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Unconventional oil and gas: decommissioning, site restoration and aftercare – obligations and treatment of financial liabilities

Published: 8 Nov 2016

Research into decommissioning, site restoration and aftercare – obligations and treatment of financial liabilities.

137 page PDF

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137 page PDF

2.6MB

Contents
Unconventional oil and gas: decommissioning, site restoration and aftercare – obligations and treatment of financial liabilities
2 Environmental Issues

137 page PDF

2.6MB

2 Environmental Issues

2.1 Introduction

This chapter provides a summary of the key environmental issues and associated hazards and risks associated with decommissioning and restoration of UOG developments. In particular, it considers the potential for leakages of gases or fluids from wells or surface equipment and the potential for impacts on water quality, air quality and by extension human health natural resources and ecosystems.

The focus of this report is on environmental issues during and following decommissioning of UOG developments. As such, it does not consider issues associated with well development and production except where they affect the potential for post-decommissioning environmental issues. For example, this assessment does not consider hydraulic fracturing operations (except where they affect well integrity post-decommissioning) or coal seam depressurisation in coalbed methane ( CBM) wells. The assessment assumes that commissioning and operational maintenance requirements will have been met by well site operators.

2.2 Unconventional Oil and Gas Resources in Scotland

2.2.1 Shale Gas and Shale Oil

Sub-surface

Potential shale gas/oil resources in Scotland are concentrated in the Central Belt of Scotland between Edinburgh and Glasgow and are also found in Fife and Lothian. Rocks containing shale gas and shale oil are found in Scotland between 1.2 km and 5 km below ground level ( BGS, 2014). The source rocks for shale gas and shale oil are generally similar to each other but those containing shale gas resources are found at greater depths. Shale gas and shale oil are accessed using very similar techniques, namely a combination of vertical and horizontal drilling to maximise the length of borehole through the shale and hydraulic fracturing to enable the gas/oil to be extracted.

Surface

On the ground surface, during drilling (and hydraulic fracturing operations if undertaken) there would be a well pad containing a number of wellheads on each site. Following drilling and hydraulic fracturing, the production site would contain both well head(s) and gas/oil collection equipment. Oil may be collected on-site in tanks before being taken off-site by tanker to an oil refinery. Gas may be collected and tankered from site or exported directly by pipeline. Gas may require processing to remove heavy hydrocarbons or impurities at an off-site processing plant before being exported to the national gas distribution network.

Figure 1: Unconventional Oil and Gas Resources
Figure 1: Unconventional Oil and Gas Resources
Source: US Energy Information Administration

2.2.2 Coalbed methane

Sub-surface

Coalbed methane ( CBM) resources in Scotland are located within the coalfields of the Central Belt of Scotland and in Ayrshire, Fife and Lothian. Coalbed methane development involves abstraction of gas from coal seams that are present at shallower depths than shale gas/shale oil resources (typically less than 1 km) ( DECC, 2013c). Development uses similar directional drilling technologies to shale gas and shale oil development but involves drilling of both water abstraction wells to allow dewatering of coal seams and wells drilled horizontally within the coal seams to allow gas abstraction. CBM development does not normally involve hydraulic fracturing.

Surface

During well drilling, surface facilities will be similar to those for shale gas/shale oil developments. During production, a wellsite will contain a number of well head(s), gas collection/transmission facilities and wastewater treatment/disposal equipment. Gas will be exported by pipeline via processing facilities if necessary (to remove heavy hydrocarbons or impurities) to gathering/pumping stations and then to the national gas distribution network.

2.3 Potential Environmental Effects

2.3.1 Surface

Planning permissions typically require that surface facilities are removed and that any surface or near surface contamination is remediated as part of the site restoration works, which should be defined through the conditions of planning consent. Any surface or below ground pipelines should also be removed and/or decommissioned as required by the planning permissions and relevant legislation.

