O IL & G AS P RODUCTION T RANSPORTATION I MPACT S TUDY - - PowerPoint PPT Presentation

SLIDE 1

OIL & GAS PRODUCTION TRANSPORTATION IMPACT STUDY

Presentation to Boulder County Board of County Commissioners

December 6, 2012

SLIDE 2

STUDY OBJECTIVES

• I

d e n t i f y p

• t

e n t i a l i m p a c t s

• f
• i

l a n d g a s i n d u s t r y

• n

B

• u

l d e r C

• u

n t y r

• a

d s

• E

s t i m a t e g e n e r a l m a g n i t u d e

• f

:

– O i l & g a s r e l a t e d t r u c k t r a f f i c – I n c r e m e n t a l r

• a

d d e t e r i

• r

a t i

• n

a n d s a f e t y c

• s

t s

• D

e v e l

• p

a c

• s

t r e c

• v

e r y m e c h a n i s m t h a t a l l

• w

s t h e C

• u

n t y t

• f

f s e t i n c r e a s e d r

• a

d d e t e r i

• r

a t i

• n

a n d s a f e t y c

• s

t s

• I

n t e g r a t e s t u d y r e s u l t s w i t h f

• r

t h c

• m

i n g

• i

l & g a s l a n d u s e r e g u l a t i

• n

s

SLIDE 3

SERVICE DELIVERY CHALLENGES

• O

i l & g a s i n d u s t r y h a s u n u s u a l c h a r a c t e r i s t i c s …

– D i s p e r s e d – R

• a

d i n t e n s i v e – M i g r a t

• r

y – E v

• l

v i n g : d r i l l i n g t

• p

r

• d

u c t i

• n

– U n c e r t a i n p a c e a n d i n t e n s i t y

• f

d e v e l

• p

m e n t – U n c e r t a i n t r a f f i c p a t t e r n s

SLIDE 4

STUDY PROCESS DIAGRAM

SLIDE 5

STUDY AREA

SLIDE 6

TRIP GENERATION – CLUSTERED DEVELOPMENT

• S
• u

r c e s i n c l u d e r e c e n t p l a n n i n g d

• c

u m e n t s f r

• m

:

– P e n n s y l v a n i a – N e w Y

• r

k – U t a h – T e x a s

• A

s s u m e s c l u s t e r e d d e v e l

• p

m e n t , h

• r

i z

• n

t a l d r i l l i n g , h y d r a u l i c f r a c t u r i n g

• F
• u

r w e l l s ,

• n

e p a d

• N

a t i

• n

a l s t u d i e s a d a p t e d t

• b

s e r v e d p a t t e r n s i n Wa t t e n b e r g / N i

• b

r a r a

Sources: "Impacts on Community Character of Horizontal Drilling and High Volume Hydraulic Fracturing in M arcellus Shale and Other Low-Permeability Gas Reservoirs", NTC Consultants, September 2009 and February 2011. "Highway Freight Traffic Associated with the Development of Oil and Gas Wells", Utah Department of Transportation, October 2006. "Potential Development of the Natural Gas Resources in the M arcellus Shale", National Park Service, December 2008 Phase Construction Pad and Road Construction 87 Drilling Rig 93 Drilling Fluid and M aterials 270 Drilling Equipment (casing, drill pipe, etc) 453 Completion Rig 42 Completion Fluid and M aterials 170 Completion Equipment (pipe, wellhead, etc) 10 Fracturing Equipment (pump trucks, tanks, etc) 317 Fracture Water 4,152 Fracture Sand 191 Flowback Water Disposal 1,400 7,184 Annual Production Trips Per Pad 730 Truck Trips 1 pad, 4 wells Drilling Completion Total Development Trips

SLIDE 7

SCENARIO DEVELOPMENT

• T

h r e e s c e n a r i

• s
• R

a n g e

• f

h y p

• t

h e t i c a l

• u

t c

• m

e s

• B

a s e d

• n

e x p e c t e d s p a c i n g ( C O G C C ) a n d p l a u s i b l e r i g a l l

• c

a t i

• n

s

• A

c c e l e r a t e d S c e n a r i

• – A

b

• u

t 3 p a d s p e r y e a r

• v

e r 9 y e a r s ( 1 r i g s ) – 8 2 4 p r

• d

u c i n g w e l l s ( 2 3 1 )

