Pennsylvania’s Natural Gas: Maximizing the Opportunity, May 3, 2011 l 1

Marcellus Shale Technology

Joseph H. Frantz, Jr.

Vice President - Engineering

Range Resources-Appalachia, LLC

RANGE RESOURCES
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Range Resources

 Natural gas production 

company

 Included in S&P 500

 Committed to Pennsylvania

 Regional Headquarters in 

Washington County

 Pioneered Marcellus Shale, 

2004

 More than $3 billion invested 

in Pennsylvania

 Employs about 350 

Pennsylvanians, thousands of 

indirect jobs
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Range Resources Strategy

Proven track record of performance 

following these principles

Nora Area 

Berea, Big Lime, Huron Shale, CBM

Marcellus Shale

20 to 31 Tcfe resource potential

Upper Devonian Shale

10 to 14 Tcfe resource potential

Utica Shale

West Texas / New Mexico

Wolfcamp, Penn Shale, Avalon/Bone Springs

Midcontinent

Ardmore Woodford, Cana Woodford, 

Granite Wash, St. Louis, Mississippian

• Grow production and 

reserves at top-quartile or 

better cost structure

• Focus on PER SHARE 

GROWTH

• Maintain simple, strong 

financial position
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Marcellus Shale

 Marcellus Shale covers 

approximately 28 million acres

 The Appalachian Basin services 

the best natural gas market in the 

world

 Range has operated in 

Pennsylvania for nearly 30 years

 There are other shales of great 

interest above and below the 

Marcellus that could combine to 

be as prolific as the Marcellus
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Marcellus Drilling Permits

Legend

New Permitted Wells

RANGE

ANADARKO

ATLAS

CABOT

CHESAPEAKE

CHIEF/AB

CNX

EAST/SHELL

EOG

EQT

FORTUNA/TAILSMAN

TURM

ULTRA

XTO/EXXON

OTHERS

LEGEND

NEW PERMITTED WELLS
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Field Name

1 South Pars/North Dome Iran and Qatar 1,235

MARCELLUS UNITED STATES OF AMERICA 489 (2)

2 Urengoy Russia 222

3 Yamburg Russia 138

4 Hassi R’Mel Algeria 123

5 Shtokman Russia 110

6 South Iolotan-Osman Turkmenistan 98

7 Zapolyarnoye Russia 95

8 Hugoton Unites States of America 81

9 Groningen Netherlands 73

10 Bovanenko Russia 70

Country Recoverable Reserves, Tcf

(1) Rafael Sandres, Global Natural Gas Reserves – A Heuristic Viewpoint, March 2006

(2) Dr. Terry Engelder, Penn State University – from August 2009 issue of Fort Worth Basin Oil & Gas Magazine

The World’s 10 Largest Natural Gas Fields (1)
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Natural Gas is a Game Changer for the USA

 ―Merry Christmas America,‖ 

– Dr. Terry Engelder in TIME Magazine

 ―Recent innovations have given us the 

opportunity to tap large reserves—

perhaps a century's worth—in the shale 

under our feet. The potential here is 

enormous,‖ 

– President Barack Obama 

 ―At a time of increased energy anxiety, 

the shale gas revolution is both a major 

innovation and a formidable new 

addition to our energy supply,‖ 

– Daniel Yergen in the Wall Street Journal 
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Key to Clean Energy Future

Electricity Demand

 The U.S. demand for electricity will 

increase by an average rate of 1.8% 

per year through 2025.

 Which will call for 340 gigawatts of 

new electric generation

 Of the 448 new power plants built by 

2014, more than 40% will be fueled by 

natural gas

 By 2025, 57% of new electric 

generation will be fueled by natural 

gas.

