Update on EPA’s Clean Water Act Revie

Coalbed Methane (CBM) Extraction S

International Petroleum & Biofuels

Environmental Conference (Houston, T

5 November 2009
5 November 2009 IPEC16 (Houston, TX) 

• Provide background on EPA’s Detailed Stud

the coalbed methane (CBM) extraction secto

– Overview of Clean Water Act (CWA), effluent guid

and effluent guidelines planning

– Overview of scope and schedule for CBM Detaile

• Provide update on current data 

gathering activities including ongoing survey of CBM operators.

P

Presentation Overview
5 November 2009 IPEC16 (Houston, TX) 

• The major environmental law governing surface water disc

Clean Water Act (CWA).

• Goals of the Clean Water Act are:

- Restore and maintain the chemical, physical and biological int

Nation's waters for the protection and propagation of fish, sheand provides for protection of human health and recreation in (e.g., fishing, swimming, boating); and

- Zero discharge of pollutants to navigable (surface) waters.

• EPA and States implement the CWA 

through publication of regulations and discharge permits for point sources of wastewater pollution.

• Any discharge to the surface waters must 

comply with the more stringent of technology-based and water-quality based effluent limits.

CBM 

EPA Regulation of Discharges to Surface Wa
5 November 2009 IPEC16 (Houston, TX) 

Technology-Based Approach• Effluent limitation guidelines (ELG) 

(national standards)

• Best professional judgment (BPJ) 

(site specific)

Water Qu

Approa

• EPA and 

water qu

– Desig

to proAnti-d

NPDES permits should be renewed ever

Set Standards

Implement 

Permit

• Issue individual permit for a single facility or a gene

group of similar facilities across a geographic area

• Permits must include the most stringent requireme

quality and/or technology-based approach.

• Ensure permits limits are met through compliance 

inspections, audits, environmental studies, and re

monitoring reports.

EPA Regulation of Discharges to Surface Wa
5 November 2009 IPEC16 (Houston, TX) 

• EPA establishes effluent limitations guidelines (ELGs) for categori• These ELGs are based on technologies that are available and eco

for the industrial sector.

• There are ELGs for 56 industrial categories (450 subcategories) c

60,000 direct and indirect dischargers.

• The ELGs for the oil and gas extraction industry are located in EP

regulations (40 CFR 435) and were issued in stages: 1979 (onsho1993 (offshore), 1996 (coastal), and synthetic-based drilling fluids 

• The Oil and Gas Extraction ELGs do not currently regulate polluta

CBM extraction operations.

– As required by EPA regulations, NPDES Permit writers used their ‘bes

to establish technology-based effluent limits. See 40 CFR 122.44(a)(1) 

– EPA considers CBM extraction a potential new subcategory of the Oil 

Category.

Technology-based Approach: Effluent Guide
5 November 2009 IPEC16 (Houston, TX) 

• The CWA requires EPA to annually review existing E

revise such regulations “if appropriate.”

• The 1987 Clean Water Act Amendments added Secti

which requires EPA to publish a plan every two years allowing for public comment. 

• In these biennial plans the Agency must announce its 

- Performing its annual reviews of existing ELGs, a

- Revising ELGs rulemakings initiated as a result o

annual reviews.

• More information at: http://www.epa.gov/guide/304m

Effluent Guidelines Planning
5 November 2009 IPEC16 (Houston, TX) 

• Rationale for Detailed Study: 

– Growing industry sector and potential impacts on 

the environment.

– Impacts to surface waters from discharge of 

CBM produced water can depend on the quantity and quality of the CBM produced water. 

• Objectives and Scope of the Detailed Study: 

– Evaluate availability and affordability of technology 

options for CBM produced water discharges in the current and future CBM basins. 

– Evaluate potential environmental issues associated

with the discharge of CBM produced water.