• S

t e a d y S c e n a r i

• – A

b

• u

t 1 5 p a d s p e r y e a r

• v

e r 1 6 y e a r s ( 5 r i g s ) – 8 2 4 p r

• d

u c i n g w e l l s ( 2 3 1 )

• L
• w

S c e n a r i

• – A

b

• u

t 3 p a d s p e r y e a r

• v

e r 1 6 y e a r s ( 1 r i g ) – 1 8 p r

• d

u c i n g w e l l s ( 2 3 1 )

SLIDE 8

SCENARIO DEVELOPMENT NEW AND PRODUCING WELLS

A n n u a l p r

• d

u c i n g w e l l s b u i l d

• v

e r t i m e a s n e w w e l l s a r e d r i l l e d a n d c

• m

p l e t e d

• 100

200 300 400 500 600 700 800 900 20 40 60 80 100 120 140 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Cumulative Producing Wells Annual New Wells Drilled Year New Wells (Accelerated Scenario) New Wells (Steady Scenario) New Wells (Low Scenario) Producing Wells (Accelerated Scenario) Producing Wells (Steady Scenario) Producing Wells (Low Scenario)

SLIDE 9

TRAVEL MODEL ROADWAY NETWORK

SLIDE 10

TRIPS PER DAY (ANNUAL AVERAGE)

N

• B
• u

l d e r C

• u

n t y

• m

a i n t a i n e d r

• a

d i s e x p e c t e d t

• e

x c e e d t h e e x i s t i n g c a p a c i t y t h r e s h

• l

d d u e t

• a

d d e d

• i

l a n d g a s t r i p s

SLIDE 11

For one pad with four wells

AVERAGE DAILY TRIPS BY STAGE

Approximate Duration

SLIDE 12

HEAVY VEHICLE IMPACTS

• L
• a

d e d w a t e r t r u c k

– 6 , 5 – 1 1 , t i m e s t h e l

• a

d i m p a c t

• f

a p a s s e n g e r c a r

• R

i g t r u c k

– 2 , – 3 , t i m e s t h e l

• a

d i m p a c t

• f

a p a s s e n g e r c a r

SLIDE 13

LOADS ON ROADWAY NETWORK

• Vehicle M iles of Travel (VM T) increase is less than 1% over background
• Load increase is 20 – 160% over background

SLIDE 14

TYPES OF MITIGATION

Road Type M itigation Activity Road Deterioration Roadway Safety

Unpaved/ Gravel Increased frequency of:

• Grading
• Gravel application
• Dust suppression

X X X Asphalt Roads

• Good/ Fair condition
• Poor condition
• Sub-standard shoulders
• Increased overlay frequency
• Expedited reconstruction
• Shoulder widening

X X X Concrete Roads

• Incremental reduction in

service life – expedited reconstruction X

SLIDE 15

CUMULATIVE COSTS BY SCENARIO

Scenario Road Deterioration Costs Safety Costs Total Costs Average Annual Costs (Range) Low $5,980,000 $2,110,000 $8,090,000 $0.5M ($0.1M – $0.9M ) Steady $24,760,000 $2,830,000 $27,590,000 $1.7M ($0.7M – $2.6M ) Accelerated $24,460,000 $2,840,000 $27,300,000 $1.7M ($0.4M – $4.0M )

Costs are 16-year cumulative figures in current year dollars.

SLIDE 16

ROAD DETERIORATION AND SAFETY FEE

• I

s

• l

a t e s

• i

l & g a s i m p a c t s

• n

c

• u

n t y r

• a

d s

• D

e s i g n e d t

• r

e c

• u

p t h e i n c r e m e n t a l c

• u

n t y c

• s

t a s s

• c

i a t e d w i t h r

• a

d d e t e r i

• r

a t i

• n

a n d s a f e t y

• B

a s e d

• n

b l e n d

• f

t h e t h r e e s c e n a r i

• s

a n d a v e r a g e t r i p l e n g t h s

• F

e e d e s i g n e d t

• b

e a p p l i e d i n t h e

• i

l a n d g a s l a n d u s e a p p l i c a t i

• n

p r

• c

e s s

SLIDE 17

FEE CALCULATION METHODOLOGY

Fees per pad and well are averaged across the three scenarios

SLIDE 18

OIL & GAS ROADWAY FEES

Road Deterioration Fee Safety Fee Total Fee Pad $1,200

• $1,200

Well $30,700 $6,200 $36,900

Fees are in current year dollars.