 Key to America’s Energy Portfolio
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Expanded Uses for Natural Gas

• Advantages

o 50% less CO2than coal; 30% less than oil

o 80% less nitrogen oxides than coal or oil

o Almost no sulfur or particulates

o One third the cost of crude oil or gasoline

o Reduced dependence on oil imports

Gas-fired electric 

generation

Compressed natural gas 

for vehicle fuel
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Water Consumptive

Source: USGS, Pennsylvania Water Consumption

 Water use in Marcellus Shale drilling "may not be as big an issue as we originally 

thought it was," the DEP analyses are determining that the average daily consumption in 

the shale industry is "no greater than one of our power plants.― 

- Dana Aunkst, DEP's acting deputy secretary for field operations
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Water Consumption Per MMBTU

Energy Resource Range of Water Used per MMBTU of 

Energy Produced (Gallons)

Deep Shale Gas 0.60 – 2.0

Nuclear 8 - 14

Conventional Oil 8-20

Synfuel-coal gasification 11-26

Coal 13-32

Oil Shale 22-56

Tar sands/oil sands 27-68

Fuel ethanol from corn 2,510-29,100

Biodiesel from Soy 14,000-75,000

Source: Ground Water Protection Council and the U.S. Department of Energy
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Regulatory Environment

Been there, done that – often forgotten that Pennsylvania revamped regulatory

program in 2008

Consistency – still work to be done, but huge leaps in permitting process

Staffing Up – new permit fee structure allows for sustainable regulatory staffing 

increases

Opportunity – Pennsylvania recently recognized as exceptional regulatory 

program for hydraulic fracturing
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 States have regulated oil and gas drilling for 150 years

 PADEP’s Bureau of Oil and Gas Management enforces a 

comprehensive set of state and federal laws and regulations

 Additional regulation of certain activities by Susquehanna and 

Delaware River Basin Commissions, and U.S. Army Corps of 

Engineers

 DEP’s BOGM staff has more than doubled over the past two years 

to address Marcellus activity, funded by drilling permit fees.

Pennsylvania Statutes:

• Oil and Gas Act

• Coal and Gas Resource

Coordination Act

• Oil and Gas Conservation Law 

• Clean Streams Law

• Solid Waste Management Act

Federal Statutes:

• Clean Water Act

• Safe Drinking Water Act

• Clean Air Act

• Resource Conservation

and Recovery Act

Regulations
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Drilling Is Performed in Rural and Wooded Areas
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Drilling Pads

 Engineered site design 

 ESCGP-1 Permits required

 E&S controls

 3-4 acre drilling pad

Protecting Water through Engineered Locations
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John Perez Graphics

Horizontal Drilling Technology
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 Small bend in drilling motor 

assembly, roughly 1-2°, drills the 

curve over the course of 900’, at 

a rate of 10° per 100’ to achieve a 

90° turn horizontally. 

 It’s not abrupt, rather a gradual 

sweeping motion.

How Do You “Drill Horizontal?”
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Horizontal Drilling

Total surface disturbance during drilling, including access road, drilling pad 

and required pipeline infrastructure:

• Horizontal (yellow) develop 1,000 acres per pad with 1% surface disturbance

• Vertical (purple) on 1,000-foot spacing develop 23 acres per well with 19% 

total surface disturbance
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Ground Water is Protected

 Range and other producers, 

through the Marcellus Shale 

Coalition, have advocated for 

modernized well casing regulations 

and standards in Pennsylvania

 Unique and varying geologic 

conditions

 Three million pounds of steel and 

concrete to isolate wellbore

 Hydraulic fracturing has not 

impacted ground water
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Multiple Steel Casing Strings and Multiple 

Cement Layers Protect Ground Water
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Hydraulic fracture 

stimulation or “fracing” 

injects water and sand 

at high pressure, 

fracturing the rock and 

safely releasing the gas

Completion
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Hydraulic Fracturing
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Fresh Water Aquifers are Protected

Actual measured hydraulic fracture 

growth from micro-seismic surveys

Surface casing depth 

(below deepest fresh water)

Fracture top

Fracture bottom

Source: American Oil & Gas Reporter, July, 2010, “Data Confirm Safety of Well Fracturing”, Kevin Fisher 
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Green Completion Objectives

• Continue treatment design advancement with 

service provider partnerships and focus on 

reusing flowback and long-term produced water 

• Develop fluid systems in line with 12 principles of 

Green Chemistry

• We continue to share best practices with:

• Industry

• State agencies

• Trade groups

• Keep additive volume low

• < .1% of job volume

• Transparent operations
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Hydraulic Fracturing Fluid by Volume

Composition of Hydraulic Fracture Fluid

 (by volume)

