Strategic Decision-Making for Water 

Management Applied to Unconventional Gas 

Fifth Shale Gas Water Management – Marcellus Initiative 2012 
Strategic Decision Making Tools 

 Water use and disposal is key to 

efficiently developing unconventional 

resources 

 Disposal options often limited and 

expensive 

 Need to consider cost, impact on 

production, and sustainability 

 How do I make the right decision? 

 Tools to help you along the way 

 Decision Tree Tool 

 Multi-Attribute Utility Theory 

(MAUT) 

 Dynamic Simulation 

 Sustainability Evaluation 

March 27, 2012 2 
Decision Tree Tool 

 Provides high level guidance through 

a series of decisions 

 Directs users to detailed corporate 

documents and regulations 

 Covers wide range of production 

 Oil or gas, onshore or offshore, 

conventional or unconventional 

 Can be utilized for water disposal- or 

supply-constrained regions 

 Includes source options, disposal 

methods and treatment technologies 

 Developed in Microsoft PowerPoint 

March 27, 2012 3 
Decision Tree Considerations 

 What are my licensing 

requirements? 

 What are my regulatory 

requirements? 

 What are my main disposal 

options? 

 What other disposal options 

might I have? 

 Do I have to treat? 

 What do I have to treat? 

 How do I treat it? 

March 27, 2012 4 
How the Tool Works 

 Need for a tool to step through the 

process and facilitate gathering of the 

required resources to allow for 

informed decision making 

 Some generic tools available 

 Limitations 

 Country/region specific 

 Production type specific 

 Do not capture corporate 

requirements 

 In some cases this may be okay 

 But – project/company specific tool 

may provide advantages in 

streamlined project development 

March 27, 2012 5 
Decision Tree 

Select 

Production 

Source 

Water 

Produced 

Water 

Treatment 

Technologies 

Guidance 

Documents 
Multi-Attribute Utility Analysis 

 MAU models score, evaluate, and compare possible alternatives 

 Offers a quantifiable method for choosing options 

 Assists in decision making involving complex issues 

 Answers the question “What is the Best Choice”? 

 Engages various decision makers 

 Allows you to explore the consequences of various choices in a way that 

is easy to see 

 Can be developed in spreadsheet format (e.g. Excel) 

 Changes to scoring criteria and weighting factors can easily be made, 

adjusting results instantly 

 Makes it clear to everyone involved the evaluation basis for the 

alternatives 

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How does a MAU Analysis Work? 

 Assigns numerical scoring criteria 

 Assigns weighting values of those criteria 

 Combines criteria scoring and weighting values to assign a numerical 

value for various alternatives or options 

 Incorporates input from multiple decision makers 

 Based on the assumption that the apparent desirability of a particular 

alternative is based on how its attributes are viewed. 

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Step 1 – Identify Options to be Evaluated 

 Flowback and Produced Water Management 

 Deliver to POTW 

 Transport to Centralized Wastewater Treatment Facility 

 Deep Well Injection 

 Reuse for Hydraulic Fracturing 

 Other Beneficial Reuse 

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Step 2 – Identify Attributes/Criteria 

March 28, 2012 10 

1 2 3

CRITERION OVERALL PREMISE

FLOWBACK AND PRODUCED WATER MANAGEMENT SCORING DEFINITION

Criterion 1: Physical Supply

Criterion 2: Regulatory Requirements

Criterion 3: Schedule

Criterion 4: Impacts

Criterion 5: Cost
Step 3 – Define Criterion 

March 28, 2012 11 

1 2 3

1A - Proximity to Site

Proximityof the end

use/disposal site to the

wellhead/wellfield

Reuse or disposal occurs

>100 miles from the

wellhead/wellfield

Reuse or disposal occurs

within 100 miles of the

wellhead/wellfield

Reuse occurs on-site

1B - Capacity/Volume

Abilityto accept discharge

volume

There are capacity

limitations that require a

second option for reuse or

disposal

There are some capacity

limitations that can be

managed with appropriate

planning

There are no capacity

limitations for reuse or

disposal activity

1C -

Transportation/Infrastructure

Transportation or

infrastructure required to

deliver the supplyto the end

use/disposal site

Infrastructure will be

required to convey

wastewater/transport of

wastewater is expected to

be >100 miles from the

site

Infrastructure needed to

conveywastewater is in

place/transport of

wastewater is limited to

within 100 miles of the

site.

No transportation of

wastewater is required, or

infrastructure is alreadyin

place at the site.

