Presentation by John Martin 2-6-2012
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Transcript of Presentation by John Martin 2-6-2012
Unconventional Resource Development and the Environment:
The Curious Situation in New YorkJohn P. Martin, Ph.D.
JPMartin Energy Strategy LLCSaratoga Springs, NY 12866
DirectorShale Resources and Society Institute
University at Buffalo, SUNY
and
Senior AdvisorEcology and Environment, Inc.
2nd United States‐Indonesia Energy Investment RoundtableJakarta, IndonesiaFebruary 6, 2012
Background – Fracture Stimulation and Unconventional Development
Early Development:
Natural Fracture Systems
•1820s: 1st
well, Fredonia, NY
•1860s: Explosive Fracturing with
Nitroglycerin (PA,
NY, KY, WV)
•1880s: 1st
Marcellus
wells in NY
•1890s: Ohio Shale, Big Sandy,
West Virginia
•1930s: acidizing
Modern Development:
Induced Fracture Stimulations
•1950s –
1990s: – Napalm, Nitrogen, Nuclear – vertical and limited horizontal– Barnett Shale, Texas water fracs
•2000 – Present: – High Volume Hydraulic Fracture
stimulation using water, propane
and recently CO2
– Shale plays on 6 of the 7 continents
State of the Art:
Complex engineered
systems requiring
significant planning,
quality control and
monitoring
Increasing Complexity
Slide courtesy of Ecology and Environment, Inc.
Shale Well Life
cycle Syno
psis
Top: Sierra ClubMiddle: Grant Jacobs, Southwestern Energy, 2010Bottom: USDOE, Shale Gas Primer, 2009
First of Three Critical Innovations: Multiwell Pads
• Key cost‐reduction factor.• Used as early as 1970 in the
Prudhoe Bay Field, Alaska.
• Flexible drilling site that can accommodate multiple
wellheads.
• Centralized site operations eliminates duplicative ancillary
activities such as drilling rig mobilization/ demobilization.
Alaska Oil and Gas
Conservation
Commission
Multiple Well
Pads: 1970
Potential Environmental Issues• There are few environmental impacts that
differ from the typical siting operation for the industry.
• Seismic operations: disturbance and noise
• Site development:– erosion– habitat fragmentation
– dust – soil compaction
• Ultimately, centralized multiwell pads REDUCE overall disturbance and impact
Well Pad Under Preparation (PA) – Source: www.naturalgas.psu.edu
Top: NYSDECMiddle: Grant Jacobs, Southwestern Energy, 2010Bottom: Star-Telegram/Joyce Marshall, 2010
• Well is “turned”
to parallel formation rather.
• First horizontal well: 1929• First horizontal shale well: 1986
(Devonian, WV, USDOE research well)
• First commercial horizontal shale well: 1988 (Michigan Antrim Shale)
• “Today, about 2/3rds of the U.S. rig count is non‐vertical, and close to
50% of the rig count is drilling horizontal wells.”
(Triepke 2010)
Innovation #2: Horizontal Drilling
Triepke, Joseph, “Land Rig Review: Rebound Predicated on Oil/Horizontal Drilling,” Rigzone, March 8, 2010 (http://www.rigzone.com/news/article.asp?a_id=88967). Image: Blue Flame Energy Corp.
National Energy Board (Canada), A Primer for Understanding Canadian Shale Gas November 2009
Environmental Issues • Underground fluid and gas migration due to
drilling practices (well design, casing, cementing)
• Noise and air emissions
• Visual impact
• Onsite spills
Insulation blankets used to deaden noise from
drilling operations
Top: Grant Jacobs, Southwestern Energy, 2010Middle: NTC ConsultantsBottom: USDOE, Shale Gas Primer, 2009
Innovation #3: Hydraulic Fracture Stimulation• First hydraulic fracturing: 1903 (granite mining) • First commercial oil and gas frac:1949• First horizontal shale frac: 1995 (Barnett Shale, Texas, USA)• Estimated 35,000 wells annually in USA. (API HF2 2010)• Over 1 million wells of the 2.5 million drilled in USA since 1949
have been hydraulically fractured. (API HF2 2010 and EIA)• Horizontal hydraulic fracturing can be equated to a series of
vertical‐well scale frac stages increasing production substantially.
Image: Blue Flame Energy Corp.
