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Facts on Natural Gas from Shales December 2013 Protecting Groundwater

Transcript of Facts on Natural Gas from Shales - Anadarko Petroleum€¦ · Facts on Natural Gas from Shales...

Facts on Natural Gas from Shales

December 2013

Protecting Groundwater

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Part 1 Summary of Concerns: Hydraulic Fracturing can contaminate groundwater.

Industry follows strict standards and requirements that ensure the protection of water resources. With adherence to such protocol hydraulic fracturing does not pose a threat to groundwater.

Key Facts:yy Hydraulic fracture stimulation, or “fracturing” has been utilized for more than 60 years, and there are no

documented direct links to groundwater contamination and hydraulic fracturing.

yy Industry is required to follow multiple levels of strict regulations and industry best practices.

yy While industry is moving into new areas of development, unconventional natural gas from shale formations does not present any new risks to the public health or the environment.

yy Vertical migration of hydraulic fracturing fluid out of the target formation and into groundwater aquifers is not physically plausible.

Examples of Water Protection: Measures used to ensure well integrity

yy Implementation of recognized and proven well-integrity standards (OGP 485, ISO, API HF 1 and 65-2);

yy Follow recognized standard well-abandonment procedures at the end of a well’s productive life, including setting cement plugs and/or mechanical barriers in the wellbore to isolate oil and natural gas from groundwater; and

yy Drilling through fresh groundwater aquifers is conducted only with air, water, or water-based drilling fluids.

Measures used to avoid above-ground spillsyy Implementation of oil and gas regulation and recognized industry operating procedures;

yy Impermeable natural or manmade material in critical well pad areas to prevent spills and releases from contacting the ground;

yy Diversionary structures/storm-water management practices to handle storm-water flow at a well pad;

yy Secondary containment, including berms, for tanks containing fluids (excluding groundwater and other benign fluids);

yy Preparation and implementation of a spill-prevention and emergency-response plan;

yy Use of closed-loop drilling fluids management systems;

yy Design of equipment and associated procedures for fuelling operations;

yy Integrity testing of high-pressure surface equipment; and

yy Testing and measurement of produced water to assess safe and approved disposal options (re-use/recycling, reinjection, treatment and disposal).

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Part 2 Detailed Information on public perceptions regarding hydraulic fracturing causing groundwater contamination.

Public Concerns:There have been many claims of groundwater contamination due to hydraulic fracturing and natural gas development from shale formations.

Groups opposing the development of natural gas from shales have further fueled public concern on hydraulic fracturing through unfounded claims. A few examples: Fracturing, according to the Sierra Club, is “known to contaminate drinking water.” Food & Water Watch says hydraulic fracturing “threatens the air we breathe, the water we drink, the communities we love and the climate on which we all depend.” The Center for Biological Diversity begins its litany of criticisms of hydraulic fracturing with: “Contaminated water.”

Although the facts continue to support the safety of fracturing, public awareness of allegations of fracturing causing water contamination has been impacted by inflammatory media events such as the movie Gasland showing water being lit on fire(cfr. Gasland movie) http://cogcc.state.co.us/library/GASLAND%20DOC.pdf. However, the occurrence of methane gas in drinking-water wells and in rivers and streams in many areas of the U.S. is not a recent phenomenon, as anecdotes from long-time residents have confirmed. http://www.cabotog.com/pdfs/Tab1.pdf. In addition to such references, historical U.S. Geological Survey studies documented the presence of naturally occurring methane in Pennsylvania aquifers long before development of the Marcellus shale. Lohman, S.W., 1937 (reprinted 1957). The concern of local populations that methane would infiltrate groundwater has largely been addressed as industry started conducting baseline water sampling prior to start of drilling and fracturing activities.

Water contamination fears exist as well in regard to possible upward migration of fracturing fluids to the drinking water aquifers. Even though most geologists and recent studies confirm that rapid upward movement of fracturing fluids is virtually impossible due the depth at which fracturing occurs, which is generally more than a mile (1.6 km) below the deepest groundwater. More information on this topic is provided in Key Fact 5 of this document.

Additionally, the U.S. Environmental Protection Agency (EPA) has on two separate occasions (Dimock and Barnett), stepped into development areas and issued emergency orders on private drinking water wells sighting gas contamination. In both instances the EPA had to retract those findings after confirming that shale gas operations in Dimock and Barnett did not cause the contamination.

Lastly, like any activity, even with the implementation of controlling measures, there is a chance of accidents. The American Water Works Association has stated “a properly constructed and managed oil or natural gas well that complies with regulations and utilizes industry best practices is unlikely to directly cause groundwater contamination.” AWWA; Water and Hydraulic Fracturing, A White Paper From the American water Works Association; 2013. http://www.awwa.org/Portals/0/files/legreg/documents/AWWAFrackingReport.pdf Incidents related to shale gas (and natural gas in general) operations can be classified into two categories: first there are the above-ground releases (such as spills of fuel), the second and less frequent category is related to wellbore integrity. None of these accidents is exclusive to hydraulic fracturing operations. More details can be found in the following sections.

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KEY Fact 1 Hydraulic fracturing has been utilized for more than 60 years, and there is no scientific data or information confirming a link between groundwater contamination and hydraulic fracturing.Fracturing is not a new technology, having first been applied in 1947. Since that time, more than 1.2 million wells have been hydraulically fractured in the U.S., and state regulators from across the U.S., numerous officials within the EPA, the U.S. Department of Energy, the U.S. Department of Interior, and countless analyses have concluded that there are zero confirmed cases of the activity of hydraulic fracturing directly contaminating groundwater (several examples provided in part 3: Supporting Documentation; additional references can be found on: http://www.truthlandmovie.com/what-they-are-saying/).

