## Jimmie Hammontree

Manager, Regulatory Affairs April 11, 2012 

## W ater Utilization, Water Efficiency, and Reuse2



# The Water / Energy Nexus

“Water is Essential for Energy Resource Development”

Fuel Extraction Fuel Processing
Power Generation Cooling



### “Energy Resources are Needed for Water”
Development (raw water pumping)
Processing (treatment)
Distribution (potable water pumping)



### “Balance” or “Nexus” is Critical but Often Overlooked when evaluating Energy Resources
Many discussions on air quality and surface pollution impacts
Limited discussion on water availability
Improve One ! Improve the Other3



# Current Chesapeake Water Use by Shale Play

Barnett Shale*

250,000 Gallons used for Drilling 4,600,000 Gallons used for Fracturing

~ 4.8 Million Gallons Used Per Well



### Liquid&Shales&(Gas,&Oil,&Condensate)& Gas&Shales&(Dry&Gas)& Marcellus Shale *
85,000 Gallons used for Drilling 5,500,000 Gallons used for Fracturing

5.6 Million Gallons Used Per Well



### Haynesville / Bossier Shale
600,000 Gallons used for Drilling 5,000,000 Gallons used for Fracturing

~ 5.6 Million Gallons Used Per Well

*Play&contains&areas&of&condensate&liquids&but&primarily&dry&gas& 

### Granite Wash
200,000 Gallons used for Drilling 4,300,000 Gallons used for Fracturing

~ 4.5 Million Gallons Used Per Well 

### Utica Shale
100,000 Gallons used for Drilling 5,400,000 Gallons used for Fracturing

~ 5.5 Million Gallons Used Per Well4



# Current Chesapeake Water Use By Shale Play Continued

Eagle Ford Shale

125,000 Gallons used for Drilling 4,800,000 Gallons used for Fracturing

~ 4.9 Million Gallons Used Per Well



### Permian Basin Plays**
100,000 Gallons used for Drilling
1,800,000 Gallons used for Fracturing

~ 1.9 Million Gallons Used Per Well

**&Includes&Avalon&Shale,&Bone&Spring,& Spraberry ,&Wol?erry,&and& Wolfcamp &plays& 

### Niobrara Shale
300,000 Gallons used for Drilling 3,000,000 Gallons used for Fracturing

~ 3.3 Million Gallons Used Per Well



### Cleveland / Tonkawa
200,000 Gallons used for Drilling 3,800,000 Gallons used for Fracturing

~ 4.0 Million Gallons Used Per Well



### Mississippi Lime
100,000 Gallons used for Drilling 2,100,000 Gallons used for Fracturing

~ 2.2 Million Gallons Used Per Well 

### Liquids9Rich& Shales &(Gas,&Oil,&Condensate)&5



# Raw Fuel Source Water Efficiency

Energy'resource Range'of'gallons'of'water'used'' per'MMBtu'of'energy'produced

Conven8onal'(ver8cal)'natural'gas 1'–'3

Chesapeake'deep'shale'natural'gas'*' 0.84'–'3.32'

Coal (no&slurry&transport) (with&slurry&transport) 2&–&8
13&–&32

Nuclear&(processed&uranium&ready&to&use&in&plant) 8&–&14

Conven8onal'(ver8cal)'oil 8'–'20
Chesapeake'deep'shale'/'8ght'sand'oil'**' 8.15'–'20.13'

Synfuel&9&coal&gasificaIon 11&–&26

Oil&shale&petroleum 22&–&56

Oil&sands&petroleum 27&–&68

Synfuel&9&Fisher&Tropsch&(Coal) 41&–&60

Enhanced&oil&recovery&(EOR) 21&–&2,500

Biofuels '(Irrigated'Corn'Ethanol,'Irrigated'Soy'Biodiesel) >'2,500

Source:&USDOE&2006&(other&than&CHK&data)

* Includes&processing&which&can&add&0&9&2&gallons&per& MMBtu

** Includes&refining&which&consumes&major&porIon&(90%)&of&water&needed&(7918&gal&per& MMBtu )& &Solar&and&wind¬&included&in&table&(require&virtually&no&water&for&processing)& &Values&in&table&are&locaIon&independent&(domesIcally&produced&fuels&are&more&water&efficient&than&imported&fuels)&&&&6



# Power Generation Water Use Efficiency Parasitic Effect of Carbon Capture

Source:&USDOE&2006&(other&than&CHK&data)&and&USDOE/&NETL&2007& *Average&consumpIon&for&fuels;&Chesapeake&data& MWh&=&megawaf9hour&7



# Water Intensity of Transportation Fuels

Compressed&Natural&Gas&(CNG)& Source:&Adapted&from&King&and&Webber&2008a;&& *Adapted&from&King&and&Webber&2008b,&combined&with&data&from&USDOE&2006& Non9irrigated&biofuels¬&shown&on&plot&above&&8



# Criticism of Oil and Natural Gas Water Use

Concerns of the so called “permanent
removal” of water from the effective hydrologic cycle.