304(m) Detailed Study: Coalbed Methane Ext
5 November 2009 IPEC16 (Houston, TX) 

Note: Alaska also has CBM reserves

CBM Detailed Study: National in Scope
5 November 2009 IPEC16 (Houston, TX) 

• EPA’s CBM Detailed Study is national in scope. However, EPA w

basin separately to identify potential pollutant discharges and tech

• Produced water volumes can vary greatly over time, between and 

basins, and may be very large.

– Production volumes range from 1,000 to 17,000 gal/day/well in the Sa

River Basins, respectively.

• Pollutants in CBM produced water also vary between basins. For 

dissolved solids (TDS) vary widely depending on basin geology.

– Eastern U.S.: TDS concentrations typically range from 500 to 27,000 

wells over 50,000 mg/L.

– Western U.S.: TDS concentrations range from 400 to 2,000 mg/L (Po

9,000 to 11,000 mg/L (Wind River), to approximately 50,000 mg/L (Sa

• CBM produced water may also contain small amounts of metals a

and semi-volatile organic compounds. EPA is also reviewing USGsodium bicarbonate aquatic toxicity. 

CBM Detailed Study: Basin Specific
5 November 2009 IPEC16 (Houston, TX) 

Source: USGS Open-File Report 00-372pubs.usgs.gov/of/2000/ofr-00-372/OF00-372.pdf 

Example of CBM Produced Water Chemistry Changing with Geographic Location: Powder River Basin (MT/WY)
5 November 2009 IPEC16 (Houston, TX) 

Source: Handbook on Coal Bed Methane Produced Water: Management and 

Use Alternatives, ALL Consulting, http://www.all-llc.com/CBM/BU/index.htm, J

This graph shows the increased production of water in the earCBM well.

Example of CBM Produced Water Discharge Changing with Time
5 November 2009 IPEC16 (Houston, TX) 

• Major Tasks for Data Collection and Analysis:

– Industry survey to collect technical, economic, and environme

range of CBM operations across the Nation.

– Site Visits & misc. secondary data sources (e.g., DOE/EIA da

– Stakeholder meetings in the major CBM basins.– EPA has contacted over 700 people in eight states in over 70 

collection activities since 2007. 

• Stakeholders: 

– So far: API, regional trade associations, individual companies

vendors, DOE, BuRec, BLM, States, Landowners, Indian Nat

• Schedule: 

– Approval from OMB to distribute the mandatory survey on 18 – First Phase (Screener Questionnaire) distributed to approxima

(that have three or more CBM wells) on February 27th. 

– Second Phase (Detailed Questionnaire) distributed to approxi

projects on October 30th. Operators have 60 days to respond 

– EPA will analyze the survey results and identify whether to ini

the final 2010 Effluent Guidelines Program Plan (October 201

CWA 304(m) Detailed Study: Coalbed Methan
5 November 2009 IPEC16 (Houston, TX) 

• Survey data will support EPA analyses that:

– Quantify levels of pollutants currently discharged by the i– Assess potential environmental impacts.– Determine availability of technologies to control pollutant – Identify water disposal practices and prevalence of each.– Evaluate economic achievability of the industry to incorpo

technologies and/or disposal and beneficial use practices

• Unit of interest is “project”

– Using State data (via HPDI.com) EPA estimated that ther

approximately 45,000 CBM wells, but no way to link the wProjects consist of 1 to many wells.

– EPA used the screener questionnaire to identify business 

number of projects for each operator, wells in each projecproduction and selected water management. 

– The detailed questionnaire was sent to statistical sample 

CWA 304(m) Detailed Study: Industry Survey
5 November 2009 IPEC16 (Houston, TX) 

EPA CBM Detailed Study: Screener Data Sum

• EPA compiled data from screener questionnaires and State d

operators managing three or more wells and 58 operators mawells (= 274 operators total).

• EPA identified that there were 56,049 CBM wells in 2008 tha

in 692 different CBM projects. 

• This CBM production, 2.0 trillion cubic feet, represents appro

of the total U.S. natural gas production in 2008. 

