Oil and Gas fields, like homes, never stop generating trash. The difference lies in the volume and nature of the rubbish. From exploration through production and eventual abandonment of wells and plants after fossil fuel reservoirs deplete, energy waste management has grown into an industry in its own right.

Common oilfield wastes include oceans of brackish “produced water” that flow to the surface in volumes measured in millions of barrels and have to be separated from oil then put into safe disposal. There are other oil-contaminated materials that can be solid or liquid. The process of completing wells alone generates respectable volumes of drill cuttings and other solids that can no longer be left lying around.

Over the last 25 years, waste regulations have become steadily tougher, encouraging growth of a disposal business that has outlasted boom-and-bust cycles of energy prices and spread across the countryside in tandem with exploration and production operations. Since 1998, the number of producing wells across Western Canada has more than doubled to about 226,000.

Deepwell Energy Services is considered a small newcomer in the field but already has four facilities in Alberta, including a large new waste treatment facility south of Calgary, near Claresholm. Last year, the company acquired a 50 per cent interest in a water disposal facility near Midale, Saskatchewan, as the celebrated Bakken oil drilling play expanded across the southeastern reaches of the province.

Built upon assets that have been around for a while, three-year-old Deepwell organized itself as an income trust and went public just before a federal government decision dubbed by investors as the Halloween Massacre of 2006 to start taxing trusts in 2011. “Everyone in the trust system is now trying to figure out how to reorganize,” says Bob Ritchie, a veteran of more than 25 years in the industry who was Deepwell’s president until March 23.

The biggest players in oilfield waste have already made their moves: Newalta Inc. has reverted to the traditional corporate model. With the help of a large hedge fund sponsored by investors from the United States as well as Canada, CCS Corporation turned itself into a private company in 2007. For its part, Deepwell is using a five-year transition period allowed by the government to decide upon its next move.

Licensed to deal only with “upstream” exploration and production materials, Deepwell typifies the independent specialist in oilfield waste management operations. “It’s up to the producer to characterize and classify their wastes. Our facilities can accept a lot of waste streams, but some materials are not on the list of acceptable materials,” Ritchie explains. Lubricating oil used in exploration and production machinery, for instance, has to go to another specialist as a refined product. Production companies are responsible for tracking and reporting their waste streams to Alberta’s Energy Resources Conservation Board.

Pages: 1 2

Related Posts

• Nothing to fear from well communication: ERCB chair
• Alberta Oil unveils a new look for 2012
• The holiday season hits Alberta Oil
• Paul Martin takes the initiative on aboriginal education
• Look to Gen Y to alleviate a labor crunch: Deloitte