Sand

5.85% Water

94.05%

Chemical

Additives 0.10%

Antimicrobial .03%

HCL Acid .01%

Scale Inhibitor .01%

Friction Reducer .05%

•Based on latest Marcellus completions listed on 

www.MyRangeResources.com

•Some Marcellus completions use only 3 additives; HCL Acid 

eliminated when possible
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Frac Fluid Additive Disclosure

Range became the first company 

to voluntarily disclose all hydraulic 

fracturing additives on a well to 

well basis.
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Water Storage Facilities - Storing Water Pre & Post Frac Operations

– Tanks and Impoundments

– Engineering and planning

– Dam Permits through PA DEP Oil & Gas

Site Development and Construction
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 23 impoundments constructed

 8 constructed to handle produced water

 5.7 million bbls of total water capacity

 Water sources vary

– Surface waters (creeks, streams, rivers, etc.)

– Municipal water supplies

– Produced waters from area wells

 Water maintained by basic filtration and aeration

 Impoundments reduce the number of storage tanks on 

location for fracing and significantly reduce truck 

traffic

Impoundment Impoundments
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Water Impoundment
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Impoundment

•Centralized locations

•Bird-netting

•Aeration system

•Manifolds

•Remote Level Monitoring 

System

•Security/Privacy Perimeter 

Fencing

•Double liner system

•Under-drain catch basin
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Water Transfer Lines

• Saves thousands of trucks on 

highways

• Can pump water several miles from 

impoundment to well during fracturing 

operation

• Aluminum irrigation pipe for fresh 

water

• HD Polyethylene or PVC for pumping 

recycled water

• More permanent, buried lines 

eventually
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Collaborations with Academic Institutions

 University of Pittsburgh

– Advanced Treatment Technologies for Flowback 

and Produced Water

– Alternative Water Source Evaluation (AMD) and 

Treatment Technologies

 Carnegie Mellon University

– Advanced Treatment Technologies for Flowback 

and Produced Water

– Biological Characterization and Treatment

 Texas A&M

– Flowback/Produced Water Data Sharing
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Radiation Associated with Marcellus Shale

• Marcellus Shale and flowback water contain very low 

levels of naturally occurring radioactive material 

(NORM)

• Nothing new to Pennsylvania – low level NORM is 

common in oil and gas wastewaters worldwide

• Industry has performed significant testing and provided 

data to DEP

• DEP’s Bureau of Radiation Protection has been 

evaluating Marcellus wastes (drill cuttings and fluids) for 

the past three years and found no public health 

concerns

• Industry fully supports additional testing
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What About the Roads?

 Nearby roads may be 

damaged

 Drillers are liable to repair all 

damages

 Roads cleaned

 Industry spends millions 

repairing roads

 Better than before

 Tax-free road improvements
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Air Quality

DEP Issues Report on Short-Term Air Quality Impacts from 

Marcellus Shale Operations in Southwest PA – 11/1/2010

• five-week air quality study conducted near Marcellus Shale natural gas 

operations in southwestern Pennsylvania’s Greene and Washington counties

• “the data shows no emission levels that would constitute a concern to 

the health of residents living near these operations," DEP Secretary 

John Hanger said.

Other studies:

• Texas Commission on Environmental Quality has studied air quality 

impacts extensively in the Barnett Shale field where over 12,000 

shale wells have been drilled over the past 10 years.

• Spot and continuous air testing has indicated no air pollution of 

concern

• Blood and urine tests of Dish, TX residents found no elevated 

levels of air-borne toxins
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Production Facilities
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Multi-Well Pad Production Facilities

•Site is reclaimed to a small fraction of its original size 

•Production equipment will remain for life of the well

•Produced water will be removed and safely reused or 

disposed, similar to field operations across USA
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Reclamation

•Work hard to 

restore property 

to a condition 

the same as or 

better than 

before the 

process began

•Often difficult to 

find after
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Reclamation 
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Renz #1H - First Modern Marcellus Shale Well

Washington County, Pennsylvania

First Modern Marcellus Well – Reclaimed Location
Pennsylvania’s Natural Gas: Maximizing the Opportunity, May 3, 2011 l 41

Thank you! 

First Marcellus Shale Well Renz #1