SLIDE 19

SUMMARY

• A

v e r a g e

• b

a s e d m e t h

• d
• l
• g

y r e c

• g

n i z e s c u r r e n t u n c e r t a i n t i e s :

– L

• c

a t i

• n
• f

d r i l l i n g i s u n k n

• w

n – T r a f f i c p a t t e r n s u n k n

• w

n – P a c e

• f

f i e l d d e v e l

• p

m e n t u n c e r t a i n – Wa t e r s

• u

r c e s a r e u n k n

• w

n

• F

e e s b a s e d

• n

a p p

• r

t i

• n

m e n t

• f

e x p e c t e d i n c r e m e n t a l r

• a

d c

• s

t s p e r p a d a n d p e r w e l l

• M

a j

• r

i m p a c t i s r

• a

d d e t e r i

• r

a t i

• n
• F

e e s a r e a t

• l

t

• r

e c

• v

e r c

• s

t s d u r i n g p e r i

• d

w h e n t r a n s p

• r

t a t i

• n

i m p a c t s a r e m

• s

t i n t e n s e —w e l l d e v e l

• p

m e n t

SLIDE 20

QUESTIONS

SLIDE 21

CUMULATIVE COSTS BY SCENARIO

ALTERNATIVE METHODOLOGY FOR POOR CONDITION ASPHALT ROADS*

Scenario Road Deterioration Costs Safety Costs Total Costs Average Annual Costs (Range) Low $3,120,000 $2,110,000 $5,230,000 $0.3M ($0.1M – $0.4M ) Steady $13,990,000 $2,830,000 $16,820,000 $1.1M ($0.6M – $1.3M ) Accelerated $15,860,000 $2,840,000 $18,700,000 $1.2M ($0.7M – $2.0M )

Costs are 16-year cumulative figures in current year dollars.

* M ethodology for poor condition asphalt roads the same as for good/ fair condition roads; based on overlay depth required to offset O&G truck impacts.

SLIDE 22

OIL & GAS ROADWAY FEES

ALTERNATIVE METHODOLOGY FOR POOR CONDITION ASPHALT ROADS*

Road Deterioration Fee Safety Fee Total Fee Pad $700

• $700

Well $17,700 $6,200 $23,900

Fees are in current year dollars.

* M ethodology for poor condition asphalt roads the same as for good/ fair condition roads; based on overlay depth required to offset O&G truck impacts.

SLIDE 23

POOR CONDITION ASPHALT REPLACEMENT COSTS

• C
• n

s t r u c t i

• n

I t e m s i n c l u d e d i n P

• r

A s p h a l t R

• a

d D e t e r i

• r

a t i

• n

F e e :

– R e m

• v

a l

• f

E x i s t i n g A s p h a l t – P l a c e m e n t

• f

N e w A s p h a l t

• C
• n

s t r u c t i

• n

I t e m s N O T i n c l u d e d i n P

• r

A s p h a l t R

• a

d D e t e r i

• r

a t i

• n

F e e :

– R e m

• v

a l s / R e s e t s / U t i l i t y R e l

• c

a t i

• n

s – E a r t h w

• r

k / S u b g r a d e R e

• s

t a b i l i z a t i

• n

– D r a i n a g e M

• d

i f i c a t i

• n

s / E r

• s

i

• n

C

• n

t r

• l

/ Wa t e r Q u a l i t y – P a v e m e n t S t r i p i n g – C

• n

s t r u c t i

• n

T r a f f i c C

• n

t r

• l

– M

• b

i l i z a t i

• n

– E n g i n e e r i n g / C

• n

s t r u c t i

• n

M a n a g e m e n t / M a t e r i a l T e s t i n g

SLIDE 24

PAVEMENT DETERIORATION CURVE

SLIDE 25

FISCAL CHALLENGE

P u b l i c I n v e s t m e n t T i m i n g

SLIDE 26

WELD COUNTY WELL DEVELOPMENT PATTERNS

S

• u

r c e : C O G C C