According to Stanford Professor Mark Zoback (Stanford Report, August 2011), “There have been fears that hydraulic fracturing fluid injected at depth could reach up into drinking water aquifers. But, the injection in the U.S. is typically done at depths of around 6,000 to 7,000 feet (approx. 2 km), and drinking water is usually pumped from shallow aquifers, no more than one or two hundred feet (30-60 m) below the surface. Fracturing fluids have not contaminated any water supply, and with that much distance to an aquifer, it is very unlikely they could.”

According to the Ground Water Protection Council on behalf of the U.S. Department of Energy and National Energy Technology Laboratory; State Oil and Natural Gas Regulations Designed to Protect Water Resources; May 2009. http://fracfocus.org/sites/default/files/publications/state_oil_and_gas_regulations_designed_to_protect_water_resources_0.pdf “Based on over sixty years of practical application and a lack of evidence to the contrary, there is nothing to indicate that when coupled with appropriate well construction; the practice of hydraulic fracturing in deep formations endangers ground water. There is also a lack of demonstrated evidence that hydraulic fracturing conducted in many shallower formations presents a substantial risk of endangerment to ground water.”

The UK Select Parliamentary Committee report HC 1449, May 2011 http://www.publications.parliament.uk/pa/cm201012/cmselect/cmenergy/1449/1449.pdf concluded that “hydraulic fracturing itself does not pose a direct risk to water aquifers, provided that the well-casing is intact before this commences. Rather, any risks that do arise are related to the integrity of the well, and are no different to issues encountered when exploring for hydrocarbons in conventional geological formations.”

“Hydraulic fracturing is engineered to target the prospective hydrocarbon-producing zone. The induced fractures create a pathway to the intended wellbore, but do not create a discharge mechanism or pathway beyond the fractured zone where none existed before. The pressure differential that pushes fracturing fluid into the formation is diminished once the rock has fractured, and is reversed toward the wellbore during the flowback and production phases. Accordingly, there is no likelihood of significant adverse impacts from the underground migration of fracturing fluids.” (State of New York, Revised Draft Supplemental Generic Environmental Impact Statement (dSGEIS): 2011)

Key Fact 2 Industry must follow multiple levels of strict regulations and industry best practices.Just like everyday activities, all industrial activities comprise certain risks; no matter what the industry is. However, the necessary measures exist to mitigate or manage the risks posed by shale gas operations, and the oil and natural gas industry employs these measures. As the U.K. Royal Society and the Royal Academy of Engineering concluded in June 2012 http://royalsociety.org/policy/projects/shale-gas-extraction/, the health, safety and environmental risks associated with hydraulic fracturing can be effectively managed through a combination of sound regulation and modern technology.

“We know that natural gas can safely be developed, and to the credit of the industry there are many companies that are leaning into this challenge and promoting best practices for safer and efficient production. That’s not always widely noticed or appreciated, but it’s a fact.”

Heather ZichalPresident Obama’s top energy and climate adviser (2012)

Industry, regulators and local stakeholders share the same value “to respect and protect the safety and health of the public, the workers and the environment in all countries and communities in which industry conducts business (after Anadarko EHS mission, vision and policy)”. In the U.S. industry, local and regional authorities and stakeholders have worked together for more than a decade to understand concerns as well as actual risks of shale gas operations. Current operational practices and legislation are frequently evaluated, new technology developed and controlling measures further refined in order to continuously improve and further minimize risks from shale gas operations.

Worldwide several regulatory review processes have been conducted to investigate whether the existing rules, guidelines and legislation on shale gas activities are suitable to safely manage the activities. Two examples are the U.S. State Review Process (STRONGER, http://www.strongerinc.org/, latest revision May 2013) and the independent review for the European Commission in 2011 by law firm Philppe & Partners to assess whether Europe’s existing laws adequately cover shale gas (http://ec.europa.eu/energy/studies/doc/2012_unconventional_gas_in_europe.pdf ).

In addition to regulatory controls, industry and other organizations have developed ‘Recommended Practices’ to protect ground and surface water during shale gas operations. The most frequently implemented guidelines are summarized below. A more comprehensive list of recommended practices can be found in Appendix A.

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Recommended Practices:Industry has accumulated a great deal of experience in how to safely manage shale gas operations. This has resulted in a long list of shale operations recommended practices.

API; HF1- Hydraulic Fracturing Operations-Well Construction and Integrity Guidelines; October 2009. http://www.api.org/oil-and-natural-gas-overview/exploration-and-production/hydraulic-fracturing/api_hf1_hydraulic_fracturing_operations

API; HF2- Water Management Associated with Hydraulic Fracturing; June 2010. http://www.api.org/oil-and-natural-gas-overview/exploration-and-production/hydraulic-fracturing/api_hf2_water_management

API; HF3- Practices for Mitigating Surface Impacts Associated with Hydraulic Fracturing; January 2011. http://www.api.org/oil-and-natural-gas-overview/exploration-and-production/hydraulic-fracturing/api_hf3_practices_for_mitigating_surface

API; Recommended Practice 51R – Environmental Protection for Onshore Oil and Gas Production Operations and Leases; July 2009. http://www.api.org/oil-and-natural-gas-overview/exploration-and-production/hydraulic-fracturing/rp-51r-environmental-protection

API; Standard 65-2: Isolating Potential Flow Zones during Well Construction. December 2010. http://www.api.org/oil-and-natural-gas-overview/exploration-and-production/hydraulic-fracturing/65-2_isolating_potential_flow_zones

API Overview of Industry Guidance/Best Practices Supporting Hydraulic Fracturing; 2013. http://www.api.org/~/media/Files/Policy/Hydraulic_Fracturing/Hydraulic-Fracturing-Best-Practices.pdf

Good practice guidelines for the development of shale oil and gas. OGP Report nr 489. December 2013. http://www.ogp.org.uk/publications/

