Exploration and Production Technologies
Energy in the Environment-Initiatives 2004-09

DE-FG26-04NT15455

Project Goal
The project goals are to 1) reduce the costs of information exchange between the regulatory agencies and the petroleum and mining industries and 2) provide the baseline reference data that all stakeholders need to make informed decisions about environmental protection and mineral resource development. These goals are being met through the development of electronic commerce (e-commerce) applications that expand the uses of the Risk-Based Data Management System (RBDMS) and the Cost-Effective Regulatory Approach (CERA).

Performer 
Ground Water Protection Research Foundation (GWPRF), Oklahoma City, OK

Background
For more than 15 years, the GWPRF has managed the development of RBDMS, providing improvements, updates, and technical support to the increasing number of regulatory agencies that use it. Developing e-commerce applications that work with both RBDMS and non-RBDMS databases is the latest way in which the GWPRF seeks to improve the flow of data between industry operators and regulators. GWPRF holds annual training sessions where States receive training in the use of RBDMS and the RBDMS e-commerce applications in locations near one of the RBDMS State agencies to provide an opportunity to highlight the host agency’s information management processes.

With respect to the CERA aspects of this project, GWPRF has spearheaded an effort to seek and foster the development of new approaches that can benefit the petroleum industry and relevant government agencies. These include holding meetings to provide technology transfer, policy review, and discussion of emerging issues such as CO2 sequestration and produced-water management. Additionally, the GWPRF conducts peer reviews of UIC programs so that representatives of State agencies can share information and policy guidelines with their peers who administer similar regulatory programs. The GWPRF education and outreach effort supports the continued communication of the activities, practices, and policies of the UIC program to the public.

Impact 
The RBDMS e-commerce applications encourage the production of more domestic oil and gas, help regulators increase environmental protection, and encourage the public to become knowledgeable in the issues surrounding energy production and water resource protection. A discussion of the tangible benefits the RBDMS e-commerce initiative offers agencies and industry operators follows:

