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MEMORANDUM
TO:
Record
FROM:
Lori
Weiss
DATE:
24
August
2004
SUBJECT:
Coalbed
Methane
Cost
Evaluation
The
attachments
to
this
memorandum
outline
the
basis
for
the
engineering
costs
for
implementing
the
treatment
and
discharge
options
for
coalbed
methane
produced
water
in
the
Powder
River
Basin
which
is
located
in
Wyoming
and
Montana.
Attachment
A
discusses
surface
discharge,
reverse
osmosis,
reinjection
wells,
and
storage
ponds.
The
general
assumptions
used
in
each
option
are
discussed
followed
by
a
detailed
description
of
the
methodology
used
to
compute
the
costs
for
each
of
the
treatment
options.
The
detailed
cost
spreadsheets
are
also
included.
Attachment
B
discusses
ion
exchange.
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ATTACHMENT
A
SUPPORTING
DOCUMENTATION
FOR
ENGINEERING
COST
MODELS:
SURFACE
DISCHARGE,
REVERSE
OSMOSIS,
STORAGE
PONDS,
AND
INJECTION
A.
1
General
Assumptions
Several
of
the
same
unit
component
costs
were
used
for
each
water
disposal
option.
One­
half
mile
of
piping
(
2,640
feet)
was
assumed
to
be
required
for
each
well.
The
piping
aggregates
flow
from
all
wells
to
the
discharge
or
treatment
location.
A
total
installed
cost
of
piping
of
$
3.06/
linear
foot
was
assumed,
based
on
information
from
RS
Means
Construction
Cost
Data
(
R.
S.
Means,
2001).
Identical
indirect
cost
markups
were
applied
to
each
option.
Insurance
was
assumed
to
cost
1.5%
of
the
total
direct
costs.
An
additional
5%
of
the
direct
costs
was
added
for
contingencies.
The
costs
for
pumps
to
transport
water
to
the
selected
disposal
option
were
not
included;
it
was
assumed
operators
would
select
a
location
for
the
disposal
option
that
would
minimize
pumping
costs.

Operating
and
maintenance
costs
for
all
options
included
labor
and
energy
costs.
Energy
costs
were
obtained
from
the
U.
S.
Department
of
Energy's
Energy
Information
Administration
Web
site
(
U.
S.
DOE,
2001a).
An
average
electricity
cost
is
$
0.044
per
kW­
hr,
which
is
the
estimated
cost
of
electricity
in
Wyoming
for
the
year
2000.
Labor
costs
were
taken
from
Camp
Dresser
&
McKee's
Technical
Support
for
Antidegradation
Review
for
Barium
(
Camp
Dresser
&
McKee,
2000).
The
annual
cost
of
water
monitoring
and
analysis
for
water
disposal
and
treatment
was
excluded
because
it
was
assumed
that
operators
would
not
incur
monitoring
costs
above
their
current
baseline
monitoring
costs.
Information
on
Wyoming's
CBM
permitting
requirements
can
be
obtained
from
http://
deq.
state.
wy.
us/
wqd/
index.
asp?
pageid=
57.
Information
on
Montana's
CBM
permitting
requirements
can
be
found
at
http://
www.
deq.
state.
mt.
us/
CoalBedMethane/
index.
asp.

A.
2
Surface
Discharge
The
capital
costs
associated
with
surface
discharge
include
piping,
riprap
and
an
outfall
structure.
Rip­
rap
is
added
near
the
point
of
discharge
to
help
precipitate
dissolved
iron.
Ten
cubic
yards
of
rip­
rap
is
needed
at
each
location.
Since
there
is
only
one
discharge
location
per
pod,
the
amount
of
rip­
rap
required
will
not
increase
with
the
increasing
number
of
wells
in
each
scenario.
Operating
and
maintenance
costs
for
this
option
include
only
labor
hours
for
inspecting
the
outfall
location.
Table
A­
1
lists
the
major
costs
for
this
option.
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Table
A­
1.
Major
Costs
for
Surface
Discharge
Parameter/
Cost
Description
Value
Limestone
rock
(
rip­
rap)
Cost
for
10
cubic
yards
of
rip­
rap
to
oxygenate
the
CBM­
produced
water
$
32.40/
cubic
yard
Piping
Cost
for
one­
half
mile
of
piping
(
2,640
feet)
for
each
well.
$
3.06/
linear
foot
Outfall
structure
Cost
to
transfer
the
CBM­
produced
water
from
underground
pipes
to
surface
water
$
3,500/
structure
Final
Capital
Cost
Equation
Surface
Discharge
Cost
($)
=
20.911
x
Flow
(
bpd)
+
4,072.6
Labor
hours
Hours
required
to
operate
the
surface
discharge
system
0.1
man
years
Labor
cost
Cost
of
manhours
$
40,000
Final
Operating
Cost
Equation
Operating
Costs
($)
=
4,000
(
for
all
flow
rates)

The
detailed
cost
spreadsheet
include
an
average
dollar
per
barrel
capital
and
operating
cost
for
each
well
scenario.

