Nothing Left To Waste

Why Innovative companies and new regulatory action will reshape oilfield-generated waste handling and disposal practices in the North Dakota portion of the Bakken.
By Luke Geiver | August 13, 2014

Scott Radig isn’t responsible for tracking oil production, power consumption or water use in North Dakota, but as the director of the state’s division of waste management, he still has some impressive numbers to share. Radig and his team track and regulate three main programs: solid waste, hazardous waste and tank storage. In 2001, Radig says the division of waste management was responsible for regulating roughly 9,000 tons of oilfield waste generated in the state. In 2013, the team monitored 1.78 million tons of oilfield waste. “In relation to the oil and gas industry,” he says, “our jobs have changed dramatically.”

Around 2005, only three very small, very specialized waste landfills capable of handling oilfield waste existed, according to Radig. Today, there are 14 large-volume special waste landfills. “We have one under public comment for a new permit and several more coming. I see the number doubling in the next five years,” he says. Prior to the Bakken-related oilfield activity there has been only one new landfill permitted in North Dakota in the past 20 years, he says. In addition to new landfills, existing landfills are looking to expand and if they aren’t, Radig says, “They are anticipating it.”

Since taking over the waste management division in 2005, Radig has seen constant change in his regulatory reach over oilfield waste generated in North Dakota. This year has been no exception. The state is currently awaiting results of a U.S. Argonne National Laboratory study aimed at determining the impact of technologically enhanced naturally occurring radioactive material (TENORM)—naturally occurring radioactive material that has been altered by a man-made process like oil retrieval. The results could drastically change the state’s stance toward oilfield waste and its allowance, by gram, of waste containing NORM. Currently, the state does not allow in-state oilfield waste disposal of anything with more than five picocuries per gram. The curie is a standard measure for the intensity of radioactivity contained in a sample of radioactive material. A picocurie is about one-trillionth of a curie, some six times smaller than the thickness of a human hair. Montana allows up to 30 picocuries per gram. Other oil producing states, such as Texas or Colorado, also accept much higher levels of oilfield waste for disposal.

As Radig waits for, and anticipates, the test results, he has been working to enhance the level of monitoring and safety linked to oilfield waste. New regulations put forth by his team will require waste producers to better track and record oil generated in North Dakota. Some oilfield waste management firms have already established operations based on sound science, traceable services and safety protocols that could someday be the norm for all Bakken-based oilfield waste operations. The combination of Radig’s work to better regulate an oil production by-product that is growing as rampantly as the state’s monthly oil output, with firms that have proven how to responsibly manage oilfield waste reveals a clear path on which the industry is headed.

Follow These Examples
Kurt Rhea lives and works out of Colorado. After forming Next Generation Solutions LLC, a radioactive material handling and treatment firm in 2010, he’s become very familiar with the North Dakota Bakken hubs of Williston, Minot, Dickinson and Bismarck. He first started working in North Dakota in 2011, and only three years later, he sold his firm to Secure Energy Services.

Rhea still runs the company with same team for Secure Energy Solutions and offers the same services that his team became recognized for as one of the leading waste management providers in North Dakota. When an abandoned gas station was found in Noonan, N.D., filled with used filter socks earlier this year, Radig brought in Rhea and his team to clean up the filter socks. The North Dakota Petroleum Council and other regulators have also turned to Rhea for guidance dealing with oilfield waste in the Bakken, he says. 

Rhea’s credibility among the industry started in 2011 when several operators realized that their oilfield waste limit was ranging higher than the 5 picocuries per gram limit that the state allows for in-state disposal. According to Rhea, it led to the rejection of loads at Williston’s landfill and another large landfill in McKenzie County. “At the time, we had the knowledge of how to properly handle it and we understood the science behind it. We were in the right place at the right time with the right resources to meet a need,” he says.
With five radiation officers in the company with experience writing regulations for Canada and the U.S., the team was able to bring an element of credibility to treating oilfield waste that its clients were looking for, Rhea says. Secure Energy Services was working to dispose of, or recycle other materials and saw an opportunity to add the expertise of Rhea and his team.

Current services offered by Next Generation Solutions include handling TENORM and transporting it to Colorado or Idaho where landfills permitted for higher levels exist. The team will also remove damaged tanks or equipment after a fire or lightning strike. Filter sock handling is a major service as well. The company provides filter tank disposal containers placed at the client's drilling site. “When our clients have full containers, we send out trained personnel to pick them up, transport and dispose of the material and then provide fresh containers onsite.” Contaminated soil and other geological areas in need of remediation can also be tested, treated and monitored by Rhea.

Environmental Materials Inc., a Montana-based company that operates under Weave Management, has also created a positive reputation and successful Bakken –based waste handling business. According to Terry Cook, general manager of EMI, the company started out as a fly ash company. After creating a product designed to stabilize drill cuttings created in the oil and gas industry, the business took off. In 2011, when open pits were allowed for drill cutting disposal, EMI was selling 20 truckloads per day, Cook says. Today, EMI provides cutting solidification services on 83 drilling rigs in the Bakken for some of the play’s most well-known operators and drilling rigs. The success with drill cuttings opened the company’s perception of the oilfield waste business. But, the opportunity to make a profit didn’t push EMI to increase its service offerings without increasing its internal knowledge and capabilities.

