Three Key Ways to Protect Oil and Gas Operations from Pollution Risks

An oil spill or gas leak might not significantly affect a company’s bottom line, but the impact of pollution losses can be damaging to a company’s reputation, even as it can result in potential harm to the community where it occurs, as well as the environment. For operators, oil and gas companies who perform regular preventive maintenance of aging pipelines can put themselves in a much better position to control their pollution risks and to respond quickly after hurricanes and other natural disasters.

“It’s about having a risk management mindset instead of chasing spills,” said Ronnie J. Kallus, a Travelers Oil and Gas Risk Control Professional. “Periodic inspections and continual testing can help companies identify potential problems.”

Ways to help control pollution risks include: preventive maintenance of aging pipeline, lightning protection, and proper polyethylene pipe — sometimes referred to as poly-pipe — installation procedures.

1. Preventive maintenance. Preventive maintenance is essentially a capital preservation plan. Investing capital into maintaining infrastructure will help to reduce the likelihood of a loss occurring. Instead of responding to a scene after pollution damage has occurred, periodic inspections can allow companies to identify and repair potentially damaged pipes and other equipment. Having a program to proactively check and replace aging pipe can be especially important as time passes from the installation, as records may be inaccurate or unavailable, Kallus noted.

Document policies and procedures to ensure that your equipment is in good working order. Your plan should account for pipelines, flow lines, gathering systems, tank batteries, salt water tanks and other equipment specific to your operations that might present a pollution risk.

The age, type and operating conditions of the pipe, including pressure, flow and the type of oil, gas, and/or saltwater, can affect how often the pipe needs to be inspected and replaced. Because in-ground pipes may not be visible when they fail, it is important to include hydrostatic pressure testing to detect leaking and deterioration of pipes.



2. Lightning protection. Saltwater tanks at oilfield operations can be particularly susceptible to lightning strikes. Static electricity can build up in fiberglass water tanks, which can attract lightning strikes and lead to spilled oil, brine and other substances. Those substances can spread to abutting land, crops, houses and waterways if secondary containment is not present or compromised.

When lightning hits a tank, oxygen in the space can also act as an ignition source, which can lead to fire risks. The National Fire Protection Association’s standard, NFPA 780, details installation requirements to protect people and property from fire risks and other hazards related to lightning strikes.

In addition to installing lightning protection, maintaining secondary containment around the tanks can provide an important additional line of defense. If a spill is limited to inside the secondary containment, it is easier to clean up than if it expands to contaminate the soil, surface water and ground water surrounding the area.

3. Poly-pipe installation. When new piping is being installed, make sure there is appropriate field oversight and documentation during the installation process. Conduct routine, planned inspections to help ensure that installation work is being conducted properly. A subcontractor’s ability to install and maintain these systems correctly can help guard against failures.

Often, gathering lines and substations are maintained by an operator or a contracted roustabout company. Operators that are self-performing these tasks need to ensure their staff is qualified to do so and have the proper equipment to perform this procedure. When lines need to be repaired, they have to be isolated from the rest of the piping system, which requires a squeeze-off process using specialized equipment. Loss investigations revealed shortcuts taken, such as use of a back-hoe to perform this process, which not only can damage the pipeline, but also can be hazardous to employees.

Lastly, poly-pipe for saltwater disposal lines can have a higher rate of failure leading to higher loss potential. A greater emphasis on inspection and maintenance programs for these systems may be beneficial.

Preparing for Major Storms

While it’s often not possible to prepare in advance for a large storm, proactive preventative maintenance can help to minimize potential damage. If companies receive sufficient notice of a large storm such as a hurricane, precautions can be taken at lease sites to help minimize pollution events. For instance, some companies will remove crude oil from tank batteries and refill the tanks with saltwater to help prevent them from tipping during a flooding event. Other precautions include securing the well head and other equipment on-site to minimize damage, as well as remove items that are considered temporary that could easily be swept away during a flood.

After a major storm, it’s important to inspect sites to check for damage and replace any impaired piping, earthen berms and secondary containment units so they will be fully functional the next time they are needed. “You can’t predict all exposures, but your response after a storm can help minimize potential pollution risks,” Kallus said.

When preparing for a potential pollution event, it’s important to take a proactive approach. Conduct regular drills to simulate how employees will respond in an actual emergency. Contracting with an emergency response vendor in advance can improve response times and may also allow you to negotiate favorable terms for labor and equipment rates, which help reduce costs following a storm. Involve your insurance carrier early in the emergency response, clean-up, and remediation process, particularly those that have experience in dealing with similar situations.

Maintain a risk management point of view in your approach to safeguarding your oil and gas operations. It’s a vantage point that can help protect your company in more ways than one.