# Underground Injection Wells For Produced Water Disposal Rick McCurdy Sr. Engineering Advisor Chemicals and Water Reclamation
Chesapeake Energy Corporation 6100 N. Western Avenue ı Oklahoma City, OK 76118 ı 405-935-8000

AskChesapeake@chk.com ı chk.com ı NYSE: CHK3 

# Agenda History



# Program Oversight Well Classifications Class II Wells Reclamation / Disposal Combinations Summary4 

# History 1930s Oilfield brine disposal (Texas) EOR Injection 

### 1940s Oil refineries inject wastes 

### 1950s Deep well injection of chemical wastes State regulations for brine disposal 

### 1960s Earthquake attributed to deep well injection in Colorado 1st documented cases of contamination in potential sources of drinking water5 

# History 1970s Waste spilling from an abandoned oil well traced to paper mill injection well SDWA gives EPA authority to control underground injection 

### 1980s UIC regulations

― 5 well classes

― Layout requirements for States to assume primacy SDWA amended to allow for existing oil and gas programs to regulate

― Must be effective in protecting USDW

― Must include UIC program components HSWA to RCRA

― Hazardous waste injection more stringent

― “No migration petition” – 10,000 years or rendered non hazardous by reaction with surroundings6 

# History 1990s Class V management strategy 1st International symposium on deep well injection (CA) 

### 2000 to present Energy Policy Act (2005) excludes hydraulic fracturing from regulation under UIC program EPA initiates Study to Evaluate Impacts to USDW’s by HF of CBM reservoirs Geologic sequestration of carbon dioxide (CO 2)7 

# Program Oversight Primary Enforcement (Primacy) States / tribes may request if they can demonstrate ability to meet minimum EPA requirements Some states / tribes share primacy with EPA Where neither of the above apply, EPA enforces UIC program through Region offices8 

# Primacy9 

# Well Classifications Class I Hazardous waste, non- hazardous liquids, municipal wastes Inject under lowermost USDW 

### Class II Class III Extraction of minerals

― Salt, uranium, sulfur 

### Class IV Banned (originally for hazardous or radioactive waste disposal into or above a USDW) Currently limited to authorized clean - up sites 

### Class V All other wells Inject non- hazardous liquids into or above a USDW 

### Class VI Geologic sequestration of carbon dioxide (CO 2)10 

# Agenda History



# Program Oversight Well Classifications Class II Wells Reclamation / Disposal Combinations Summary11 

# Class II Wells Approximately 144,000 wells in the U.S. Majority in TX, CA, KS and OK

CA, 26305 IL, 7944 KS, 16245 NM, 4699 OK, 11365 TX, 49957 WY, 4723 Others,

1920412 

# Class II Wells ~144,000 Class II Wells 

### Enhanced Oil Recovery ~80% of all Class II wells Water injection wells (WIW) most common, but also includes

― Steam injection

― Water - alternating - gas (WAG)

― Simultaneous water and gas (SWAG)

― CO 2 injection 

### Salt Water Disposal ~20% of all Class II wells Used only for disposal of fluids associated with oil and gas production 

### Hydrocarbon Storage Used to inject and remove liquid hydrocarbons from underground storage (i.e. salt caverns) Strategic Petroleum Reserve More than 100 wells in the U.S. (<0.1% of Class II)13 

# Agenda History 

# Program Oversight Well Classifications Class II Wells Salt Water Disposal Wells

― Selection

― Well Construction

― Volume / Pressure

― Integrity Assurance

― Economics

― Pennsylvania / Texas Comparison 

# Reclamation / Disposal Combinations Summary14 

# Salt Water Disposal Wells

Selection Non - hydrocarbon bearing formation or an unproductive / depleted formation Barriers to USDWs Area Review Porosity Permeability Location, location, location!15 

# Chesapeake Barnett SWD Construction Texas Railroad Commission Monitoring & Testing

*Areas in which Chesapeake exceeds Railroad Commission of Texas standards (5) Packer (1) Surface Casing
(6) Steel tubing (2) Surface Casing Cement (3) Production Casing (4) Production Casing Cement (7) Plastic coating 

