HYDRAULIC FRACTURING OF NATURAL GAS WELLS IN MICHIGAN

Description

Natural gas production from hydrocarbon rich shale rock formations, known as “shale gas,” is one of the most rapidly expanding trends in onshore domestic gas exploration and production. Shale gas reservoirs are not conventional ones as normally seen in oil and gas development. The gas is more tightly locked into these shale gas reservoirs and its development relies on hydraulic fracturing (“hydrofracking,” or “fracking”). Hydraulic fracturing is a one-time procedure that is part of the completion of some types of oil or natural gas wells. More recently, horizontal drilling is being utilized, particularly in the deeper gas reservoirs. The purpose of both of these technologies is the same: to increase exposure of more reservoir rock formation to the well bore to maximize gas production.

Horizontal drilling has been used commercially since the 1980s but has not been widely applied for natural gas development until recent years. Hydraulic fracturing has been utilized throughout the United States for more than 60 years. In Michigan, since the 1960s, more than 12,000 wells have been hydraulically fractured. Mo st of these are Antrim Shale Formation gas

wells in the northern Lower Peninsula.

Hydraulic fracturing involves pumping water at high pressure to create fractures in reservoir rock that allow the oil or natural gas to flow more freely to the well bore. Proppants, usually silica sand, are added to the water to hold the fractures open once they are created. Small concentrations of chemicals are added to improve the effectiveness of the fracture job. Typically, a compound is added to increase the viscosity of the water to enable it to carry the proppant more effectively. Another typical compound is a friction

‐ reducing additive, to allow fracturing fluids and proppant to be pumped to the target zone at a higher rate and reduced pressure than if water alone were used. Other additives include: biocides to prevent microorganism growth that could plug the fractures; stabilizers to prevent corrosion of metal pipes; and acids to remove drilling mud damage near the wellbore. Some of the chemical

additives can have adverse health or environmen tal impacts if they are not properly handled

and contained.

After a hydraulic fracture treatment, when the pumping pressure has been relieved from the
well, the water

‐ based fracturing fluid begins to flow back through the well casing to the wellhead. Typically, 25 to 75 percent of the hydraulic fracturing fluid is recovered initially as “flowback” water. The rest remains in the gas-bearing formation or is recovered over time along with the gas that is produced. The flowback water may be mixed with native water from the formation itself (together, this is termed “produced water”) that generally contains salts and

other dissolved constituents.

Regulation of Hydraulic Fracturing

Michigan has comprehensive laws and rules, enforced by the Michigan Department of Environmental Quality (DEQ), that regulate hydrau lic fracturing as well as every other aspect of oil and gas drilling and production. The DEQ has not found any cases where hydraulic fracturing has caused adverse impacts to the environment or public health in Michigan.

Despite the benign history of hydraulic fracturing in Michigan, it recently has become a concern to many people primarily due to issues raised in other states. In addition, there has been recentHydraulic Fracturing Page 2

interest in the Utica/Collingwood formations in Michigan, which are relatively deep and are expected to require significantly larger volumes of fluids for hydraulic fracturing. In response, the DEQ in May 2011 issued Supervisor of Wells Instruction 1-2011 that improves environmental protection measures and fosters greater transparency. The Instruction applies to high-volume hydraulic fracturing operations. It sets standards for water withdrawal evaluation; monitoring and reporting of fracturing pressures and rates; providing information on chemical additives; and reporting of flowback water.

The concerns over hydraulic fracturing center on five issues: (1) migration of gas or fracture fluids, (2) water use, (3) management of produced water, (4) surface spills, and (5) identification

of chemical additives. Each issue is addressed in turn below.

Migration of gas or fracture fluids. A major concern in natural gas development is the prevention of migration of gas or other fluids out of the reservoir and into overlying strata, particularly fresh water aquifers. In cases where this has occurred, it has been the result of well construction problems and not of hydraulic fracturing itself. At depths of about 2000 feet or less, fractures propagate horizontally due to the natural stress regime of the rock. This confines the fractures to the gas reservoir. At greater depths, fractures may propagate vertically; however, characteristics of overlying rock layers prevent fractures from extending above the top of the gas reservoir.