Ground Water Protection Council and the Interstate Oil and Gas Compact Commission (U.S.); FracFocus; disclosure on fracturing additives and ingredients for wells in the United States, Since 2011. www.fracfocus.org

The International Oil and Gas Producers Association (OGP) manage a similar publically accessible web site for disclosure on fracturing additives and ingredients for wells in the European Economic Area. http://www.ngsfacts.org/

International Energy Agency (iea). 2012; Golden Rules for a Golden Age of Gas. http://www.worldenergyoutlook.org/media/weowebsite/2012/goldenrules/WEO2012_GoldenRulesReport.pdf

Key Fact 3 While Industry is moving into new geographic areas of development, unconventional natural gas from shale formations does not present any new risks to the public health or the environment. A German Risk Assessment on fracturing http://dialog-erdgasundfrac.de/sites/dialogerdgasundfrac.de/files/Ex_HydrofrackingRiskAssessment_120611.pdf concluded that challenges for shale gas operations different from conventional oil and gas operations are twofold: 1. local (German) geology situation (shallow unconventional source rock), and 2. the need for realization of a high number of wells and fracturing operations; resulting in a greater amount of activities and resources used, such as: land use, trucks and pipelines, water and energy.

Horizontal drilling and hydraulic fracturing activities do not pose any new or unmanageable risks. A recognized benefit of horizontal drilling combined with hydraulic fracturing is a reduction in the surface disturbance Arthur, Dan, ALL Consulting; Technologies Reduce Pad Size, Waste The American Oil and Gas Reporter; August 2010 and also maximizing the efficiencies of resources. It is the higher level of activities that result in a bigger usage of resources (incl. manpower) compared to conventional hydrocarbon operations and inherently increases the risk for accidents to happen.

640 with verticals 640 with horizontal wells

Incidents related to shale operations (and conventional operations in general) are often classified into two categories: first there are the above-ground releases, the second and less frequent, are related to well integrity. A review of groundwater impact investigations for Texas and Ohio in the last 30 years documented that less than 20 percent of those are attributable to well integrity concerns. Kell, S. August 2011. State Oil and Gas Agency Groundwater Investigations and Their Role in Advancing Regulatory Reforms. A Two-State Review: Ohio and Texas.

Groundwater Protection Council. Available at http://fracfocus.org/sites/default/files/publications/state_oil__gas_agency_groundwater_investigations_optimized.pdf.

Typically these well integrity incidents are a result from historic wells that have been abandoned.

There have been only a few occasions where the well construction practices were proven to be below industry standards and regulations resulting in subsurface gas and/or fluid. An excellent example of a well construction issue is in Pennsylvania in 2007, where the producing well became over-pressured causing gas to migrate; the operator added additional production casing and permanently resolved the problem. Even in this example over a dozen historically abandoned wells were discovered that were also believed to contribute to the issue. Pennsylvania Department of Environmental Protection; Stray Natural Gas Migration Associated with Oil and Gas Wells; 2009. http://www.dep.state.pa.us/dep/subject/advcoun/oil_gas/2009/Stray%20Gas%20Migration%20Cases.pdf

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These well-understood risks are minimized by following strict regulations and leading industry practices. To quote a well-known well integrity expert, George King “It must be remembered that failures of the past are what our knowledge of today is built upon and, as learnings progress, the failure rates of a later time should be lower than the era before it. Everything we know about success is based on mistakes we have made, but only if we learn from them.” King, George; Society of Petroleum Engineers Paper 166142; Environmental Risk Arising From Well Construction Failure: Difference Between Barrier and Well Failure, and Estimates of Failure Frequency Across Common Well Types, Locations and Well Age; 2012. As part of the groundwater investigation review performed by Mr. Kell. (see reference Kell, S. August 2011. on page 9), the state regulations and industry practices were reviewed as well showing how they were modified to address and prevent future incidents of a similar nature. For example, unlined disposal pits which contributed to the majority of major groundwater impact investigations were prohibited in Texas. Based on the regulation changes in Ohio the incident rate went down by 90% over the study period (see source above).

Key Fact: Careful well construction prevents groundwater contamination.

Steel pipes, also called casing strings, are an important element of well completion with respect to the protection of groundwater resources as they provide for the shielding of fresh water zones and groundwater from the inside of the well. Casing is also used to transmit flowback fluids from well treatment. In this regard, surface casing is the first line of defense, production casing provides a second layer of protection, and production tubing provides a third layer of protection for groundwater. As important as casing is, it is the cementation of the casing that adds the most value to the process of ground water protection. Proper sealing of annular spaces with cement, creates a hydraulic barrier to both vertical and horizontal fluid migration. Consequently, the quality of the initial cement job is the most critical factor in the prevention of fluid movement from deeper zones into ground water resources. Ground Water Protection Council on behalf of the U.S. Department of Energy and National Energy Technology Laboratory; State Oil and Natural Gas Regulations Designed to Protect Water Resources; May 2009. http://fracfocus.org/sites/default/files/publications/state_oil_and_gas_regulations_designed_to_protect_water_resources_0.pdf

Multiple concentric, protective layers of steel pipe, also called casing, and cement, are initially set to encase the wellbore, beginning several hundred feet below the deepest known aquifer, and cemented all the way to the surface. The cement used to encase a well must meet stringent quality requirements and extend the full length of the wellbore. Throughout the process of setting the casing and cement, both are pressure tested, the cement’s quality and placement is checked, and pressure gauges are installed to monitor the wellbore for mechanical integrity once production begins.

Key Fact 4 Vertical migration of hydraulic fracturing fluid out of the target formation and into groundwater aquifers is not physically plausible. Public concerns exist on possible upward migration of fracturing fluids to the groundwater aquifers, even though general hydrogeology experience with petroleum systems would rank the chance of something like this happening as very unlikely.