  • Benefits to industry operators. GWPRF has documented that the RBDMS e-commerce tools are helping industry operators maximize the recovery of oil and gas from marginal wells in several ways. First, they help by reducing the time required for receiving routine permit approval, which improves well field management and reduces idle rig time. For example, one California operator estimates that the automated approval of routine permits could increase production by as much as 25,000 barrels per year from just one of that company’s fields in Kern County, CA. Second, many marginal wells nationwide are being reworked and brought back online at a significant cost savings through new technology, redrilling, or horizontal drilling. The cost savings to drill a well horizontally from an existing well rather than a grassroots well is estimated to be at least $300,000. For example, in North Dakota, more than 250 wells over the last 5 years have been re-entered and drilled horizontally. Before agencies’ well information was readily available, many of these wells would have been plugged or shut in. By keeping these wells available, industry has saved in excess of $75,000,000 in North Dakota. By the same token, shut-in and idle wells that cannot be technologically or economically worked in various market scenarios and that pose a low risk of contaminating underground sources of drinking water can be preserved as possible candidates for enhanced oil recovery projects. Through agency tracking and evaluation of mechanical integrity, static fluid levels, and idle well reports, those wells can be kept in a beneficial state and environmentally sound manner and brought back online as service wells. Finally, improved industry access to oil and gas agency data also gives exploration geologists the ability to develop prospects and to drill and operate their companies’ leases more efficiently. Production trends and risk can be assessed across lease, State, Federal, and other boundaries to produce more domestic oil and gas.
  • Benefits to regulatory agencies. Regulatory agencies are tasked with continuing to meet environmental protection goals in the face of stagnating funding and escalating real costs for the resources to operate these programs. Although it is the best means of ensuring compliance, onsite inspection is also the most expensive component of the agencies’ underground injection control (UIC) and mines inspection programs. The Nebraska Oil and Gas Conservation Commission (NOGCC) is an example of an agency that received an annual Federal grant to implement its environmental regulatory program. The amount of this Environmental Protection Agency grant was $100,000 in 1986, but it decreased to $90,000 in 2006. The problem is that, in 2006, the cost of those same goods and services was $203,313. The fiscal mandate to cut the cost of pollution prevention without sacrificing services is in stark contrast to the reality that 99 percent of the drinking water in Nebraska comes from ground water. RBDMS allows agencies to provide the same level of environmental protection at reduced cost. The RBDMS e-commerce initiative and CERA strategy of interagency data-sharing has made it possible for agencies to refocus inspection programs to target UIC inspections in source water protection areas. In Nebraska, this work by the GWPRF has slashed $40,000 per year from the oil and gas commission’s UIC budget as measured in vehicle mileage and inspector labor. The cost-effectiveness of the RBDMS e-commerce initiative is reflected in the fact that the Nebraska agency will recoup 100 percent of its investment in customizing the RBDMS Web interface within the first year of its use. With electronic data transfer and the automated data quality checks built into the RBDMS e-commerce applications, regulatory agencies and industry operators will reduce the costs associated with paper handling and storage and the need for staff to rekey information multiple times. Also, where agencies are having difficulties maintaining staffing levels or where skilled geologists and permitting analysts are in short supply, such automation of business rules and workflow is vital to maintaining service levels.
  • Benefits to all stakeholders. The increase in domestic oil and gas production that has been demonstrated to result from data automation lessens the country’s dependence on foreign oil and boosts tax revenues. As an example, with the number of permits issued at a 20-year high, the Kentucky oil and gas agency reported that the State realized an increase in severance taxes of about $8,000,000 as a result of the increase in prices at the wellhead. The agency estimated that oil and gas produced in the state rose by 10 percent in 2006. By automating the flow and quality control of data through the RBDMS e-commerce applications, regulators are able to speed the analysis needed to target those violations that pose the greatest risk to underground sources of drinking water. Well and mine inspection programs that are focused in this way afford greater environmental protection and make the best use of public funding. Additional documentation on how RBDMS saves money, helps to produce more oil and gas, and protects the environment can be found in the 2006 RBDMS Annual Report (www.GWPC.org).

Electronic permitting and reporting data flows.

Accomplishments 
The project eases information exchange between petroleum and mining operators and regulators through automation in the form of e-commerce applications. Examples include running ad hoc queries against regulatory databases over the Internet for research exploration and compliance tracking (data mining), filing and processing permit notices (ePermit) and production and injection reports (eReport) in both single-form and large-batch submittals, and tracking water quality data as it relates to fossil energy activities and prioritizing inspections according to environmental risk (RBDMS for Water).

Data mining is available in Utah, New Mexico, Colorado, Nebraska, Alaska, Montana, North Dakota, and New York. An updated version of data mining is available at http://www.nogcc.ne.gov/NOGCCOnlineGIS/. This incorporates GIS and “Google” style search technology with data access.

Electronic reporting of production and injection data is available in Utah, Nebraska, New York, Pennsylvania, and Montana and will soon be online in North Dakota.

Electronic permitting via single-submittal Web forms is now in development. Colorado, Alabama, Kentucky, and Alaska will pilot test this system. Batch transfer of files parsed against a WITSML-compliant XML schema will be pilot-tested in Colorado, California, and New Mexico.

RBDMS for Water has been installed in Ohio and Nebraska, with other agencies expressing interest.

Other cost-effective regulatory initiatives include the following:

  • RBDMS Water Quality Module
    GWPC is developing a water quality module for the RBDMS system of programs. This module will track and analyze water quality and quantity data for all fossil energy activities. Ohio is the pilot state and water quality data will be electronically imported and combined with a GIS format. The program will be displayed at the 2006 GWPC Annual Forum in Miami, Florida.
  • Targeted Primacy
    In January, 2006 representatives of GWPC met with Region 8 EPA staff in Denver, CO to discuss a draft Memorandum of Agreement (MOA) between EPA and the Montana Board of Oil and Gas Conservation (MBOGC) for the management of Class V UIC wells by MBOGC as they relate to produced water from coalbed natural gas production. GWPC is still working with EPA and the MBOGC Director Tom Richmond to develop a request for implementation of a strategy acceptable to EPA. Additionally, GWPC will work on a template for future MOA’s with a goal of obtaining a general approval from EPA Headquarters on the use of this mechanism for UIC program responsibility sharing.
  • Oil Shale
    In October 2006, Argonne National Laboratory published the paper commissioned by GWPC and entitled “Potential Ground Water and Surface Water Impacts from Oil Shale and Tar Sands Energy-Production Operations” The paper was also presented at the GWPC Annual Forum in October.
  • MIT Study
    The final MIT study report entitled “Report of Survey on MIT Failures” was published in October, 2006. The report was also added to the GWPC website e-Library. Follow-up work on data management issues related to Class II UIC reporting is being conducted for use by GWPC in future National UIC Database discussions. A follow-up discussion on USEPA plans for fall 2007 implementation of the National UIC database is scheduled for the GWPC Annual Forum in September, 2007 in San Diego. A NODE server designed and ordered and is expected to be installed in the offices of GWPC during the next quarter. The server will provide the hardware/software bridge to UIC reporting to the USEPA by the states.
  • Class II Peer Reviews
    A report entitled “Peer Review Kentucky Class II UIC Program” was published in September, 2006. Fifty copies of the report were delivered to the Kentucky Division of Oil and Gas Conservation for their use in attempting to acquire primacy for the Class II UIC Program from USEPA. An additional four hundred and fifty copies were printed and are being distributed at GWPC meeting and conferences and upon request. In addition, the report was posted to the GWPC website e-Library. As a result of this report, Kentucky has decided to pursue a delegation for the Class II UIC program from USEPA. GWPC will assist the state with this effort by providing application review and comment and, as needed, direct discussion with the regional EPA office in Atlanta.
  • CO2 Geosequestration
    In early 2007 GWPC facilitated the submission of comments on the USEPA draft Guidance #83 regarding the DOE Phase II projects. This resulted in a number of modifications to the initial draft including a clearer representation of the difference between CO2 EOR projects and other geosequestration. During the second quarter of 2007 GWPC began development of a regulatory framework project designed to facilitate the appropriate and reasonable regulation of geosequestration. Additionally, member state agency and GWPC staff attended the DOE/ NETL Carbon Conference in Pittsburgh in May, 2007 and discussed the issue of regulatory management of geosequestration with DOE staff and regional partnerships. During the previous quarter GWPC commissioned Argonne National Laboratory to conduct a review of state needs for regulation of geosequestration. A final report on this issue was published during the quarter and is listed below.

The GWPC UIC Meeting was held in San Antonio, TX January 26-29, 2009. The UIC Conference provided an opportunity for representatives from a wide range of government entities, as well as industry and public representatives, to explore and better understand issues and regulations regarding underground injection.

RBDMS Classic is being installed in Illinois in conjunction with an EPA UIC database project. Montana is ready to submit data to the national UIC database. Nebraska, North Dakota, and Utah RBDMS systems are being mapped to the national UIC database. The RBDMS Entity Bond Module was installed in Oklahoma. The fourth iteration of RBDMS has been released in Mississippi while a needs assessment is being performed for RBDMS in Pennsylvania. RBDMS Annual Training was held on May 3-6, 2009 in Sarasota, FL.

Current Status (January 2010)
On September 13-16, 2009, in Salt Lake City, the Ground Water Protection Council and the US Department of Energy were joined by 26 water, power, and energy organizations as partners for the Water/Energy Sustainability Symposium: Water & Energy Policy in the 21st Century. The Symposium was dedicated to understanding water-energy inter-relationships and the science, technology, and policy that are needed for integrated water-energy planning and sustainability. There were 310 total participants at the Symposium with 124 presenters. The full agenda, abstracts as well as the majority of the power point presentations are located at the GWPC web site at www.gwpc.org/meetings/proceedings.htm

A Primer of Modern Shale Gas Development has been released. “Modern Shale Gas Development in the United States: A Primer.” [PDF-5.11MB] provides regulators, policy makers, and the public with an objective source of information on the technology advances and challenges that accompany deep shale gas development and describes the importance of shale gas in meeting the future energy needs of the United States. Protecting and conserving water resources is an important aspect of producing shale gas, and this effort was championed by the Ground Water Protection Council through a cooperative agreement with NETL.

