## EPA Hydraulic Fracturing Study Technical Workshop #4 Water Resources Management March 29-

30, 20112 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 

### Matthew E. Mantell, P.E. Environmental Engineer Engineering Technology Group 

# Produced Water Reuse and Recycling Challenges and Opportunities Across Major Shale Plays3 

# Presentation Overview Introduction  Chesapeake Operating Areas  Water Use by Shale Play 

## Produced Water Management  Produced Water Naming Conventions  Generation of Produced Water by Play  Produced Water Quality and Issues 

## Produced Water Management Options  Direct Filtration and Reuse  Deep Well Disposal  Advanced Treatment for Reuse 

## CHK Experience with Water Reuse/Recycling Criticisms of Shale Gas Water Use Closing Thoughts Additional information on water efficiency of shale gas presented in Appendix4 

# Chesapeake Energy Operating Areas5 

# Current Chesapeake Water Use by Shale Play
Barnett Shale* 250,000 Gallons used for Drilling 3,800,000 Gallons used for Fracturing ~ 4.0 Million Gallons Used Per Well 

### Haynesville Shale 600,000 Gallons used for Drilling 5,000,000 Gallons used for Fracturing ~ 5.6 Million Gallons Used Per Well 

### Fayetteville Shale 65,000 Gallons used for Drilling 4,900,000 Gallons used for Fracturing ~ 4.9 Million Gallons Used Per Well 

### Marcellus Shale * 85,000 Gallons used for Drilling 5,500,000 Gallons used for Fracturing 5.6 Million Gallons Used Per Well

* Portion of play contains some NG liquids 

### Eagle Ford Shale 125,000 Gallons used for Drilling 6,000,000 Gallons used for Fracturing ~ 6.1 Million Gallons Used Per Well 

### Niobrara 300,000 Gallons used for Drilling 3,000,000 Gallons used for Fracturing ~ 3.3 Million Gallons Used Per Well 

## Gas Shales (Dry Gas)

Liquid Shales (Gas, Oil, Condensate)6



# Produced Water 

# Management7 

### “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) Produced water is chemically analyzed prior to reuse / recycling or disposal

― Analyzed for hydrocarbons, metals, and naturally occurring elements 

### Water quality varies:

― “Brackish” (5,000 to 35,000 ppm TDS)

― “Saline” (35,000 to 50,000 ppm TDS)

― “Brine” (50,000 to 150,000+ ppm TDS) 

# Produced Water Naming Conventions8 

### “ Flowback” Process Term associated with the PROCESS Process allows the well to flow back excess fluids and sand

― Once sand and fluid have been removed, gas and/or petroleum liquids begin to flow (the purpose)

― Flowback process equipment is designed to handle heavy solids

― Permanent equipment put in place when process is complete 

### 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” 

# Produced Water Naming Conventions9 

### Quantities and Rates of Water Production Important for Reuse Need large volume of water over short time 

### period

― Helps ensure the effectiveness of the process 

### “Initial” defined here as first 10 days of Flowback and Production Process 

### Barnett, Fayetteville, and Marcellus Shales “Initial” volume of water significant

― 500,000 to 600,000 gallons per well in first 10 days  ~ 10% to 15% of total water need to frac new wells 

### Haynesville Shale “Initial” volume of water less significant

― 250,000 gallons per well in first 10 days  ~ 5% of total water needed to frac new well 

# Produced Water Generation by Shale Play: Initial Produced Water

Still collecting data on “initial” water production data on Niobrara and Eagle Ford Wells10 High “Long Term” Produced Water Generating Play (> 1,000 Gallons Per MMCF) Barnett Shale:

― Formation characteristics result in high produced water generation

― Higher volumes of natural formation water present in / near shale Moderate “Long Term” Produced Water Generating Plays (200 – 1,000 Gallons Per MMCF) Eagle Ford Shale Haynesville Shale Fayetteville Shale

― Formation characteristics allow less fluid production per MMCF

― Relatively desiccated formations (dry) Low “Long Term” Produced Water Generating Play (< 200 Gallons Per MMCF) Marcellus Shale Higher water production in South (West Virginia), lower in North (Pennsylvania)

― Shale formation characteristics tend to “trap” fluids

― Highly desiccated formations (very dry)

― Capillary pressure difference “binds” water to formation (known as imbibition ) 

# Produced Water Generation by Shale Play: Dependant on Geology of Shale Formation

Salt Water Disposal wells may still be needed to manage and dispose of long term produced water11 

