Department of Conservation Division of Oil, Gas, and Geothermal Resources Underground Injection Control Program Common Reasons for Injection Project Approval Delays LA SPE March 9, 2010

GOALS of this presentation: To provide industry with clear guidelines on the submittal of injection project applications To streamline the Division’s review process for injection project applications by clarifying data requirements To encourage operators to do their own AOR to identify problem wells before submitting injection project applications for approval Goals of this presentation are: To provide clear information on State requirements for new or expanded/modified injection project applications To describe data required for a complete application so the review process can proceed efficiently To enlist the support of operators by encouraging them to perform their own Area of Review (AOR) and identify problem wells before submitting their application to the Division for approval.

To meet these Goals this presentation will: Clarify the Division’s authority for underground injection Identify the Division’s mandate Outline Injection Project Application Requirements Provide insight to the Division’s review of project applications What are we looking for and why?

Quick Acronyms Division or DOGGR - Division of Oil, Gas, and Geothermal Resources UIC - Underground Injection Control AOR - Area of Review MIT - Mechanical Integrity Testing

DOGGR Authority from 3 Sources 1) California Law: Public Resources Code (PRC) Division 3. Oil and Gas Section 3000 et seq Section 3106 - Division Mandate 2) California Regulations: California Code of Regulations (CCR) Title 14 Natural Resources Division 2 Department of Conservation Chapter 4 Development of Oil and Gas Resources Sections 1712 – 1998 Section 1724.7 - Project Data 3) Primacy Agreement with U.S. EPA The DOGGR’s basic authority for the operation, maintenance, and abandonment of oil, gas and injection wells in the state. Authority CA Law CA regulations Primacy Application

U.S. EPA Authority Federal Law Safe Drinking Water Act (SDWA – 1974) Part C – Section 300h et seq Prevent Endangerment of Drinking Water Sources Federal Regulations 40 CFR Part 144 Sections 144.1 et seq Underground Injection Control Program Delegate Primary Authority to the States to carry out the federal program (feds maintain authority to take enforcement action if the State fails to act on a violation) SDWA - requires permit prior to injection injection will not endanger drinking water sources includes inspection, monitoring, record keeping and reporting to US EPA by state

March 14, 1983 Primacy for Class II UIC Program DOGGR U.S. EPA Injection Well Program UIC Class II Program “One permitting agency” One Permitting agency instead of 2 DOGGR 1) enhance recovery 2) protect fresh waters California UIC Class II Injection Program

Current CA Division Injection Program Injection Project Approval + Well Permits Protection of USDW’s 10,000 mg/L TDS MIT testing (internal and external MIT) Area of Review (AOR) or Area of Influence (AOI) Aquifer Exemptions 1) One permitting agency DOGGR – Encourage the ultimate recovery of the resource Prevent Damage – waters, life, health, property, natural resources 2) Two Permits required: Project Approval Letter Individual Well Permit Protection of USDW’s = 10,000 ppm TDS MIT testing - Internal MIT’s (determine significant leak of casing, tubing and packer) - External MIT’s (determine no injection fluid migration behind casing, tubing and packer) AOR or Area of Endangering Influence – calculated for injection period equal to expected life of the injection well/project.

Fundamental Mandate of the Division PRC Section 3106 – provides the fundamental duties of the State Oil and Gas Supervisor for the supervision of oil and gas activities in the State. (a) … to prevent: damage to life, health, property, and natural resources; damage to underground oil and gas deposits from infiltrating water and other causes; loss of oil, gas, and reservoir energy; and damage to underground and surface waters suitable for irrigation or domestic purposes, by the infiltration of, or the addition of, detrimental substances. …to encourage the wise development of oil and gas resources. Base of Fresh Waters (BFW) = historically 3,000 ppm TDS

Prior to Injection Two Parts to Permitting Injection 1) Injection Project Approval (sec. 1724.6) 2) Individual Well Permits (sec. 1722 (d)) Geologic Engineering study Injection plan

Project Application: Major Elements 1) A statement of the primary purpose of the project 2) A detailed engineering and geologic study 3) Reservoir and fluid characteristics of each injection zone 4) Evidence that plugged and abandoned wells within the AOR will not have an adverse effect on the project 5) Casing diagrams and plugging information of wells within the AOR 6) Proposed well-drilling and abandonment program 7) An injection plan (sec 1724.7 Data Requirements)

We are going to focus on those elements that cause the most delays.

