$2.2 Trillion…The Oil in Our Backyard

oillagoon1By Zach Sorrells, International Development Manager, Surface Active Solutions

According to a recent World Bank report there are approximately 9 billion metric tonnes of oil sludge on the planet today… sitting there… doing nothing… pure waste.

The oil sludge is generated as a byproduct of the oil drilling and refining process and consists of water, oil, solids and often a range of harsh chemicals that were introduced to the sludge at some point in the drilling or refining process.

Much of this oil sludge resides in open pits or lagoons awaiting treatment that never seems to come.   Many of these pits are poorly lined (if lined at all), which means, the oil can seep into the ground, causing widespread contamination.  In other cases, the sludge can sit for literally decades in storage tanks, where leaks are commonplace.

This behavior is environmentally negligent and economically insane.

Best estimates reveal that this oily waste is likely to contain more than 30 billion barrels of useable oil, which at current market prices is the equivalent of $2.2 trillion worth of oil.  That’s right, there is currently $2.2 Trillion worth of oil sitting in our collective backyard. All this, while we continue to spend extraordinary amounts of money exploring the furthest corners of the planet for new oil reserves.

Now is the time to start cleaning up this waste and capturing this oil, both for environmental reasons and because it simply makes good business sense.

Waste treatment technologies exist that make it financially very attractive to clean up this mess.  The bigger problem seems to be a deep-rooted culture of waste in the oil and gas industry.  Additionally, many in the in oil and gas industry continue to look at this sludge as waste, as opposed to a readily available and tappable resource.

One technology that makes it possible to profitably treat this waste has been developed by Surface Active Solutions. We have developed a unique chemistry that in conjunction with a simple centrifuge can recover virtually all of the oil, clean the solids making them safe for landfills and clean the water which can be treated using a standard waste water treatment facility.

It’s possible to make hefty returns by treating this waste and re-selling/re-using the recovered oil.  Here are a few numbers based on a typical oil lagoon.

  • Size of lagoon: 200m wide x 200m long x 5m deep (by the way, this is on the small side)
  • Total volume of oil based sludge: 200,000 MT of sludge
  • Percentage of oil in sludge: 50 percent (conservative estimates based on the World Bank Report)
  • Total recoverable oil: 100,000 MT of oil OR 628,931 barrels
  • Total value of oil: $49,056,604 (based on $90/bbl)
  • Estimated operating cost: $30,000,000 (materials, equipment, chemicals, labor)
  • Estimated return on investment: $19,000,000 or a 63% ROI.

We’ve done the math based on several projects and the data is clear: Cleaning up the lagoons of oil sludge is an excellent business opportunity, and it’s clearly the right thing to do.

So, why isn’t this happening at a greater pace?  What’s stopping this from happening on a mass scale? The technology exists, the business model works, it’s environmentally and socially responsible.

To be fair, there are groups of companies making significant steps forward, but the majority of the industry still seem to think this oil sludge is a waste rather than a resource.

This type of solution may not represent the environmental holy grail offered by renewables.  However, the reality is that oil and gas is an integral part of our society and economy.  It will be some time before oil and gas is replaced by renewables as the main energy source.  There are however huge opportunities to make the oil and gas industry much more environmentally friendly and much less wasteful.

We think cleaning up the historical waste is a good place to start.

Zach Sorrells is the International Development Manager for Surface Active Solutions. He is on a mission to eliminate waste from the oil and gas industry. 

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