A.
3
Reverse
Osmosis
Water
volume
and
TDS
concentration
were
used
to
compute
the
fraction
of
water
flow
that
could
bypass
the
reverse
osmosis
unit
while
still
achieving
the
desired
effluent
quality.
The
TDS
concentration
of
the
raw
CBM
water
was
based
on
the
water
quality
data
for
the
location
of
the
model
projects.
Because
the
TDS
concentration
in
the
raw
water
is
relatively
low,
EPA
estimated
that
90%
of
the
flow
entering
the
reverse
osmosis
unit
will
become
permeate
and
that
the
remaining
10%
is
concentrated
brine.
Using
this
estimate,
flows
for
all
streams
were
determined
from
the
flow
from
the
CBM
wells.
Reverse
osmosis
costs
were
calculated
for
final
effluent
TDS
concentrations
of
500,
750,
1000,
and
1500
ppm.
Costs
were
developed
for
both
new
and
existing
projects.
In
many
cases,
the
model
projects
met
the
desired
effluent
TDS
concentration
without
treatment.
In
other
cases,
the
fraction
of
water
that
needed
to
be
treated
to
meet
the
given
water
quality
criteria
was
minimal
(
1­
5
gallons
per
minute).

The
reverse
osmosis
option
consists
of
a
packaged
reverse
osmosis
unit
designed
to
handle
the
range
of
flows
in
the
engineering
model.
Reverse
osmosis
often
requires
pretreatment
to
help
prevent
fouling
of
the
membranes;
therefore,
prefilters
are
included
in
the
reverse
osmosis
unit.
U.
S.
Filter
provided
costs
for
a
reverse
osmosis
unit
including
pre­
filters.
The
system
consists
of
three
activated
carbon
filters,
four
manganese
greensand
filters,
two
cartridge
filters,
one
reverse
osmosis
unit,
two
chemical
feed
systems,
and
instrumentation
and
controls.
According
to
information
from
U.
S.
Filter,
the
reverse
osmosis
unit
is
capable
of
treating
to
74
ppm
TDS.
A
linear
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relationship
was
established
between
flow
in
gallons
per
minute
(
gpm)
and
cost
of
the
reverse
osmosis
unit
using
the
U.
S.
Filter
information:

Cost
of
the
reverse
osmosis
unit
($)
=
1037.4
x
Flow
(
gpm)
+
90,849
(
1)

This
equation
was
used
to
develop
total
direct
costs
for
the
reverse
osmosis
option.
It
was
assumed
that
the
smallest
reverse
osmosis
unit
will
cost
$
100,000.
If
the
cost
of
the
reverse
osmosis
unit
calculated
from
Equation
(
1)
is
less
than
$
100,000,
a
cost
of
$
100,000
was
entered
in
the
spreadsheet
model.

The
reverse
osmosis
system
also
includes
costs
for
influent
and
effluent
holding
tanks
and
for
the
75
horsepower
of
electricity
required.
Tanks
would
need
to
hold
one
hour
of
flow.
Although
most
oilfield
tankage
is
available
only
in
a
range
of
standard
sizes,
the
costs
from
Plas­
Tanks
Industries
for
fiberglass­
reinforced
plastic
tanks
were
used
to
develop
a
cost
curve
relating
tank
cost
to
tank
capacity
in
gallons.
The
cost
for
tanks
is:

Tank
cost
($)
=
0.6654
x
gallons
+
3,445
(
2)

This
cost
equation
was
also
used
in
the
spreadsheet
to
develop
the
reverse
osmosis
costs.

