HYDRAULIC FRACTURING OPERATIONS: SEPARATING FACT FROM FICTION - - PowerPoint PPT Presentation

Albany, New York May 30, 2013

Mark K. Boling President

HYDRAULIC FRACTURING OPERATIONS: SEPARATING FACT FROM FICTION

Regulatory Considerations

1

Surface Considerations Subsurface Considerations

Surface Considerations

2

Air Emissions Water Supply Water Handling Water Reuse & Disposal Surface Impact

• Drilling Locations
• Truck Traffic & Road Damage
• Infrastructure

Subsurface Considerations

3

Protecting Underground Water Resources Frac Fluid Disclosure

Protecting Underground Water Resources

4

Well Integrity Is the Key!

Well Integrity

5

Well Construction Standards

2

Evaluate Stratigraphic Confinement

1

Evaluate Mechanical Integrity of Well

3

Monitor Frac Job & Producing Well

4

~2000’ - 3000’

• f Sediment

Surface Casing 925’ 850’ Usable Fresh Water Various Upper Devonian Sands & Shales Tully Limestone Hamilton Group Shales Onondaga Limestone 100’ - 300’ Marcellus Shale

• 1. Evaluating Stratigraphic Confinement

6 Cross sectional view

Virtually all fresh water wells are less than 850 feet deep in the Marcellus Shale area Thousands of feet of rock separates the Marcellus Shale from shallow, freshwater zones

Cross sectional view

~2000’ - 3000’

• f Sediment

Surface Casing 925’ 850’ Usable Fresh Water Various Upper Devonian Sands & Shales Tully Limestone Hamilton Group Shales Onondaga Limestone 100’ - 300’ Marcellus Shale

Evaluating Stratigraphic Confinement

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• Differences in rock properties (i.e. strength and brittleness/elasticity) between the

target formation (Marcellus Shale) and surrounding formations (Hamilton Group Shales and Tully Limestone above, and Onondaga Limestone below) act to limit growth of the hydraulic fractures outside the target formation.

• Hydraulic fractures follow the path of least resistance and continue to propagate

within the Marcellus Shale.

Hamilton Group Shales 100’ - 300’ Marcellus Shale Onondaga Limestone

Microseismic Evaluation of Stimulation Treatment

8 Cross Sectional View 1,000’

Subsea Depth

• 3,000’
• 5,000’
• 4,000’

Top of Tully Limestone Well Path Top of Marcellus Shale Top of Onondaga Limestone

200’

The largest recorded seismic event generates the same amount of energy as would be released when dropping a gallon of milk from chest high to the floor.

~2000’ - 3000’

• f Sediment

Surface Casing 925’ 850’ Usable Fresh Water Various Upper Devonian Sands & Shales Tully Limestone Hamilton Group Shales Onondaga Limestone 100’ - 300’ Marcellus Shale

Evaluating Stratigraphic Confinement

Shallow Wells

9

1850’ 850’ Usable Fresh Water 100’ - 300’ Marcellus Shale 1000’ Middle-Upper Devonian Sands & Shales Abandoned Well Transmissive Fault

In most shallow formations (less than ~2,000’), the hydraulic fracture will propagate in a horizontal direction.

Cross sectional view

~2000’ - 3000’

• f Sediment

Surface Casing 925’ 850’ Usable Fresh Water Various Upper Devonian Sands & Shales Tully Limestone Hamilton Group Shales Onondaga Limestone 100’ - 300’ Marcellus Shale

• 2. Well Construction Standards

10 Cross sectional view

4000’

• f Sediment

Surface Casing 550’

Cross sectional view

400’ Usable Fresh Water 2100’ Various Atoka Sands & Shales 1300’ Upper Hale 600’ Morrow Shale Hindsville 300’ Fayetteville Shale

FRESH WATER AQUIFER ZONE SHALLOW PRODUCING ZONE

WELL CONSTRUCTION STANDARDS

TARGET PRODUCING ZONE CONDUCTOR PIPE SURFACE CASING PRODUCTION CASING CEMENT CEMENT CEMENT

FRESH WATER AQUIFER ZONE SHALLOW PRODUCING ZONE CONDUCTOR PIPE SURFACE CASING INTERMEDIATE CASING

WELL CONSTRUCTION STANDARDS

TARGET PRODUCING ZONE CEMENT CEMENT

(New York Proposed Rules)

CEMENT PRODUCTION CASING CEMENT

• 3. Evaluating Mechanical Integrity of Well
• Internal Mechanical Integrity

– Verify appropriateness of proposed casing program (e.g., size, grade, minimum internal yield pressure, etc.) – Test casing string to ensure it can withstand maximum stimulation pressure