• The 692 CBM projects are located in 16 different CBM basins 

but are mainly concentrated in Wyoming, New Mexico, AlabaAppalachia. 

• CBM projects ranged from over 2,000 CBM wells to 1 CBM w

medium and large businesses have 28% of the projects (by n79% of the gas production.

• EPA used these data to draw a representative sample of CB

detailed questionnaire will collect financial and technical data 250 CBM methane projects across the country.
5 November 2009 IPEC16 (Houston, TX) 

Distribution of CBM Projects (Operator Size, Discharge 

Small Operator 

(Discharge)

15%

Not-Sm

(Dis

Not-Small Operator

(No Discharge)

15%

Small Operator

(No Discharge)

57%
5 November 2009 IPEC16 (Houston, TX) 

Distribution of CBM Gas Production (Operator Size, Dischar

Not-Sm

(Dis

Not-Small Operator

(No Discharge)

46%

Small Operator 

(No Discharge)

14%

Small Operator

(Discharge)

7%
5 November 2009 IPEC16 (Houston, TX) 

CWA 304(m) Detailed Study: Industry Survey

• EPA’s mailing list for the screener questionnaire was built o

data (via HPDI.com).

• EPA opted to include operators on the screener questionna

list if it was unclear about the type of gas production (convecoalbed methane).

• EPA spent considerable effort in tracking down contact info

smaller operators. 

• EPA used the updated contact information for its detailed q

mailing list.
5 November 2009 IPEC16 (Houston, TX) 

EPA CBM Detailed Study: Screener Data Sum

Overall operators identified more CBM wells in their responsscreener questionnaire (2008 data) than what EPA identified data (via HPDI.com) (2007 data). 

Screener database numbers rounded to two significant figures
5 November 2009 IPEC16 (Houston, TX) 

EPA CBM Detailed Study: Screener Data Sum

Overall operators identified more gas production (MMcf) in tto the screener questionnaire (2008 data) than what EPA idState data (via HPDI.com) (2007 data). 

Screener database numbers rounded to two significant figures
5 November 2009 IPEC16 (Houston, TX) 

EPA CBM Detailed Study: Screener Data Sum

Produced Water Management Method for Selected 

(Percentage of Reported CBM Projects)
5 November 2009 IPEC16 (Houston, TX) 

EPA CBM Detailed Study: Screener Data Sum

Produced Water Management Method for Selected 

(Percentage of Reported CBM Production)
5 November 2009 IPEC16 (Houston, TX) 

• Stratification variables for selecting detailed questionnair

include:

– Basin: Geological and regional differences

+ Collapsed small basins within state+ Split Powder River Basin into Montana, Wyoming

– Business size: Small business impacts– Discharge practices within two basins:

+ Powder River Basin in Wyoming+ Appalachian+ Most other basin tend to have one main method for pro

management (discharge or zero discharge).

• In the final design of the survey draw EPA focused on ba

dischargers.

• EPA also excluded basins from the draw that could not b

model potential future CBM basins and were entirely comdischargers.

CWA 304(m) Detailed Study: Industry Survey
5 November 2009 IPEC16 (Houston, TX) 

CWA 304(m) Detailed Study: Industry Survey

• EPA used pie charts in evaluating the potential burden of t

questionnaire on operators (in terms of number of projects production).

• For example, the following charts show the distribution of s

businesses that discharge produced water in the Powder RWyoming:- One operator had 48 of the 85 projects.- Two operators contributed 50% of the gas.

% projects/operator: %gas/operator:
5 November 2009 IPEC16 (Houston, TX) 

CWA 304(m) Detailed Study: Industry Survey

The detailed questionnaire will capture different configurations water management for the selected CBM projects. 

EPA is also using the detailed questionnaire to identiand OPEX, management of treatment residuals, and 

water characteristics (volume and pollutant concentra
5 November 2009 IPEC16 (Houston, TX) 

CWA 304(m) Detailed Study: Industry Survey

EPA will use the different configurations of produced water mato identify the current industry practices and evaluate alternativmanagement options. 