After
treatment
by
reverse
osmosis,
90
percent
of
the
water
could
be
surface
discharged.
The
remaining
10
percent
is
a
concentrated
brine
stream
that
is
injected.
Therefore,
the
reverse
osmosis
option
also
includes
the
cost
of
an
injection
facility.
The
injection
system
consists
of
one
well
that
can
inject
the
water
to
a
depth
of
approximately
2,300
feet.
Operating
and
maintenance
costs
for
this
option
include
labor,
electricity
to
run
the
reverse
osmosis
pump,
membrane
cleaning,
and
membrane
replacement.
Table
A­
2
lists
the
major
costs
for
this
option.
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Table
A­
2.
Major
Costs
for
Reverse
Osmosis
Parameter/
Cost
Description
Value
Piping
Cost
for
one­
half
mile
of
piping
(
2,640
feet)
for
each
well.
$
3.06/
linear
foot
Tanks
Cost
curve
for
influent
and
effluent
holding
tanks
based
on
information
from
Plas­
Tanks
Industries
Tank
cost
($)
=
0.6654
x
capacity
(
gal)
+
3,445
Land
required
Cost
for
one
acre
of
land
were
included
to
house
the
equipment
building.
$
338/
acre
Reverse
osmosis
system
Cost
for
a
complete
system
including
pre­
filters.
U.
S.
Filter
provided
costs
for
various
size
units
Variable
Equipment
building
Cost
for
a
1,000­
square­
foot
building
to
house
the
reverse
osmosis
system
and
injection
well
$
32.64/
square
foot
Injection
well
Costs
for
one
injection
well
capable
of
injecting
to
a
depth
of
up
to
2,300
feet
$
200,000
Final
Capital
Cost
Equation
EPA
developed
costs
by
model
project
Labor
hours
Hours
required
to
operate
the
reverse
osmosis
system
0.5
man
years
Labor
cost
Cost
of
manhours
$
40,000
Electrical
costs
Cost
for
running
the
reverse
osmosis
unit
$
0.044/
kilowatt
hour
Membrane
cleaning
Costs
to
periodically
clean
the
membranes
are
included.
$
0.011/
1,000
gallons
Membrane
replacement
Cost
to
replace
the
membranes.
$
0.05275/
1,000
gallons
Final
Operating
Cost
Equation
EPA
developed
costs
by
model
project
The
costs
of
disposing
the
concentrated
brine
stream
by
contract
hauling
was
compared
to
injecting
the
wastes.
A
cost
of
$
2/
gallon
of
brine
disposal
was
based
on
information
from
Advanced
Resources,
Inc.
The
detailed
costs
of
reverse
osmosis
using
this
brine
disposal
option
are
also
shown
on
the
attached
spreadsheets.
Average
capital
and
operating
costs
in
dollars
per
barrel
($/
bbl)
were
also
calculated.
In
most
of
the
model
project
scenarios,
only
a
portion
of
the
flow
needed
to
be
treated
to
meet
the
final
effluent
limits.
At
the
higher
effluent
limits,
some
model
projects
required
no
treatment.
Four
different
average
dollar
per
barrel
costs
were
computed:
average
$/
bbl
across
all
model
projects;
average
$/
bbl
for
the
treated
portion
of
the
flow
over
all
projects;
average
$/
bbl
for
only
those
projects
requiring
treatment;
and
average
$/
bbl
for
the
treated
portion
of
the
projects
requiring
treatment.
All
costs
are
shown
in
the
attached
spreadsheets.
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A.
4
Storage
Ponds
Pond
dimensions
were
used
to
determine
the
land
required
and
the
excavation
volume.
Operating
and
maintenance
costs
for
this
option
include
only
labor
hours
for
inspecting
the
pond.
Table
A­
3
lists
the
major
costs
for
this
option.
Note
that
fencing
around
the
perimeter
of
the
pond
was
not
included.
Fencing
was
not
observed
during
site
visits
in
the
Powder
River
Basin,
and
many
ponds
are
used
for
livestock
watering.

Table
A­
3.
Major
Costs
for
Storage
Ponds
Parameter/
Cost
Description
Value
Piping
Cost
for
one­
half
mile
of
piping
(
2,640
feet)
for
each
well.
$
3.06/
linear
foot
Excavation
Cost
for
excavating
entire
volume
of
pond
$
0.99/
cubic
yard
Mobilization
Cost
for
moving
excavation
equipment
to
site
$
194
Limestone
rock
(
rip­
rap)
Cost
for
10
cubic
yards
of
rip­
rap
to
oxygenate
the
CBM­
produced
water
$
32.40/
cubic
yard
Land
required
Cost
for
land
required
for
storage
pond
$
338/
acre
Final
Capital
Cost
Equation
Storage
Pond
Cost
($)
=
46.886
x
Flow
(
bpd)
­
4312.4
Labor
hours
Hours
required
to
inspect
storage
pond.
0.1
man
years
Labor
cost
Cost
of
manhours
$
40,000
Final
Operating
Cost
Equation
Operating
Costs
($)
=
4,000
(
for
all
flow
rates)

The
detailed
cost
spreadsheets
show
the
costs
for
each
model
scenario
and
computes
an
average
dollar
per
barrel
capital
and
operating
cost.

A.
5
Injection
In
all
three
well­
depth
scenarios
for
the
injection
option,
the
cost
components
are
the
same
and
include
the
injection
well,
piping,
tanks
and
chlorinators,
storage
tanks,
an
injection
pump,
an
equipment
building
and
land
to
house
the
building.
Storage
tanks
are
used
to
settle
sediments
in
the
water
before
it
is
injected.
The
chlorinators
are
needed
to
disinfect
the
water
before
injection
to
help
prevent
fouling.
Well­
workover
costs
were
assumed
to
be
50
percent
of
the
cost
of
drilling
a
new
injection
well.
Table
A­
4
lists
the
three
different
injection
scenarios
and
the
cost
for
drilling
a
new
well
or
converting
an
existing
well.
Based
on
information
from
coalbed
methane
operators,
the
problems
and
risks
associated
with
re­
entering
an
existing
well
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make
using
this
option
unlikely.