2.3.2 Sub-Surface

The key environmental risk associated with decommissioning is that associated with poorly constructed or abandoned oil and gas wells. These may leak gases or other fluids from the sub-surface to groundwater or, in the case of methane and other gases, to the atmosphere. Uncontrolled emissions have the potential to affect human health, ecosystems and groundwater and surface water quality. Methane is also a greenhouse gas and contributes to man-made climate change. Poorly constructed wells may also cause sub-surface leakage between groundwater bodies such as aquifers.

Poorly constructed and decommissioned oil and gas wells can develop leaks along the casing after production has ceased and the well has been decommissioned. In certain circumstances, hydrocarbons or other well fluids can migrate out of the well and into the environment. Contamination of groundwater with methane associated with UOG development has been a concern, for example in Pennsylvania in the United States (Osborn, et al., 2011) and Alberta in Canada (Watson & Bachu, 2007).

The principal sources are hydrocarbon fluids (gas and/or oil) which may leak from the well bore or use the wellbore as a transmission pathway from depth to the near surface. The main receptors at risk from migration of hydrocarbons from wells are:

  • shallow groundwater both as aquifers and also as a pathway for migration;
  • groundwater bodies at greater depth (as defined by the Water Framework Directive);
  • drinking water;
  • people (through drinking water or gas migration into properties);
  • ecosystems and habitats; and
  • air quality (climate change impact).

The key to managing risks of leakage from UOG wells is the maintenance of well integrity in both the short and long-term (Hetrick, 2011).

2.4 Well Integrity

2.4.1 Introduction

Well integrity describes the application of technical, operational and organisational solutions to the construction, operation and decommissioning of wells. Maintaining well integrity prevents the uncontrolled release of fluids, solids and gases into the subsurface or surface environment over the full life cycle of the well (SCER, 2012). Well integrity is also defined by the Norwegian petroleum standards authority as the "application of technical, operational and organizational solutions to reduce risk of uncontrolled release of formation fluids throughout the life cycle of a well" (NORSOK, 2013).

2.4.2 Well Construction

Wells drilled for UOG development are constructed using standard oil and gas drilling and completion techniques. Wells are drilled in sections the diameter of which decrease with depth ( Figure 2). Each section of the well is lined with steel casing, which is cemented in place prior to the drilling of the next. The main casing types and their uses are described in Table 2.

The primary objective of casing is to provide support to the well, to contain sub-surface pressures, and to provide isolation of different zones penetrated by the well (Dusseault, et al., 2000). Cementing creates both a good seal between the formation and the casing and provides support to the casing. The quality of the casing-cement-formation bond is assessed after the casing is set.

A high standard of well construction is critical to ensuring well integrity. In particular, the quality of casing and cementing is fundamental to ensuring environmental protection both during the operational life of a well and in the long-term by minimising risk of escape of well fluids (including hydrocarbons) (Hetrick, 2011).

Figure 2: Typical UOG Well Construction Details
Figure 2: Typical UOG Well Construction Details
Modified from Independent Scientific Expert Panel (2014)
(Forth railway bridge shown for scale only)

Table 2: Casing Types

Casing

Purpose

Conductor

Set into the ground to a depth of approximately 30 metres, the conductor casing serves as a foundation for the well and prevents caving in of surface soils.

Surface Casing

Drilled through any freshwater bearing zones (including drinking water aquifers) and sealed with a casing and extends all the way back to the surface. Cement is pumped down the wellbore and up between the casing and the rock it reaches the surface. The integrity of the surface casing is critical in preventing migration of hydrocarbon or fluids to the surface or the migration of fluids between groundwater bodies.

Intermediate Casing

Drilled and lined by an intermediate casing to isolate the well from non-freshwater zones that may cause instability or be abnormally pressurised. The casing may be sealed with cement typically either up to the base of the surface casing or all the way to the surface.

Production Casing (or Liner)

A final wellbore is drilled into the target rock formation containing UOG. This wellbore is lined with a production casing that may be sealed with cement either to a safe height above the target formation up to the base of the intermediate casing; or all the way to the surface, depending on well depths and local geological conditions.

