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Arroyo Grande water recycling plant under construction

May 25, 2011

By LISA RIZZO

After years seeking approval, construction is now underway on a cutting edge water recycling plant—unique in the world—at the Plains Exploration and Production Company (PXP) oil field in Arroyo Grande which will increase its oil production.

PXP recently broke ground for the Produced Water Reclamation Facility at its oil field off Price Canyon Road in partnership with Veolia Water Solutions & Technologies, which has been contracted to design, build and operate the plant under a 12-year agreement.

Veolia Water says the water treatment facility will be the first of its kind utilizing technology that has never been installed before with the exception of a four-month pilot scale study that was conducted at the site.

PXP was required to obtain more than half a dozen permits to be granted permission to build the water reclamation facility including a discharge permit from the Regional Water Quality Control Board which allows the company to release recycled water back into Pismo Creek.

The facility, in operation and using “a highly technical and sophisticated version of reverse osmosis technology,” is expected to produce 45,000 barrels per day of treated water that, according to Veolia Water, meets or exceeds state and federal permit requirements for cleanliness.

The completed plant, anticipated in 2013, will be used to process the water produced from increased oil extraction efforts and will allow PXP to boost daily production of marketable crude oil by thousands of barrels a day.

Over the last five years the field has produced on average about 1,300 barrels of oil equivalent per day.

“Anything that increases hydrocarbon production is helpful to the country, state and overall economy,” said Norm Witt, senior vice president of Cook Hill Properties which manages real estate assets for a number of PXP projects.

Advances in technology have enabled oil companies to produce large quantities of oil from  some previously abandoned or under-performing oil fields.

In 2009, to improve oil extraction efforts at its San Luis Obispo County property, PXP spent $4 million on a capital improvement project that included drilling seven oil wells with depths averaging 1,700 feet. Because of the heaviness of the oil, the wells require continuous steam injection to operate.

When the oil is extracted from the ground, so is water which is then re-injected back into the earth. Once the water treatment facility is operational, it will allow PXP to skip the re-injection process and instead treat and discharge the water, speeding the oil recovery process.

Neither the designer nor PXP would divulge or discuss the cost to build and operate the facility, but a source close to the project who asked not to be named, says it is in the range of $65 million to $70 million.

Veolia Water General Manager Kirk Schwab says they are proud of the “societal and environmental benefits” this project will create including the “responsible development of resources.”

The technology may have future applications for PXP or the neighboring community. That reclaimed water plant sits next to the Pismo Beach sewage plant

“We are looking for opportunities for beneficial reuse, but we plan to use it on our property in the meantime,” Witt said.


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I don’t get it. Why is it easier/cheaper to build and operate an expensive water reclamation plant rather than reusing the water? Why is it okay to use (and pollute?) 45,000 barrels (1,890,000 gallons @ 42 gallons per barrel) of local water a day for a commercial project?


And what exactly do state and federal guidelines cover regarding water “cleanliness?”


If PXP is using fracking to produce more oil, that procedure has received a lot of criticism in national media. It remains to be seen how clean the water from the plant will be. I still don’t get why they can’t reuse the water.


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Is this a water reclamation project, or a water recycling project? You might be able to reclaim wastewater to create steam energy, but not be able to drink it. On the other hand, the idea that water can be recycled gives me the impression that it can be potable (drinkable) again.


The ideal way to mitigate the inevitable pollution of earth and water that results from drilling for oil and bringing it to the surface, is to do both reclamation and recycling, if it is scientifically possible. I hope you write follow-up articles about this technology.


Oceano, Nipomo and Arroyo Grande also have oil. Whether or not we further develop our oil reserves in the Five Cities area, we will be impacted by current oil development activity as water is carried from Price Canyon to the South County’s wastewater treatment plant. At least, that was the plan before Oceano rejected the sale of water to Price Canyon.


An inevitable result of local oil development is that naturally occurring carcinogenic materials in the earth are disturbed as oil is brought to the surface. Eventually, these elements find their way into the area’s water supply as water is evaporated and recaptured after a rain, for example, and through percolation of the water back into the earth. For instance, uranium, strontium, rodium, iodine, mercury, lead, and arsenic are either naturally occurring elements in San Luis Obispo, or are a biproduct of agricultural and industrial activities.


