Water Issues and ChallengesAssociated with Shale Gas ProductionJohnVeil410‐212‐0950john@veilenvironmental.comwww.veilenvironmental.com2011InternationalWaterConferenceOrlando,FLNovember13‐17,20112Topics for DiscussionIntrotoproducedwaterWaterneedsandproductionfordifferenttypesofhydrocarbonStepsinshalegasproductionWellcompletionandhydraulicfracturingWastewatermanagementCostconsiderationsWaterneedstoproduceshalegasWhichchemicaladditivesareusedinfracfluidsandwhy?FracFocuswebsite3What is Produced Water?WaterthatcomestothesurfacewithoilandgasContainsmanychemicalconstituents–Saltcontent(salinity,totaldissolvedsolids[TDS],electricalconductivity)–Oilandgrease•Compositeofmanyhydrocarbonsandotherorganicmaterials–Toxicityfromvariousnaturalinorganicandorganiccompoundsorchemicaladditives–NORMProduced Water VolumeLargestvolumewastestreamfromoilandgasproduction–Worldwideestimate– 77billionbbl/year(2003SPEpaper)–U.S.– 21billionbbl/year(ClarkandVeil2009)•~57millionbbl/dayor2.4billiongallons/day•Metric:333millionm3/yearor913,000m3/dayRatioofwater‐to‐oil–World‐wideestimate– 2:1to3:1–U.S.estimate– 5:1to8:1•withmorecompletedatasetsthatincludeTXandOKdata,thiswouldbe>10:1ClarkandVeil2009canbedownloadedat:http://www.veilenvironmental.com/produced_water.html5Produced Water Volume Changes Over Time in a Well and aFieldOIL AND GASCBM GASWATERProducing TimeProducing Time

Rate RateWATER•Conventional oil and gaswell•Coal bed methane well•Shale gas wells behave in asimilar mannerOverview of Water Needs andProduction by Hydrocarbon TypeConventional Oil and GasWaterneeds–Manywellsreceivehydraulicfracturing–WaterfloodasfieldmaturesProducedwatergeneration–Startslowthensteadilyclimbs–ContinuesforthelifeofthewellProducedwatermanagement– mostcommonpractices–Offshore– treatanddischargetoocean–Onshore‐injectCoal Bed Methane (Coal Seam Natural Gas)Waterneeds–ManywellsreceivehydraulicfracturingProducedwatergeneration–StartshighthengraduallydeclinesProducedwatermanagement– mostcommonpractices–Alabama,PowderRiverBasin– treatanddischargetoriver–OtherU.S.‐injectShale GasWaterneeds–AllwellsreceivehydraulicfracturingProducedwatergeneration–Initialvolumeofflowbackwater(primarilyconsistsofthefracfluidsthatwereusedforfracking)•ConcentrationsofTDSandotherconstituentsincreaseovertime;oftenTDScanbeveryhigh–Longtermproducedwaterflow(blendofformationwaterfoundinshalerockporesandresidualfracfluids)•Continuesformanymonths–Notalloffracfluidsreturntosurface•Marcellus– 10‐15%•Otherplays– higherProducedwatermanagement–variableoptions;dependonlocalconditions–InjectionismostcommonHeavy Liquid Crude OilWaterneeds–SteamfloodtohelpmoveheavyoiltoproductionwellsProducedwatergeneration–MuchofthewaterresultsfromtheinjectedsteamusedinsteamfloodingOil SandsWaterneeds–Steam(orwater)injectionusedinlargevolumesProducedwatergeneration–In‐situproductionmethods•somewaterisformationwater,butmuchisfromtheinjectedsteam–Oilsandminingproductionmethodsandsubsequentprocessingstepsalsogeneratewastewater12Shale Gas, HydraulicFracturing, andWater Management13Importance of Shale Gas to the USANaturalgasisanimportantenergysourcefortheUnitedStates.Shaleformationsrepresentagrowingsourceofnaturalgasforthenationandareamongthebusiestoilandgasplaysinthecountry.Source:DOE/EIAAnnualEnergyOutlook2011U.S. Shale PlaysThemostactiveU.S.shaleplaystodateare:–BarnettShaleinTexas,–FayettevilleShaleinArkansas–HaynesvilleShaleinLouisiana–MarcellusShaleinPennsylvania,NewYork,andWestVirginia–WoodfordShaleinOklahoma–EagleFordShaleinTexas–BakkenShaleinNorthDakota–UticaShale(beneathMarcellus)Source:DOE/EIAwebsiteNew