Employing Decision Analysis to Evaluate Nontraditional Management Pathways for Produced Water from Oil and Gas Extraction

Produced water is a common byproduct of oil and gas (O&G) production that must be properly managed to avoid damage to the environment and human health. Currently, the majority of produced water is disposed underground via deep well injection. In addition, O&G development can be limited when there is insufficient disposal capacity or wastewater management strategies. Over time, treatment and reuse of the produced water for beneficial uses has become more commonplace yet the majority of produced water is still disposed downhole.

In this study, we built a framework employing decision analysis methodology to determine the economic tradeoffs of several produced water management pathways. Nontraditional pathways including piping and selling treated water to a municipality, irrigating terrestrial energy crops onsite, irrigating greenhouse crops, among others, were compared to more typical management strategies of discharging to a nearby stream or underground injection. To assess the water management pathways, the model incorporates key parameters including CAPEX, OPEX, potential revenue, and uncertainty for each option. The methodology is illustrated using data found in literature along with field data and conditions from an oil and gas site in central Wyoming. We determined that the management pathway with the highest expected value is discharging to a nearby stream followed closely by irrigating an onsite energy crop. This result is primarily due to the lower treatment and brine disposal costs associated with these two options. This work also determined the commodity prices required for each of the management pathways to achieve profitability.