CRITERION OVERALL PREMISE

Criterion 1: Physical Supply
Step 4 – Establish Weighting Criteria 

4 = Corporate water management requirement 

3= Suggested Water Management Criteria 

2 = Future Water Resource Management Goal - Not a factor 

at this time 

1 = Not considered a factor in water management planning 

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Step 5 – Weight Criterion 

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1A - Proximity to Site

Proximity of the end

use/disposal site to the

wellhead/wellfield

1B - Capacity/Volume

Ability to accept discharge

volume

1C -

Transportation/Infrast

ructure

Transportation or

infrastructure required to

deliver the supply to the end

use/disposal site

1D - Operation of

tanks/storage

facilities

Reletive degree of

operational challenges

1E - Water Quality

General quality of the water

resource which could affect

reuse and disposal

1F - Seasonality

Seasonal fluctuations or

climate conditions that may

impact the end use/disposal

option

Criterion 1: Physical Supply

CRITERION OVERALL PREMISE WEIGHTING FACTOR

(1-4)
Step 6 – Rank Options 

March 28, 2012 14 

RawScore Weighted Score RawScore Weighted Score RawScore Weighted Score

2 4 1 2 3 6 2 4

1A-Proximityto

Site

Proximityofthe end

use/disposalsite to

the

wellhead/wellfield

2 2 4 1 2 3 6 2 4

1B - Capacity/Volume Abilityto accept discharge

volume

0 0 0 0

1C -

Transportation/Infrast

ructure

Transportation or

infrastructure required to

deliver the supplyto the end

use/disposalsite

0 0 0 0

1D - Operationof

tanks/storage

facilities

Reletive degree of

operationalchalenges

0 0 0 0

1E-WaterQuality

Generalqualityof the water

resource which could affect

reuse and disposal

0 0 0 0

1F-Seasonality

Seasonalfluctuations or

climate conditions that may

impact the end use/disposal

option

0 0 0 0

Criterion 1: PhysicalSupply

CRITERION

OVERALLPREMISE

WEIGHTING FACTOR

(1-4) Transport toCentralizedWastewater

Treatment Facility

DeepWell Injection On-Site Reuse with Treatment OtherBeneficial Reuse

CRITERION 

` OVERALL PREMISE 

1 2 3 

1A - Proximity to Site Proximity of the end use/disposal site to the 

wellhead/wellfield

Reuse or disposal occurs >100 miles 

from the wellhead/wellfield

Reuse or disposal occurs within 100 

miles of the wellhead/wellfield Reuse occurs on-site 
 Simulation Tools 

 Spreadsheets 

 Discrete (static) simulation 

 Dynamic simulation 

 Dynamic Simulation 

A process of creating a model of 

an existing or proposed system 

in order to identify and 

understand those factors that 

control the system and/or to 

predict (forecast) the future 

behavior of the system. 

Our knowledge of the way 

things work, in society or 

nature, comes trailing 

clouds of vagueness. Vast 

ills have followed a belief 

in certainty. 

Kenneth Arrow 

Nobel Laureate, 

Economics, 1972 

Simulation Tools 

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Reasons to use Dynamic Simulation 

 Water resources and hydrological 

modeling projects involve simulating 

systems made up of many component 

parts that are interrelated, and in some 

cases, poorly characterized 

 The hydrological system is driven by 

stochastic variables (i.e., production, 

precipitation, evaporation, demand) 

and involves uncertain processes, 

parameters, and events 

 Simulation tools allow these 

characteristics to be explicitly 

represented in a model 

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Reasons to use Dynamic Simulation 

 Predicting the future state of the system 

 Dynamic models are used for 

exploration, communication, and analysis 

 Useful for the decision-making process 

where conflict resolution, negotiation, 

and dialogue are key 

 The increasing demand for water and the 

complexity of evaluating water 

management schemes has also made it 

more difficult to plan for the future 

 Simulation models are a powerful tool for 

analyzing different options and 

understanding the long-term implications 

of management decisions 

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Strategic Planning and Forecasting 

March 28, 2012 18 

 Dynamic Simulation can track 

any parameters of interest – 

long term events and discrete 

events 

 Parameters can be easily 

adjusted 

 Can calculate costs for any 

defined area 

 Can produce graphical 

simulations for future strategic 

planning for any selected 

timeframe 0

1.0e04

2.0e04

3.0e04

4.0e04

5.0e04

6.0e04

2015 2016 2017 2018 2019

(gal/day)

Time

Total_Production
Why Evaluating Sustainability is Critical 

How to manage the pressure? 

ORGANIZATION 

Rising Stakeholder Concerns 

Growing 

Complexity of 

Sustainability/ 

Non Technical 

Risk Issues 

Multiplication 

of Principles, 

Indicators, 

Guidelines, 

etc. 

Manage the Business Risk 

UN Global

Compact 

WBCSD 

Equator 

Principles 

FIDIC’s 

Guidelines 

for SD 
GoldSET Sustainability Evaluation Tool

Results & 

Interpretation Scoring

Indicator

Selection and 

Weighting

Project Objective 

Option 

Development 

 Environmental, Social, and Financial considerations 

 Additional Dimensions i.e. Technical 

 Easy to understand and communicate (visual) 

 Defensible to all stakeholders: shareholders, employees, 

community, regulators, NGOs, etc 

 Both quantitative and qualitative 

 Specific to the organization & the project context 

20 
 GoldSET has 5 Main Components: 

 Project Description: Comprehensive project and option description

 Indicator Identification: Development of goals, identification of 

indicators to be used to measure the impacts of the project (related to the 

three elements of sustainability – Environment, Social and Economic) and 

scoring approach to be used

 Use of Quantitative Indicators: Certain indicators are quantitative and 

are used to provide a more realistic, robust comparative analysis

 Scoring of Options against Indicators: Evaluation of each option 

against each indicator and weighting of each indicator according to 

stakeholder perception 

 Analysis of Results: Interpret results to establish most appropriate 

option

GoldSET Model Components
Results & Interpretation 

22 

Results & Scoring Interpretation 

Indicator Selection and 

Weighting

Project Description 

Option Development 

Identifies option which optimizes environmental, social and 

economic aspects 

Identifies option which is technically feasible 

Transparent and visual – efficient reporting – better informed 

decisions 
Conclusions 

 Consider alternate disposal and reuse 

options 

 Evaluate social, environmental and 

economic impacts of each option 

 Demonstrate that you are making a 

strategic decision 

 Decision Tree for detailed regulatory 

evaluation 

 MAU for multiple stakeholder input 

 Dynamic simulation for complex 

technical situations 

 Triple bottom line evaluation to 

quantify stakeholder concerns 

Industrial Reuse Hydrofracturing 

Deep Well Injection Local municipality 

Agricultural Use 

March 27, 2012 23 
Questions? 

March 27, 2012 24