Purpose & ScopeAnode Systems Company Gas Well Produced Water Tanks 2010 Corrosion
- Purpose & Scope
Purpose of the Program
To eliminate replacement costs of leaking produced water tanks that are
approximately $10,000 per tank.
To eliminate cleanup costs of contaminated soil.
To eliminate cleanup costs to contaminated water.
To prevent violations of the Clean Water Act or violations of drilling
permits that provide for the proper disposal of waste water.
To prevent the cost of fines or legal expenses and the costs of future leaks.
Losses To The Producer Caused By Internal Corrosion Of Produced Water Tanks
Produced water can cause internal corrosion of a steel tank resulting in a
failure and a replacement of the tank.
Produced water can contain salt, benzene, hydrocarbons or hazardous fluids
are detrimental to the soil under the tank. The cost to excavate and aerate
contaminated soil and the possible transportation and disposal of
soil could be significant.
A leak of sufficient quantity could migrate down to a shallow water table or
a surface stream causing harm to groundwater supplies or to vegetation or to
wildlife. The cost of drilling de-watering wells, installing storage
and disposing of contaminated water could have a high initial cost and be a
monthly expense for years.
Replacement costs for materials and labor for a new storage tank could easily
Cleanup costs for a tank that has leaked over a period of time could easily
Legal costs to defend against a landowner lawsuit could cost thousands of
A government agency fine could exceed $1 million.
Purpose Of The Program
In 1972 Congress passed the Water Pollution Control Act (also known as the
Clean Water Act) to prevent discharges of oil from vessels and other
facilities both onshore and offshore. The Clean Water Act made the EPA
responsible for storage facilities and it made the DOT responsible for
transportation facilities. It also resulted in the first Spill Prevention,
Control and Countermeasure (SPCC) regulations.
The Oil Pollution Prevention regulation known as the SPCC Regulation was
enacted in 1974 to protect surface waters. The regulation is known as Title
40, Code of Federal Regulations (CFR) Part 112. It requires owners or
operators of storage facilities (non transportation) to have a plan to
prevent, control, manage and remove oil spills under a worst case scenario.
In 1976 Congress passed the Resource Conservation and Recovery Act (RCRA) in
response to environmental catastrophes such as the Love Canal in Niagara
Falls, New York. It directed the EPA to develop and implement a program to
protect human health and the environment from improper hazardous waste
management practices by big companies. The program was designed to control
the management of hazardous waste from its generation to its ultimate
disposal (cradle to grave).
In 1984, President Reagan signed into law the Hazardous and Solid Waste
Amendments to RCRA. This act of Congress directed the EPA to establish new
requirements that would bring small generators of hazardous waste from
leaking fuel and chemical tanks into the regulatory system. This was to
protect drinking water supplies from fuel or chemicals that could seep into
the earth and contaminate the ground water that is a source of drinking
water. The law is known as 40 CFR Part 280 and went into effect in 1988.
Among other rules, the law requires cathodic protection on any underground
steel tank with a capacity of 500 gallons or more.
In 1988 a 4 million gallon oil storage tank collapsed at Ashland Oil
Company’s Floreffe, PA refinery which spilled 750,000 gallons of diesel fuel
over the tank’s containment dike, across a parking lot on an adjacent
property and into a storm drain that emptied into the Monongahela River. The
oil slick flowed for miles down river, over two dam locks and into the Ohio
River. It killed wildlife, damaged private property, adversely affected
businesses in the area, contaminated river ecosystems and temporarily
contaminated the drinking water for an estimated one million people in
Pennsylvania, West Virginia and Ohio.
In 1989 the oil tanker, Exxon Valdez ran onto rocks and spilled 10,000,000
gallons of crude oil into the Prince William Sound of Alaska. The Exxon
Valdez spill moved Congress to enact the Oil Pollution Act of 1990. The Oil
Pollution Act of 1990 made oil spill prevention, control, response and
removal a major priority of the Clean Water Act.
In 1994 the U.S. Government enacted new laws regulating above ground
petroleum and chemical tanks as a result of the spillage of 750,000 gallons
of oil into the Monongahela River by Ashland Oil below Pittsburgh.
In 2001 Chevron agreed to pay fines to the EPA totaling $750,000 and make $3
million worth of improvements for spilling the equivalent of 90,000 barrels
of salt water and oil over a period of five years from corroded pipes in its
Rangely field. The fine was for 320 salt water spills and 36 oil spills from
leaks caused by corrosion. Chevron acknowledged that the majority of spills
were on dry land but that some salt water and oil reached the White River.
In 2005 the Colorado Liquefied Petroleum (LPG) rule (7 CCR 1101-15) went into
effect. Among other requirements, the law requires corrosion protection and
monitoring of all new tanks installed after September 1, 2005 and of all
existing underground LPG tanks by January 1, 2011.
In May 2009, Anadarko Petroleum agreed to pay more than $1 million in fines
and to spend more than $8 million on improvements to its SPCC program. This
was in response to at least 35 spills of more than 31,300 barrels of oily
water over a five year period between 2003 and 2008. The oily water and oil
were discharged into drainages in Wyoming that are tributaries to the Clarks
Fork and the Powder Rivers.
On June 19, 2009, the EPA published in the Federal Register a SPCC compliance
date extension for oil production facilities until November 10, 2010. In
November 2009 the EPA signed a notice covering the December 5, 2008,
amendments to the SPCC rule. It changed the SPCC rule that had exempted
produced water tanks at oil production facilities. Effective January 14,
2010, produced water tanks are not exempt from SPCC rules as they once were.
SPCC plans must be amended and the plans must be implemented by November 10,
In 2010 the National Fire Protection Association Code on underground LPG
tanks is being revised. The 2011 Edition of NFPA 58 will require cathodic
protection and periodic testing of all new underground steel LPG tanks.
In 1998 the EPA estimated that 25% of all underground steel tanks were
probably leaking through holes caused by corrosion. In 1998 the EPA stated
that after ten years, tanks and pipes not protected against corrosion had a
dramatically higher potential for a failure due to corrosion.
There are 75,000 oil or gas wells in Colorado. At a 25% failure rate and one
water tank per well, 18,750 tanks could be leaking.
A drip of one drop every two seconds through a pinhole leak will amount to
438 gallons in one year.
A stream of water through a 1/16 in. hole in a tank will amount to 25,920
gallons in one year.
A stream of water through a ¼ in. hole in a tank will amount to 335,232
gallons in one year.
Earthen berms around produced water tanks setting on the ground will not
contain the produced water lost through a hole in the bottom of the tank.
The water will seep into the ground under the tank. Water from a leaking
tank where there is no shallow groundwater will evaporate leaving the salts
and oily hydrocarbons in the soil. Water from a leaking tank where there is
a high water table will commingle with the groundwater and has the potential
for surfacing in nearby surface waters.