In 2012, the company purchased a solid control company that had a piece of equipment designed to process drill cuttings. In 2013, the company also acquired a consulting firm that allows EMI to remain in compliance and provide a high level of certainty to its clients that all of the work related to oilfield waste handling and disposal is being carried out properly. In March 2013, EMI was officially running its first oilfield disposal site near Chimney Butte on U.S. Highway 85. The company recently opened its second facility in Divide County, also on U.S. 85. Warren Transport, a sister company to EMI, provides waste transport for clients close to either disposal site.

“We are a relatively small company,” Cook says. The size of EMI hasn’t impacted its ability to form lasting relationships with Bakken operators, however. As waste comes off the drilling rigs, the EMI team can handle the waste, return the fluids back to the rig and then take the waste for treatment before it goes to the landfill. “We could be a lot bigger than we are, but our goal is to provide high quality and good customer service,” Cook says. “We want to be there with the operators in 20 to 30 years. We really pay attention to detail, that is why we aren’t serving 20 customers. We service five rigs. We could be at 20 rigs if we wanted too.”
 
The Future of Oilfield Disposal
The main factor driving the business of oilfield waste disposal is location. According to Cook, operators will always work to place waste suitable for a North Dakota facility in the closest landfill. In addition to its two current facilities, EMI is currently undergoing the permitting process for a new landfill in North Dakota.

Radig believes the push to move oilfield waste out of small, operator owned pits to landfills like EMI’s is simple: liability. “That is a huge reason for the increase in volume going to landfills,” Radig says. “Waste generators are looking for facilities with better liners, leaching collection and long-term ground water monitoring.”

Rhea can cite examples of large oil producers that were fined for more than $1 billion for failing to keep track of and monitor oilfield waste. According to Rhea, the fines could’ve been avoided by a few thousand dollars’ worth of investment.
In the Bakken, waste generators will have to invest in record keeping and waste containers for filter socks or a service that can provide them. There will be requirements for containers, record keeping and manifesting cradle to grave, Radig says, “so we know exactly where waste is generated, who transports it and where it ends up for final disposal.”

Companies will be required to keep records on hand for three to five years and also submit periodic summary reports to the department of health. There are no current requirements for record keeping or reporting.

The biggest change for the business of oilfield waste will be in the state’s stance on TENORM. “I think we will be moving forward with changing our landfill rules to potentially raise that limit,” Radig says. The Argonne study will help provide the state with science to justify a different stance. From an engineering standpoint, the design of special waste landfills is no different in North Dakota than other states that accept higher levels, including Montana.

“There isn’t a lot of documentation of how those other states came up with their accepted levels,” Radig says. “That is why we commissioned this study. Any changes we do make we want to be based on science and not because someone else has a higher number.”
Existing facilities in North Dakota would not have to perform retrofits, and, if North Dakota does raise its acceptable NORM limits it would most likely match that of Montana. “Once our study is done, we will probably try and have matching limits with Montana so that there isn’t a temptation to cross the border and get the advantage one way or another,” Radig says. “I think that if waste is being generated in North Dakota, we should have the option to dispose of it here.”

While Radig continues his quest to create a more robust tracking and long-term monitoring process for oilfield waste (and awaits evidence that will aid in a NORM decision), the EMI and Next Generation Solutions teams both are pursuing a constant goal. Providing oilfield waste services, they both say, is about educating.

“We are open and we are honest,” says Jon Kees, EMI manager.

“There have been a lot of people who think they know what they are doing out there, they just see it as another business opportunity,” Rhea says. “I think the biggest challenge for the industry is to try and help people understand what the relative risk is. It is about educating,” adding that, “when we say this word, ‘radioactive,’ there is this fear factor.” According to Rhea, a granite countertop has roughly 25 pecocuries per gram, a much higher level than the state allows in landfills.

Both Rhea and Kees also shared perspective on their respective roles in the industry that Rhea tried to summarize. “We see ourselves in a really cool role where we understand the science and we can help the public understand it. We can also help the industry. By virtue of helping the industry do the right thing by the public, we are making the regulators job easier.”

Radig does believe most waste handling firms are responsible like EMI or Rhea’s team. But, the few that aren’t shed a very negative light on a situation that can be handled properly. Until then, Radig has a request in to the state for more employees and he awaits the Argonne study expected to arrive this fall. He is also taking action now. “We are changing the rules so that there is a more comprehensive way to regulate the waste that is created here.”

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Author: Luke Geiver
Managing Editor, The Bakken magazine
lgeiver@bbiinternational.com
701-738-4944

Printed in The Bakken magazine - August 2014