Report on Global Shale Gas ReservesU.S.DepartmentofEnergyreleasedanewreportonApril5,2011thatassessed48shalegasbasinsin32countries,containingalmost70shalegasformationsaroundtheworld.http://www.eia.gov/analysis/studies/worldshalegas/Steps in the ShaleGas ProcessGainingAccesstotheGas(Leasing)SearchingforNaturalGasPreparingaSiteDrillingtheWellPreparingaWellforProduction(HydraulicFracturing)GasProductionandWaterManagementMovingNaturalGastoMarketWellClosureandReclamationStepsinvolvingwaterareshadedSource:FayettevilleShaleInformationwebsitehttp://lingo.cast.uark.edu/LINGOPUBLIC/index.htm17Water Issues in Site PreparationNeedtoconsiderstormwaterrunofffromalllandareasdisturbedduringconstruction–Followpropersedimentcontrolpractices–StabilizeexposedsurfacesWater Issues in DrillingWaterisneededtomakeupdrillingfluids–IntheMarcellusShalethevolumeofwaterusedfordrillingvolumeisabout80,000gallonsperwell.Drillingwasteissenttolinedpitsorintoaclosed‐loopsystememployingtanksWell Completion and Hydraulic Fracturing (HF)WhatisHF?WhyisHFused?ThewellcompletionprocessWhat Is HF?“Hydraulic”‐Involveshigh‐rate,highpressureinjectionofwater,aproppantmaterialsuchassand,andvariouschemicals“Fracturing”‐ProcessusedtocreatecracksintheshalerockthatallownaturalgastomovetothewellwhereitcanbecollectedDifferentterms–Frac/frack–Frac/frackjob–Fraccing/fracking/fracingSource:C.B.Veil– takeninIthaca,NY,June2010Why Is HF Used?Shalerockisverydenseanddoesnotcontainnaturalpores–HFcreatesanetworkofsmallcracksintherockthatextendoutasfaras1,000feetlaterallyandverticallyawayfromthewellVirtuallynoshalegaswellsintheU.S.wouldbedevelopedunlessHFisdoneItiscontroversialandexpensive,butisacriticalelementincost‐effectiveproductionSource:K.Fisher,PinnacleWell Completion ProcessMostshalegaswellsaredrilledashorizontalwellswithupto1mileoflateralextentthroughtheshaleformationInordertogetgasfromtheformationintothewellbore,companiesmustfollowtwosteps:–Perforation–HFGoodanimationofcompletionprocess:http://marcellus.psu.edu/resources/drilling/index.phpSource:T.Murphy– PennStateMarcellusCenterforOutreachandResearchWell Completion Process (2)Onalonghorizontalleg,completionindoneinaseriesofstages,eachofwhichisafewhundredfeetlong–Perfsaremadeusingsmallexplosivechargesthatareloweredtothedesireddepthonacable–HFisdoneforseveralhoursforeachstage–Pressureisheldonthewellandaplugissettoisolatethatfracturedintervalandallowstimulationofthenextstage–ThenextstageisperfedandfrackedSource:FracFocuswebsiteSource:J.VeilWater Needed for Frac JobsMostwellsrequireupto5milliongallons,butthetrendistohavemorestagesandusemorewater–Individualvolumeisnotcritical,butcollectivelycanbeimportantwithinaregionSourceofwater:–Stream,river,orlake–Well–Impoundmentcreatedbyproducer–PublicwatersupplyPipedtositevs.deliveryintanktrucksFrac Job Pumps Large Volume of Water, Sand, andAdditives into the Well in StagesManagement of Frac Flowback Water (1)Largevolumeofflowbackreturnstothesurfaceinfirstfewhourstofewdays–Typicallycollectinpits/pondsManagement of Frac Flowback Water (2)SomelargersitescollectflowbackinbrinetanksFilteredandreusedinfracfluidforfuturewellOvertime,smallervolumeofproducedwaterflowstosurface–CollectedinonsitetanksManagement of FracFlowback Water (3)CollectedwatermustberemovedfromsiteTypicallyiscollectedbytanktrucksandhauledoffsiteto:–Commercialdisposalwells–Wastewatertreatmentplants•NeedtotreatwatertoverylowTDSorreturncleanbrinetoproducers–Filtrationandreusefacilities(orangetanksonpreviousslide)MostMarcellusproducersreusetheflowbackwaterafterfiltration.