As Stanford Professor Mark Zoback (Stanford Report, August 2011) points out, “There have been fears that hydraulic fracturing fluid injected at depth could reach up into drinking water aquifers. But, the injection is typically done at depths of around 6,000 to 7,000 feet (approx. 2 km) and drinking water is usually pumped from shallow aquifers, no more than 100 or 200 feet (30-60 m) below the surface. Fracturing fluids have not contaminated any water supply and with that much distance to an aquifer, it is very unlikely they could.”

A recent modeling study “Potential Contaminant Pathways from Hydraulically Fractured Shale to Aquifers” by Tom Myers, 2012 concluded that fracturing fluids in the Marcellus region could be transported to the shallow aquifers in less than 10 years. The publication of this study triggered further academic analysis and in depth peer-review of Myers, 2012 paper:

yy The Pennsylvania Council of Professional Geologists (PCPG) and the Pennsylvania Geological Survey (PAGS) conducted a formal review of the 2012 report from Myers and concluded: “the author’s selective use of modeling parameters, misrepresentation and/or misapplication of existing technical references to justify his modeling scenario, and omission of certain key data and widely accepted principles regarding subsurface geology and fluid flow through porous media, highlight two major deficiencies of this work: 1) lack of objectivity, and 2) lack of understanding how to develop a credible hydrogeological conceptual site model.” https://pcpg.wildapricot.org/Resources/Documents/Shale%20Gas/PAGS%20PCPG%20Rebuttal%20to%20Frac%20Induced%20GW%20Contamination%20Article%201.pdf)

yy According to researchers at Gradient (Flewelling et al, 2013) “Our review of the literature indicates that hydraulic fracturing affects a very limited portion of the entire thickness of the overlying bedrock and therefore, is unable to create direct hydraulic communication between black shales and shallow aquifers via induced fractures. As a result, upward migration of hydraulic fracturing fluid and brine is controlled by preexisting hydraulic gradients and bedrock permeability. We show that in cases where there is an upward gradient, permeability is low, upward flow rates are low, and mean travel times are long [often >1,000,000 years]. Consequently, the recently proposed rapid upward migration (Myers, 2012) of brine and hydraulic fracturing fluid, predicted to occur as a result of increased hydraulic fracturing activity, does not appear to be physically plausible. Unrealistically high estimates of upward flow are the result of invalid assumptions about hydraulic fracturing and the hydrogeology of sedimentary basins.”

yy Other peer reviews have been published in the magazine ‘Groundwater’ from the National Ground Water Association (U.S.): http://onlinelibrary.wiley.com/doi/10.1111/gwat.12015/abstract and http://onlinelibrary.wiley.com/doi/10.1111/gwat.12015/abstract

Cement

Steel Casing

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Key Resources: API; HF1- Hydraulic Fracturing Operations-Well Construction and Integrity Guidelines; October 2009. http://www.api.org/oil-and-natural-gas-overview/exploration-and-production/hydraulic-fracturing/api_hf1_hydraulic_fracturing_operations

API; HF2- Water Management Associated with Hydraulic Fracturing; June 2010. http://www.api.org/oil-and-natural-gas-overview/exploration-and-production/hydraulic-fracturing/api_hf2_water_management

API; HF3- Practices for Mitigating Surface Impacts Associated with Hydraulic Fracturing; January 2011. http://www.api.org/oil-and-natural-gas-overview/exploration-and-production/hydraulic-fracturing/api_hf3_practices_for_mitigating_surface

API; Recommended Practice 51R – Environmental Protection for Onshore Oil and Gas Production Operations and Leases; July 2009. http://www.api.org/oil-and-natural-gas-overview/exploration-and-production/hydraulic-fracturing/rp-51r-environmental-protection

API; Standard 65-2: Isolating Potential Flow Zones during Well Construction. December 2010. http://www.api.org/oil-and-natural-gas-overview/exploration-and-production/hydraulic-fracturing/65-2_isolating_potential_flow_zones

API Overview of Industry Guidance/Best Practices Supporting Hydraulic Fracturing; 2013. http://www.api.org/~/media/Files/Policy/Hydraulic_Fracturing/Hydraulic-Fracturing-Best-Practices.pdf

Flewelling, Samuel A., Sharma, Manu; Gradient; Constraints on Upward Migration of Hydraulic Fracturing Fluid and Brine; Groundwater Publication by National Groundwater Association; July 29, 2013. http://onlinelibrary.wiley.com/doi/10.1111/gwat.12095/pdf

AWWA; Water and Hydraulic Fracturing, A White Paper From the American water Works Association; 2013. http://www.awwa.org/Portals/0/files/legreg/documents/AWWAFracturingReport.pdf

Kell, S. August 2011. State Oil and Gas Agency Groundwater Investigations and Their Role in Advancing Regulatory Reforms. A Two-State Review: Ohio and Texas. Groundwater Protection Council. http://fracfocus.org/sites/default/files/publications/state_oil__gas_agency_groundwater_investigations_optimized.pdf.

Ground Water Protection Council on behalf of the U.S. Department of Energy and National Energy Technology Laboratory; State Oil and Natural Gas Regulations Designed to Protect Water Resources; May 2009. http://fracfocus.org/sites/default/files/publications/state_oil_and_gas_regulations_designed_to_protect_water_resources_0.pdf

Pennsylvania Department of Environmental Protection; Stray Natural Gas Migration Associated with Oil and Gas Wells; 2009. http://www.dep.state.pa.us/dep/subject/advcoun/oil_gas/2009/Stray%20Gas%20Migration%20Cases.pdf

Veil, J. 2012. A White Paper Summarizing the Stray Gas Incidence & Response Forum. Ground Water Protection Council. http://www.gwpc.org/sites/default/files/files/stray%20gas%20white%20paper-final.pdf.

