Fracking In California: What it is, Who controls it, And Who Is Concerned About It. Dennis R. Luna, Managing Partner LUNA & GLUSHON Century City, CA

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1 Fracking In California: What it is, Who controls it, And Who Is Concerned About It. Dennis R. Luna, Managing Partner LUNA & GLUSHON Century City, CA

2 Fracking is getting a lot of attention Frac-tivists

3 Where the Frackable Natural Gas Is

4 Where the Frackable Oil Is

5 California Is A Major Oil Producer Was No. 3 in Production

6 Now No. 4, but still huge Calif. & N. Dakota each equal the production of Ecuador (OPEC Member).

7 California Has The Most Potential California s Monterey shale is the largest such formation in the country. With 15 billion barrels of recoverable oil underlying 1,750 square miles of Southern California, the Monterey formation represents 64 percent of the nation s shale oil.

8 Oil Is Trapped Between the Grains

9 Shale Rock

10 What is Hydraulic Fracking? Injecting water, sand and lubricants into an oil or gas formation under pressure. This creates cracks (fractures) in the formation. Cracks increase the exposed surface area in the formation. Wells may extend to depths of 1,000 to 10,000 feet. Horizontal sections may extend several thousands of feet away. Fig. 1 - US EPA, 2010

11 Fracking Fluids Fracturing fluids are approx. 90.5% water, 9% proppants, and 0.5% Other Chemicals. As the formation is fractured, a propping agent, such as sand or ceramic beads, is pumped into the cracks to keep them from closing as the pumping pressure is released. Other Chemicals include: Friction reducers..(lubricants (detergents) to help the proppants (sand) slip into the cracks. ) Corrosion inhibitors Biocides Gelling agents

12 Proppants

13 Chemicals in Fracking The chemicals in fracking fluid are introduced for a variety of purposes, including killing bacteria, inhibiting corrosion, reducing friction, increasing fluid viscosity and reducing surface tension. Many are found around the typical house: including sodium chloride (table salt), guar gum (in ice cream), borate salts (a fungicide used in cosmetics), ethylene glycol (car antifreeze, also airplane deicing), sodium and potassium carbonate (household detergents), isopropanol (deodorants), diluted hydrochloric acid (pool cleaner) and mineral oil.

14 Horizontal vs. Vertical Fracking

15 Well Heads Are Cased To Protect Aquifers Casing works both ways, it keeps ground water out of the well and keeps well oil out of the ground water.

16 California Fracking is Vertical The California Department of Conservation (DOC) now states on their web site that hydraulic fracturing is occurring in California, but is different from much of the U.S.: "To date, the Division is aware of very little, if any, fracturing of horizontal shale gas wells in California of the type performed in other parts of the United States. Most of California's oil and gas production to date has been from vertical wells into traditional oil and natural gas reservoirs."

17 Long History in California A typical California oil well is between 3,000-10,000 feet deep. (In California the Aquifer is typically 10 to 100 feet.) Hydraulic fracturing has been going on in the State for almost 60 years. Fracking has been done in at least six California counties: Kern, Los Angeles, Monterey, Sacramento, Santa Barbara and Ventura, going back to In its 2010 hydraulic fracturing fact sheet, the Division of Oil and Gas said, To date, DOGGR has no evidence of freshwater contamination resulting from fracking in California.

18 Fracking in California The Western States Petroleum Association (WSPA), the members of which account for 80 percent of the oil and natural gas drilled in California, estimate that WSPA companies fracked 628 oil wells in about a quarter of all oil and gas wells drilled across the state that year. Most are listed in Kern County.

19 Seesaw of Publicity EPA claimed that hydraulic fracturing and drilling had caused groundwater contamination in Dimock, Penn., Pavilion, Wyo, and Parker County, Texas. In all three cases, the agency has recanted. A 2010 report by Pennsylvania s Department of Environmental Protection concluded no groundwater pollution or disruption of underground sources of drinking water have been attributed to hydraulic fracturing of deep gas formations. There is an argument regarding whether there is no known case in the U.S. of contamination resulting from fracking or only one known case.

