Courtesy of ARC Advisory Group/Industry Trends
For many years now, ARC has been writing about the nexus, or relationship between of energy and water and the implications this has for industrial organizations, most that rely heavily on both energy and water to operate. Once again, in a nutshell, power generation (and particularly fossil and nuclear generation) require lots and lots of water; while energy to power the large pumps and energy-intensive treatment processes represents a major operating cost for most water and wastewater utilities. In particularly dry regions (think portions of China, Australia, and South Africa, for example), lack of adequate water for cooling/condensing represents a significant constraint to adding generating capacity, or in some cases, even for operating existing power gen plants. Along similar lines, water-related issues (associated with consumption, treatment, and pollution) also frequently constrain upstream oil and gas production activities. This particularly true for the water-intensive hydraulic fracturing (“fracking”) operations that have proven increasingly successful at recovering oil and gas from shale plays in the US and elsewhere, but that frequently struggle with water supply, transportation, and treatment issues.
But what about downstream? As we learned in some recent industry news items and reports, access to adequate water resources could also pose a constraint for adding new petroleum refining capacity, even in geographic areas where building a grassroots refinery otherwise has received economic justification (a rare occurrence indeed in much of the developed world these days…).
Just last month, Meridian Energy Group issued a press release announcing that it had received a water allocation draft permit recommendation from the North Dakota State Engineer’s Office for the company’s new Davis Refinery, which – if built – will be the first high-conversion greenfield refinery constructed in the US since 1976. According to the company’s website, the refinery will enjoy new equipment configured with longer operating cycles and higher output as compared to the legacy refineries built decades ago. In addition, operating primarily on natural gas will provide many advantages including lower operating costs, lower emissions, and reduced impact.
In May 2016, Meridian had applied for a water allocation permit to draw groundwater from the Dakota Aquifer, a briny (non-potable) formation that will not compete with potable water users such as farmers and ranchers. At the Davis Refinery location, this aquifer is approximately 5,700 feet deep. Water drawn from this depth will need to be treated (most likely via reverse osmosis) for use in the refinery. As we learned from the press release, “This decision marks the latest hurdle cleared by Meridian in the extensive permitting process for the Davis Refinery, which involves two possible phases, phase 2, ‘Davis Light,” which will process approximately 27,500 bpd, and a Phase 2, ‘Davis Full,’ which could double that capacity to 55,000 bpd.”
Obviously, with its proximity to the burgeoning Bakken shale production in North Dakota, this site would provide the refinery owners with ready access to locally produced shale oil (and shale gas for process heating) and reduce the costs of transporting the crude feedstocks to more distant, out-of-state refineries in the Gulf Coast or on the West Coast of the US. This provides the economic justification for building the grassroots crude refinery, which Meridian claims will be the most advanced and environmentally responsible of its kind in the world. According to the company, in addition to the best available control technology for air emissions, Meridian will deploy the best available control technology for treating both process water and wastewater. The Davis Refinery will be equipped with the latest water treatment technology to reduce the amount of disposal waste water with the goal to become a zero-discharge facility. Air-cooled equipment will be installed to reduce the amount of water needed to be used throughout the facility.
Read Full Article Here (ArcWeb.com)