### 1

MEMORANDUM

TO: Bruce Moore, Office of Air Quality Planning and Standards

FROM: ICF International

DATE: May 19 , 2011

SUBJECT: Percent of Emissions Recovered by Reduced Emission Completions

This memo explains the methodology used to estimate the percent recovery of flowback gas that is captured and sold on average, through implementation of a Reduced Emission Completion (REC) , for a well completion (or workover) after a hydraulic fracture . The value is 90% and is a reflection of

information taken from Na tural Gas STAR partner company presentat ions presented at workshops.

Exhibit 1, below, summarizes the data from four company presentations. Each number in Exhibit 1 was either taken directly from the presentation or derived from other information in the presentation as

described in the comments column and footnotes

. The individual percentages in Exhibit 1 represent the volume of gas recovered divided by the total flowback gas volume per year (i.e., the gas that would have vented in absence of an REC) . E xhibits 2, 3, 4, and 5 show the data provided by each company in their
presentatio n s and details on the calculations done to estimate the percent emissions recovered.

Exhibit 1: Summary of Partner Presentations for RECs

Company Region/

Field/Basin Percent

captured
and sold Notes on Calculation

EnCana a Jonah Field,

Wyoming 96.3%

to
99.9% This value is calculated by taking the gas recover e d by the

REC and dividing by the total flowback gas volume . It is assumed that all of the flowback gas would have been sent through the REC skid.

Anadarko b DJ Basin,

Colorado 99% This calculation is the average volume of gas vented per well for a REC completion divided by the average volume of gas vented per well for a non

- REC completion. Based on data provided by Anadarko in its 2008 presentation.

Marathon c Cook Inlet,

Alaska 83% This value is the gas recovered for a completion using an

REC divided by the total flowback gas of an equivalent non

REC completion

.

Williams d Piceance

Basin,
Colorado 61.3%

to
97.5% This value is reported by the partner and is based on the

total volume of gas recovered divided by the total flowback

gas . The data is from 2002 to 2006.

a www.epa.gov/gasstar/documents/workshops/2009

- annual

- conf/08ellwood.pdf

b www.epa.gov/gasstar/documents/workshops/2008

- tech

- transfer/rocksprings5.pdf

c www.epa.gov/gasstar/documents/workshops/2007

- annual

- conf/06_phil_snider.pdf

d www.epa.gov/gasstar/documents/workshops/glenwood

- 2007/04_recs.pdf

### 2 Exhibit 2: Summary of EnCana Partner Data

Year * # of

Wells Gas
Recovered MMcf per

year Total

Flowback

Gas MMcf per

year %

Recovered Notes

2001 0 0 0 0.0% Assuming no venting before connecting to the REC skid.

* Since the # of wells was not
available within the presentation, the populations were estimated using the EF of 9,175 Mcf per completion. By dividing the flowback gas volume by 9,175 Mcf per completion, it was possible to
estimate the number of completions. 2002 0 0 0 0.0%

2003 50 442 459 96.3%

2004 680 6,174 6,237 99.0%

2005 1960 17,876 17,985 99.4%

2006 1031 9,323 9,461 98.5%

2007 926 8,418 8,492 99.1%

2008 1617 14,766 14,832 99.6%

2009 (first few months) 310 2,845 2,848 99.9%

### 3 Exhibit 3: Summary of Anadarko Partner Data

Year # of

Wells Gas
Recovered MMcf per

year 1 Gas Vented

During
Flowback MMcf per

year %

Recovered Notes

1998 281 0 899.2 0% The total flowback gas vented from 1998 to 2005 is 16,581 MMcf per year. 16,581 divided by 3370 wells completed from 1998 to

2005 is 4.92 MMcf flowback gas per well.

The total number of wells completed from 2006 to 2008 is 1,536. The total flowback gas
vented from 2006 to 2008 is 51.2. 1,536 divided by 51.2 is 0.033 MMcf flowback gas per well.

The percent flowback gas recovered on average per well is
estimated to be:

1

– (0.033 / 4.92) = 99% 1999 374 0 1,196.8 0%

2000 387 0 1,702.8 0%

2001 491 0 2,553.2 0%

2002 538 0 3,012.8 0%

2003 447 0 2,860.8 0%

2004 379 0 2,274.0 0%

2005 473 0 2,081.2 0%

2006 590 n/a 2 19.7 n/a

2007 636 n/a 21.2 n/a

2008 310 n/a 10.3 n/a

Exhibit 4: Summary of Marathon Partner Data

Year # of Wells Gas Recovered Mcf per year Total Flowback

Gas Mcf per year %

Recovered

n/a 1 3,500 4,200 83%

1 Anadarko reported RECs beginning in 2006, therefore no recovered gas was reported between 1998 and 2005.

2 N/a values were not directly available from the company presentation. The average percent of gas recovered per
well was estimated based on other information in the presentation as described in the Notes.

### 4 Exhibit 5: Summary of Williams Partner Data

Year # of Wells Gas Recovered MMcf per year Total Flowback

Gas MMcf per year %

Recovered

2002 46 487 794 61.3%

2003 76 1,196 1,227 97.5%

2004 241 4,858 5,060 96.0%

2005 275 7,229 8,070 89.6%

2006 426 9,931 10,863 91.4%

Calculating the simple average of all the % recovery values presented by each partner (which is not a weighted average using wells), results in an average recovery of 93% or approximately 90%.

The 90% recovery estimate is based on data from four different partners that performed RECs. The data includes RECs performed as early as 2002 and as recently as 2009. The data represents RECs performed in four different U.S. regions. Gas capture during the REC process is known to involve similar equipment

and techni ques across regions, based on partner information. For these reasons, the 90% recovery is expected to be valid for the range of reservoir and field conditions found throughout the U.S.

Notes:

1) In this 90% gas recovered estimate the volume of gas that would have been vented is assumed to represent any and all venting during flowback rather than just a subset for the time in which
an REC skid may be present or operating. 2) Using the number of wells to weight the average percent recovery might result in over

rep resentation of one area of the U.S. relative to the rest or one operating technique over the
rest. For example, although the equipment and techniques are similar across regions, gas specifications for gathering lines may vary by company, so giving equal w eight to each partner experience rather than to each well is a way to acknowledge this variation. 3) In the application of this percent recovery to the emission factor of 9,175 Mcf gas per completion after a hydraulic fracture, it should be noted that many p artners have reported recovery volumes for a single completion which exceed this emission factor (which is in agreement with the fact that these are voluntary implementations often performed with profitability in mind). Therefore, if the 90% gas recovered estimate that is the conclusion of this memo is used, the resulting volume of gas recovered will be a conservatively low estimate for such partner

- reported situati ons.