## Best Practices Implemented in the Barnett Shale Darren Smith – Devon Energy Brian Boerner – Chesapeake Energy April 18, 2011

# Objectives ● What is the impact of natural gas operations on ozone 

### non -attainment and SIP development? ● Discuss Best Management Practices in the Barnett Shale

– Road and pad construction

– Drilling and completion

– Hydraulic fracturing

– Production

– Pipelines

– Process/sale water disposal

– Compression
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# North America’s New Source of Abundance

Mowry Hillard-Baxter Excello/Mulky

Cody Gammon Antrim Marcellus Utica Huran Chattanooga Floyd Eagleford New Albany Woodford Barnett Barnett & Woodford Fayetteville

Caney Haynesville Bend Palo Duro
Pearsall Mancos Lewis Hermosa Cane Creek Pierre Horn River Montney Big Horn CBM

Monterrey McClure

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# Two Issues ● Ozone non -attainment

– NOx dependent

– Additional controls are not needed to demonstrate attainment by 2012 

### ● Demonstration of reasonable further progress

– NOx requirements met for 2011 and 2012

– VOC requirements anticipate a shortfall

– Using assumed emissions data

– Emission Inventory submitted January 2011 will not be incorporated until July 2011

# What are VOCs? For the purpose of SIP planning, ozone non -attainment, 

## and the evaluation of the region’s demonstration of “Reasonable Further Progress,” a VOC is: ● Any compound of carbon (with some exceptions) which participates in atmospheric photochemical reactions

– Does not include methane and ethane , which have been determined to have negligible photochemical reactivity

– 40 CFR 51.100(s)

# Barnett Shale By The Numbers
● Active wells ~15,675 (December 31, 2010) 

### ● Active rigs (April 8, 2011)

– ~82 in the Barnett Shale

– ~45 in the non -attainment area ● 12 operators 

### ● 24 counties within the Barnett Shale

– 5 counties within the non -attainment area TCCD North, Hurst

# Dry and Wet Zones of the Barnett Shale “Dry” Gas = Lean Gas ● Free of condensate ● 95%+ methane ● Minimal potential for presence of VOC 

### “Wet” Gas = Rich Gas ● Condensate present ● 75%+ methane ● Increased potential for presence of VOC DFW Non Attainment Area

One size does not fit all Best practices are unique to the area of the play that you operate

# Review of Best Practices ● Evaluate each stage of gas drilling and production ● Outline potential sources of NOx and VOC 

## ● Outline best practices currently being used ● EPA’s Natural Gas STAR program

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# General Air Quality Considerations ● NOx sources are heavily regulated

– Compressor Engines ● Texas Commission on Environmental Quality

– Title 30 Part 1 Chapter 117 Subchapter D Division 2

– Combustion control at minor sources in ozone non -attainment areas ● Environmental Protection Agency

– 40 CFR 60 Subpart JJJJ ● New Source Performance Standards – Spark Ignition Reciprocating Internal Combustion Engines

– 40 CFR 63 Subpart ZZZZ ● National Emissions Standards for Hazardous Air Pollutants for Stationary Reciprocating Internal Combustion Engines

– Vehicle Engines ● EPA Tier 3 and 4 diesel emission standards

# General Air Quality Considerations ● VOC sources have permitted thresholds

– Permit by Rule

– Standard Permit

– Title V

– 40C FR 63 Subpart HH – Dehydration control requirement ● In revision to include many more sources

# Road and Pad Construction Emission source ● On - road and non - road vehicles

– Seismic trucks

– Concrete trucks

– Construction equipment 

### Suggested emissions control strategy ● Use of idling limitations ● Replacement/repower/retrofit of vehicles/equipment

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# Road and Pad Construction BMP Devon ● Idling minimized

– Contract equipment is kept working

– Standby time is minimized

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# Road and Pad Construction BMP Chesapeake ● Contracted service

– Equipment is kept working

– Standby/idling time is minimized

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# Drilling and Completion Emission source ● Generators and portable diesel engines ● Tanks ● Flare and vent lines Suggested emission control strategy ● Replacement with electric motors (where available) ● Replacement/repower/retrofit of engines ● Use of lower emission fuels ● Use of vapor recovery units (VRUs) or recover to reuse/resell ● Use of enclosed flares in condensate tanks ● Use of “Green Completions” process (collect and filter gas/liquids back to the surface to reuse in production pipelines)
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# Drilling and Completion BMP Chesapeake ● Electric drilling rigs