A final version of the report entitled "State Oil and Natural Gas Regulations Designed to Protect Water Resources Report" prepared by the Ground Water Protection Council is published on http://www.gwpc.org [external site]. The report provides an assessment of state oil and gas regulations in order to provide insight into measures that have been designed to protect water resources. The report includes an addendum of regulations from 31 states that represent 99.9% of the national oil and natural gas production.

The project ended on September 11, 2009. A final report has been submitted.

Project Start: September 1, 2004 
Project End: September 11, 2009

Anticipated DOE Contribution: $4,534,688
Performer Contribution: $2,297,542 (34% of total)

Other Government Organizations Involved: State oil and gas commissions, BLM, and EPA.

Contact Information 
NETL – Sandra McSurdy (sandra.mcsurdy@netl.doe.gov or 412-386-4533)
GWPR - Mike Paque (mike@gwpc.org or 405-516-4972)

Additional Information

Final Project Report [PDF-3.13MB]

Modern Shale Gas Development in the United States: A Primer.” [PDF-5.11MB]

Version 1.0 of the well lifecycle regulatory reporting schema:
http://www.rbdmsonline.org/XML/batch_regReporting.xsd [external site]

RBDMS Annual Reports. Published each year starting in 1999. http://www.gwpc.org [external site].

Publications 
Belieu, Stan, Scott Kell, Paul Jehn, David Lowther, and Deborah Gillespie, “Using Risk-Based Analysis to Identify Inspection Priorities,” Society of Petroleum Engineers, SPE-106753-PP, paper presented at the 2007 SPE E&P Environmental and Safety Conference, Galveston, TX, March 2007.

Belieu, Stan, “Prioritizing Class II Inspections in Source Water Areas Using GIS and RBDMS,” presented at the GWPC Annual Forum. Miami, FL, September 30-October 5, 2006.

Belieu, S.D., P.J. Jehn, and M.F. Bohrer, SPE 94371, “Increased Access to Federal Lands Through Data Sharing,” March 2005.

Ground Water Protection Council, RBDMS eCommerce Initiative: Encouraging Domestic Oil and Gas Production While Helping to Protect the Environment, Annual Report, July 2006.

Ground Water Protection Council, The Effects of the RBDMS/e-Commerce Initiative on Domestic Oil and Gas Production and Water Resource Protection, Annual Report 2005, www.GWPC.org.

Ground Water Protection Council, “Technical Achievements of Five DOE Grant Initiatives,” 2005, www.GWPC.org.

Ground Water Protection Council, “E-Commerce Application Development and Support Needs: Practical Considerations and Challenges for Regulators and Industry,” white paper, April 2004, www.GWPC.org.

Jehn, Paul, Scott Kell, Tom Gillespie, and Dave Lowther, “Source Water Protection and the Energy Nexus,” International Petroleum Environmental Conference, San Antonio, TX, October 2006.

Jehn, Paul, Thom Kerr, Jim Milne, Bob Johnson, “Increasing Access to Federal Lands in Western States Through Data Sharing,” International Petroleum Environmental Conference, San Antonio, TX, October 2006.

Kell, Scott, Tom Gillespie, and Dave Lowther, “The Ohio Water Quality Module for Tracking Compliance Related Monitoring Data,” presented at the GWPC Annual Forum. Miami, FL, September 30-October 5, 2006.

Version 1.0 of the well lifecycle regulatory reporting schema: http://www.rbdmsonline.org/XML/batch_regReporting.xsd

Companies e-reporting in New York and Pennsylvania.

Agency permit processing time since RBDMS started up in Alaska.

 
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