### 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 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 

# Water Quality and Treatment / Reuse

“ Frac Tanks” on location12 

### Barnett Shale Significant increase over time in TDS (50,000  140,000 ppm ) and Chlorides (25,000  80,000 ppm ) ; initial produced water is relatively low Relatively low TSS, no problem for filtration Iron values are relatively low compared to other plays, but still pose concern 

### Fayetteville Shale “Good Quality Water” on both initial and long
-term 

###  very low Chlorides (~ 10,000 ppm ), low TDS (~ 15,000 ppm ) Lower scaling tendency (low Calcium, low Magnesium) Excellent potential for reuse of both initial and long term produced water 

# Initial and Produced Water Quality Data: Barnett and Fayetteville Shales13 

# Initial and Produced Water Quality Data: Haynesville and Marcellus Shales 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 ) Relatively unattractive reuse potential 

### Marcellus Shale 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 Eagle Ford Shale and Niobrara currently being evaluated for reuse: definite potential!14



# Produced Water Management Options15 

### Process 1. Produced water during “flowback ” process collected and stored in holding tanks onsite 2. Produced water pumped from tanks through a 100
- micron filter followed by a 20
- micron filter

― Filter is designed to remove suspended solids in fluid (not salts) 3. Filtered fluid is pumped into a clean storage tank and transported to next well to be hydraulically fractured

― Filters and solids collected are disposed of by a licensed contractor and sent to an approved landfill 4. Prior to use in frac, the water is tested for remaining constituents (TDS/Salts, Scaling Compounds) that were not removed in filtration process

― Test results determine blending ratios

― Robust scale inhibition and bacteria elimination programs implemented which require substantial management and testing prior to frac 5. Fresh “make
- up” water is still required to ensure adequate quality and quantity of fluids 

# Preferred Practice: Filtration and Reuse CHK’s Marcellus Shale Program Example16 

### Benefits 1. Reduction in the volume of wastewater

― Less sent offsite for disposal 

### 2. Less fresh water needed for hydraulic fracturing operations

― Reduced impact on local supplies 

### 3. Reduced truck traffic on public roads (less fresh water hauled)

― Lower impact on public roads, noise, air quality 

### 4. Filtration process used is inexpensive and does not require substantial amounts of energy like other processes that remove salts (i.e. reverse 

### osmosis membranes, distillation) 5. Helps reduce the cost of operations

― Reduces wastewater disposal costs, water supply costs, and transportation costs 

# Preferred Practice: Filtration and Reuse CHK’s Marcellus Shale Program Example17 

# Advanced Treatment and Reuse Not Always the Environmental Option Environmental and Economic benefits may directly correlate when evaluating reuse versus disposal REUSE $$ = ENERGY $$ + TRANSPORT $$ + CONCENTRATED WASTE DISPOSAL $$ DISPOSAL $$ = TRUCKING $$ + DISPOSAL $$ 

### Where Direct Reuse is Not Feasible Due to Water Quality, Logistics Injection Wells are low cost, low energy, safe, and effective Energy requirements for treating some fluids make these techniques economically unfeasible, and ALSO environmentally undesirable

― Air Emissions

― Water use

― Waste 

### Chesapeake Energy does not surface discharge any produced water either directly, or via wastewater treatment plants18 

# Advanced Produced Water Treatment Options Thermal Distillation Ability to treat produced water and recapture distilled water Beneficial in times of drought or in arid areas Very energy intensive (and costly) Most distillation systems are designed for treatment of large volumes of water
 Larger Centralized Facilities  Long Hauling Distances 

### Membrane Systems (Reverse Osmosis) Very prone to scaling without comprehensive pretreatment Need very experienced operators Technology is improving  coatings, etc Energy intensive  but less than Thermal Distillation 

### Chemical Precipitation and Electro-Coagulation Less expensive but still requires relatively experienced operators 

## Beware of the Black Box!19 

# Produced Water Reuse and Recycling: The Chesapeake Experience

Intevras’ EVRAS unit at the Brentwood site in east Fort Worth20 

# Barnett Shale Reuse / Recycling Blessed with Extensive SWD Infrastructure Injection into Ellenberger formation 

### Currently Reusing Approx 230,000 Gallons Per Well in southern portion of the play Partial Reuse Makes Economic Sense Reuse makes up ~ 6% of total water needed to hydraulically fracture a new well Logistics and economics are the main limiting factor in preventing higher levels of reuse 

