# 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

2 March 27, 2012

# 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

3 March 27, 2012

# 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

5 March 27, 2012

# 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

7 March 27, 2012

# 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.

8 March 27, 2012

# 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

March 28, 2012 9

# Step 2 – Identify Attributes/Criteria

March 28, 2012 10 1 2 3 C R I T E R I O N O V E R A L L P R E M I S E F L O W B A C K A N D P R O D U C E D W A

T E R M A

N A G E M E N T S C O R I N G D E F I N I T I O N

C r i t e r i o n 1 : P h y s i c a l S u p p l y C r i t e r i o n 2 : R e g u l a t o r y R e q u i r e m e n t s C r i t e r i o n 3 : S c h e d u l e C r i t e r i o n 4 : I m p a c t s C r i t e r i o n 5 : C o s t

# Step 3 – Define Criterion

March 28, 2012 11 1 2 3

1 A

- P r o x i m i t y t o S i t e P r o

x

i m i t y o f t h e e n d

u s e / d i s p o s a l s i t e t o t h e

w

e l l h e a d / w

e l l

f i e l d R e u s e o r d i s p o s a l o c c u r s

> 1 0 0 m i l e s f r o m t h e

w

e l l h e a d / w

e l l

f i e l d R e u s e o r d i s p o s a l o c c u r s

w

i t h i n 1 0 0 m i l e s o f t h e

w

e l l h e a d / w

e l l

f i e l d R e u s e o c c u r s o n

- s i t e

1 B

- C a p a c i t y

/ V

o l u m e A b i l i t y t o a c c e p t d i s c h a r g e

v

o l u m e T h e r e a r e c a p a c i t y l i m i t a t i o n s t h a t r e q u i r e a

s e c o n d o p t i o n f o r r e u s e o r d i s p o s a l T h e r e a r e s o m e c a p a c i t y l i m i t a t i o n s t h a t c a n b e

m a n a g e d w i t h a p p r o p r i a t e p l a n n i n g T h e r e a r e n o c a p a c i t y l i m i t a t i o n s f o r r e u s e o r d i s p o s a l a c t i v i t

y

1 C

- T r a n s p o r t a

t i o n / I n f r a s t r u c t u r e T r a n s p o r t a t i o n o r i n f r a s t r u c t u r e r e q u i r e d t o d e l i v e r t h e s u p p l y t o t h e e n d

u s e / d i s p o s a l s i t e I n f r a s t r u c t u r e w i l l b e

r e q u i r e d t o c o n v e y

w

a s t e w

a t e r / t r

a n s p o r t o f

w

a s t e w

a t e r i s e x

p e c t e d t o b e > 1 0 0 m i l e s f r o m t h e

s i t e I n f r a s t r u c t u r e n e e d e d t o

c o n v e y w a s t e w

a t e r i s i n p l a c e / t r

a n s p o r t o f

w

a s t e w

a t e r i s l i m i t e d t o

w

i t h i n 1 0 0 m i l e s o f t h e

s i t e

. N o t r a n s p o r t a t i o n o f

w

a s t e w

a t e r i s r e q u i r e d

, o r i n f r a s t r u c t u r e i s a l r e a d y i n p l a c e a t t h e s i t e

. C R I T E R I O N O V E R A L L P R E M I S E

C r i t e r i o n 1 : P h y s i c a l S u p p l y

# 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

March 28, 2012 12

# Step 5 – Weight Criterion

March 28, 2012 13 1 A

- P r o x i m i t y t o S i t e P r o x i m i t y o f t h e e n d

u s e / d i s p o s a l s i t e t o t h e

w e l l h e a d / w e l l f i e l d

1 B

- C a p a c i t y /

V o l u m e A b i l i t y t o a c c e p t d i s c h a r g e

v

o l u m e

1 C

- T r a n s p o r t a t i o n / I n f r a s t

r u c t u r e T r a n s p o r t a t i o n o r i n f r a s t r u c t u r e r e q u i r e d t o d e l i v e r t h e s u p p l y t o t h e e n d

u s e / d i s p o s a l s i t e 1 D

- O p e r a t i o n o f
t a n k s / s t o r a g e f a c i l i t i e s R e l e t i v e d e g r e e o f

o p e r a t i o n a l c h a l l e n g e s

1 E

- W a t e r Q u a l i t y G e n e r a l q u a l i t y o f t h e w a t e r

r e s o u r c e w h i c h c o u l d a f f e c t

r e u s e a n d d i s p o s a l

1 F

- S e a s o n a l i t y S e a s o n a l f l u c t u a t i o n s o r

c l i m a t e c o n d i t i o n s t h a t m a y i m p a c t t h e e n d u s e / d i s p o s a l

o p t i o n 

## C r i t e r i o n 1 : P h y s i c a l S u p p l y C R I T E R I O N O V E R A L L P R E M I S E W E I G H T I N G F A C T O R ( 1

- 4 )

# Step 6 – Rank Options

March 28, 2012 14 R a w S

c o r

e W e i g h t e d S c o r

e R a w S

c o r

e W e i g h t e d S c o r

e R a w S

c o r

e W e i g h t e d S c o r

e 

### 2 4 1 2 3 6 2 4

1 A

- P r o x i m i t y t

o S i t

e P r o x i m i t y o f t h e e n d

u s e / d i s p o s a l s i t e t

o t h e

w

e l l h e a d / w

e l l f

i e l d 2 2 4 1 2 3 6 2 4

1 B

- C a p a c i t

y / V o l u m

e A b i l

i t y t o a c c e p t d i s c h a r g e

v o l u m e 0 0 0 0

1 C

- T r a n

s p

o r t a t i o

n / I n

f r a s t

r u c

t u r

e T r a n s p o r t a t i o n o r i n f r

a s t r

u c t u r e r

e q u i r e d t o d e l

i v e r t h e s u p p l y t o t h e e n d

u s e

/ d i s p o s a l s i t e 0 0 0 0

1 D

- O p e r

a t i o

n o

f t a n k

s / s t

o r a g

e f a c i l i t i e s R e l e t i v

e d e g r e e o f

o p e r a t i o n a l c h a l e n g e s 0 0 0 0

1 E

- W a t e r Q u a l i t

y G e n e r a l q u a l i t y o

f t h e w a t e r

r e s o u r c e w h i c h c o u l d a

f f e c t

r e u s e a n d d i s p o s a l 0 0 0 0

1 F

- S e a s o n a l i t

y S e a s o n a l f l u c t u a t i o n s o r

c l i m a t e c o n d i t i o n s t h a t m a y i m p a c t t h e e n d u s e / d i s p o s a l

o p t i o n 0 0 0 0 

### C

r i t

e r i o n 1 : P h y s i c a l S u p p l y C R I T E R I O N O V E R A

L L P

R E

M I S

E W E I G H T I N G F A C T

O R ( 1

-

4) T r a n

s p

o r t t

o C e n t r a l i z e d W a s t

e w a

t e r T r e a

t m

e n

t F

a c i l i t y D e e p W e l l I n j e c

t i o

n O th e r B e n e f i c i a l R e u s e O n

- S i t

e R e u s e w

i t h T

r e a t

m

e n

t

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

March 27, 2012 15

# 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

16 March 27, 2012

# 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

17 March 27, 2012

# 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 timefram e 0 1

. 0 e 0 4 2

. 0 e 0 4 3

. 0 e 0 4 4

. 0 e 0 4 5

. 0 e 0 4 6

. 0 e 0 4

2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9(gal/day)



### T i m e T

o t a l

_ P r o d u c t i o n

# 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 & Interpretation Scoring 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