Main Reasons for Project Approval Delays 1) Failure to state purpose of the project 2) Incomplete or inaccurate data 3) Data is not detailed 4) Casing diagrams not current 5) Problem wells within the AOR 6) Failure to include directionally drilled wells in the AOR Data submitted is incomplete either because Division records are not complete or operator failed to file well histories and supporting data Inaccurate data. Data submitted does not conform to data in Division records AOR – identify problem wells Well lacking cement behind casing at the BFW and above the zone Holes in casing, especially old wells. Improperly abandoned wells – lacking cement behind casing behind plug

Project Application Review The following questions may be used to determine if the Division mandates will be met. “Prevent damage” and “Ensure ultimate recovery of the resource”

Most common questions? Continued 1) Is this a new project or expansion of an existing permitted project? 2) What is the primary purpose of the project? 3) What wells will be impacted? 4) What is the condition of each well affected by the project? Will the injection fluid be contained? 5) Any pathways to migration? Continued 5) Any potential pathways for migration of fluids? 6) Is the BFW protected?

Common Questions continued … 6) Are casing diagrams included for all wells in the AOR, including directionally drilled wells? 7) Does the injection fluid meet the Class II well definition? 8) What is the source of the fluid? 9) What is the injection plan? 10) Will injection affect offset operators?

Most common questions: 1) Is this a new project or expansion of an existing permitted project? New projects will require more data review Expansion or modification of an existing project

What Triggers Project Expansion or Modification? Adding a new injection zone Adding injection wells beyond the AOR Increasing the geographic area Adding or changing the source of injection fluid

2) What is the primary purpose of the project? CCR Sec 1724.7 (a)(1) EOR Waterflood Steamflood Other Disposal Water Disposal Commercial Water Disposal “We need a clear statement of the purpose so we know what to permit!” EOR and WD have different monitoring requirements WD and Commercial have different monitoring and bonding requirements

3) What wells will be impacted by the project? (a) List all wells in the AOR or AOI that penetrate the intended zone of injection Wells within the AOR or AOI Wells directionally drilled into the AOR or AOI Wells in the AOR/AOI belonging to offset operators Wells in the AOR/AOI located on federal lands “1/4 mile radius” CCR Sec 1724.7 (a)(4)

Area of Review California Requirement Federal Requirement Prior to approval, the operator must submit an engineering study that includes casing diagrams…of wells within the area affected by the project. CCR Sec 1724.7 (a)(4) and Primacy Application pages 15 - 16 Federal Requirement The area of review for each injection well, field or project area shall be determined according to either: (a) Zone of endangering influence (b) Fixed Radius 40 CFR Sec 146.6

Area of Review (AOR) ¼ mile radius

Fixed Radius minimum ¼ mile radius

Fixed Radius minimum ¼ mile fixed radius

Directionally Drilled Wells

(b) List of all wells not penetrating the zone of injection if wells within the AOR do not protect the zone above the proposed injection zone and/or base of fresh water “Potential risks”

AOR for Project Expansion

Adding proposed injection wells outside the original ¼ mile area of review – Expansion

Area of Influence Computation of the Zone of Endangering Influence The area the radius of which is the lateral distance in which the pressures in the injection zone may cause the migration of the injection and/or formation fluid into a USDW Calculated for an injection time period equal to the expected life of the injection well or pattern Bernard’s equation Modified Theis Equation (one form of the equation) 40 CFR Sec 146.6 (a) “Fluids must be confined to the permitted zone of injection.”

AOI The Bernard pressure build up equation is given as P(r,t) = Pi + (5575 q μ / k h)(log t + log (k / φ μ C r²) - 3.32 + 0.875s) Where: P(r,t) = pressure as a function of radius and time (pounds per square inch, psi) Pi = initial zone pressure (pounds per square inch, psi) r = radius (feet, ft) t = time (hours, hrs) q = injection rate (gallons per minute, gpm) μ = injection fluid viscosity (centipoises, cp) k = zone permeability (millidarcys, md) h = net zone thickness (feet, ft) φ = porosity (percentage in decimal, e.g. 5% = 0.05) C = injection fluid compressibility (square inches per pound, 1/psi) s = skin factor (ratio, no dimensions) Burt changes

Bernard’s Equation Example P(r,t) 1,408.82 psi s 0 Pi 1,400.00 psi r 690 ft q 145.8333 5,000 bpd u .8 cp Δ P 8.82 psi k 300 md ft rise 20.38 h 1,000 ft t 21,902.4 hrs 30 months φ .22 C 3.20 E-06

