P020212

- 1

3 rd Water Management

for Shale Plays

The Briefing

Assessing Specific Shale Plays

Utica Play

Stephen Hughes, P.E.

October 29

- 31, 2012

Pittsburgh, PA

## Presentation Agenda

 Overview of the Marcellus and Utica Shale Plays

 Impact of Evolving Regulations on Water Management

 Flowback/Produced Water Treatment, Recycle and

Disposal Options

 Future Produced Water Generation and Treatment &

Disposal Developments

2

## Marcellus Play Footprint

3

## Marcellus Play Wet Gas/Dry Gas Map

4

## Marcellus Shale Play Facts

 Natural gas reserves estimated to be

267 to 534 trillion cu. ft

. source: IHS Corp.

 C overs 95,000 sq. miles and parts of six states (PA,

WV, OH, NY, MD and VA) source: USGS

 Over 10,000 sq. miles are currently under lease in PA

and WV

source: Intek, Inc.

 Well production began ramping significantly in 2008

and 171 drilling rigs active in PA and WV in May 2012

source : E nergy E conomist

 Marcellus natural gas production in PA and WV

generated $4.7 billion in 2011

source : ShaleBlog.com

5

## Marcellus Shale Play Facts (cont.)

 Pennsylvania is self

- sufficient

in natural gas (net exporter)

 Projected 2020 output levels (17

billion cubic feet per day) could

make the Marcellus the largest

producing gas field in the U.S.

 Marcellus could produce a

quarter of U.S. natural gas by

2020

6

## Utica Play Footprint

7

## Utica Play Dry Gas/Wet Gas/Oil Map

source: ODNR 8

## Utica Play Facts

 Geologic formation located below the Marcellus Play

(8,000 to 10,000 ft vs 5,000 to 7,000 ft)

source : USGS

 Recoverable Reserves

- 38 trillion cu. ft. of natural gas

- 9 40 billion barrels (bbl) of oil

- 208 million bbl of Natural Gas Liquids (NGLs)

source : USGS

 Utica’s NGLs and oil have attracted rigs from dry gas

areas to take advantage of higher commodity prices

9

## Marcellus and Utica Wells Permitted & Drilled

10 January 2008 to June 2012

State Marcellus/Utica

Permits Issued Marcellus/Utica

Wells Drilled

Pennsylvania 10,994 5,532

West Virginia 3,289 937

Ohio 295 144

sources: Pennsylvania Department of Environmental Protection (http://www.dep.state.pa.us/); West Virginia Department of Environmental Pr otection

(http://www.dep.wv.gov/); Ohio Department of Natural Resources (http://www.ohiodnr.com/)

## Impact of Regulations on Water Management

2008

 Marcellus natural gas w ell d evelopment b egan to

rapidly e xpand in PA

 Flowback/produced w ater is disposed of at brine

treatment facilities and publicly owned treatment

works (POTWs)

 In Fall 2008, Monongahela River in SW PA exhibited

high TDS conc. that impacted drinking water supplies

- A study concluded that treated flowback/produced

water only contributed 7% of TDS loadings

source : Marcellus Shale Coalition

11

## Impact of Regulations on Water Management

2009

 Mon River incident raised concerns about the

potential impact increased well development

operations would have on river water quality

 PADEP began limiting flowback/produced water

POTWs could accept to 1% of total plant throughput

 In response E&Ps began:

- Blending flowback/produced water with fresh water

and reusing it in hydraulic fracturing operations

- Using brine injection wells in eastern OH

12

## Impact of Regulations on Water Management

2010

 PADEP authorized a new 500 mg/L TDS limit on

effluent discharges from new or existing facilities

treating Marcellus wastewaters

 This regulation resulted in:

- Increased flowback/produced water recycling

- Increased use of OH brine disposal wells

13

## Impact of Regulations on Water Management

2011

 PADEP asked E&Ps to stop taking flowback/produced

water to existing treatment facilities due to elevated

bromide concentrations in Allegheny River

 Seismic activity in eastern OH attributed to brine

injection well activity resulted in concerns about the

reliability of this disposal option

 These events resulted in ramping up of :

- E&Ps recycling efforts (~80 to 90%)

- P lanning and permitting of treatment facilities capable

of TDS removal

14

## Flowback/Produced Water Volume per Well

Flowback Water per Well

 Typically 95,000 to 170,000 bbl (4 to 7 million gal) used

in a single well hydraulic fracturing operation

 Flowback water is typically 15 to 20% of frac water used



### Produced Water per Well

 After a year of operation, wells typically generate

4 to 10 bbl/day (168 to 420 gal/day) of produced water

15

## Flowback & Produced Water Recycling

 Flowback/Produced Water recycled is estimated to be

~80

- 90% of total generated in Marcellus Play in 2012

 Therefore ~10

-

20% of flowback/produced water requires

disposal via injection wells and/or TDS removal treatment

 Challenges in achieving 100% recycle

- A fter multiple recycles constituents in frac water

continue to increase (potentially impacting water

quality)

