REGULATORY: Environmental Regulatory: Mitigating the Prospect of Mercury in Hydrocarbons in Exploratory Drilling

by King & Spalding

Today's oil and gas exploration increasingly involves drilling deeper, increasing the likelihood of encountering elevated levels of naturally-occurring mercury in hydrocarbons found at these advanced depths. Hydrocarbons with elevated mercury levels traditionally have been associated with a limited number of regions around the world. The deep drilling now occurring is producing elevated mercury in hydrocarbons in regions that have not previously experienced the phenomenon. This can lead to damage downstream from the wells in processing equipment. Of particular concern is mercury corrosion, commonly known as liquid metal embrittlement or LME, of equipment that has not been "hardened."

The presence of elevated levels of mercury in oil and gas feed stocks also can require additional environmental and health and safety controls that are well known throughout the industry but have traditionally been implemented only in regions known to experience elevated mercury. For these reasons, elevated mercury hydrocarbons frequently carry a significant price discount in world markets.

E&P companies now frequently drill very close to the basement rock in highly volcanic areas. Basement rock underlays the deepest layers commonly drilled to previously and overlays the magma that is constantly working its way up to the earth's mantle. Put another way, it is about as deep as one can drill without hitting molten rock. Deeper drilling means higher temperatures, which create more opportunities to encounter mercury trying to escape radiating geothermal energy and push toward the surface. As a result, companies drilling into the basement rock layer may encounter elevated levels of mercury in the produced hydrocarbons. Produced water can also contain elevated mercury levels, which creates additional handling and disposal issues.

Dr. Darrell Gallup, a Senior Process Chemist at Thermochem, Inc. and an industry veteran in the area of mercury chemistry and process engineering, explains that the deeper companies drill, the more opportunities exist to encounter mercury in various forms. Dr. Gallup has observed that, as a general rule, reservoirs reaching temperatures of 300 to 400 degrees Fahrenheit have an increased likelihood of mercury presence in the basement rock and, as a result, in the produced product. From a geological standpoint, higher mercury levels are emerging in old volcanic areas with higher temperatures, where the rocks thermally degrade. Although oil and gas companies have been historically prepared to encounter and safely handle relatively high mercury levels along the earth's mercuriferous belt--the region containing the highest known mercury concentrations--elevated mercury levels are now being found outside the belt regions.

With advanced technology allowing for deeper exploratory drilling, health and safety professionals must be prepared to assess and address mercury contamination in end products on a larger scale. Likewise, companies producing oil from deep wells must generalize mercury-related worker health and environmental safety programs to more production operations. For example, when mercury contaminates exploratory piping and tubing, Dr. Gallup notes, oil field equipment may fail and equipment must be decommissioned. Smelters avoid mercury-impacted equipment because when contaminated piping is smelted any mercury present is released as a gas. When workers or contractors are involved in deeper hydrocarbon exploration, they chance exposure to mercury not only in the product but also in handling piping and other drilling equipment. This possibility repeats at numerous spots downstream of the wells including in marine and pipeline transport, storage, and in processing and refining.

Mercury in hydrocarbons is a fact of life in the oil and gas business. And, industry has developed a number of mercury safe-handling protocols for use in upstream, midstream, and downstream applications. Dr. Gallup encourages companies to have pre-drilling samples analyzed for hydrocarbons and for total mercury. When companies determine that hydrocarbon exploration involves deep drilling and may expose operations to increased mercury levels, companies should develop a mercury management plan in accordance with both legal obligations and industry best practices. A mercury management plan should outline how to mitigate mercury exposure during exploration and how to remove or manage it before it has a chance to negatively impact operators and equipment downstream. There is a wealth of information available across the industry related to safe mercury management in all phases of the industry. The takeaway is that companies need to start exploring their need for implementing these mercury management steps in areas of the world previously thought to be free of elevated mercury in hydrocarbons.

The author wishes to thank Erica Knear for her valuable research assistance.

 Kelsey Desloover
 Washington D.C.
 +1 202 626 5608
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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