Part 3 – Supporting Documentation Statements regarding groundwater contamination as a result of hydraulic fracturing: http://www.truthlandmovie.com/what-they-are-saying/

“[T]here is at present little or no evidence of groundwater contamination from hydraulic fracturing of shales at normal depths. No evidence of chemicals from hydraulic fracturing fluid has been found in aquifers as a result of fracturing operations.”

– “Fact-Based Regulation for Environmental Protection in Shale Gas Development,” Energy Institute, University of Texas at Austin (p. 18, February 2012)

“I’ve yet to see a single impact of fracturing actually directly communicating with fresh groundwater resources…Again and again and again, I never see a single incidence of fracturing causing this direct communication that we keep hearing about.”

– Scott Perry, Director of Pennsylvania’s Bureau of Oil and Gas Management (June 28, 2011)

“We have never had any instance of groundwater contamination from hydraulic fracturing — ever. For any fluid, frac fluid, to migrate up a mile, two miles to the water table is impossible. You are more likely to hit the moon with a Roman candle.”

– Elizabeth Ames Jones, Texas Railroad Commission (June 3, 2011)

“I’m not aware of any proven case where the fracturing process itself has affected water.”

– Lisa Jackson, U.S. Environmental Protection Agency Administrator (May 24, 2011)

“Although an estimated 80,000 wells have been fractured in Ohio, state agencies have not identified a single instance where groundwater has been contaminated by hydraulic fracturing operations.”

– “Ohio Hydraulic Fracturing State Review,” State Review of Oil and Natural Gas Environmental Regulations, Inc. (January 2011)

“[T]here is substantial vertical separation between the freshwater aquifers and the fracture zones in the major shale plays. The shallow layers are protected from injected fluid by a number of layers of casing and cement — and as a practical matter fracturing operations cannot proceed if these layers of protection are not fully functional.”

– “The Future of Natural Gas,” Massachusetts Institute of Technology (p. 15, 2010)

“To the knowledge of the Colorado Oil and Gas Conservation Commission staff, there has been no verified instance of harm to groundwater caused by hydraulic fracturing in Colorado.”

– David Neslin, former Director of the Colorado Oil and Gas Conservation Commission (2009)

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Frequently Cited Potential Hydraulic Fracturing Contamination Cases: A chronology of different water contamination studies: http://www.ipaa.org/wp-content/uploads/downloads/2013/05/Testimony_IPAA-EID-Regarding-May-23-ENR-Roundtable-5-31-13.pdf

Pavillion, WY: yy EPA groundwater investigation, starting 2011: http://www2.epa.gov/region8/pavillion

yy After the release of the EPA’s preliminary findings in a draft report, state regulators criticized EPA’s methods, criticism that was bolstered by the Bureau of Land Management, which oversees oil and gas production on federal lands. The BLM stated that EPA’s testing procedures could have introduced “bias” into its samples Simpson, Donald A.; BLM Wyoming State Field Office comments to Draft Research Report: Investigation of Ground Water Contamination Near Pavillion, Wyoming; Mar 2012., the same ones that the Times described as being linked to gas drilling. Later, a U.S. Geological Survey report registered at least 50 different measurements from EPA’s findings, including an effective disqualification of one of only two monitoring wells used by EPA. USGS Press Release: http://www.usgs.gov/newsroom/article.asp?ID=3410&from=rss_home

yy EPA, 2013 announcement: “While EPA stands behind its work and data, the agency recognizes the State of Wyoming’s commitment for further investigation and efforts to provide clean water and does not plan to finalize or seek peer review of its draft Pavillion groundwater report released in December, 2011. Nor does the agency plan to rely upon the conclusions in the draft report. EPA is conducting a major research program on the relationship between hydraulic fracturing and drinking water in different areas of the country and will release a draft report in late 2014 (note: delayed until 2016). EPA will look to the results of that national program as the basis for its scientific conclusions and recommendations on hydraulic fracturing.” http://yosemite.epa.gov/opa/admpress.nsf/0/DC7DCDB471DCFE1785257B90007377BF

yy API report on EPA report, 2011: http://www.api.org/~/media/Files/Policy/Hydraulic_Fracturing/Pavillion-reviews/API-Report-on-Pavillion-WY.pdf

Dimock, PA (gas migration)yy EPA Regional Administrator Shawn M. Garvin. “The sampling and an evaluation of the particular

circumstances at each home did not indicate levels of contaminants that would give EPA reason to take further action. Throughout EPA’s work in Dimock, the Agency has used the best available scientific data to provide clarity to Dimock residents and address their concerns about the safety of their drinking water.” Overall during the sampling in Dimock, EPA found hazardous substances, specifically arsenic, barium or manganese, all of which are also naturally occurring substances, in well water at five homes at levels that could present a health concern. http://yosemite.epa.gov/opa/admpress.nsf/0/1A6E49D193E1007585257A46005B61AD

Barnett, TX (gas migration)yy Due to private water well owner complaints, the Railroad Commission of Texas (TRRC) began investigating

potential contamination in August of 2010. Based on their investigations the gas found was not due to oil and gas operations. The TRRC held a hearing in January 2011 to consider whether operations caused gas migration into domestic water wells in Parker County. Based on all of the evidence collected and presented the TRRC found that reference O&G operations had not contributed and are not contributing to contamination of any domestic water wells. http://www.rrc.state.tx.us/meetings/ogpfd/RangePFD.PDF

yy U.S. Environmental Protection Agency (“EPA”) withdrew the Imminent and Substantial Endangerment Order that EPA Region VI issued to Range Resources Corporation and Range Production Company (collectively, “Range”) under Section 1431 of the Safe Drinking Water Act.