### CHK Pioneering Use of Evaporative Technologies that Utilize Waste Heat in the Barnett INTEVRAS Evaporative Unit Less water (as concentrated brine) injected in SWD well onsite21 

# Fayetteville Shale Very good water quality (low TDS, chlorides) as compared to other plays TDS in 10,000 to 20,000 ppm range 

### Currently reusing approx 250,000 gallons (80% of initial produced water) per well Reuse makes up ~ 6% of the total water needed to hydraulically fracture a new well Good produced water quality makes reuse of long term produced water possible if logistics make sense22 

# Haynesville Shale
Extensive SWD Infrastructure in East Texas Currently, CHK is not reusing HS produced water Poor produced water quality (even initially) High TDS, high solids, high scaling tendencies 

### Relatively low volume of initial produced water 250,000 gallons over 1st ten days (low) Water production falls off quickly 

### Large volumes and higher quality drilling wastewater currently make it a more feasible reuse candidate23 

# Marcellus Shale Currently recycling / reusing nearly 100% of initial produced water via improved filtering processes Reduces produced water disposal volumes by approx 85% to 100% Tremendously successful program Remaining fluids (long term produced water, etc) sent to Salt Water Disposal wells Small volume (<1%) sent to advanced treatment and reused 

### Reuse makes up ~ 10% of the total water needed to hydraulically fracture a new well Use closed loop synthetic oil based muds Significantly reduces wastewater generated from drilling 

### Chesapeake Energy does not surface discharge any produced water either directly, or via wastewater treatment plants24



# Oil and Natural Gas Water Use Concerns25 

## Concerns of the so called “permanent removal of water from the effective hydrologic cycle Most water used in shale gas 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” 

# Criticism of Oil and Natural Gas Water Use26 

## 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, and ethylene production.27 

# Closing Thoughts 1. U.S. Oil and Natural Gas Industry is REDUCING* the volume of freshwater used in operations  reducing the need to compete with other 

### freshwater users 2. Feasibility of Produced Water Reuse is dependent on 3 factors: quantity, duration, and quality 3. All three factors (quantity, duration, quality) can vary considerably between / within shale plays 4. Environmental and Economic Benefits may directly correlate when evaluating reuse versus disposal options 

### 5. Volume of water “removed” from hydrologic cycle during fracturing or deep well disposal is more than offset during the combustion of fuel * More importantly the industry is improving the efficiency of fresh water use (i.e. more hydrocarbon production per unit of fresh water utilized)

### Matthew E. Mantell, P.E. Corporate Environmental Engineer
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 

# Produced Water Reuse and Recycling Challenges and Opportunities Across Major Shale Plays29



# Appendix: Water / Energy Nexus: 

# The Water Efficiency of Energy Resources30 

### “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 Other 

# The Water / Energy Nexus31 

# Water Use Efficiency in Natural Gas Plays

Shale Play Average Water Use

Per Well 1 CHK Est. Avg. Natural

Gas Production Over Well Lifetime 2 Resulting Energy From

Natural Gas Production Per Well ( based on 1,028 Btu per Cubic Feet ) 3 Water Use Efficiency ( in gallons per MMBtu) Haynesville 5.6 million gallons 6.5 billion cubic feet 6.68 trillion Btu 0.84
Marcellus 5.6 million gallons 5.2 billion cubic feet 5.35 trillion Btu 1.05
Barnett 4.0 million gallons 3.0 billion cubic feet 3.08 trillion Btu 1.30 Fayetteville 4.9 million gallons 2.6 billion cubic feet 2.67 trillion Btu 1.84

Source: 1Chesapeake Energy 2009b, 2Chesapeake Energy 2009c, 3 USDOE 2007 British Thermal Unit (Btu) Million British Thermal Units (MMBtu)



## Chesapeake’s Four M ajor Deep S hale P lays32 Energy resource Range of gallons of water used per MMBtu of energy produced Chesapeake d eep s hale n atural g as * 0.84 – 1.84 Conventional natural gas 1
– 3 Coal (no slurry transport) (with slurry transport) 2
– 8 13
– 32 Nuclear (processed uranium ready to use in plant) 8
– 14 Conventional oil 8 – 20 Synfuel
- coal gasification 11
– 26 Oil shale petroleum 22
– 56 Oil sands petroleum 27
– 68 Synfuel
- 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) * Does not include processing which can add from 0
- 2 gallons per MMBtu Solar and wind not included in table (require virtually no water for processing) Values in table are location independent (domestically produced fuels are more water efficient than imported fuels) 