Back in the early 1980’s, I did a three-part series of articles on oil drilling methods in the Sespe-Frasier Condor Sanctuary. I compared that project to another such project in the Wild Horse sanctuary near the Red Wind Indian Reservation. These articles were published in the Paso Robles Country News with research contributed by members of the U.S. Forestry service. At the time, the U.S. Dept. of the Interior has transferred its authority to issue permits for gas and oil exploration to the U.S. Dept. of Forestry, with the intention of giving the states greater management over federal forest land within their rspective geographic regions.


I predict that development of oil in the Five Cities area, and particularly its impact on our drinking water, will be one of the most important decisions our communities will have to make in the near future.


As we welcome in the summer tourist season, we should be making the effort to combine our festivities with hands-on activities that demonstrate state of the art methods of energy production, such as the use and application of biodiesel fuel (e.g., algae, corn, soy oil) already being used to reduce oil and gas consumption to power wastewater treatment plants and cars. Did you know that cars manufactured to run on diesel can also run on biodiesel fuel with little or no conversion required?


The technology is no longer something that will happen in the future. The method and means are already used with success, both here and abroad. When will the public be invited to tour the PXP/Veolia water “recycling” project? Will the water be potable, or not? I look forward to watching this project through from start to finish. Perhaps these companies could establish a weekly public tour as it will be a useful lesson on which to base our future decisions about gas and oil development in the local area.


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To help put “one million barrels a day” in perspective:


Exxon Mobile, the worlds largest oil producer, pumps company-wide, world-wide roughly 4 million barrels a day.


One million barrels a day is almost 1% of the worlds production capacity.


One million barrels a day would make AG the 23rd largest oil producing COUNTRY in the world.


http://en.wikipedia.org/wiki/List_of_countries_by_oil_production


I can assure you one million barrels a day of oil is not being produced in AG.


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The downstream neighbors ought to hoot and holler. Once PXP starts dumping clean water into Pismo Creek, steelhead are going to start running again, which will give the enviro-gumbmint contingent the ability to further degrade property rights of landowners whom are unfortunate enough to have the stream cross their property.


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PXP was required to obtain more than half a dozen permits to be granted permission to build the water reclamation facility including a discharge permit from the Regional Water Quality Control Board which allows the company to release recycled water back into Pismo Creek.


I needed more permits than this, just to build a new building! Wow, 6+ permits is not a lot – guess they greased the proper wheels.


Once the water treatment facility is operational, it will allow PXP to skip the re-injection process and instead treat and discharge the water…


Correct me if I’m wrong, but I thought one reason to refill empty oil fields was to avoid sinkholes or other seismic reasons. I’m not in the oil biz, but that was my impression. Unless we are to believe that oil fields refill themselves. I did find this eleven-year-old reply explaining what happens to empty wells, but not really what happens to empty fields.


Still, it’s economy and we can sure use some good economy about now! ;-)


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A million MBoe a day? At that rate they would deplete their entire reserves in one year and be out of business. They pump less than 100k MBoe a day from ALL of their operations in TX, CA, an LA combined.


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According to that Reuters link the company pumps not only 1M barrels a day from AG, but combined of over 17M barrels a day which would be roughly 6.2 billion barrels per year which at an average of $50 per is revenue of over $300 billion. The Reuters link also show company financials of roughly $2B per yr. of revenue. Obvious disconnect there. Results published by PXP show daily production (company wide) of roughly 88k barrels per day, average per barrel rev of roughly 50 bux and roughly 1.5B in total sales.


http://phx.corporate-ir.net/phoenix.zhtml?c=132091&p=irol-newsArticle&ID=1521564&highlight=


http://www.stockbloghub.com/2011/05/06/pxp-plains-exploration-production-posts-strong-2011-first-quarter/73552


http://phx.corporate-ir.net/phoenix.zhtml?c=132091&p=irol-newsArticle&ID=1532395&highlight=


One million barrels per day from AG alone would result in sales of over $18 billion per yr. at 50 bucks a barrel.


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What’s this? Don’t trust the media numbers when oil is involved? Or when anything is involved? Say it ain’t so!


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This obvious disconnect is possibly the fact that “M” in Roman numerals stands for the number 1,000 (one thousand=three zeros preceded by the number one–) not six zeros, preceded by the number one. Did they use the Roman numeral M in the reuters article?


As far my knowledge about oil production in Price Canyon, I have no clue.


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