DJ Basin, CO (flaming faucet)yy State of Colorado Oil and Gas Conservation Commission (COGCC) GasLand Correction Document: http://

cogcc.state.co.us/library/GASLAND%20DOC.pdf

Duke Groundwater Study:yy In 2011 and 2012, researchers from Duke University studied shale gas drilling and hydraulic fracturing and

the potential effects on shallow groundwater systems near the Marcellus Shale in Pennsylvania and the Utica Shale in New York. Sixty drinking water samples were collected in Pennsylvania and New York from bedrock aquifers that overlie the Marcellus or Utica Shale formations—some from areas with shale gas development and some from areas with no shale gas development. The study found that methane concentrations were detected generally in 85% of drinking water wells across the region— regardless of whether shale gas drilling occurred in the area—but that concentrations of methane were substantially higher closer to shale gas wells. However, the researchers reported that a source of the contamination could not be determined. Further, the researchers reported that they found no evidence of fracturing fluid in any of the samples. http://www.eenews.net/assets/2011/05/09/document_pm_01.pdf

yy Similar studies, such as the one by USGS, determine that methane is present in many counties in Pennsylvania, including those without shale development. “Testing of 1,701 water wells in northeastern Pennsylvania shows that methane is ubiquitous in groundwater, with higher concentrations observed in valleys vs. upland areas and in association with calcium/sodium/bicarbonate, and sodium chloride-rich waters…on a regional scale, methane concentrations are best correlated to topographic and hydrogeologic features, rather than shale-gas extraction.” http://pubs.usgs.gov/sir/2013/5085/; http://www.ngwa.org/Media-Center/press/2013/Pages/2013-05-24-groundwater-.aspx

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Appendix A – Recommended PracticesIndustry in the U.S has accumulated a great deal of experience in how to safely manage shale gas operations. This has resulted in a long list of shale operations recommended practices.

Examples of Standard Operating Procedures:Well Integrity

yy Implementation of recognized well integrity standards (OGP 485, ISO, American Petroleum Institute 65-2)

yy Design and construct new wells with properly engineered barriers to isolate and protect groundwater

yy Design pressure relief and control systems for anticipated flow rates, safe management and proper containment of fluids

yy Monitor system pressures during drilling and completion activities, and take appropriate corrective actions, including shutting down, if necessary

yy Monitor the well’s mechanical integrity throughout its life

yy Test emergency well shutdown procedures and blowout preventers and conduct pressure tests on well components according to good industry practices including prior to the start of the first fracture stage

yy Follow recognized standard well abandonment procedures at the end of a well’s productive life, including setting cement plugs and/or mechanical barriers in the wellbore to isolate oil and gas from groundwater

yy Operators should drill through fresh ground water only with air, water, or water based drilling fluids

Well Site Design and Constructionyy Use impermeable natural or manmade material in critical well pad areas to prevent accidental spills and

releases from contacting the ground

yy Employ diversionary structures/storm-water management practices to handle storm water flow at a well pad

yy Use secondary containment, including berms, for tanks containing fluids (excluding groundwater and other harmless fluids)

Spill Prevention and Emergency Response yy Prepare a spill prevention and emergency response plan that includes access to key equipment and material,

as well as internal and external reporting processes and contacts

yy Communicate emergency and spill response notification procedures to employees and contractors on site, clarifying individual responsibilities and providing necessary training

yy Have appropriate amounts of spill response equipment (personal protective equipment, sorbent material) readily available at the well site

Operations yy Store chemicals (fluids and liquid additives) in tanks or containers with secondary containment, and dry

additives with weather protection, consistent with requirements for all oil and gas operations

yy Consider the use of closed-loop drilling fluids management systems, where practicable, to reduce the risk of pit liner leakage and reduce the risk of surface spills, reduce waste volumes, reduce pad sizes Organize the waste area with tanks or basins for temporary storage of each type of waste

yy Implement an onsite management system to monitor tank liquid levels

yy Design equipment and associated procedures for fuelling operations to reduce the risk of accidental fuel spillage

yy Test the integrity of high pressure surface equipment (wellhead, flowlines, manifolds, piping and pumping equipment)

Produced Water Disposalyy Test and measure produced water from production zones to assess disposal options

yy Capture produced water from well operations in tanks/impoundments and manage these fluids according to government-approved methods (reinjection, re-use/recycling, treatment and disposal)

1. Overview of Industry Guidance/Best Practices on Hydraulic Fracturing. API. 2012. http://www.api.org/~/media/Files/Policy/Exploration/Hydraulic_Fracturing_InfoSheet.pdf

Copies of the documents are available via the API website www.api.org.

Summary: Industry, working through organizations like the American Petroleum Institute (API), has a long history of developing consensus based “best practices.” These best practices are developed by industry experts in a variety of areas of technology and operations and go through a rigorous review process before being adopted. Subsequently they are reviewed regularly to ensure they remain accurate and reflect the normal evolution and improvements in technology and operational practices over time.

Hydraulic fracturing has been a routine industry practice since 1947, first applied to improve crude oil production. Therefore, the API ” HF Series” of guidance documents is applicable to fracturing activity associated with both crude oil and natural gas resources.

HF 1 -- Hydraulic Fracturing Operations – Well Construction and Integrity Guidelines, 1st Edition, October 2009, (API).

yy Highlights industry practices for well construction and integrity for wells that will be hydraulically fractured.

yy The guidance identifies actions to protect shallow groundwater aquifers, while also enabling economically viable development of oil and natural gas resources.

HF 2 -- Water Management Associated with Hydraulic Fracturing, 1st Edition, June 2010, (API).

yy Identifies best practices used to minimize environmental and societal impacts associated with the acquisition, use, management, treatment, and disposal of water and other fluids associated with the process of hydraulic fracturing.

yy Focuses primarily on issues associated with hydraulic fracturing pursued in deep shale gas development, but also describes the important distinctions related to hydraulic fracturing in other applications.

