Patina Oil & Gas Corporation Integrated E&P Waste Management Facility in Colorado
John Nussbaumer & Kenneth A. Wonstolen
Patina Oil & Gas Corporation
Patina Oil & Gas Corporation ("Patina") operates an integrated exploration and production ("E&P") waste management facility ("the facility") in Weld County, Colorado. Patina operates approximately 3000 wells in Weld, Adams and Boulder Counties, all part of the "Greater Wattenberg" Field of the Denver-Julesburg Basin. This facility allows Patina to manage and control all of its E&P waste streams, except for produced water (which is disposed in Class II underground injection wells).
The facility was designed to allow bioremediation of soil contaminated by oil spills through "landfarming". In addition, the facility has a sludge treatment capability whereby oily drilling muds, tank bottoms and other sludges can be separated into salable product, clear water and residual solids. The water from this process is evaporated in a "special purpose pit" using a simple sprayer system, while the solids are incorporated into the landfarm for bioremediation.
There were two primary reasons for the construction of this facility. First, disposal of E&P wastes at commercial facilities can be costly. Patina's cost for disposing oily soils at a solid waste landfill were $9.00 per cubic yard. In addition, one of the commercial facilities authorized to receive such waste was limited to soil with no more than 10,000 ppm (1%)of hydrocarbons. This level of contamination is the clean-up standard under Colorado Oil and Gas Conservation Commission ("COGCC") standards applicable to "non-sensitive areas".
Equally important were liability considerations. This is especially true with regard to disposal of tank bottoms and other sludges which cannot be brought to landfills or injected into UIC Class II wells. The only cost-effective alternative for such sludges was disposal at large commercial evaporation ponds. These facilities tend to be under-capitalized and operated "on-the-cheap". One such pond, Weld County Waste Disposal is currently undergoing site investigation and remediation under EPA supervision, having been determined to represent an "imminent and substantial endangerment" to the environment under the Resource Conservation & Recovery Act (RCRA Sec. 7003). The immediate cause for this determination was the failure of the operator to keep the pond surface clear of oily scum, which led to the death of several great blue herons. Once the facility was brought under RCRA (the E&P waste exemption is not applicable to Sec. 7003 actions), EPA mandated a full site investigation, including groundwater. This investigation and the related remediation is expected to cost oil and gas operators which "contributed" waste to the facility some $3 million (the site operator has declared insolvency).
Such an outcome, which should be expected to become more common, demonstrates the value to operators associated with controlling their own waste streams and ensuring proper waste management. In combination, the cost-savings available from landfarming, the recovery of salable product and reusable soil, and the reduced exposure to third party liability make the case for an operator-owned integrated waste management facility compelling.