Potential Environmental Issues• Truck traffic ‐
noise, emissions, road damage
• Water quality impacts:– ecosystem and aquifer impacts associated with water withdrawals
for
hydraulic fracturing
– Water contamination due to wellbore failure, spills, disposal
• Naturally occurring radioactive materials
• Air emissions: – Greenhouse gases– Volatile organic compounds
• Induced Seismicity– Stimulation – no
– Disposal –
maybe
Lifecycle Fluid Management
And One that is Likely not an Issue“One of the commonly perceived risks from hydraulic fracturing is
the
possibility of leakage of fracturing fluid through fractures into drinking water.
Regulators and geophysical experts agree that the likelihood of properly
injected fracturing fluid reaching drinking water through fractures is remote
where there is a large depth separation between drinking water sources and
the producing zone.”
Secretary of Energy Advisory Board Subcommittee 90‐Day
Report Shale Gas Production, August 18, 2011
Fish
er, K
evin
, “D
ata
Con
firm
the
Saf
ety
of W
ell
Frac
turin
g,”A
mer
ican
Oil
and
Gas
Rep
orte
r, Ju
ly,
2010
Potential Life Cycle Impacts• Potential Negative
Impacts:– Surface
• Site disruption, spills, water
management
– Subsurface• Drinking water table,
chemicals
• Community and Cumulative Impacts:
– Change in community
character, growth?– Cumulative
• air, water, noise, visual and
ecological (including climate
change)
• Potential Positive Impacts:
– Jobs• Direct and indirect
– income and tax revenue• Company, landowner,
associated services, local
and state tax collections
• Community and Cumulative Impacts:
– Economic development• Infrastructure, growth
– Energy for society and all its ramifications
• Domestically‐sourced,
multi‐purpose fuel
Environmental Issues: New York Style!• Oil, Gas and Solution Mining Law
• NYS Environmental Quality Review Act– “encourage productive and enjoyable
harmony between man and his environment”
– Identify potential adverse impacts and ways to mitigate them (think NEPA).
• Surface waters, ground water, agriculture, historical & archeological
sites, significant habitats, floodplains, wetlands, state lands, coastal zone,
streams, general habitat loss
New York Policy Actions
• July 21, 2008: Shale well spacing goes in effect.
• July 22, 2008: A media report critical of hydraulic fracturing and NYS regulation released.
• July 23,
2008: While announcing signing the new spacing law, the Governor requests new
environmental review of drilling practices.
• Starts evaluation of high volume hydraulic fracture stimulation and multi‐well pads.
• BIG ISSUE: New York City watershed
The SGEIS Review Process:
A Very Public Debate
(clever title: are they cutting in on your lawyer’s action?)
Note liberal use of celebrity/ environmental activist.
And tree….
Understanding Context
• Once again requisite use of
celebrities • “…water that can be lit on fire
right out of the sink…”
• But that’s not so unusual.. This photo
from Saratoga Lake published in the
Daily Gazette, July 13, 1997
Photo Credit: Geraint Lloyd
SGEIS and Jobs: Ecology and Environment Study Versus JOBS…
“Opponents of natural gas hydrofracking take part in a rally at the Legislative Office Building on Monday, Jan. 23, 2012 in Albany, NY. Opponents held the rally prior to meeting with legislators to press for a ban on hydrofracking in the state.”(Photos: Paul Buckowski / Times Union)
Read more: http://www.timesunion.com/local/articl e/Fracking-foes-push-drilling-ban- 2681557.php#ixzz1kPb5Pf1h
Nearing, Brian, “Fracking foes push drilling ban,” Times Union, January 23, 2012
“New York State is the key battleground that will determine the
future of fracking in the U.S., and January 11, 2012, is a turning point.”
Fracking’s Future in the U.S. Comes Down to Upcoming New York State Decisions
By Mark Fischetti | January 11, 2012| 10
Realizing a Risk: Is this Regulatory Failure?
• Since 2008, > 3,500 Marcellus wells have been drilled in Pennsylvania – with less than 25 major impact events.*
• Perrow’s Normal Accidents: “There is no such thing as a system that is totally risk free. No matter how we work to reduce the likelihood of failure, there is always some minimal probability that some time, some place, there
will be failure”**
• Betrayal Aversion: “The mere possibility of betrayal threatens the social order that enables us to trust the
safety infrastructure of our society, causing intense visceral reactions and negative emotions toward the betrayer (Koehler and Gershoff 2003).”***
* Considine et al. 2012 in review. ** from Mike Uretsky, Ph.D. unpublished manuscript using the framework developed in Perrow, Charles,
Normal Accidents: Living with High‐Risk Technologies, New York, Basic Books, 1984. *** Gershoff, A. and J. Koehler,
Safety First? The Role of
Emotion in Safety Product Betrayal Aversion, JOURNAL OF CONSUMER
RESEARCH, Vol. 38, June 2011
Thank You