Adapted from The Royal Society and The Royal Academy of Engineering (2012)

2.4.3 Decommissioning and Well Abandonment

Decommissioning involves the removal of surface equipment, the restoration of the ground surface and the permanent closure of any wells. The permanent closure of the well to prevent migration of well fluids, including hydrocarbons, into the environment or the surface is termed abandonment. All wells including dry exploratory wells and production wells that have reached the end of their commercial lifespan must be abandoned.

Figure 3: Well Abandonment
Figure 3: Well Abandonment
Adapted from Independent Scientific Expert Panel (2014) and HSE (2015)

Well abandonment involves the placement of cement plugs in the well adjacent to rocks of low permeability and which overlie zones containing hydrocarbons. Cement is used as the primary sealant for plugging wells because of its similarity in behaviour to solid rock. Steel bridge plugs are used to provide physical support to the cement. Cement plugs are also used to isolate near surface groundwater bodies, including those used as aquifers, by sealing the base of the surface casing ( Figure 3).

2.4.4 Well Leakage

Leakage can only occur from a well if:

  • there is a source of hydrocarbons or well fluids; and
  • there is a driving force for hydrocarbons or well fluids to migrate; and
  • there is a pathway for the leak to reach the near surface.

(Watson & Bachu, 2007).

Hydrocarbons below ground are the source of any leakage. The driving force is the pressure under which hydrocarbons are found within the rocks penetrated by the well or buoyancy driven by density differences. Leakage through the well is the means by which hydrocarbons under pressure may reach the near surface (see Figure 4).

The risk of leakage from wells penetrating rocks containing UOG is considered to be low. This is because the formation pressures in unconventional hydrocarbons are much lower than in conventional hydrocarbon reservoirs and there is little driving force to cause leakage (Thorogood & Younger, 2015). However, conventional hydrocarbons in permeable rocks such as sandstones or limestones which can overlie UOG resources in some wells do represent a potential source of leaks if a driving force such as high formation pressures exists (Darrah, et al., 2014) ( Figure 4). In Scotland, permeable rocks that could contain hydrocarbons overlie the shales and coals that contain UOG resources (Read, et al., 2003) and may represent a source for potential leakages.

Migration of fluids between two or more sub-surface groundwater bodies ( e.g. aquifers) can also occur if there is a pressure differential between the aquifers and if the well offers a pathway for fluid migration.

Good design and construction is required to minimise the risk of well leakage. In particular, the use of multiple barrier systems means that several barriers within a well need to fail for there to be a failure in well integrity and for a well to leak (Ingraffea, et al., 2014). Individual barriers within a well have a higher risk of failure than whole wells (King & King, 2013). This explains the high failure rates quoted in some studies. For example, barrier failure rates for the Norwegian Sector of the North Sea of between 13 and 19% for production wells and 37 - 41% for injection wells have been reported (Randhol & Carlsen, 2008).

Failure rates for whole wells and subsequent potential for leakage are much lower than for individual barriers, with failure rates for well-constructed wells being less than 1% (King & King, 2013). For example, a review of 316,000 wells in Alberta identified 4.6% as having "leaks" ( i.e. failure of one or more barrier elements) but with gas migration occurring in only 0.6% (Watson & Bachu, 2007). Failure rates for poorly constructed wells were higher. Similarly, in Pennsylvania whilst the proportion of well barrier failures in recent wells range from 6.2% to 7.2% (Ingraffea, 2012), most well integrity issues do not currently result in gas migration (Brantley, 2015) and problematic wells represent only 0.1 to 1% of the UOG wells drilled over the period 2008-2012 (Brantley, et al., 2014) indicating a much lower incidence of well integrity failures.