– Insufficient grid and supply to ensure quality power supply without causing brownouts and blackouts in neighboring communities

– Displacing emissions from pad sites to facilities ● Potential for greater emissions at generating facility ● Green Completion

– Industry Best Practice ● Flare one well per pad or area to measure well flow volume and pressure

– DFW: 1 well flared/115 completed ● Put subsequent wells in to sales line ● VRU

– Operate one VRU unit on well with liquids present

– Not effective in “dry” gas areas

– Can create hazardous condition if an insufficient gas supply present 15

# Drilling and Completion BMP Devon 

### ● Green completion on approximately 85% of wells

– Own and operate the gathering system

– Wells of sufficient bottom hole pressure to overcome gathering pressure ● VRU

– Prefer VRU over flare when emissions exceed regulatory threshold

– For wells below this threshold, vapor volume is insufficient to operate VRU

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# Hydraulic Fracturing Emission source ● Trucks ● Pumps ● Internal combustion engines 

### Suggested emission control strategy ● Replacement/repower/retrofit of vehicles ● Use of idling limitations ● Conversion of pneumatic devices to electric/compressed air/mechanical ● Replacement with electric motors (where available) ● Replacement/repower/retrofit of engines
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# Hydraulic Fracturing BMP Devon ● Frac jobs are of short duration

– Designed to optimize horsepower and fuel use 

### ● Fuel use is tracked, as it is a significant expense ● Switching this portable, contract fleet to electricity is impractical

– Electric service would only be used for a few days and may not be available for the next job

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# Hydraulic Fracturing BMP Chesapeake ● Contracted operation

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# Production Emission sources ● Lift compressors ● Condensate tank vapors ● Fugitive leaks from valves, connectors, flanges, pipe connectors, compressors and pumps, pipelines ● Dehydrators ● Pneumatic devices

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# Production Suggested emission control strategy ● Use of electric motors and/or electric starters, or other lower emission fuel (i.e. compressed air, solar power, electric, refined natural gas) ● Use of VRUs or recover to reuse/resell ● Use of annual inspection program to detect damages and leaks ● Use of enhanced leak detection and repair program ● Conversion of dehydrator pumps to lower emission fuel (i.e. compressed air, solar power, electric, refined natural gas)

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# Production Suggested emission control strategy (continued) 

### ● Use of VRUs or recover to reuse/resell ● Replacement of pneumatic devices with low- bleed/nobleed devices ● Retrofit of high - bleed devices ● Maintenance of pneumatic devices

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# Production BMP Chesapeake ● VRU – not effective in “dry” gas areas ● Plunger Lifts ● Low- bleed pneumatic valves

– Current industry practice ● Actively installed in new facilities ● Used to replace standard valves as part of site maintenance ● Housekeeping

– Pumpers ● On site daily ● Site maintenance ● FLIR 2X per year

– SCADA 23

# Production BMP Devon ● VRU is used when feasible ● Low- bleed pneumatic valves ● Housekeeping

– Inspected by lease operators

– SCADA ● IR camera inspection ● Note:

– Use of compressed air in hydrocarbon service is dangerous

– Use of solar equipment is not practical for 24- hour operations 24

# Pipelines Emission sources ● Leaks from damaged pipelines ● Pressure relief vents ● Construction machinery for laying pipe Suggested emission control strategy ● Use of plastic pipes or plastic liners/protective coating around metal pipes ● Use of composite wrap to repair non - leaking damages ● Optimization of pressure levels ● Use of idling restrictions ● Replacement/repower/retrofit of equipment 25

# Pipelines BMP Devon ● “One Call” used to avoid pipe damage ● Coated pipe is repaired if damaged ● Poly (plastic) pipe

– Has a low pressure rating

– Not as durable as plastic pipe

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# Pipelines BMP Chesapeake ● Participate in Dig -Tess /Texas811/One Call to avoid pipeline damage ● Install DOT Class 4 pipe ● Routing maintenance and repair ● Installation

– Bore

– Open Cut

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# Process / Salt Water Disposal Emission source ● Trucks ● Retention ponds and tanks 

### Suggested emission control strategy ● Replacement/repower/retrofit of vehicles ● Optimization of route efficiency/reduction of deadhead miles ● Use of idling limitations ● Capture of evaporative emissions

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# Process / Salt Water Disposal BMP Devon ● Very little VOC from produced water ● Contract trucking companies maximize profit by making operations efficient