4) What is the condition of each well affected by the project? Must show evidence that wells within the AOR/AOI will not have an adverse effect on the project (CCR 1724.7 (a)(4)) Must demonstrate confinement to the permitted zone of injection to: (CCR 1724.7 (c)(3)) Ensure project meets its purpose Protect USDWs Prevent damage to oil and gas reservoirs Prevent surface break through Protect other reservoirs “Will the injection fluid be confined to the intended zone of injection?” 1) No migration into USDW or BFW 2) Zonal isolation

5) Any pathways to migration? Is there sufficient cement behind casing to prevent fluid migration? Will the injection fluid be confined to the intended zone of injection? Is there cement behind casing protecting the base of freshwater? Cement regulations require the annular space behind casing to be at least 100 feet above the BFW A CBL, temperature, or other survey may be used to determine cement fill behind casing CCR Sec 1722.2 – 1722.4 Regulations require the annular space behind casing to be 500 feet above oil and gas zones or anomalous pressure intervals.

Provides a quick view of the condition of each well Casing diagrams 1) Include casing diagrams for wells in the AOR/AOI: Producing Idle Plugged and abandoned (include offset operator’s wells) 2) Must show current condition Provides a quick view of the condition of each well

Casing Diagram Requirements Operator, lease, well number, API number, date well drilled, location (Sec T&R) and drafting date, elevation of the well and datum reference All casings, liners (size and weight) All hole sizes (rotary drill holes, estimate if cable tool) All perforations, cp points, WSO, etc. Cement fill behind casing. Include cement volume and top of cement fill (note if actual or calculated). Tagged top of cement before drill out. Depth to geologic markers, BFW, top of injection zone, injection intervals, etc. Mud weight, if well is plugged and abandoned Damaged casing, junk in hole, etc. Kick-off and original hole diagrams

Common missing casing diagram data Redrilled wells, plugging and abandonment data for each redrill hole Junk in hole and squeeze cement data BFW depth If well is directionally drilled Depth and name of geologic markers

Operators completing an AOR prior to submitting an application can identify problem wells and propose remedial work or an alternative injection plan

6) Are casing diagrams provided for all wells in the AOR, including directionally drilled wells? CCR Sec 1724.7 (a)(4)

7) Does the injection fluid meet the Class II well definition? Integrally related to oil and gas production operations California non-hazardous for water disposal wells CCR Sec 1724.6 and CCR Sec 1724.7 (c)(7)

8) What is the source of the fluid? Source of Fluid Chemical Fluid Analysis To ensure the fluid meets Class II well definition To ensure the fluid is compatible with reservoir fluid CCR Sec 1724.7 (c)(7) For EOR injection fluid source must be continuous Fluid Analysis must include TDS, specific gravity, pH, specific conductivity, etc

9) What is the Injection Plan? Project Applications Require an Injection Plan that provides the following data: (for complete list see CCR Sec. 1724.7 (c)) 1) Number of anticipated injection wells 2) Maximum anticipated: Daily injection volume Surface injection pressure Daily rate of injection by well “Will the injection fluid be confined to the permitted zone of injection?”

Injection Plan cont… 3) Monitoring system or method to be utilized to ensure no damage is occurring in the intended zone or zones of injections and that the fluid is confined to the intended zone or zones of injection. (CCR 1724.7 (c)(3)) (evaluated on a case-by-case basis) 4) Mechanical Integrity Testing (MIT) Internal MI - no significant leak in casing, tbg, and packer External MI - no significant fluid movement behind casing 5) Method of injection Tbg and packer Gravity feed “Will the fluid be confined to the zone?”

10) Will injection affect offset operators? Application must include copies of letters notifying offset operators of the proposed injection project with copies of certified receipt of these letters. CCR Sec. 1724.7 (8)(d)

All data must be supported Gaps between Operator records and Division well records. Especially old wells Operators can come into District office and check well records for completeness Engineers reviewing project data compare information submitted with in house well file data In some cases, in house data is incomplete especially wells older than 1940’s In other cases, data has not been submitted

Gap in Division Inhouse Data Well records may be incomplete because: Old wells Operators have not submitted records of all work Review of well histories may have missed cement information and other well data E-logs, directional surveys, other logs not on file

Application delays can be minimized if Operators either submit supporting data with their applications or Review well files in the District Office and ensure DOGGR data is complete Recap Mandate - “prevent damage” How – 1) protect fresh waters 2) confined to approved zone(s) of injection Evaluation - data must support information data gaps => time data processing => sheer volume of information scanned/electronic 1) Completeness of project application – first step 2) Evaluation of data - AOR casing diagrams e logs evaluation of zones Class II fluid 3) Injection Plan - purpose of project EOR / WD determining MASP frac gradient step-rate test

Electronic Format Please submit Injection Project Applications in hardcopy and include a scanned version either on a DVD or via email pdf format 300 dpi resolution

Thank You www.conservation.ca.gov Any questions, please contact the UIC Engineer in your local Division District Office For more information www.conservation.ca.gov

QUESTIONS?