The installation of steel pipe (“casing”), encased in cement, is key to preventing migration of gas or fluids. Michigan regulations require that each oil and gas well have a casing and cementing plan that will effectively contain gas and other fluids within the wellbore, whether related to fracturing or not. Surface casing must be set a minimum of 100 feet into the bedrock and 100 feet below any fresh water zones and cemented from the base of the casing to the ground surface. Before fracturing or other operations can take place to complete a well for production, an additional string of production casing must be set to the depth of the reservoir and cemented in place. Depending on depth, additional protective casing may be required. To provide additional protection for aquifers and well integrit y, the DEQ imposes a permit condition for wells in shallow reservoirs prohibiting hydraulic fracturing within 50 feet of the base of the surface casing. In addition, Instruction 1-2011 requires reporting of volumes, rates, and pressures (including pressure immediately outside of the pipe used to inject the fracturing fluid). Also, DEQ staff check wells in the vicinity to assure there are no wells or other features that could serve as conduits for unwanted movement of fracturing fluids.

Water use. A fracture treatment of a typical Antrim gas well requires about 50,000 gallons of water. In the emerging Utica/Collingwood Shale gas development, the amount of water needed to fracture a horizontal well may be up to 5,000,000 gallons or more. To put this in perspective, 5,000,000 gallons is the volume of water typically used by eight to ten acres of corn during a growing season. Withdrawal of water for oil and gas operations is exempt from the requirements of Michigan’s water withdrawal statute; however, Instruction 1-2011 requires the operator to perform the same water withdrawal impact assessment as any other user of large volumes of water. It also requires installation and monitoring of an observation well if there is a freshwater supply well within one-quarter mile. The DEQ will not approve a withdrawal of water for hydraulic fracturing if it is likely to cause a significant adverse impact to groundwater or

surface water.

Management of produced water. Proper management of produced water is essential in protecting public health and the environment. In Michigan, produced water must be managedHydraulic Fracturing Page 3

and disposed of according to strict rules specific ally applying to those fluids. The fluids must be contained in steel tanks and transported to disposal wells where they are injected into deep rock layers that are isolated from fresh water supplies. The disposal wells are licensed by both the DEQ and the U.S. Environmental Protection Agency, and must be tested periodically to assure well integrity. Instruction 1-2011 requires reporting of the volume of flowback water recovered after a hydraulic fracturing operation.

Surface spills. Spills of chemical additives or flowback water can have adverse environmental or public health impacts. Michigan requires secondary containment under tanks, wellheads, and other areas where spills may be most likely. If a spill does occur, it must be reported immediately to the DEQ, and all spills must be promptly recovered and cleaned up according to strict requirements.

Identification of chemical additives. Instruction 1-2011 requires oil and gas operators to provide to the DEQ copies of all Material Safety Data Sheets (MSDSs) for additives used in hydraulic fracturing. The MSDSs include information on physica l characteristics, toxicity, health effects, first aid, reactivity, storage, disposal, protective equipment, and spill response. The DEQ will post the MSDSs on the Department’s web site for public review. While the details on some of the chemical compounds used in hydraulic fr acturing are exempted from disclosure on the MSDSs under federal law, the MSDSs will provide enough information for the DEQ to track and monitor spills.

Conclusions

Michigan’s laws and rules effectively protect water and other natural resources as well as public health and safety from potential adverse effects of hydraulic fracturing. The DEQ has more than 50 staff employed in enforcing these state requirements. To date, only two productive Utica/Collingwood Shale gas wells have been drilled in Michigan and the potential for more extensive development is unknow n; however, the DEQ is taking a proactive approach in addressing large-scale hydraulic fracturing as we ll as other issues associated with deep shale gas development.

While fracturing of deep shale gas wells may require larger volumes of water on a per well basis, the development is expected to require significantly fewer wells. The DEQ is proposing a well density of up to 640 acres per well, and has convened a hearing to address well spacing. By comparison, much of the past oil and gas development has been based on 40 to 80 acres per well. The hearing is under continuation as more information is acquired.

Prepared by: Office of Geological Survey Department of Environmental Quality Updated May 31, 2011