1. Protocol for Non-Toxic Concentrations of Drilling Fluid Additives Dr. John Ashworth Soil Science Director, ALS Environmental - Edmonton Vince Walker Director of Operations, ALS Environmental - Fort St. John Formerly

2. Overview Introduction and Significance Background Method Description (Microtox® Acute Toxicity Analysis) Determination of Threshold Values Conclusion and Acknowledgements

3. Introduction and Significance Averaging 300 wells drilled/week in western Canada Alberta produces 70% of Canadas crude and 80% of its natural gas in 2004/2005 fiscal year, revenues from oil and gas accounted for more than 34% of Albertas total revenues (ie. $10 billion) WCSB...

5. Drilling and Disposal Total of 19,365 (including dry and service) wells drilled in Alberta in 2004 Alberta Energy and Utilities Board (EUB) permits on-site disposal of generated drilling waste provided criteria are met (Guide 50; EUB 1996) Disposal methods require quantification of toxicity of waste using Microtox® bioassay

6. Background Petroleum Services Association of Canada (PSAC) was developed in 1981 to represent upstream oil and gas industry sectors (in response to National Energy Program) PSACs Mud List - drilling fluid additive product listing for potential toxicity:

8. Toxicity Thresholds To be listed, a products toxic rate of application/addition must be known PSAC asked the Western Canada Microtox Users Committee (WCMUC) to establish toxic rates for new additives

9. WCMUC Resource group formed in 1987, consisting of various members dedicated to the standardization of Microtox® testing To maintain performance standards, an inter-laboratory quality control Round Robin program is run twice a year At present, the group consists of 17 members with 13 laboratories participating in Round Robin studies

10. Microtox® Acute Toxicity Assessment

11. Photoluminescent Bacteria Uses a strain of Vibrio fisheri (NRRL B- 11177) as a test organism bacteria emit light as a metabolic by- product:

12. Procedure Bacteria are reconstituted from a freeze- dried state, and initial light outputs are measured from homogenized suspensions Maintained at 15°C, suspensions are exposed to serially-diluted (2-fold) concentrations of osmotically-adjusted test sample Light output readings are taken at specified time intervals (usually 5 and 15 minutes)

13. EC 50 (15 min) EC - effective concentration of a test sample that reduces light emission by a specific amount under defined conditions of time and temperature (also called Inhibitory Concentration, or IC) EC 50 (15 min) = effective concentration of a test sample that reduces light emission by 50% at 15 minutes at 15°C NOTE: EUB defines non-toxic substances as those with EC 50 (15 min) > 75%

14. Determination of EC Correction factor (R t ) = ratio of light output of control at time t to initial light output of control (used to correct for time-dependent changes): R t = I t /I o Gamma (G t ) = ratio of light lost at time t to light remaining at time t (calculated for each sample dilution):G t = [(R t x I o )/I t ] - 1 Final Sample Concentrations (%) Raw Light Output Readings

15. Determination of EC The log of Gamma values are plotted against the log of concentrations for each respective time t: Therefore, when log gamma = 0 (x-intercept), this is the point where light output is halved, and represents the EC 50 concentration at time t after the anti-logarithm is applied.

16. Measures of Uncertainty Confidence limits (CLs) are estimated for every analysis performed, based on the deviation of light output readings obtained (derivation of R 2 values) IMPORTANT - this is only a partial measure of within-lab uncertainty, and DOES NOT represent inter-lab uncertainty (critical in determining safe rates of additive use)

17. Determination of Threshold Rates Can be made from absolute EC values, but allowances need to be made for uncertainty in test results Confidence limits (CLs) are normally set at 2 standard deviations (sd) from the mean To be conservative, we would use the lower confidence limit (ie. replicates displaying higher toxicities) to derive threshold rates

18. Lower Confidence Limit Since % relative standard deviation (%RSD) = 100 x (sd/mean), we arrive at the following equation: lower CL = mean EC 50 (15min) - 2 x (%RSD x mean/100) Modified, we get the following: lower CL = mean EC 50 (15 min) x (1 - 2 x %RSD/100)

19. Volume and Threshold Conversion This lower CL is expressed as a percentage of the original sample concentration (1/100); to convert to L/m3 (1/1000), we apply a factor of 10 as well, since the EUB EC 50 (15 min) pass threshold is set at 75% of the original concentration of sample, a factor of 4/3 is applied to the lower CL to meet this criterion

20. Equation for a Non-Toxic Threshold Rate L/m 3 = (4/3) x 10 x mean EC 50 (15 min) x (1 - 2 x %RSD/100)

21. %RSD and WCMUC Since its not feasible to subject all drilling fluid additives to WCMUC round robin studies, how can we derive an appropriate %RSD for every additive to obtain a probable non-toxic rate of application? The examination of WCMUC Round Robin data from 2000-2005 revealed a skewed frequency distribution of %RSD values

22. Neglecting 2 %RSDs over 100 caused by test liquid instability; the mean of 31 RSD values is 28%

23. New Threshold Equation Inserting a %RSD of 28 into the equation for determining a non-toxic threshold rate, we derive the following: L/m3 = 5.867 x EC 50 (15 min), Or simply: L/m3 = 6 x EC50(15 min)

24. Conclusion Of course, depending on the stability of additives and consistency in results which they yield, % RSD will vary; it is recommended that this conservative threshold equation is used in cases where the additive is only tested at one laboratory Likewise, coloured samples display wider scatter of data, and thus higher %RSDs; in these cases, using a factor smaller than 6 is advisable

25. Acknowledgements Dave Horton of Brine-Add Fluids (representing PSAC) for providing various drilling fluid additives Dave Wong of Epcor Canada for distributing test liquids and for collation and statistical analysis of WCMUC Round Robin data