– Fuel is a high cost item

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# Process/Salt Water Disposal BMP Chesapeake ● Contracted service

– Routed for efficiency 

### ● Use City-approved/ 

### mandated routes

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# Compression Emission source ● Compressor engines 

### Suggested emission control strategy ● Replacement/repower/retrofit of engines ● Use of electric motors ● Use of lower- emission fuels

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# Compression Chesapeake ● Pneumatic start on select engines ● Fuel stream bleed system ● Electric compressor engines

– Insufficient grid and supply to ensure quality power supply without causing brownouts and blackouts in neighboring communities

– Displacing emissions from padsites to facilities ● Potential for greater emissions at generating facility ● Glycol recycling units

– Partially fueled by VOC emissions ● Low- bleed valves

– Installing and replacing in maintenance 32

# Compression Devon ● Compressor engines are highly regulated

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# EPA’s Natural Gas Star Program

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### ● Focus on best practices ● Information sharing and technology transfer ● Technical guidance ● Peer networking ● Voluntary record of reductions ● Public recognition 

## A voluntary partnership that 

## promotes practices that reduce emissions of methane

# Chesapeake Recognized by EPA

Source: www.epa.gov/gasstar/, October 15, 2009 Chesapeake has employed numerous EPA- recommended best practices to reduce emissions, including: ● Identified and implemented opportunities for immediate methane emissions reductions, including installing vapor recovery units in areas where needed ● Piloted and installed Mizer retrofit valves in most districts, reducing the amount of gas emitted from process controllers ● Purchased infrared FLIR cameras and Apogee technology to detect VOC emissions while implementing a formal company-wide emissions inspection program 

### Chesapeake was selected by the EPA as the Natural Gas 

### STAR Production Partner of the Year for 2009

Chesapeake employee Andrew McCalmont received the EPA’s Implementation Manager of the Year award for 2009Directed Inspection and Maintenance

Retrofit Technology Lean Burn Technology Solar Technology 

# Technology Driven

# Keys to Success – Gas STAR Best Practices – High Environmental Standards – Efficiency Improvements 

### ● Research and understanding of the Gas STAR Program ● Articulate goals and scope ● Develop an implementation plan to achieve goals 

### ● Commit resources – key individuals, capital and executive leadership ● Engage, challenge and empower operations teams - a ccountability ● Technology driven – new and proven ● Economics driven ● Quality driven ● Feedback and continual improvement CHK strives to provide industry leadership in all we do

# 2008 Chesapeake Reductions by BMP

59% 11% 9% 6% 5% 3%

2% 5%

RECs Pipeline Leak Repair Low Bleed Pneumatic Level Controllers Recover Dehy Flash Gas Plunger Lifts No-Bleed Chem Pump Optimize Glycol Circ Rate Other Methane Reduction Activity % Reductions Reduced Emission Completions 59% Pipeline Leak Repair 11% Low Bleed Pneumatic Level Controllers 9.0% Recover Dehy Flash Gas 6.4% Plunger Lifts 5.2% No- Bleed Chem Pump 2.6% Optimize Glycol Circ Rate 1.7% Replace Prod Unit w/Mech Dump Sep 1.3% Workover - Green Re-Completion 0.9% VRU 0.7% De-Water/Unload with Foaming Agents 0.6% Pressure/Hydraulic SWAB 0.5% Install Elec Glycol Pump 0.3% Vert Seps - Install Mech Dumps 0.1% De-Water/Unload with Cap String 0.1% Snubbing Operations 0.1% Replace Gas Driver w/ Elec Motor - Compressors 0.1% Flir Camera Leak Repair 0.1% Remove/Bypass Prod Unit or Sep 0.1% Low Bleed Pressure Controllers 0.1% Recover Dehy FG to Suction 0.1% Replace Gas Driver w/ Elec Motor - Pumping Units 0.07% Blow Down to Sales 0.04% No-Vent Gathering System Tie- In 0.03% Engine Starter Change 0.02% Pipeline Hot Tap 0.01% De-Water/Unload with CVR String 0.004% De-Water/Unload with Pumping Unit 0.004% De-Water/Unload with Compression 0.001% De-Water/Unload with Gas Lift 0.001% Total 100%

# Other Task Force Considerations ● Closer salt water disposal wells

– Limited number needed in Tarrant County

– Strategically located

– Highly regulated 

### ● Promote piping of produced water to centralized containment and disposal site

– Eliminate trucking emissions

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# Thank You!

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