|Authors:||Duncan Kenyon, Nikki Way, Andrew Read, Barend Dronkers, Benjamin Israel, Binnu Jeyakumar, Nina Lothian|
|Publish Date:||October 2016|
|PDF Download:||[Landowners' Guide] [Landowners' Primer]|
|Pipelines and Other Infrastructure|
Oil and Gas Operational Impacts,
Conservation and Reclamation
|Abandonment and Reclamation|
|Compensation, Rights, and Hearings|
Well drilling generates large volumes of waste in the form of drilling mud, drill cuttings and flowback fluids, which require storage and disposal. Spills and leaks of drilling fluid, hydrocarbons or water produced during drilling operations must be carefully cleaned up, as required by the regulations, to minimize any contamination of soil and water.
Drilling mud is circulated down the drill pipe to cool the drill bit and maintain the desired pressure in the well. The mud is prepared and stored in tanks on or near the well site and circulated into the well bore as needed. The mud is then returned to the surface, carrying the drill cuttings with it. The mud may be a water-based clay mixture, but if there is a risk of encountering a water-sensitive subsurface rock formation, hydrocarbon-based muds are used. These hydrocarbon-based drilling muds have historically had a diesel fuel base. Mineral oil and canola oil are less toxic alternatives to diesel fuel but are typically more expensive and may have other operational challenges. Rock cuttings from the active drilling zone are normally separated from the drilling mud and collected in a pit (commonly referred to as a “sump”) or in large tanks. They ultimately form part of the drilling mud waste when the drilling project is complete.
The chemical composition of drilling muds varies, depending on the products that must be added to address the challenges at each well. Potentially toxic products include bactericides, emulsifiers, lubricants, shale control inhibitors and surfactants. Drilling muds may also become contaminated with hydrocarbons or salts that are brought to the surface from deep underground formations.
Drilling muds, flowback and wastewater associated with hydraulic fracturing activities may also contain higher concentrations of naturally occurring radioactive materials (NORM). This may include uranium, thorium, radium (and their decay products); potassium-40; and lead-210/polonium-210. As the name suggests, deposits of NORM occur naturally in different concentrations at different depths, depending on the underlying geology. Specifically, NORMs may be concentrated in shale or clay-rich layers, and therefore are often associated with unconventional oil and gas activities. These activities and the storage or transportation of these materials can increase concentrations of NORMs above their natural background levels, when they are called technologically enhanced natural occurring radioactive material (TENORM).
Reserve pits of hydraulic fracturing wastes present a potentially heightened risk of exposure, such as by animals drinking pit water, wind distributing dust particles onto nearby soil and crops, and waste water breaching the berms.
Current regulations allow a company to dispose of non-hydrocarbon-based drilling wastes on the lease site or access road, or to seek written permission to use public or private land in the area. As described in more detail below, landowners have the right to withhold their consent for many types of waste disposal methods, and have the ability to influence the management of waste on-site through their surface agreements and the negotiating process.
The AER sets out its requirements for drilling waste disposal in Directive 050: Drilling Waste Management. It specifies that the company must provide landowners with a copy of Information for Landowners on Consent for the Disposal, Treatment, or Storage of Drilling Wastes. The Directive identifies several management methods of drilling waste disposal:
These practices are described in the AER’s FAQs about Directive 050.
Drilling waste may contain heavy metals, sodium, chloride, hydrocarbons, nitrogen or TENORMs, which can degrade the quality of or be harmful to the soil. Contaminants may also be transported from the disposal location into ground and surface waters. Since these methods have the potential to pollute soils and surface waters, the AER Directive 050 specifies maximum loading or application rates (even nitrogen loadings should not be exceeded).
Companies are required to sample and test the wastes prior to disposal for all options. Drilling wastes are not treated prior to land application unless these tests indicate the presence of toxicants in the waste. If this testing identifies that hydrocarbons are a likely source of toxicity however, disposal may still proceed provided that all criteria for the chosen disposal method are met. Companies are also required to collect samples to assess the pre-soil conditions at the disposal site; in some cases, post-soil sampling is also required. Landowners should ask to see the laboratory results and review the disposal method criteria that the company must adhere to. If, during drilling, a company later adds new substances to the mud that change its chemistry, they will have to revise their disposal plan. However, they do not have to take into account any changes they may cause in the level of salts from the rock formations or produced water when disposal is underway.