# Raw Fuel Source Water Use Efficiency33 

## Wind and solar notes Solar and wind power not included in previous table Require virtually no water for processing Most water efficient Currently not “baseload” worthy

― 

### Wind: 0.5% of all U.S. energy in 2008

― 

### Solar: 0.1% of all U.S. energy in 2008 

# Fuel Source Water Use Efficiency34 

## Geography Plays Important Role in Fuel Source Water Efficiency Values in table are location independent Energy demands of fuel transport not considered If considered:

― 

### Locally produced fuels would be given higher “value”

― 

### Imported fuels less water efficient  lower “value” » 

### Foreign Oil, Alaskan Oil and Gas, Off
-Shore Oil and Gas 

# Raw Fuel Source Water Use Efficiency: Geography / Location35 

# Typical Efficiencies of Thermoelectric Power Plants

Source: Adapted from Stillwell et al. 2009 

### Natural Gas Combined Cycle

SynGas (Coal) Combined Cycle Coal /Biomass Steam Turbine

Nuclear Steam Turbine Concentrating Solar36 

### Three of the power plant types evaluated emit CO 2 Natural Gas Combined Cycle (NGCC) Integrated Gasification (SynGas from Coal) Combined Cycle (IGCC) Coal / Biomass Steam Turbine 

### Believed technological solution is the use of carbon 

### capture, (combined with deep geological sequestration) Commonly overlooked in the discussion of carbon capture is the parasitic effect the carbon capture technology has on power generation efficiency When the efficiency of a power plant is decreased, additional generating capacity must be brought online to maintain the plant’s previous electrical output Results in a reduction of the water efficiency of power plants that incorporate carbon capture 

# Carbon Capture and the Parasitic Effect on Power Generation and Water Use37

0 100 200 300 400 500 600 700 800

Deep Shale Natural Gas

Combined Cycle Integrated Gasification

(from Coal) Combined Cycle Coal Steam Turbine Nuclear Steam Turbine Concentrating Solar Avg Consumption for Fuel (gal / MWh) Avg Consumption for Cooling (gal / MWh) Consumption for CCS gal / MWh

* 

# Power Generation Water Use Efficiency Parasitic Effect of Carbon Capture Consumption: Gallons of Water Per MWh Electricity Generated

453 472 704 750

14 123 52 114 0

Source: USDOE 2006 (other than CHK data) and USDOE/ NETL 2007 *Average consumption for fuels; Chesapeake data MWh = megawatt
- hour 

### ( Including raw fuel source and carbon capture input)

204 232 516 62038 

## Conventional Petroleum and Gasoline Dominate U.S. Market 97% of all fuels Some contain 10% ethanol blend to reduce air emissions 

## Currently Looking at “Unconventional” and “Alternative” Fuels Non
-Conventional Liquid Fossil Fuels (fuels from coal, oil shale, tar sands) Biofuels (ethanol, biodiesel) Compressed Natural Gas Hydrogen (carrier source) 

## Major “Push” to Electric Vehicles Major focus of research and development Perceived to be “green” (how is electricity generated?) Increase in water use “overlooked” 

# Transportation Fuels and Water Use39 1 10 100 1,000 10,000 Biodiesel from Non-Irrigated Soybeans CNG using NG Generator for Compression

Hydrogen from Natural Gas CNG using Electricity for Compression Diesel Electric Vehicle (Electric from Shale NG)* Gasoline Electric Vehicle (Electric from Coal)* Ethanol from Non-Irrigated Corn

Oil Shale Gasoline Syn Diesel from Natural Gas Oil Sands Gasoline Electric Vehicle (Electric from Nuclear)*

Syn Diesel from Coal Hydrogen via Electrolysis Biodiesel from Irrigated Soybeans Ethanol from Irrigated Corn

1.5 3 6 6.5 8 10 10.5 23

25 26 27.5 33 35 38.5 42 800 2,350

Consumption: Gallons of Water Per 100 Miles Driven 

# 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 Non
- irrigated biofuels not shown on plot above Gasoline with 10% irrigated ethanol blend: ~ 200 gallons water consumed per 100 miles driven40 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 

### Matthew E. Mantell, P.E. Corporate Environmental Engineer 

# Produced Water Reuse and Recycling Challenges and Opportunities Across Major Shale Plays