Figure 4: Potential Sources of Fluids that may Leak through a Hydrocarbon Well
Figure 4: Potential Sources of Fluids that may Leak through a Hydrocarbon Well
Modified from Davies, et al. (2014)

Studies of well integrity failures have found that hydrocarbon and well-fluid migration issues in abandoned wells are directly related to casing and cementing operations during well construction. Wells where there is gas migration from depth to the surface prior to abandonment are likely to continue to have migration issues after decommissioning (Hetrick, 2011). In particular, well integrity issues result from of corrosion, joint failures, and inadequate cementing of casing. Fluid migration through cement can be via a number of pathways, which are usually associated with problems with the original cementing process ( Figure 5). These include channelling, poor filter cake removal, shrinkage, and high cement permeability.

Figure 5: Potential Cement Leakage Pathways
Figure 5: Potential Cement Leakage Pathways
Key
1. Leakage between cement in annulus and wellbore
2. Leakage between cement in annulus and casing
3. Leakage between cement plug and casing
4. Leakage through cement plug
5. Leakage through cement in annulus
6. Leakage across cement in annulus and between cemented annulus and casing
Modified from Celia, et al. (2005)

Some well integrity issues are specific to the horizontal wells used in UOG developments. Casing in the horizontal part of the well is subject to gravity making it more difficult to keep the casing properly centred to allow it to be effectively cemented it in place. Repeated pressure changes along the horizontal length of pipe during hydraulic fracturing may also induce stress in the casing and cement and may cause the cement to debond from the casing and crack (Bachu & Valencia, 2014).

Shrinkage in cement plugs and in cement behind casing can lead to development of circumferential fractures in the cement in the longer term, after well construction and toward the end of, or after, the productive life of the well. Such fractures develop and propagate over time and with use of the well. This can be the case where the cement bond is assessed as being reasonable over substantial sections of the casing after cementing (Dusseault, et al., 2000). Cement shrinkage leads to a residual risk that leakage may occur in some wells a few years after construction and/or abandonment (The Royal Society and The Royal Academy of Engineering, 2012).

2.5 Best Practice in Minimising Leakage

2.5.1 Construction

The regulatory system in Scotland is set out in Chapter 3. All operators in the UK holding Petroleum Exploration and Development Licences ( PEDLs - see Section 3) are required by the Oil and Gas Authority ( OGA) to be members of UK Onshore Oil and Gas ( UKOOG) the onshore operators group. The Scottish Government will have the ability to maintain this requirement after the OGA's petroleum licensing powers are devolved in accordance with the Scotland Act 2016.

Guidance produced by UKOOG ( UKOOG, 2015a) requires all operators to comply with their duties under the relevant regulations (see Chapter 3). The UKOOG guidelines state that the " most important role of the well-operator is to ensure the integrity of its wells, barriers and the pressure containment boundary throughout the well life cycle from design to final abandonment". The guidance confirms, " integrity can be assured by keeping adequate barriers between the hazards in the well and the surface. The selection, installation, monitoring, checking, testing, maintenance and repair of barriers are the most important aspects of well planning and operations." To do this, the UOG operator will need a system for managing well integrity, which, as a minimum, should cover well design and construction, well operations/production, and well suspension and abandonment. UKOOG therefore requires its members to follow best practice in well construction as set out in the guidelines for well construction produced by Oil and Gas UK ( OGUK) the UK offshore operator's body ( OGUK, 2014). UKOOG members are also required to follow Oil and Gas UK guidance on the competence of personnel involved in well operations including well construction and abandonment ( OGUK, 2012).

The OGUK guidance for well construction is based on international standards such those produced by the as the American Petroleum Institute ( API) ( API, 2010; API, 2015) and Standards Norway (NORSOK) (NORSOK, 2013). The API publishes a range of practice notes that are used to guide well construction and operations in many countries. The Norwegian petroleum industry developed the NORSOK standards to ensure adequate safety, benefit, and cost-effectiveness for petroleum industry developments and operations.

Corrosion can be minimised through selection of casing designed to resist corrosive subsurface environments. The risk of joint failure can be minimised by use of improved couplings on casing joints and use of appropriate methods for casing installation. Development of pathways through cement as a result of primary cementing can be minimised by good casing and cement programme design and material selection (Watson & Bachu, 2007).