20 What About the Flaming Faucets? Flammable tap water is likely related to dissolved methane, which is naturally found in well water. (No worries here either the methane bubbles out quickly, and the EPA does not even regulate it.) EPA started a study on hydraulic fracturing in 1999 that focused on coalbed methane reservoirs and whether fracturing them impacted underground sources of drinking water. Published in 2004 after peer review, the study concluded that fracking posed little to no risk in terms of contaminating drinking water.

21 Water Handling The fracturing fluids (water and chemical additives) are returned back to the surface. Flow-back can be reused to fracture additional wells. Some pits in the past have leaked. That s why they are being phased out in most states in favor of aboveground storage solutions that enable much better leak detection and repair capabilities. Innovation: Halliburton has created a fracking fluid called CleanStim, made from materials sourced from the food industry.

22 Water Usage: Fracking Water a Micro % of Total Water Consumption California vertical fracking wells use 1/5 th as much water per well as compared to a horizontal fracturing. Further, the total amount of California fracking is estimated to about 0.05% of total California water consumption. Farming accounts for percent of the California water usage.

23 California Fracking Regulations No specific regulations regarding fracking. Public Resources Code gives the Supervisor of the Division of Oil, Gas and Geothermal Resources (DOGGR) significant authority to protect ground water.

24 Pub. Res. Code 3106 (a) - Duties of Supervisor The supervisor shall so supervise the drilling, operation, maintenance, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities attendant to oil and gas production... so as to prevent, as far as possible, damage to life, health, property, and natural resources; damage to underground oil and gas deposits from infiltrating water and other causes; loss of oil, gas, or reservoir energy, and damage to underground and surface waters suitable for irrigation or domestic purposes by the infiltration of, or the addition of, detrimental substances.

25 Pub. Res. Code Contents of Log The log shall show the character and depth of the formation passed through or encountered in the drilling of the well. The log shall show completely whether all water overlying and underlying the oil-bearing or gas-bearing strata was successfully and permanently shut off so as to prevent the percolation or penetration of water into the oil-bearing or gasbearing strata; and whether strata bearing water that might be suitable for irrigation or domestic purposes are properly protected from the infiltration or addition of detrimental substances from the well.

26 Pub. Res. Code Demonstration of Water Shutoff The owner or operator of any well shall, at the request of the supervisor, demonstrate that water from any well is not penetrating oilbearing or gas-bearing strata or that detrimental substances are not infiltrating into underground or surface water suitable for irrigation or domestic purposes. The owner or operator shall give the district deputy adequate notice of the time at which he will demonstrate the test for shutoff in the well.

27 Pub. Res. Code Order for Tests or Remedial Work The supervisor shall order such tests or remedial work as in his judgment are necessary to protect oil and gas deposits from damage by underground water; or to prevent the escape of water into underground formations, or to prevent the infiltration of detrimental substances into underground or surface water suitable for irrigation or domestic purposes, to the best interests of the neighboring property owners and the public.the order shall specify the conditions sought to be remedied and the work necessary to protect such deposits from damage from underground water.

28 California Dept. of Conservation is Drafting Regulations Just completed 7 Statewide workshops to gather public comment. Dept of Conservation will draft regulations by end of September/early October, 2012 Will then circulate draft regs for additional public comment. Plan to publish final fracking regulations by end of Spring, 2013.

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33 Fracking Bills in the Calif. Legislature SB 1054,was introduced by state Sen. Fran Pavley (D-Agoura Hills) required energy firms to notify property owners before using hydraulic fracturing. (Failed, 17 to 18, May, 2012.) AB 972, introduced by Assemblywoman Betsy Butler (D- Marina del Rey) would prohibit hydraulic fracturing in California until the process could be regulated. (Hearing August 5 th.) AB 591, A bill by Assemblyman Bob Wieckowski (D-Fremont), would require oil companies to disclose to California regulators what chemicals they use and how much water they pump in hydraulic fracturing operations. (Currently undergoing amendments.)

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35 What should be our Energy policy?