Blog Post

Mitigating the Risks from Oil and Gas Wastewater Storage: Addressing Cost-Effectiveness and Heterogeneity

Dec 23, 2015 | Yusuke Kuwayama

In a previous post on our new RFF discussion paper, Pits versus Tanks: Risks and Mitigation Options for On-site Storage of Wastewater from Shale Gas and Tight Oil Development, we provided six recommendations for mitigating the environmental risks associated with storing flowback and produced water in pits and tanks.

States can implement some of these recommendations by developing new state regulations or modifying existing ones. In the paper, we describe nine classes of elements that states can use for regulation. However, these regulations may not be universally cost-effective or protective of the environment across all states because of unique economic or geologic conditions. We’re following up today with three additional recommendations from the paper that directly address variations in oil and gas production across states and identify ways to make the regulation of pits and tanks more cost-effective.

1. When possible, adopt a performance-based standard for each regulatory element.

Rather than rigid design or technology standards, applying more flexible performance-based standards to fluid storage would likely reduce costs and help account for local conditions at each site. For example, pit liner performance standards should be based the liner’s ability to ensure that the probability of leakage does not exceed a certain threshold. Users can then choose any liner material, thickness, permeability, and/or seam joining combination that achieves that probability threshold. Performance-based standards would also encourage the development of new risk-mitigating technologies and processes that are more cost-effective while still meeting desired environmental goals.

2. Develop permitting or other authorization procedures based on the characteristics of the fluids stored.

Not all liquid wastes carry the same risks to the environment. Permitting procedures and standards that take into account the specific risks posed by the waste fluids would better match the level of regulation to the level of risk, lowering costs for users whose pits contain fluids with lower potential toxicity.

3. Identify and require regulatory elements that involve relatively homogeneous costs across producers.

Some risk mitigation practices are relatively homogeneous across operators even in very different conditions.  Identifying such practices that are universal for all producers and creating standards around those practices would be a relatively easy task, reducing operator and regulatory costs. Examples include fencing requirements around pits and uniform standards regarding qualifications and limits on consecutive hours worked for truck drivers who handle fluids from pits and tanks.