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Produced Water Claim Investigations

August 24, 2022

What is a Produced Water Claim?

Produced Water is water that comes out of the ground along with oil and natural gas in different extraction methods. The produced water is typically a brackish and saline water solution formed underground, although it can have varying compositions depending on the chemistry of the rocks it has been in contact with. Produced water claims can arise anywhere near oil and gas exploration Sites in the United States, or the transportation routes between them.  As a result of the subsurface geologic conditions that typically accompany these areas and the human activities that disturb them, Technologically Enhanced Naturally Occurring Radioactive Material (TENORM) is often identified at these Sites as well.

Due to the ever expanding and evolving nature of the oil and gas industry, the need for produced water pipelines and injection wells has significantly increased in the 21st century. VERTEX has personnel throughout the country with significant experience investigating and managing claims arising from produced water or TENORM losses.   

PRODUCED WATER CLAIM INVESTIGATIONS 

tanker truck flipped on road

VERTEX has experience investigating produced water losses that arise from truck rollovers, storage tank releases, corrosion holes along pipelines, miscellaneous failures between the storage tanks, and well head blowouts. Each of these loss types present their own unique challenges. Additionally, VERTEX understands the environmental media that can be impacted by produced water releases, including surface soil and water, wetlands, sediments, and vegetation.  Due to the watery nature of this pollutant, releases can quickly impact vast areas. Explosions, equipment component failures, and unique property ownership situations can further complicate these claims. When appropriate and requested, VERTEX utilizes our geographic footprint to conduct expedited inspections of these produced water spill sites. A brief inspection by our experts establishes our role to stakeholders, addresses project complexities, and often yields critical information for our eventual cost review during claim management.   

PRODUCED WATER CLAIM MANAGEMENT 

Produced water losses often necessitate large excavation projects with costs quickly expanding into the range of $1M+, placing all involved parties in precarious positions with outstanding costs. VERTEX has extensive experience reviewing large emergency remediation invoices under expedited time constraints to ease all parties’ concerns.  VERTEX’s nationwide presence allows us to understand what additional remediation work is required to obtain Site closure with either the state and/or federal regulatory agency.   VERTEX will work with the Insured and remediation contractor to calculate an Estimated Closure Budget (ECB) for the client, if requested. 

VERTEX has significant experience reviewing remediation contractor invoices to determine the reasonableness and necessity of incurred costs. VERTEX often discovers remediation contractors apply unreasonable fees for emergency response activities associated with produced water/TENORM losses.  VERTEX personnel will review incurred charges for the following: unrelated work scope (i.e. capital improvements concurrent to remedial work); appropriate labor/equipment/material rates based on the location of the loss; excessive markups; equipment rental costs meeting capitalization costs; excessive per diem costs; excessive fuel surcharges; excessive miscellaneous fees; and other unreasonable charges. Upon request, VERTEX can expedite invoice reviews for our clients, if requested.  

How VERTEX Can Help

Produced water releases of significant volumes of a variety of hazardous chemicals.  These releases can impact soil, groundwater, and surface water quality.  VERTEX understands the complexity and regulatory intricacies of produced water spills for the Insured.  VERTEX will work with the stakeholders to determine the appropriate allocation for the remedial aspect of the claim, if necessary.  

VERTEX’s team of Claims & Experts Services continue to perform produced water claim investigations, management, and technical guidance for our clients.  Our experienced team applies a practical approach to review costs that may be required to remediate produced water loss. 

To learn more about VERTEX’s Environmental Claims Consulting services or speak with an Environmental Expert, please call 888.298.5162 or email info@vertexeng.com

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