• External Mechanical Integrity

– Verify quality of cement – Identify top of cement – Test cement job (FIT, CBL, etc.) when operations indicate inadequate coverage

13

FRESH WATER AQUIFER ZONE SHALLOW PRODUCING ZONE CONDUCTOR PIPE SURFACE CASING PRODUCTION CASING TARGET PRODUCING ZONE

GOOD MECHANICAL INTEGRITY

FRESH WATER AQUIFER ZONE SHALLOW PRODUCING ZONE TARGET PRODUCING ZONE CEMENT CEMENT CEMENT CEMENT

GOOD MECHANICAL INTEGRITY

(New York Proposed Rules)

CONDUCTOR PIPE SURFACE CASING INTERMEDIATE CASING PRODUCTION CASING

CEMENT CHANNELING

PRESSURE BUILDS UP

CONDUCTOR PIPE SURFACE CASING PRODUCTION CASING FRESH WATER AQUIFER ZONE SHALLOW PRODUCING ZONE TARGET PRODUCING ZONE CASING CEMENT FORMATION

PSI 1,000 psi

FRESH WATER AQUIFER ZONE SHALLOW PRODUCING ZONE CONDUCTOR PIPE SURFACE CASING INTERMEDIATE CASING TARGET PRODUCING ZONE PRODUCTION CASING

CEMENT CHANNELING

PRESSURE BUILDS UP

CASING CEMENT FORMATION

(New York Proposed Rules)

• 4. Monitoring Frac Job and Producing Well
• Monitor pump pressure

and rate during frac job

• Monitor annular

pressures during and after frac job

• Terminate operations

and take corrective action if abnormal pressure responses indicate mechanical integrity failure or fracture growth out of target zone

18

Water Supply

19

Location, Rate & Timing of Withdrawals Cumulative Impact Assessment

19

Volumes Needed

Water Handling

20

Trucks vs. Pipeline

• Truck Traffic
• Road Damage

Impoundments vs. Tanks

• Closed-Loop Drilling Systems
• Recycling Logistics
• Air Emissions

Tracking Wastewater

• Characterize Wastewater
• Record Volumes Produced
• Verify Volumes Delivered

Water Reuse & Disposal

Water Recycling & Reuse

• Volume and quality of wastewater
• Chemical compatibility
• Storage and transportation logistics

Water Treatment Facilities

• Flowback & produced water

chemistry

• Capacity & Capability limitations

(NORM, DBPs, heavy metals)

• Central vs. drill site facilities

Water Disposal Wells

• Geological & hydrological limitations
• NIMBY concerns
• Triggered seismicity considerations

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25,000’ IGNEOUS BASEMENT LIMESTONE SHALE

TRIGGERED SEISMICITY

WATER DISPOSAL WELL WATER DISPOSAL WELL HORIZONTAL SHALE WELL SAND

The largest recorded seismic event generates the same amount of energy as would be released when dropping a gallon of milk from chest high to the floor.

EXISTING STRESS NEW STRESS 22

Surface Considerations

23

Reduction Technology

• Catalytic reduction
• Ultra-low sulfur diesel fuel
• LNG and CNG fuels
• Oxidation catalysts
• Green completions, vapor recovery

units, low bleed/no bleed pneumatic devices, plunger lift systems, leak detection

Air Emissions

Emission Type

• NOx
• SO2
• CO
• PM
• CH4
• VOCs (incl. BTEX)

Emission Levels

• EPA
• Industry
• State regulators
• Research groups

Surface Considerations

24

Infrastructure

• Compressors
• Pipelines
• Roads
• Water treatment

facilities

Truck Traffic & Road Damage Drilling Locations

• Pit construction
• Erosion and

sedimentation

• Chemical storage

Surface Impact

Surface Considerations

25

No Pad Drilling

Surface Considerations

26

Pad Drilling

Pad Drilling

• Reduce surface footprint by over 80%
• Reduce truck traffic up to 65%
• Optimize installation of infrastructure

PERCEIVED RISK ACTUAL RISK

RISK

INFORMATION GAP

Smart Regulation = Effective Risk Management

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ACTUAL RISK PERCEIVED RISK COLLABORATION AND RISK COMMUNICATION

SMART REGULATION PERCEIVED RISK ACTUAL RISK PUBLIC TRUST & ACCEPTANCE

ACTUAL RISK PERCEIVED RISK

SMART REGULATION PERCEIVED RISK ASSESSED RISK

COLLABORATION AND RISK COMMUNICATION

PUBLIC TRUST & ACCEPTANCE

Albany, New York May 30, 2013

Mark K. Boling President

HYDRAULIC FRACTURING OPERATIONS: SEPARATING FACT FROM FICTION