Appendix Class II Well Classification and Fluid Definition PRC Sections - Abandonment of Wells

40 CFR Sec. 144.6 Classification of wells (b) Class II Wells which inject fluids: (1) Which are brought to the surface in connection with natural gas storage operations, or conventional oil or natural gas production and may be commingled with waste waters from gas plants which are an integral part of production operations, unless those waters are classified as a hazardous waste at the time of injection (2) For enhanced recovery of oil and natural gas; and (3) For storage of hydrocarbons which are liquid at standard temperature and pressure

July 1987 FINAL POLICY – Classification of Class II Wells Aside from EOR operations, four kinds of fluids can be injected into Class II wells. Waste waters (regardless of their source) from gas plants which are an integral part of production operations, unless those waters are classified as hazardous waste at the time on injection. Brines or other fluids brought to the surface in connection with oil or natural gas production or natural gas storage operations. Brines or other fluids described in item 2 which, prior to injection, have been: Used on-site for purposes integrally associated to oil and gas production or storage, Chemically treated or altered to the extent necessary to make them useable for purposes integrally related to oil and gas production or storage, or Co-mingled with fluid wastes resulting from the treatment in (b), so long as they do not constitute a hazardous waste under 40 CFR Part 261. Fresh water (i.e. water containing less than 10,000 mg/l TDS) from ground-water or surface water sources, added to or substituted for the brine may also be injected, as long as the only use of the water is for purposes integrally associated with oil and gas production or storage Fro EOR projects the fluid must come from a continuous source

Class II Wells Aside from produced brines, the State Oil and Gas Supervisor has determined that a Class II WD well may accept the following non-hazardous fluid types that originate from oilfield activities: 1) Diatomaceous earth filter backwash; 2) Thermally enhanced oil recovery cogeneration plant fluid; 3) Water-softener regeneration brine; 4) Air scrubber waste; 5) Drilling mud filtrate (slurry); 6) Slurrified crude-oil saturated soils; 7) Tank bottom sludge; and 8) NORM (Naturally Occurring Radioactive Material) 9) Cuttings

E & P Waste Is the waste intrinsic to oil production? Yes, (e.g. waste generated by contact with production stream) No (e.g. wastes not generated by contact with the production stream) E & P Exemption may apply, depending on the characteristics of the wastes E & P exemption does not apply Does the waste meet any of the criteria for hazardous waste in CA: Ignitibility, Corrosivity, Reactivity or Toxicity? (22 CCR, Article 3) Does the waste meet any of the criteria for hazardous waste in CA Ignitibility, Corrosivity, Reactivity or Toxicity? (22 CCR, Article 3) Yes No Yes No Is waste hazardous solely by meeting TCLP criteria for Toxicity? (22 CCR, Sec. 66261.24) Waste not hazardous in CA manage in accordance with laws applicable to exempted E & P waste Manage as hazardous waste in accordance with applicable laws Manage as non-hazardous solid waste, in accordance with applicable laws Yes Yes No, it meets other criteria For hazardous waste flowchart from the “Oil Exploration and Production Waste Initiative” May 2002 CA EPA - Department of Toxic Substances Control Hazardous Waste Management Division Statewide Compliance Division E & P exemption applies, Wastes not hazardous in CA manage in accordance with laws applicable to exempted E&P waste. E&P exemption does not apply manage as hazardous waste, in accordance with applicable laws From DTSC Pub. Oil Exploration and Production Wastes Initiative, May 2002

PRC Section 3228 Section 3228 Before abandoning any well in accordance with methods approved by the supervisor or the district deputy, and under his or her direction, the owner or operator shall isolate all oil-bearing or gas-bearing strata encountered in the well and shall use every effort and endeavor to protect any underground or surface water suitable for irrigation or domestic purposes from the infiltration or addition of any detrimental substances.

PRC Section 3208 Section 3208 A well is properly abandoned when it has been shown, to the satisfaction of the supervisor, that all proper steps have been taken to isolate all oil-bearing strata encountered in the well, and to protect underground or surface water suitable for irrigation or farm or domestic purposes form the infiltration or addition of any detrimental substances and to prevent subsequent damage to life, health, property and other resources.