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HF 3 -- Practices for Mitigating Surface Impacts Associated with Hydraulic Fracturing, 1st Edition, February 2011, (API).

yy Indentifies the best practices for minimizing surface environmental impacts associated with hydraulic fracturing operations.

yy Focused on protecting surface water, soils, wildlife, other surface ecosystems, and nearby communities.

yy Includes API’s policy on chemical disclosure:

yy API supports transparency regarding the disclosure of the chemical ingredients;

yy States are the proper authority to determine reporting requirements and formatting of reporting and public disclosure;

yy Proprietary information should be protected; and

yy Hydraulic fracturing is effectively regulated by numerous federal, state and local requirements. Hydraulic fracturing should not be placed exclusively under the purview of the Safe Drinking Water Act (SDWA) or any other federal statute.

Std 65 Part 2 -- Isolating Potential Flow Zones During Well Construction, 2nd Edition, December 2010, (API).

yy Provides best practices for isolating potential flow zones, an integral element in maintaining well integrity. Focus is the prevention of flow through or past barriers that are installed during well construction.

yy Barriers that seal wellbore and formation pressures may include mechanical barriers such as seals, cement, or hydrostatic head pressure or operational barriers such as flow detection practices.

RP 51 R-- Environmental Protection for Onshore Oil and Gas Production Operations and Leases, 1st Edition, July 2009, (API).

yy Provides environmentally sound practices for domestic onshore oil and gas production operations, including fracturing. Applies to all production facilities, including produced water handling facilities. Operational coverage begins with the design and construction of access roads and well locations, and includes reclamation, abandonment, and restoration operations.

yy Annex A provides guidance for a company to consider as a “Good Neighbor.”

2. FracFocus website. Since 2011. www.fracfocus.org

Summary: Publically accessible web site (fracfocus.org) for disclosure on fracturing additives and ingredients for wells in the United States. Developed and operated by the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission with industry collaboration. In addition, site provides substantial background and technical information on shale gas operations chemicals.

The International Oil and Gas Producers Association manage a similar publically accessible web site for disclosure on fracturing additives and ingredients for wells in the European Economic Area. http://www.ngsfacts.org/

3. Golden Rules for a Golden Age of Gas. A World Energy Outlook Special Report on Unconventional Gas. International Energy Agency (iea). 2012. http://www.worldenergyoutlook.org/media/weowebsite/2012/goldenrules/WEO2012_GoldenRulesReport.pdf Annex: http://www.worldenergyoutlook.org/media/weowebsite/2012/goldenrules/WEO2012_GoldenRulesReport_Annex.pdf

Summary: This report features two cases: a Golden Rule Case, in which the highest practicable standards are adopted, gaining industry a social license to operate, and its counterpart, in which the tide turns against unconventional gas as constraints prove too difficult to overcome.

4. Good practice guidelines for the development of shale oil and gas. OGP Report nr 489. December 2013. http://www.ogp.org.uk/publications/

These OGP-IPIECA Good practice Guidelines for the development of shale oil and gas are intended to complement established practices and provide a general, global framework of principles for operations, under which more detailed standards and/or practices may be developed to meet regional and local circumstances. For the majority of issues, good practices for shale oil and gas will be identical to those for ‘conventional’ operations.

5. Recommended Standards and Practices. Appalachian Shale Recommended Practices Group (ASRPG). April 2012. http://asrpg.org/pdf/ASRPG_standards_and_practices-April2012.pdf

Summary: These recommended practices are designed for the Marcellus Shale play only. They were designed to ensure the protection of the Appalachia environment. Anadarko, along with eleven other operators were instrumental in developing and implementing best practices in the industry.

6. Recommended Practices: Pre-Drill Water Supply Surveys (MSC RP 2013-3). Marcellus Shale Coalition. August 28, 2012, Updated March 19, 2013. http://marcelluscoalition.org/wp-content/uploads/2013/03/RP_Pre_Drill_Water.pdf

Summary: A description of recommended practices Pre-Drill Water Supply Surveys and guiding principles for the Marcellus Shale Coalition.

7. Guiding Principles for Hydraulic Fracturing. Canadian Association of Petroleum Producers. December 2012. http://www.capp.ca/getdoc.aspx?DocId=218125&DT=NTV

Summary: Key principles producers follow when drilling in Canada.

8. UK Onshore Shale Gas Well Guidelines – exploration and appraisal. UK Onshore Operators Group (UKOOG). February 2013. http://www.ukoog.org.uk/elements/pdfs/ShaleGasWellGuidelines.pdf

Summary: The guidelines are relevant to UK onshore shale gas wells designed and constructed for the extraction of naturally occurring hydrocarbons which includes stimulation by techniques involving high volume hydraulic fracturing. The guidelines contain what is considered to be good industry practice and they reference the relevant legislation, standards and practices.

9. Global Recommended Practice for Shale Gas. Det Norske Veritas. http://www.dnv.com/industry/oil_gas/segments/lng_natural_gas/shale_gas/index.asp

Summary: The best practices for the entire life cycle of shale gas extraction. The framework was developed by DNV, a company that provides third party auditing and certification services.

10. Shale Gas Exploration and Production, Key Issues and Responsible Business Practices-Guidance note for Financiers. CPFI. November, 2012. http://iehn.org/documents/CPFIShaleGasGuidanceNoteApril2013.pdf

Summary: The guideline identifies 16 areas of responsible business practice so that financial institutions can minimize risks to both their investments and their reputations from environmental hazards and adverse community impacts.

11. International Organization for Standardization (ISO) documents. A list of standards is available from the OGP website (in addition to the ISO website) http://www.ogp.org.uk/pubs/4210.pdf

yy BS EN ISO 11960 - Petroleum and natural gas industries – steel pipes for use as casing and tubing (API Spec 5CT), 2011.

yy BS EN ISO 15156 - Materials for use in H2S-containing environments in oil and gas production (NACE MR

2120

0175), 2009.

yy BS EN ISO 10423 - Petroleum and natural gas industries – drilling and production equipment – wellhead and christmas tree equipment (API Spec 6A), 2009.

yy BS EN ISO 14310 - Petroleum and natural gas industries – downhole equipment – packers and bridge plugs, 2008.

yy BS EN ISO 10417 - Petroleum and natural gas industries – subsurface safety valve systems – design, installation, operation and redress, 2004.

