquire remaining data necessary to develop a North Dakota CO2 SFP application. The EERC generated full carbon life cycle estimates for CCS integration with the RTE ethanol facility. Results indicated that an average 40% reduction in CO2 emissions is possible through CCS implementation. Approximately half of the carbon in the overall life cycle for a dry mill ethanol plant is generated through the fermentation process and emitted to the atmosphere; this is the CO2 stream targeted for CCS. The remaining carbon is attributed to corn feedstock farming (diesel, fertilizer), energy for fuel processing (natural gas, electricity), and transportation (diesel) of the fuel product. Life cycle carbon estimates are also affected by the anticipated energy consumption of a potential capture facility, which depend on the type of CO2 product generated. For example, a 30%–40% net CO2 emission reduction is estimated if a liquefied CO2 facility were incorporated compared to a 40%–50% net CO2 reduction if a supercritical “injection-grade” CO2 product is generated; i.e., more energy is required to further refine the CO2 stream, affecting the full carbon life cycle estimates. A CCS FIP was developed and initiated at the RTE CCS site, resulting in the development of several guidance documents: a CO2 Capture Process Design Package, a North Dakota CO2 geologic Storage Permits Template, and a Public Outreach Package for CCS in North Dakota. General FIP components include CO2 capture system, pipeline and well designs; monitoring, verification, and accounting (MVA) plans; geologic characterization and testing programs; and permitting and outreach plans. Vendor bids were also acquired for the CO2 liquefaction facility. Near-surface characterization (groundwater and soil gas sampling) and geologic characterization (seismic survey) were initiated to inform development of a UIC Class VI-compliant MVA plan compliant with a North Dakota CO2 SFP. Designs (well and geologic testing) were completed for a stratigraphic test well compliant with a North Dakota CO2 SFP. In addition, the outreach plan was executed, including community open houses, meetings with city/county/state officials, and development of public materials. Although other entities continued to mature incentive programs in 2019–2020, California and the Internal Revenue Service (IRS) currently provide the most advanced economic opportunities for CCS integrated with fuel production. The California Low-Carbon Fuel Standard (LCFS) adopted a CCS Protocol in January 2019, allowing submittal of a design-based pathway (DBP) application for an approved temporary (not certified) carbon intensity value for a fully engineered facility. An ethanol–CCS DBP application to the California LCFS Program (officially approved February 28, 2020) was developed to show that the RTE CCS effort meets LCFS requirements. The approved DBP provides confidence to advance the project and supports potential investments. Other entities continue to mature incentive programs. The IRS issued guidance in February 2020 that addresses the definition of beginning of construction and revenue procedure on partnerships for the Enhancement of Carbon Dioxide Sequestration Credit (a.k.a. Section 45Q) CCS tax credit program; the IRS anticipates issuing further guidance on issues such as secure geologic storage, utilization qualifications, and recapture of claimed credits. Maturing incentive programs coupled with workable permitting regulations provide confidence to advance CCS projects in North Dakota and support financial investment to proceed with designing, constructing, and implementing CCS projects at small-scale fuel production facilities. The largest hurdles for CCS implementation at small-scale industrial systems are often business/economic-related (i.e., not technical). Market uncertainty already exists for agriculture-based alternative fuels such as corn ethanol, for which production has increased by ~33%, and prices have correspondingly lowered since 2015. Passing the Section 45Q tax credit program improves economic feasibility for CCS but may require external investors for a small business to achieve maximum benefits. Public–private partnerships with NDIC and DOE have resulted in foundational technical and regulatory knowledge, growing stakeholder confidence, and a pathway to implementation that enables similar industrial CCS projects in the region to advance. This subtask was funded through the EERC–DOE Joint Program on Research and Development for Fossil Energy-Related Resources Cooperative Agreement No. DE-FE0024233. Nonfederal funding was provided by NDIC and RTE. The authors would also like to thank CMG, ESRI, IHS, Neuralog, and Schlumberger for allowing the use of their software packages in support of this work.

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