Release Date: June 13, 2000

In its third and final round of competition for projects that can help sustain natural gas production from "stripper" wells, the U.S. Department of Energy has selected a proposal to test a coal-based filtering material that could sharply reduce the costs of disposing of waste water from these low-volume wells.

The Rosebud SynCoal® demonstration plant near Colstrip, Montana, was built in DOE's Clean Coal Technology Program. Its upgraded coal product, originally intended as a high quality fuel for power plants, may also be a low cost filter material for oil and gas well waste water.

The Energy Department plans to award $132,000 to Western SynCoal LLC of Billings, Montana. The company will combine the federal funding with $28,000 of its own money to develop a promising spinoff application for an enhanced coal-based product it developed in the government's Clean Coal Technology Program.

The product, called SynCoal^®, is a high-quality, low-moisture coal material made by heating and physically cleaning low-rank subbituminous coal. Originally intended as a low-sulfur fuel for power plants, the material has characteristics that researchers believe will make it ideal for filtering contaminated waste water. Its affinity for capturing hydrocarbon and other impurities makes it similar to activated carbon, but it is much less expensive.

The product is so economical that, if successful, it could reduce water disposal costs from low volume gas wells by 70 percent. Such a dramatic cost reduction would prolong the economical lifetimes of thousands of stripper gas wells, allowing gas to continue flowing that might otherwise be shut in.

Moreover, the water produced by the SynCoal^® filtering process is clean enough for agricultural use. This could be especially beneficial in Northwestern states where clean water is at a premium, and a significant amount of natural gas production is carried out.

Throughout the lower-48 states, more than half of all onshore gas wells are classified as low-volume stripper wells. On average, each of the more than 191,000 U.S. wells in this category produces about 16,000 cubic feet of natural gas per day. Together the wells account for about eight percent of U.S. gas production, but their numbers are growing. In the last seven years, some 30,000 gas wells have been reclassified as stripper wells. As their production declines, many are being plugged and abandoned.

The cost of waste water disposal is a major factor in the economic "tightrope" that many of these well's operators must walk.

As the flow of gas declines, the influx of water into these wells increases. Gas producers often must truck the waste water to disposal wells that can be several miles from the production site. Excluding trucking costs, waste water disposal can cost as much as $2 per barrel, costs that must be absorbed in the overall economics of a gas field.

Western SynCoal's novel filtering system will be tested at an existing gas production facility owned and operated by NARCo of Denver, CO. NARCo owns and operates about 450 stripper gas wells in the Denver-Julesburg basin in Colorado. Both companies are in the Energy Supply Division of the Montana Power Company in Butte, MT.

Subcontractors are Western Energy Company, Colstrip, MT; Environmental Management Systems, Butte, MT; Chemical Applications and Engineering Inc., Lyons, Co; and HSB Services, Sheridan, WY.

Western SynCoal's Clean Coal Technology project was selected in 1988 by the Energy Department as one of a series of joint government-industry ventures to demonstrate advanced ways to use the nation's abundant coal resources more cleanly and economically. In 1992 the company completed construction on a processing plant in Colstrip, Montana, to convert high-moisture, low-rank coals into the high-value SynCoal^® product. To date, more than 1.5 million tons of SynCoal^® has been produced by the plant, which is 1/10th commercial scale. Much of the product is being fed to Montana Power's Colstrip No. 2 power plant.

In addition to its new potential use for waste water filtering, SynCoal^® also can be used to improve cement and lime production.

The new project will be managed by the Energy Department's National Energy Technology Laboratory which oversees a broad spectrum of the department's energy and environmental programs, including its efforts in natural gas technology. Previously, as part of its program to prevent the premature abandonment of gas stripper wells, the laboratory selected proposals in September 1999 to develop low-cost software programs for gas fields. In March 2000, the laboratory chose a second set of projects to apply advanced computer and remote gas well monitoring technologies to lower operating costs.

DOE Stripper Well Round Three Selections - Public Abstract

Western SynCoal LLC

Western SynCoal LLC proposes to study, test, and evaluate the concept of removing stripper gas well produced water impurities using a unique filter medium. The concept uses a SynCoal^® based filtering system to produce agricultural quality water as an inexpensive and productive alternative to current produced water disposal methods.

The proposed project will define the economic feasibility of using a SynCoal^® based filtration system to remove hydrocarbons and dissolved metal salts from stripper gas well produced waters. Current stripper gas well operations typically collect this water and dispose of it through deep well injection or large surface evaporation facilities. These disposal processes require collection and storage at each well location and are subject to significant transportation costs to the disposal facility while tying up significant land areas or subsurface aquifers. The water disposed of in this manner remains contaminated and is unavailable for productive use.

SynCoal^® is a beneficiated coal product produced by Western SynCoal LLC at their Advanced Coal Conversion Process facility located in Colstrip, Montana. The SynCoal^® process produces a high calorific value, low ash, low moisture, and low sulfur synthetic coal used for electric power generating plant supplemental fuel, as a "green" casting sand additive, and as a cement plant primary fuel. SynCoal has active surface properties which give it an affinity to absorb/adsorb hydrocarbon materials similar to activated carbon, but is much less expensive.

The objectives of the proposed work are as follows:

• Remediate stripper gas well produced water by reducing hydrocarbon and metal salt content in the water to agricultural use standards and,
• Identify technology combination requirements to make productive water resource from produced waters, and
• Reduce stripper gas well operating costs by mitigating water transportation and disposal costs.

The filtering system will be tested at an existing gas production facility with minimal modification costs. Three different SynCoal^® filtration column designs will be investigated under this proposal. The data generated from the tests will be evaluated to determine SynCoal^® filtration column effectiveness, and whether the technology can be employed separately or requires integration into another remediation design. At specified time intervals, produced well water and the treated water shall be sampled and analyzed for the following: pH, Eh, suspended solids, total dissolved solids (TDS), and total hydrocarbons (THC).

Western SynCoal LLC, with the cooperation of its sister company, North American Resources Company (NARCo), is the cost sharing participants for this proposal. Western SynCoal, located in Billings, Montana, is the proposer and project manager. NARCo, located in Denver, Colorado, owns and operates the approximately 450 stripper gas wells located in the Denver-Julesburg (D-J) basin of Colorado. Both companies are in the Energy Supply Division of the Montana Power Company, located in Butte, Montana.

Subcontractors for the proposal are the Western Energy Company of Coalstrip, Montana, Environmental Management Systems (EMS) of Butte, Montana, Chemical Applications and Engineering, Inc., (CAE) of Lyons, Colorado, and HSB Services of Sheridan, Wyoming.