–Thewaterisblendedwithfreshwatertomakeupnewfracfluids.29Category CostComponent(Someorallmaybeapplicable)PriortoOperationsPreparefeasibilitystudytoselectoption(in‐housecostsandoutsideconsultants)ObtainfinancingObtainnecessarypermitsPreparesite(grading;constructionoffacilitiesfortreatmentandstorage;pipeinstallation)PurchaseandinstallequipmentEnsureutilitiesareavailableDuringOperationsUtilitiesChemicalsandotherconsumablesuppliesTransportationDebtserviceMaintenanceDisposalfeesManagementofresidualsremovedorgeneratedduringtreatmentMonitoringandreportingDowntimeduetocomponentfailureorrepairCleanupofspillsAfterOperationsRemovaloffacilitiesLong‐termliabilitySiteremediationandrestorationComponentsContributingtoTotalCostofWastewaterManagementDifficulty in Accurately Assessing and Comparing CostsCostdatafromvendors–Maynotincludeallcostcomponentsshownonpreviousslide–ComparativecostsbetweenvendorsrarelyincludethesamelistofcostcomponentsCostdatafromusers–Companiesshouldhaveaccuratecostdata,buttheyrarelywillsharetheirdetailedcosts–ThisisconsideredproprietaryinformationrelatedtocompetitivenessRelativelyfewpublishedpapersorreportsgivecomprehensivecostdata3031How Does a Company Choose aWastewater Management Option?ManyalternativesareavailableformanagingproducedwaterCompaniesmustconsider:–Volumeofwatergenerated–Chemicalandphysicalcharacteristics–Practicalityandfeasibilityofanoption–Regulatoryrequirementsthatalloworblockanoption–Long‐termliabilityofchosenoptions–Costsofusinganoptioninawaythatmeetsregulatoryrequirements•NeedtoconsiderfullcostloadWater Use Data in Susquehanna Basin•Totalwateruse:1.6billiongallonson553wells(6/08to3/11)•Averagetotalvolumeoffluidusedperwell:4.2milliongallonsperwell―3.8milliongallonsoffreshwater(90%)—0.4milliongallonsofreusedflowback(10%)•30‐dayavg.recoveryofflowback:8%•Totalamountofflowback:117milliongallons(6/08to3/11)—Reuse75milliongallons—Disposal42milliongallons—64%flowbackreuseStatistics on Water Requirements for Marcellus ShaleMakeestimateofmaximumvolumeofwaterneededtomeetMarcellusShalefraccingneeds–Estimatevolumeofwaterperwell–EstimatemaximumnumberofwellsinayearPennsylvania Drilling Permits and Wells DrilledYearMarcellusShaleDrillingPermitsIssuedMarcellusShaleWellsDrilled20079918(July–December)200851919620091,98576320103,4461,454Source:PADEPwebsiteAssumingahypotheticalmaximumisdoublethe2010total=2,908wellsWest Virginia Drilling Permits and Wells DrilledYearMarcellusShaleDrillingPermitsIssuedMarcellusShaleWellsDrilled2007152143200840027420094244720102442Source:WVDEPwebsiteAssumingahypotheticalmaximumisdoublethe2008total=548wellsNew York Drilling Permits and Wells DrilledNewYorkhasmoratoriumonMarcellusShalewellsNogoodwaytopredictmaximumnumberofwellsChosetoestimatemaximumNewYorkwellstobethesameasmaximumWestVirginiawells=548wellsYear TotalDrillingPermitsIssued(notnecessarilyMarcellusShale)Total WellsDrilled2008 744 ??2009 552 ??2010 302(January– August) ??Source:presentationmadebyJackDahl,NYDEC,August24,2010Hypothetical Maximum Water Demand for MarcellusStateHypotheticalMaximumNumberofWellsDrilledinaYearAnnualVolumeassuming5milliongalsofwaterneededperwellPA2,90814.5billiongals/yrWV5482.7billiongals/yrNY5482.7billiongals/yrTotal4,00420billiongals/yr=55MGDCaveats–estimatesofmaximumwellsdrilledcouldsignificantlyoverestimateorunderestimatetheactualquantity–assumedmaximumnumberinonestatewillnotnecessarilycorrespondtothemaximumineachoftheotherstates–Asgascompaniesrefineandimprovetheireffortstorecycleandreuseflowbackandproducedwaterfromwellsalreadyfracked,thewaterneededperwellmaydecrease–ifoperatorsdrilllongerhorizontalwellswithmorefracstages,thevolumeperwellcouldincreaseActual