Landowners have the right to withhold their consent for any disposal that goes beyond the well site or pipeline right-of-way boundaries for any landspray, landspray-while- drilling, or pump-off methods, or a remote site for storage, mix-bury-cover, landspread or biodegrade wastes. The company does not have to secure consent if the drilling waste will be managed on the site where it was created. Off-site waste disposal requires the approval of the landowner over and above the approval given for the well site itself, or of a nearby landowner who consents to the disposal process on their land. This approval should be in writing and attached to the surface lease or right-of-entry agreement, from which it should remain a separate agreement.
As a landowner, before giving permission for any drilling mud to be spread on your land, you should ask what type of drilling mud is being used and the level of compensation offered. If you agree to disposal on your land, ask to receive copies of the lab work on the mud sampling and the pre-disposal soil conditions, so you can ensure that the mud meets the criteria and the baseline condition of the disposal site is documented. If you are engaged in organic farming you will require the wastes to be taken off-site to maintain your organic status. Neighbours of organic farmers should also be aware that organic beekeepers can lose their organic status if sump fluids are spread within range of their hives.
|The AER conducted 155 drilling waste inspections in 2012, and determined that 10 were high-risk noncompliant. The primary reasons for noncompliance were inadequate disposal practices resulting in pooling, clumping, or erosion; inadequate sump location; and failure to get landowner approval for off-site disposal of drilling wastes.|
There are environmentally preferable methods of treating and disposing of some wastes, particularly for invert and hydrocarbon-contaminated muds. These methods include oilfield waste treatment facilities, thermal destruction, or disposal in hazardous waste landfills. Companies should be encouraged to dispose of their waste in the way that minimizes environmental impacts.
You may have concerns that an oil or gas well or pipeline is contaminating soil or water. You may see a leak or spill, or it may be indicated by a change in vegetation growth in a certain place. Unless it is an emergency situation, you should first ask the company to deal with the problem, although you should report the issue to the AER as well. If you are not satisfied that the problem has been adequately resolved, you will need to contact the AER again. Occasionally a leak or spill will contaminate the property of a neighbour. The owner or leaseholder of the affected land should notify the AER as soon as possible, and ensure that they require the company to complete a thorough clean-up and remediation of any affected land. If staff from the AER find evidence of spills, leaks or improper conservation, they can take various enforcement actions (see Oil and Gas Conservation Act).
|If you find a spill or leak you should contact the AER on the Energy and Environmental 24- hour Response line: 1-800-222-6514.|
Despite the fact that a company is liable for any contamination that results from its activities, as the landowner you are required by law to disclose any known contamination or “latent defects” when you sell your property. A landowner can be sued for deceit or fraud if they have intentionally or recklessly misled a buyer, and the buyer has been harmed as a result.
Despite this: buyer beware. Recent court cases have suggested that “the burden of thoroughly investigating a site remains firmly on the purchaser’s shoulders”. Much of the time, land contracts may transfer land “as is” and exclude a warranty outside of the scope of the contract, such as the condition of the soil. Therefore if an engineering report recommends that further investigation is necessary, or there are other indications that investigation needs to be done, if you do not do your due diligence the liability may fall on you as a buyer. In some cases the purchaser’s bank has asked for an environmental assessment if a reclamation certificate has not been issued (see Well and Pipeline Abandonment and Reclamation) and it is possible they may want an environmental audit before they grant a mortgage. The current landowner would normally have to pay for this audit. Also, some lenders may ask for an environmental assessment of sumps or sites used for drilling waste disposal before allowing a person to use their property as security for borrowing, although this is not universally asked. These sites may or may not be identified specifically on resources like the Environmental Site Assessment Repository (ESAR), so you may have to dig into the approval of past projects to determine if these sites existed in the past. The Farmers’ Advocate’s Office may be able to give advice in these situations.