- Interruptions in well development operations and

limited storage capacity require disposal of

flowback/produced water that normally is recycled

16

## Treatment/Disposal Options

T reatment/disposal options currently used/planned in

Marcellus/Utica Plays

Option 1

– Offsite Primary Treatment & Reuse

Option 2

– Well Site Primary Treatment & Reuse

Option 3

– Brine Injection Well Disposal

Option 4

– Offsite TDS Removal and Reuse

Option 5

– Well Site TDS Removal and Reuse

17

## 1

- Offsite Primary Treatment and Reuse

18

## 1

- Offsite Primary Treatment & Reuse

 Option 1 is a fix

- based treatment facility located in

general vicinity of well field (typically within 20 miles)

 L evel of treatment varies depending on

flowback/produced water quality, fresh water quality,

required frac water quality and the proportion of each

in frac water blend

 None of the treatment processes remove or reduce

TDS concentrations in flowback/produced water

 Typical Treatment Capacity Range

– 5,000 bbl/day (210,000 gal/day) to

30,000 bbl/day (1.3 million gal/day)

19

## 1

- Offsite Primary Treatment & Reuse

Treatment Levels

Low

- Level

– Insoluble organics and suspended solids

removal using sedimentation, clarification, and/or

filtration

Mid

- Level

– Low

- level treatment plus the addition of

chemical reagents to form heavy metals precipitates and

may also remove dissolved hydrocarbons

High

- Level

– Mid

- level treatment plus the addition of

chemical reagents to react with barium & strontium to

form sulfate

- based precipitates

20

## 2

- Well Site Primary Treatment & Reuse

21

## 2

- Well Site Primary Treatment & Reuse

 Treatment Levels

– Basically the same as Option 1

 Typical Mobile treatment system capacity range

– 3,600 bbl/day (150,000 gal/day) to

12,000 bbl/day (500,000 gal/day ) w/ multiple units

 Since this treatment option takes place at the well site,

there are no flowback/produced water transportation

costs except trucking residual waste (dewatered

treatment sludge) to disposal ( landfills )

22

## 3

- Brine Injection Well Disposal

23

## 3

- Brine Injection Well Disposal

 Currently there are only 5 permitted Class II UIC

disposal wells in operation in PA

 Approximately 70 permitted disposal wells in WV and

180 in OH, mostly in eastern part of the state

 Typical injection well flowrates

– 500 bbl/day (21,000 gal/day) to

1,200 bbl/day (50,400 gal/day)

 More stringent OH and WV regulations addressing

injection wells have recently been promulgated

24

## 4

- Offsite TDS Removal and Reuse

25

## 4

- Offsite TDS Removal and Reuse

E&Ps are increasing considering TDS removal

treatment because of

 More stringent TDS discharge limits

 Potential concerns regarding limited injection wells

capacity

 Increased quantities of produced water that can’t all

be recycled as frac water

26

## 4

- Offsite TDS Removal and Reuse

TDS removal process generates

 Distillate for well reuse or industrial applications

 Brine concentrate

- disposed of (injection wells) or

further treated for landfilling or beneficial reuse



### Brine concentrate treatment

 Typically uses a crystallizer to form salt cake that is

landfilled or further treated to generate beneficial

reuse products

2728 

## 5

– Well Site TDS Removal and Reuse

## 5

- Well Site TDS Removal and Reuse

 Mobile TDS removal systems have recently been

marketed in the Marcellus Play in response to the

concerns listed in Option 4

 Reported throughput flowrates

- 1,030 to 1,710 bbl/day (43,200 to 72,000 gal/day )

29

## Offsite vs Well Site Treatment Comparisons

Offsite Fixed

- Based Treatment Advantages

 $/bbl costs are typically lower due to higher volume

operational efficiencies

 Greater volumes of water can be treated/recycled in a

shorter period of time

Mobile Well Site Treatment Advantage

 Minimal water transportation costs incurred

Hybrid Treatment Option (offers both large fixed

- based

facility advantages and well site location)

 Large modular treatment facility that is located within

the well fields (can relocated to new well fields)

 P ipeline network used to transport water

30

## PA Flowback/Produced Water

- 2011 to 2020

Source: Considine et al., 2011. The Pennsylvania Marcellus Natural Gas Industry: Status, Economic Impacts and Future Potential

. Estimated flowback water

– 1 million gallons per well; estimated produced water

– 300 gallons per well per day

2011 wells drilled revised from marcellus monitor TM (http://www.marcellusmonitor.com/) 31

## Flowback/Produced Water Volume Projections

Pennsylvania 2011 2020

million

bbl million

gal million

bbl million

gal

Flowback

Water 48.0 1,968 59.5 2,500

Produced

Water 13.3 560 71.3 3,000

Total 61.3 2,528 131 5,500

32

## Future Produced Water Generation

 Annual produced water quantities are projected to

increase almost six

- fold from 2011 (13.3 million bbl) to

2020 (71.3 million bbl) in the Marcellus Play in PA alone

 As development of the Utica Play in OH, PA and WV

ramps up, significant additional produced water

quantities will be generated

 This will result in increasing volumes of excess

produced water that can’t be reused in well

development operations

33

## Future Treatment & Disposal Developments

As a result of the future produced water volume

projections

–

 I ncrease in disposal well permit applications is

occurring in OH and WV

 Several disposal well siting studies are currently

underway in PA

 Numerous TDS removal treatment facilities are

currently in the planning and/or permitting stages

 Some of the new facilities will be designed with

processes to generate beneficial reuse byproducts

34