# Storage: Pits Vs. Tanks October 30, 2013 Scott K. Mason Lead – Environmental Programs

# Examining Cost – Cheaper & Safer Option? What’s The Plan? • Are you going to reuse the water? • What will be in the impoundment or tank?

– Freshwater

– Produced Water

– Flowback • Temporary or permanent installation? • What are the regulatory requirements? • What are you drilling?

– Resource Play

– Exploratory

– Wildcat 2

# What are the options? Impoundment • Pros

– Often preferred by regulators when receiving flowback or produced water

– Better opportunities for recycling

– Is a cheaper permanent solution

– Centralized hydraulic fracturing

– Provides opportunity to pull water from your cheapest option (not limited by a rental rate) • Cons

– High construction and reclamation costs

– Takes time to construct and reclaim

– Potentially high maintenance costs

– Wildlife

– Liner disposal

– Not portable

– Minimal biocide treatment in the event of a release 3

# What are the options? Frac Tanks • Pros

– Mobile

– Own or rent

– Can be provided with secondary containment

– Equates to regulatory preference

– Flowback can go right back to frac tanks

– Easy to identify and remediate leaks

– Can get insulated tanks ($$$)

– Generally cheaper to heat • Cons

– Large footprint

– Manifold rental and set-up costs are considerable

– Increased truck traffic

– Increased trucking cost

– Increased road/pad maintenance (degradation, dust, track out) 4

# What are the options? Frac Ponds • Pros

– Mobile

– Smaller footprint

– Quick set up and breakdown

– Less truck traffic

– Cost effective • Cons

– Catastrophic failure can cause sediment transport (very rare)

– Regulatory concerns with storing produced or flowback water

– Heating costs

– Minimal biocide treatment in the event of a release 5

# How Much Will It Cost?

6 

## One Million Dollars?

# Cost Comparison Scenario Single Well Pad 1. 60,000 Bbls Freshwater Required. 2. No re-use is planned. 3. Single-well pad. 4. 4 days to perform hydraulic fracturing. 4 Well Pad 1. 60,000 Bbls Freshwater Required. 2. Water is not reused. 3. 4 days to perform each frac . 7

# Cost Comparison Chart – Single Well

$231,640 $24,000 $19,500 $87,300 $18,000 $93,000 $14,000 $11,000 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000

Impoundment Frac Tanks Frac Ponds Set Up/Const. Rental Rates Demob./Reclaim Total $48,500 Total $125,300

8 

## Insert text here Total $324,640

# Cost Comparison Chart – 4 Well Pad (Cost Per Well)
$78,596 $6,000 $4,875 $50,925 $13,800 $23,250 $14,000 $11,000 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000

Impoundment Frac Tanks Frac Ponds Set Up/Const. Rental Rates Demob./Reclaim Total $29,675 Total $70,925

9 Total $101,846

# What can reduce costs?

• Perfect weather • Negotiate better rates • Own your own equipment (maybe) • Multi-well pads • Centralized operations • Re-using and recycling water • Build-up of the play • Tie directly into water disposal facility • Covering frac ponds in the winter can reduce heating costs 10

# What can increase costs? Impoundments • Wildlife in the impoundment • Penalty + $30k 8’ fence • Netting • Leaking liner • Stormwater maintenance and water hauling • What if you don’t drill or complete the well? • Managing bacteria treatment Frac Tanks • Delays • Availability • More road maintenance • Moving from PW or FB to FW requires cleaning • > Footprint = > Surface Damages $$$ Frac Ponds • Delays • Availability • Netting 11

# Questions?