Table
A­
4.
Injection
Scenarios
Depth
Scenario
Well
Depth
(
feet)
Formation
Well
Capacity
(
gpm/
well)
Drilling/
Workover
Cost1
Shallow
700
Coal
seam
1­
250
New
well
­
$
50,0001
Well
workover
­
$
25,000
Medium
3,000
Fox
Hills
111­
693
New
well
­
$
442,0002
Well
workover
­
$
221,000
Deep
9,500
Minnelusa
321­
3,209
New
well
­
$
900,0002
Well
workover
­
$
450,000
1
See
the
attached
spreadsheets.

Data
from
Camp
Dresser
&
McKee
(
CDM,
2000)
was
used
to
estimate
the
costs
for
tanks
and
chlorinators
to
develop
a
cost
curve
relating
cost
to
flow
in
gallons
per
minute
(
gpm).
The
spreadsheet
model
used
the
following
equation
to
compute
the
injection
cost
of
tanks
and
chlorinators:

Tanks
and
chlorinators
($)
=
121.72
x
gpm
+
18,009
Costs
were
added
for
a
holding
tank
prior
to
injection
that
can
hold
one
hour
of
CBMproduced
water
flow.
As
in
the
reverse
osmosis
model,
costs
from
Plas­
Tanks
Industries
for
fiberglass­
reinforced
plastic
tanks
were
used
to
develop
a
cost
curve
relating
tank
cost
to
tank
capacity
in
gallons.
The
cost
for
tanks
is:

Tank
cost
($)
=
0.6654
x
gallons
+
3,445
A
cost
curve
for
injection
pumps
is:

Pump
cost
($)
=
11.284
x
barrels
per
day
+
1222.6
The
detailed
spreadsheets
contain
the
supporting
information
for
the
development
of
the
equations
for
tanks
and
pumps.

Operating
and
maintenance
costs
for
injection
include
labor
and
chemical
costs
to
disinfect
the
stream
prior
to
injection.
Caribou
Land
and
Livestock
provided
costs
to
compute
a
chemical
cost
of
$
0.00185
per
gallon
of
CBM­
produced
water.
Table
A­
5
lists
the
major
costs
for
this
option.
Additional
details
are
included
in
the
attached
spreadsheets
including
an
average
dollars
per
barrel
capital
and
operating
cost
for
each
model
scenario.
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Table
A­
5.
Major
Costs
for
Injection
Parameter/
Cost
Description
Value
Piping
Cost
for
one­
half
mile
of
piping
(
2,640
feet)
for
each
well.
$
3.06/
linear
foot
Land
acquisition
Cost
for
1
acre
plot
for
equipment
building
$
338/
acre
Equipment
building
Cost
for
1,000­
square­
foot
building
$
32.64/
square
foot
Tanks
and
chlorinators
Cost
for
tank
to
aid
sediment
settling
and
chlorinators
for
disinfection
Tanks
and
chlorinators
($)
=
121.72
x
gpm
+
18,009
Well
Cost
for
drilling
a
new
well
or
converting
an
existing
well
See
Table
D­
4
Tank
Cost
for
holding
tank
prior
to
injection
Tank
cost
($)
=
0.6654
x
gallons
+
3,445
Pump
Cost
for
injection
pump
Pump
costs
($)
=
11.284
x
barrels
per
day
+
1222.6
Final
Capital
Cost
Equations
Shallow
New
Well
($)
=
43.134
x
Flow
(
bpd)
+
98,842
Shallow
Well
Workover
($)
=
40.542
x
Flow
(
bpd)
+
79,057
Medium
New
Well
($)
=
37.95
x
Flow
(
bpd)
+
530,003
Medium
Well
Workover
($)
=
37.95
x
Flow
(
bpd)
+
294,638
Deep
New
Well
($)
=
37.95
x
Flow
(
bpd)
+
1,000,000
Deep
Well
Workover
($)
=
37.95
x
Flow
(
bpd)
+
538,523
Labor
hours
Hours
required
to
run
injection
system
0.5
man­
years
Labor
cost
Cost
of
manhours
$
40,000
Chemicals
Cost
of
biocides
and
chlorine
for
disinfection
$
0.00185/
gallon
Final
Operating
Cost
Equation
Operating
Cost
($)
=
28.34
x
Flow
(
bpd)
+
20,000
(
for
all
well
types)