Example Diagram
5 November 2009 IPEC16 (Houston, TX) 

CWA 304(m) Detailed Study: Industry Survey

EPA will use the survey weights to estimate incremental complfor alternative management options. 

Example Diagram
5 November 2009 IPEC16 (Houston, TX) 

• CBM produced water of a suitable 

quality can be used for beneficial use. Key controls are TDS and Sodium Adsorption Ratio (SAR).

– Beneficial use technologies include 

sub-drip irrigation, irrigation, livestock watering all either with or without treatment.

Irrigation with CBM Produced Wat

• Treatment options inclu

(aeration), coagulation/osmosis (RO), counter(CCIX), fixed bed ion eprecipitation, surface imdownhole separation, a

– Reduces TDS, SAR, – Iron oxidation is typic

discharge locations adiscoloration of disch

CCIX resin contract chamber 

(Powder River Basin, WY)

Coalbed Methane Technology Options (Exam
5 November 2009 IPEC16 (Houston, TX) 

• EPA and WYDEQ staff visited ten 

different newer treatment technology sites in Wyoming (June 2009). 

• This recent trip supplements the five 

trips to eight States that EPA took in October 2007. In total EPA has visited over 30 CBM projects with varying forms of produced water management (e.g., re-injection, treatment and discharge, beneficial use). Trucked Produc

Coalbed Methane Technology Options (Exam

• Treatment systems recently visited by EPA include:

– Fixed Bed Ion Exchange (PRB, WY)– Fluidized Bed Ion Exchange (Pilot Scale) (PRB, WY)– Aeration and Upflow Mixed Media Filtration (PRB, WY)– Ozone and Activated Carbon Pretreatment with Reverse Osmos– Barium and SAR Removal via Chemical Precipitation (PRB, WY)– Commercial Facility Providing Organic and Inorganic Treatment – Thermal Distillation (Pinedale, WY)– Evaporation and Disposal Commercial Facility (Sublette County, 
5 November 2009 IPEC16 (Houston, TX) 

• EPA examines the costs of different technology options a

economic impacts. 

• These pollution control options could be costly, with mult

CBM projects and operators.

• EPA would like to address the following issues with respe

economic impacts of CBM produced water treatment cos

– Production losses– Firm failures– Employment impacts resulting from production losses and – Impacts on small businesses

• The magnitude of such impacts can be directly or indirec

production-level and firm-level economic and financial 

• These models require detailed economic and financial da

accurately reflect potential impacts.

EPA CBM Economic Analysis
5 November 2009 IPEC16 (Houston, TX) 

Project-specific

production volumes:

current & projected

Project-specifc costs

(operating &

maintenance, other):

current & projected

Project-specific costs

(investments) (new

projects only) Project-specific cash flow

model

Project-specific 

Discount rate

EPA estimates of

option costs

INPUTS 

Project-specific a

Project-specific a

Statistical weights

Project-specifi

Project-specific 

Project-specific a

Project-specific 

p

Baseline

conditions

Post-option

conditions

Project-Level Analysis

Project specific 

Firm-Level Analysis

Income statement

information

Balance sheet

information

Baseline

conditions

Post-option

conditions

Firm-level model

Firm-specific 

Lesser firm-spe

Em

Impacts on sm

Firm size information

EPA CBM Economic Analysis
5 November 2009 IPEC16 (Houston, TX) 

For more information on EPA’s study on CB

 More information is available on EPA’s website at:

– http://www.epa.gov/guide/cbm/.

 EPA project lead is Mr. Carey Johnston, 202-566-10

johnston.carey@epa.gov.

 FYI – there are other related studies underway on th

produced water management:

– National Research Council (BLM funding)

[http://www8.nationalacademies.org/cp/projectview.aspx?key=48996]

– Bureau of Reclamation (potential for re-use of CBM pr– Colorado School of Mines (DOE funding)