Wells design must be approved by the Health and Safety Executive before development may proceed (see Section 3.3).

2.5.2 Abandonment

Operators are also expected by UKOOG to follow OGUK's Guidelines for the Abandonment of Wells ( OGUK, 2015a) which has been prepared to provide operators with guidance on the considerations that should be taken into account during well abandonment. The guidelines provide minimum criteria to ensure full and adequate isolation of formation fluids both within the wellbore and from the surface. The guidelines also help operators to comply with the relevant regulations (see Section 3.3) which lay down the minimum abandonment standards to be achieved by operators in the UK. OGUK guidance for well abandonment is also based on international standards ( API, 1993; NORSOK, 2013).

Importantly, OGUK guidance requires that abandonment design should make allowance for the deterioration of casing, cement and plugging materials in the well over time and the possible recovery of hydrocarbon-bearing formations to natural pressure (and thereby having greater potential to leak). Reducing the risk of long-term cement shrinkage and cracking requires improvement in cement composition (Dusseault, et al., 2000) and new shrink resistant cement formulations have been developed (Bentz & Jensen, 2004). This is recognised by OGUK with their guidelines on materials for use in well abandonment, which require operators to consider alternative cements with lower shrinkage potential than the cements traditionally used for well abandonment ( OGUK, 2015b).

In operational wells, flows of gas causing rising pressures within the casing can indicate barrier problems anywhere in the well. Gas accumulating inside the casing leads to pressure build-up at the wellhead, also known as sustained casing pressure ( SCP) (Bachu & Valencia, 2014; Bruffato, et al., 2003). In production wells, the presence of elevated SCP may indicate the potential for gas migration between different zones in the well and therefore should be taken into account during the abandonment design (Ingraffea, et al., 2014). For exploration wells, the lack of SCP monitoring data means that abandonment design for exploratory wells may need to be more conservative than for production wells to ensure that migration of any hydrocarbons that may be present does not occur.

Notwithstanding the above guidance, well abandonment plans must be approved by the Health and Safety Executive before sites are decommissioned proceed (see Section 3.3).

2.5.3 Impact of Regulation

Regulation is instrumental in ensuring that wells are constructed to high standards and that the risk of leakage is minimised. A review of factors controlling well failure and leakage in Alberta (Watson & Bachu, 2007) identified regulation as having the greatest impact on reducing well leakage; overriding factors such as well type, location or age. Recent wells were found to be the least likely to develop problems because of improved construction and barrier standards and more stringent regulatory requirements. Wells constructed earlier, however, were vulnerable to leakage (Bachu & Valencia, 2014).

A review of environmental impacts associated with drilling in the Marcellus Shale in Pennsylvania concluded that "the number of environmental violations and subsequent environmental events that caused some physical impact on the environment [has] steadily declined […] in conjunction with actions by state regulators" (Considine, et al., 2012).

In the UK, drilling for and production of conventional hydrocarbons on-shore has taken place for around a century with over two thousand wells having been drilled (Davies, et al., 2014). Around two-thirds of these wells have been abandoned to standards, considered comparable to those currently in force (Boothroyd, et al., 2016). There have been only two recorded pollution incidents due to well integrity failure in the UK. Both of these were from conventional oil wells (Davies, et al., 2014). In a recent study of fugitive emissions of methane from conventional oil and gas exploration and production wells in the UK (Boothroyd, et al., 2016), approximately one third of the wells monitored exhibited low rates of emissions of methane gas at the soil surface. The presence of methane indicates that leakages had occurred in these wells, however, the monitored methane emissions were low and comparable to the rates of emission from the type of agricultural activities commonly used on decommissioned well sites (sheep grazing for example). In contrast, methane emissions from a well, which had not been decommissioned to modern standards, were found to be significantly higher.

