How$An$Operator$Is$Developing$A$Systema7c$Sourcing$Strategy$To$

Guarantee$Water$Availability$At$Minimal$Costs

Katharine$A.$Fredriksen

Senior!Vice!President—Environmental!Strategy!and!Regulatory!Affairs!
About$CONSOL$Energy

• Founded!in!1860,!began!operaCons!in!1864!

• $6.1!billion!revenue!

• Member!–!Fortune!500;!S&P!500!

• Largest!underground!coal!producer!in!the!U.S.!

• Among!the!largest!natural!gas!producers!in!Appalachia!

• 12!mining!complexes!in!four!states,!including!the!3!largest!underground!mines!in!the!

world!

• 4.5!billion!tons!of!proven!and!recoverable!coal!reserves!and!3.5!tcf!natural!gas!

reserves!!

• Marcellus!Shale!partnership!with!Noble!Energy;!UCca!Shale!partnership!with!Hess!

CorporaCon!

• Private!R&D!facility!working!with!U.S.!DOE!and!others!on!advanced!technology!for!coal!

and!CBM!producCon!and!uClizaCon!

• Over!9,000!employees!

2!
CONSOL$Energy$3$Core$Values$and$2$Priori7es$

Core$Values$

• Safety!

• Compliance!

• ConCnuous!Improvement!

Priori7es$

• ProducCon!

• Cost!

Values$are$not$priori7es$–$priori7es$change$while$values$remain$

constant$

3!
CONSOL’s$Unique$Perspec7ve$

CONSOL$Energy$is$the$only$company$that$operates$across$all$of$these$$

different$horizons.$$

8,000!^! - 8,000 ft 

Upper Devonian Sands - 

– 1,750 – 5,500 ft 

Utica Shale 

– 11,500 ft 

Rhinestreet Shale - 

– 7,400 – 7,800 ft 

Marcellus Shale 

– 8,000 ft 

Surface 

Sewickley Coal Seam 

– 900 ft

Pittsburgh Coal Seam 

– 1,000 ft

Freeport Coal Seam 

– 1,650 ft
CONSOL$Energy$Corporate$Responsibility$Report$for$2011$

• First!Report!Completed!

• Used!Global!ReporCng!

IniCaCve!(GRI)!principles!

• Highlighted!our!performance!

in!

– Safety!

– Environment!

– Health!&!Wellness!

– Community!

Will$publish$annually$in$concert$with$our$annual$report$
Water$Fundamentals$

• Sustainability!of!water!

resources!

• Water!for!HF!can!come!

from:!

– Public!water!sources!

– Groundwater!

– Surface!waters!

– Reduse!flowback!water!

– Use!treated!mine!and!

shale!gasdproduced!water!

Approximately$5$million$gallons$per$well$may$be$used$depending$on$site$
CONSOL$Approach—First$Reduce$

• Step!OneddSeek!to!reduce!our!impact!

on!the!watershed!

– Steps!taken!in!developing!our!water!

management!plans!include:!

• Plan!water!needs!along!with!well!

development!schedule

• Assess!makeup!water!sources—

potable?!Surface!water!withdrawal?!!

• Plan!for!seasonal!drought!

– In!cooperaCon!with!USGS,!installed!

permanent!monitors!on!streams!

CONSOL$takes$a$holis7c$approach$to$water$management$planning$across$its$

coal$and$gas$opera7ons$to$capture$efficiencies$and$opportuni7es$
CONSOL$Energy$Water$Use$$

• Gas!OperaCons!–!2011!

– Total!Water!Withdrawn!(in!

thousands!of!gallons)dd180,250!!

• Municipal!Sources!–!66,838!

• Surface!Water!–!113,412!

CONSOL$tracks$and$reports$annually$on$its$water$use$in$our$CR$Report$
CONSOL$Approach—Next$Re[Use$

CONSOL’s!policy!is!to!reduse!100%!

of!its!shale!flowback!water!

– Requires!a!planned!system!of!

pipelines!and!centralized!

impoundments!to!meet!drilling!

and!compleCon!schedules.!

– CONSOL!redused!56,299!(in!

thousands!of!gallons)!or!31%!of!

its!total!water!used!

CONSOL$recycles$100%$of$its$Marcellus$water,$and$is$currently$on$track$to$

recycle$all$of$its$U7ca$water$
Opera7onal$Expecta7ons$

• Assure!control!&!safe!

storage!of!all!frac!fluids!

on!the!surface!

• Spill!Containment!

• Erosion!and!

SedimentaCon!Controls!

• Complete!well!casing!

and!cemenCng!

• Final!disposal!

underground!in!UIC!
Centralized$Surface$Impoundments$

• Centralized!

impoundments!are!

necessary!for!reduse!

• Double!lined!with!leak!

detecCon!system!

• Designed!and!operated!

for!5d14!million!gallons!of!

frac!water!

• Connected!through!a!

series!of!buried!pipelines!

that!connect!each!well!

pad!
CONSOL—Recycle

• Recycle!opCons!include:!

– Use!of!treated!mine!water!

– Treatment!and!reduse!of!brine!

water!through!advanced!

technology!

– Use!of!effluent!from!advanced!

waste!water!treatment!plants!

CONSOL’s$holis7c$approach$allows$for$mul7ple$op7ons$for$recycling$
Use$of$Acid$Mine$Drainage$(AMD)$

• CONSOL!treats!36!billion!gallons!

annually!

• Minimal!treatment!–!high!potenCal!

use!in!gas!well!development!

applicaCons!

• PA!leading!the!way!promoCng!use!of!

AMD!in!gas!well!water!management!

plans!

– US!EPA!acceptance?!

• LocaCon!and!!dissolved!solids!profile–!

biggest!challenges!

CONSOL$is$the$first$company$to$successfully$frac$a$well$using$AMD$water$
CONSOL[Epiphany$Solar$Water$Systems$$

• June!25,!2012!CONSOL!

announced!a!JV!with!Epiphany!

Solar!Water!Systems!!

– Process!uses!ondsite!

concentrated!solar!to!disCll!

produced!water!from!our!shale!

operaCons,!removing!90%!of!the!

contaminants!

CONSOL’s$goal$is$to$minimize$our$water$footprint$in$our$shale$opera7ons$
Zero[Liquid$Discharge$Reverse$Osmosis$Treatment$

• CONSOL!has!and!is!installing!RO!

treatment!plants!for!our!large!

underground!mines!

– The!clean!water!which!exits!the!

system!can!be!used!in!our!own!

operaCons!or!sold!for!use!by!other!

operators.!

– Over!5000!gpm!of!purified!water!

will!be!available,!along!with!a!salt!

product!that!is!sold!for!commercial!

use!

CONSOL$captures$value$from$the$synergies$of$our$business$opera7ons$
Conclusion$

• CONSOL!uClizes!a!holisCc!

approach!in!planning!its!shale!gas!

development!

• Goal!is!to!minimize!our!water!

footprint!

– Water!needs!are!calculated,!sources!

idenCfied,!infrastructure!put!in!

place!to!enable!reduse,!and!recycle!

opCons!employed!to!deliver!a!sound!

water!management!plan!

Water$management$planning$up$front$helps$minimize$environmental$

impacts$