Water Withdrawals for 2005 (in MGD)Category NewYork Pennsylvania WestVirginia TotalPublicSupply2,530 1,420 1894,139Domestic140 152 34326Irrigation51 24 <175Livestock30 62 597Aquaculture63 524 53640Industrial301 770 9662,037Mining33 96 14143Thermoelectric7,140 6,430 3,55017,120Total10,288 9,478 4,811 24,577Source:USGSreport(Kennyetal.2009)Comparison of Marcellus Shale Water Needs with ActualWithdrawalVolume PercentageWaterRequiredforShaleGasProductionComparedtoTotalWithdrawalWaterneededforshalegas 55MGD‐Totalwaterwithdrawal 24,577MGD 0.22%Arkansas Completions in the Fayetteville ShaleYearFayettevilleShaleCompletions2007411200868320098392010862Source:ARO&GCommissionwebsiteAssumingahypotheticalmaximumisdoublethe2010total=1,724wellsActual Water Withdrawals for 2005 (in MGD)CategoryArkansasPublicSupply266Domestic0Irrigation1,510Livestock23.3Aquaculture10.6Industrial113Mining1Thermoelectric2,000Total3,920Source:USGSreport(Kennyetal.2009)Comparison of Fayetteville Shale Water Needs withActual WithdrawalVolume PercentageWaterRequiredforShaleGasProductionComparedtoTotalWithdrawalWaterneededforshalegas(assume5MG/well)23.6MGD‐Totalwaterwithdrawal 3,920MGD0.6%Frac Fluid ChemicalsWhataretheingredients?Whyarethosechemicalsused?Frac Fluid CompositionWatermakesup~90%ofvolumeSandmakesup~10%ofvolumeAllotherchemicaladditivesmakeup~0.5%ofvolumeSource:ShaleGasPrimer,GWPCandALLWhy Chemical Additives Are UsedSource:ShaleGasPrimer,GWPCandALLWhy Chemical Additives Are Used (2)Source:ShaleGasPrimer,GWPCandALLChemical Disclosure Rules Adopted by States47Oneofthemostcontentioustopicssurroundinghydraulicfracturingisthatcompanieshavenotshareddetailedinformationwithregulatorsorthepubliconwhichchemicalsareactuallyusedinfracjobs.NationallegislationrequiringchemicaldisclosurewasintroducedintoCongressseveralyearsagobutwasnotpassed.Severalstateshavesincepassedtheirownchemicaldisclosurerequirements–Wyoming–Arkansas–Pennsylvania–Texas–Montana–Michigan–6otherstateshaveproposedregulationsChemical Disclosure RegistryInApril2011,theGroundWaterProtectionCouncilandtheInterstateOilandGasCompactCommissionopenedanewonlinesystemtohostinformationaboutthechemicaladditivesusedinfracfluidsandtheiringredients–DataentryisvoluntaryandisdonebythegascompaniesAnyinterestedpersoncanvisitthewebsiteandsearchfordataonaspecificwellAsofNovember10,datahadbeenenteredonnearly7,000wells48www.fracfocus.org49Frac Focus HomepageExample of Registry Record for Well in Texas50ChesapeakeWell,Bing2H,TarrantCounty,Texas(FracDate3/21/11)ConclusionsShalegasisanimportantcontributortotheU.S.oilandgasmarket–ItsimportanceandproportionalcontributionisgrowingyearlyNearlyallshalegasisproducedusinghorizontalwellsthatmustundergoHFTheHFprocessinvolveslotsofwaterandsandplusvariouschemicaladditivesthatallowformoreproductiveandsaferoperationsIntheMarcellusandFayettevilleshales,thereappearstobesufficientfreshwateravailabletomeetshalegasoperationalneeds–Itisnotavailableatalltimesorinalllocations–OperatorsmustplanaheadandprocurewaterwhenstreamlevelsarehighTheflowbackandproducedwaterfromshalegasoperationsrequiresdisposalormanagementInjectionisalmostalwaysapreferredchoiceunless:–Goodinjectionformationsarenotavailablelocally–Freshwaterisinshortsupply,therebyaddingvaluetorecyclingflowback–AcompanychoosestofollowsustainablepracticesandvoluntarilylookstorecycleorreuseReuseoftreatedflowbackfornewfracfluidsisgrowinginpopularity