Most water used in shale development either
remains in the formation or returns as produced water
The preferred method for disposal of produced water is through permitted Class II
SWDs
Argument that this is a different type of “consumption” than the evaporation of water from a power plant and other types of “consumption”9 

## Balanced Methane Combustion Reaction:

CH 4 

### + 2O 2 

### ! CO 2 

### + 2H 2 

### O



## Volume of Water Vapor Produced per Million Cubic Feet of Natural
Gas:
10,675 gallons



## Need to combust 525 MMCF of natural gas to produce an equivalent amount of water (as vapor) used to drill and complete a typical
Marcellus Shale well

Based on current production trends, it takes an average CHK Marcellus Well < 6 months to produce 525 MMCF of Natural Gas 

# Natural Gas Combustion: Water Vapor Generation

*&Not&all&natural&gas&that&is&consumed&is&combusted.&&According&to&1995&DOE&Topical&Report,&approximately&3.5%&of&natural&gas&is&used&as& feedstock&for&ammonia,&methanol,&andðylene&producIon.&

# Produced Water Reuse: Key Considerations11



# Produced Water Naming Conventions

“Produced Water” ALL water that is returned to the surface through a well
borehole
Made up of water injected during fracture stimulation process as well as natural formation water Typically is produced for the lifespan of a well (quantities vary significantly by play)

“ Flowback ” Process

Term associated with the PROCESS

Process allows the well to flow back excess fluids and
sand
Actual duration of the process varies from well to well and play to play

The distinction of “ flowback water” and “produced water” has nothing to do with water quality.

ALL “ flowback water” IS “produced water”12



# Water Quality Treatment / Reuse

Dissolved Parameters ! Blending for Reuse

Chlorides and Total Dissolved Solids (TDS)
Generally not looking at removal, determines freshwater blending ratios

Very high TDS increases friction in hydraulic fracturing process (bad)



### Suspended Parameters ! Filtering Prior to Reuse

Turbidity and Total Suspended Solids (TSS)
Can determine filtration rates, size of filter, performance
High solids can plug well and decrease biocide effectiveness



### Other Parameters of Concern

Residual hydrocarbons (liquid plays) can foul membranes / filters
Water “hardness” compounds (e.g. Calcium and Magnesium)
Sulfates can be used by bacteria to create hydrogen sulfide

Barium can combine with sulfates to create scale *

High iron can drop out creating emulsions and plugging
Bacteria is always a concern “ Frac Tanks” on location

*&Barium&is&only&a&concern&in&presence&of&sulfates&or&other&compounds&that&can&form&scale&13



# Barnett and Haynesville Produced Water Reuse

Generally&blessed&with&extensive&SWD&infrastructure&in&the&BarneD&and&Haynesville&plays&

Barnett Shale

Significant increase over time in TDS (50,000 ! 140,000 ppm ); initial produced water is relatively low

Relatively low TSS, no problem for filtration
Reusing approx 230,000 gallons in the southern portion of the play (currently suspended pending FR testing)



### Haynesville Shale

Immediately after frac, very poor quality water ! high TDS, high chlorides, high TSS (~350 ppm )
High scaling tendency ! high calcium (~8,000 ppm ) and high magnesium (~500 ppm )
Unattractive produced water reuse potential but higher quality drilling (pit) wastewater being evaluated for reuse14



# Eagle Ford Produced Water Reuse Potential

Produced Water Quality

Relatively good quality, manageable both initially and long term
Lower TDS increasing slightly over time (10,000 - 70,000 ppm ); with relatively low chlorides (10,000 - 45,000 ppm )
Lower scaling tendency (low Magnesium, Sulfates, and Barium, and moderate Calcium)
Still early on in evaluation and currently accumulating data



### Quality Shouldn’t be an Impediment to Reuse

Liquid hydrocarbon removal will be a required pre-treatment step

" DAF (dissolved air floatation)

" IGF (induced gas floatation)

" Air emissions associated with treatment must also be evaluated
Residual gels in produced water must also be managed with
chemical breakers and filtration

" Borate levels in produced water must be monitored to prevent premature cross-linking of linear gels in next completion15



# Marcellus Shale Produced Water Reuse

Marcellus Water Quality

Immediately after frac, high TDS (40,000 ppm -- 90,000 ppm with long term > 120,000 ppm )

However, lower TSS values (~160 ppm ) make filtration
reasonable
Moderate to high scaling tendency (high Ca, Mg)
Quality is manageable and attractive for reuse



### Currently recycling / reusing nearly 100% of initial produced water via simple treatment processes

Filtration and clarification processes
Reduces produced water disposal volumes by > 95%

Tremendously successful program
Remaining fluids (long term produced water, etc) sent to Salt Water Disposal wells (as needed)