The evidence therefore suggests that the environmental impact of existing decommissioned conventional oil and gas wells in the UK, which have been abandoned to contemporary standards, is unlikely to lead to significant impacts on people or the environment. For the reasons set out in Section 2.4, the environmental impact of future UOG developments would be anticipated to be similar or lower than this.

2.5.4 Monitoring

In order to assess whether wells leak and to determine whether leakage is sufficient to require remedial action or other migration requires monitoring. Monitoring for hydrocarbon or fluid migration should be undertaken during the:

  • operational stage - during drilling and completion but also production; and
  • post-decommissioning stage.

Both are required by SEPA (see Section 3.5) with post-abandonment monitoring continuing until relevant environmental authorisations are surrendered.

Monitoring of baseline conditions before drilling or well construction commences is not currently a legal requirement in Scotland but is regarded as best practice by UKOOG ( UKOOG, 2015b) and is likely to be required by SEPA before a licence for to drill a deep borehole can be awarded. Baseline monitoring in soil and groundwater allows background values of methane, for example, to be assessed and subsequently allows operational monitoring to be put in context. Baseline and operational monitoring for methane can also be benchmarked against the results of the British Geological Survey's National Methane Baseline Survey of UK Groundwaters ( BGS, 2016).

Post-decommissioning monitoring is critical in the assessment of the long-term risk of leakage from wells because evidence shows that, where they occur, leaks start relatively soon (within several years) following well abandonment (Boothroyd, et al., 2016; Watson & Bachu, 2007). For this reason, monitoring for leakage from decommissioned UOG wells is required for as long as deemed necessary by SEPA to allow environmental authorisations to be surrendered . Where leaks are identified, the need for remedial action by the UOG Operator should be based on a risk assessment with remedial action undertaken in accordance with the steps that SEPA consider necessary.

2.6 Conclusions

The principal environmental issues associated with unconventional oil and gas in Scotland that require managing are those associated with the risk of long-term well leakage or of migration of fluids between aquifers.

Poorly constructed and decommissioned oil and gas wells may leak gases or other fluids from the sub-surface to groundwater or to the atmosphere. Such uncontrolled emissions have the potential to affect human health, ecosystems and to groundwater and surface water quality. Methane is also a greenhouse gas and contributes to man-made climate change.

The key to preventing leaks from the sub-surface is ensuring well integrity in both the short and long-term. Experience in the United States, Canada and the UK suggests that long-term well integrity can be achieved by implementing best practice during well construction and abandonment operations under a strong regulatory regime.

Despite this, there is a risk that a small proportion of wells may fail - mainly as a result of cement shrinkage. However, for leakage to occur a source of hydrocarbons is also required together with a driving force for the gas or oil to migrate. The oil or gas in shales or the gas in coals that are targeted by UOG wells are not under abnormal pressure and there is therefore generally no driving force for leakage. The risk of leakage from abandoned UOG wells is therefore likely to be very low. However, in those UOG wells where there are permeable rocks overlying the target shales or coals that contain hydrocarbons under pressure, there remains a residual risk of leakage if there is a failure of well integrity. In Scotland, permeable rocks that could contain hydrocarbons overlie the shales and coals that contain UOG resources (Read, et al., 2003).

For this reason, it is appropriate to monitor for leakage from decommissioned UOG wells for as long as is required by the regulator, the Scottish Environment Protection Agency ( SEPA). Where leaks are identified, the need for remedial action by the UOG Operator should be based on a risk assessment with remedial action undertaken in accordance with the steps that SEPA consider to be necessary.

Decommissioning and restoration of surface UOG development may also require the management of leaks from surface installations e.g. tanks and pipework, that could potentially contaminate the ground and potentially affect the quality of groundwater and surface water. The key to preventing surface spillages and leakage is a combination of good design in accordance with pollution control legislation and implementation of an accredited environmental management system. In the event that surface spillages or leakages occur there is appropriate legislation already in place in Scotland to ensure remediation if required following decommissioning and prior to restoration.


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