### Drilling and Completion • Casing* • Cement* • Tubing* • Packer 

### Testing Prior to Service • Cement Bond Log • Pressure Testing 

### Operations • Continuous Monitoring* • Annual Integrity Testing* 

### Reporting • Prior to Placing in Service • Monthly • Injection Date • Pressure • Volume16 

# Volume and Pressure Step rate tests utilized to confirm the rate and 

## pressure required to “break down” or fracture the targeted formation Fracture gradient established based on step rate tests and instantaneous shut-in pressure (ISIP) Wells are typically permitted for a pressure and rate that does not exceed the frac gradient when pumping the typical brine for a known area17 

# Wellbore IntegrityPrior to service Cement bond / cement evaluation logs Pressure test casing 

# During operation UIC minimum requirements

― Mechanical integrity test – every 5 years

― Monitor pressure – annually 

## Many States have more stringent requirements

― Texas » Monitor and report mechanical integrity (H5) – minimum once every five years, but permit may specify more frequent » Monitor injection pressure monthly & report annually (H10)18 

# Economics CHK SWD Typically < $0.25 / barrel 

## Commercial SWD $0.50 - $2.50 / barrel Supply and demand 

## Trucking $1.00 / barrel / hour (average) SWD’s plentiful (TX)

― $0.50 - $1.00 / barrel SWD’s scarce (PA)

― $4.00 – $8.00 / barrel 

## Salt Water Pipelines More efficient than trucking Reduces traffic and road wear19 

# Pennsylvania / Texas Comparison Pennsylvania 8 Class II saltwater disposal (SWD)wells

― Oriskany 3

― Oriskany / Huntersville 2

― Balltown 1

― Gatesburg 1

― Mine Void 1 

## Texas ~12,000 Class II SWD wells Tarrant County – 10 SWD wells

― All Ellenburger20 

### 20 

# Brentwood SWD Site

Close - up of Brentwood SWD well in East Fort Worth.21 

# Disposal Capacity Mann SWD – Cleburne, Texas Ellenburger Formation ~26,000 barrels per day (BPD) 9.5 million barrels per year 

## Pennsylvania SWD’s Operator BPD Columbia 700 EXCO 142 CNX 5,000* Range 665 XTO** 120 Cottonwood 900 EXCO 140 Dominion 1,000 8,667 

### * - Mine void ** - Reported as recently plugged22 

# PA Experience PA SWD Target Trenton / Black River SE of Towanda, PA Targeted total depth (TD) – 14,300’ Budgeted - $3 MM Final Spend - $ 7 MM Limited fluid capacity Well TA’d

― Permanent bridge plug @ 12,000’23 

# Water Reuse Lack of Suitable Disposal Infrastructure / Capacity in PA 

### Originally Resulted in Produced Water Being Trucked (or railed) to Ohio and West Virginia Aqua Renew Filtration and reuse Central filtration sites Bermed and lined Steel tanks for storage of all produced brine 

### Benefits Decreases fresh water demand by 10- 15% ~52,500 less truck road miles per well for water disposal CO 2 emissions reduced by ~88 metric tons per well24 

# Agenda History



# Program Oversight Well Classifications Class II Wells Reclamation / Disposal Combinations Summary25 

# Brentwood SWD Site26 

# Reclamation / Disposal Combinations Economics can work in areas where disposal 

## capacity is limited Water quality (total dissolved solids - TDS) greatly influences economics Capacity multiplier – particularly with relatively low TDS brine Concentrated brine requires less energy for disposal Evaporative systems – no backhaul of treated water27 

# Agenda History



# Program Oversight Well Classifications Class II Wells Reclamation / Disposal Combinations Summary28 

# Summary The Oil and Gas Industry Has Utilized Underground 

### Injection of Brine Since the 1930’s and Class II UIC Wells Currently Inject Two Billion Gallons of Fluid Per Day For Enhanced Oil Recovery, Disposal and Storage. Wells Used Exclusively To Dispose of Fluids From Oil and Gas Production Account For 20% of the 144,000 Class II Wells in the U.S. Brine Disposal in Class II Wells Is Safe, Environmentally Sound and is the Most Economic Option in Most Areas. 

### In Areas of Limited Disposal Capacity or Where Water Resources Are Stressed, Reuse of Produced Brine is Proving To Be an Effective Alternative To Underground Injection.

# Underground Injection Wells For Produced Water Disposal Rick McCurdy Sr. Engineering Advisor Chemicals and Water Reclamation
Chesapeake Energy Corporation 6100 N. Western Avenue ı Oklahoma City, OK 76118 ı 405-935-8000

AskChesapeake@chk.com ı chk.com ı NYSE: CHK