Appendix B – Academic literature on groundwater monitoring and water management in relation to shale gas operations

Groundwater Impact Studies and Water Baseline Testing1. Methane in Pennsylvania water wells unrelated to Marcellus shale fracturing. Lisa Molofsky, et al. GSI Environmental & Cabot Oil and Gas Corp. 2013. http://www.cabotog.com/pdfs/MethaneUnrelatedtoFracturing.pdf

Summary: Water quality study of over 1,700 water wells in northeastern Pennsylvania.

2. Geochemical and isotopic variations in shallow groundwater in areas of Fayetteville shale development, north-central Arkansas. N.R. Warner, et al., Duke University. Applied Geochemistry. 2013. http://ac.els-cdn.com/S0883292713001133/1-s2.0-S0883292713001133-main.pdf?_tid=d8830f82-be38-11e2-8828-00000aacb362&acdnat=1368716393_f19f4c0145235ae398ac5167cf2207ba

Summary: The geochemistry of 127 domestic groundwater wells was investigated in aquifers overlying the Fayetteville Shale in north-central Arkansas, where approximately 4000 wells have been drilled since 2004 to extract unconventional natural gas.

3. The Impact of Marcellus Gas Drilling on Rural Drinking Water Supplies. University of Pennsylvania, Elizabeth W. Boyer, et al. October 2011. http://www.rural.palegislature.us/documents/reports/Marcellus_and_drinking_water_2011_rev.pdf

Summary: Large scale water quality study on private water wells before and after the drilling of nearby Marcellus Shale gas wells.

4. Naturally Occurring Methane Found in Some Sullivan County Water. U.S. Department of the Interior, U.S. Geological Survey. June 2013. http://www.usgs.gov/newsroom/article.asp?ID=3619 (link to article located on this page)

Summary: Example of water baseline sampling.

5. Recommended Practices: Pre-Drill Water Supply Surveys (MSC RP 2013-3). Marcellus Shale Coalition. August 28, 2012, Updated March 19, 2013. http://marcelluscoalition.org/wp-content/uploads/2013/03/RP_Pre_Drill_Water.pdf

Summary: A description of recommended practices Pre-Drill Water Supply Surveys and guiding principles for the Marcellus Shale Coalition.

6. Study of the Potential Impacts of Hydraulic Fracturing on Drinking Water Resources: Progress Report. United States EPA. December 2012. http://www2.epa.gov/sites/production/files/documents/hf-report20121214.pdf

Summary: This study assesses the potential impacts of hydraulic fracturing on drinking water resources, if any, and to identify the driving factors that may affect the severity and frequency of the impacts. The study runs different scenarios/models on migration routes from hydraulic fracturing fluids and gas. The study will be released in 2016.

Water Management Practices1. Water Management in Shale Gas Plays. Marcus Oliver Gay, Sarah Fletcher, Samantha Goss, IHS Water White Paper. August 2012. http://connectoilandgas.ihs.com/StaticDocuments/LandingPage/WaterManagement.pdf

Summary: This paper focuses on water treatment, transport and disposal as key concerns in shale gas development, including national trends and specific information relating to the Pennsylvania region of the Marcellus play.

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2. Water Management Guideline Associated with Hydraulic Fracturing. API Guidance Document HF2. June 2010. http://www.api.org/~/media/Files/Policy/Exploration/HF2_e1.pdf

Summary: This guidance document describes many of the current industry best practices used to minimize environmental impacts associated with the acquisition, use, management, treatment, and disposal of water and other fluids associated with the process of hydraulic fracturing.

3. Water Management Technologies Used by Marcellus Shale Gas Producers. John A. Veil, Argonne National Laboratory. Oil and Natural Gas Technology. July 2010. http://energy.wilkes.edu/PDFFiles/Issues/water_management_in_the_marcellus.pdf

Summary: Description of various water management challenges associated with shale gas production and how they are managed in the Marcellus Shale.

4. A Better and Coordinated Understanding of Water Resources Could Help Mitigate the Impacts of Potential Oil Shale Development. GAO. 2010. http://www.gao.gov/products/GAO-11-35

Summary: This report covers (1) what is known about the potential impacts of oil shale development on surface water and groundwater, (2) what is known about the amount of water that may be needed for commercial oil shale development, (3) the extent to which water will likely be available for commercial oil shale development and its source, and (4) federal research efforts to address impacts to water resources from commercial oil shale development. The report examined environmental impacts and water needs studies and talked to Department of Energy (DOE), Department of the Interior (Interior), and industry officials.

5. Deep Shale Natural Gas and Water Use, Part Two: Abundant, Affordable and Still Water Efficient. Mantell. 2010. http://www.springsgov.com/units/boardscomm/OilGas/GWPC%20-%20Deep%20Shale%20Natural%20Gas%20and%20Water%20Use.pdf

Summary: This paper and presentation is an update to “Deep Shale Natural Gas: Abundant, Affordable and Surprisingly Water Efficient” originally developed for the 2009 Groundwater Protection Council (GWPC) Water/Energy Symposium in Salt Lake City, Utah.

6. Marcellus Shale Water Management Challenges in Pennsylvania, (SPE -119898-PP).‖ A.W. Gaudlip, L.O. Paugh and T.D. Hayes. Society of Petroleum Engineers. 2008. http://www.onepetro.org/mslib/servlet/onepetropreview?id=SPE-119898-MS (click on PDF link on top right hand side of page for full PDF).

Summary: This paper discusses the many challenges the oil and gas industry face working in Pennsylvania while they expand developments in the Marcellus Shale.

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