Water Resource Management for Shale Energy Development

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1 Water Resource Management for Shale Energy Development Presented by Dave Yoxtheimer, P.G. February 19, 2014

2 Bakken

3 Shale Energy: A Global Play

4 Well Site in Operation

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7 U.S. Natural Gas Production is Increasing

8 - PA averaging 9.3 BCF/D for 2 nd half of Total of 3.1 TCF from 4903 wells in Total of 3 MMBBLs of NGLs in Total of 200 MBBLs of oil in 2013

9 Shale Gas Development Water Use 3 to 7 million gallons of water used during hydraulic fracturing Approximately 5-10% of injected fluids return as flowback water 90% of produced water recycled in 1H 2013 Source: Chesapeake Energy For more info:

10 Source: DraN EPA Hydraulic Fracturing Study Workplan

11 Getting More Bang Per Barrel!

12 Reduced Cluster Spacing= Greater Stimulated Reservoir Volume Twice the number of perforation intervals increases stimulated reservoir volume Increased proppant near the wellbore improves fracture conductivity: proppant use increased by >200 lbs/ft (from 1275 to 1479 lbs/ft) Source: Seneca Resources

13 Improving Production Initial Approach Wells 5H and 6H Avg. lateral length: 3,344 Small casing: 4.5 Restricted pump rates Wide stage spacing: 350 No soaking Improved Approach Well 9H and 10H Avg. lateral length: >5,500 Large casing: 5.5 Increased pump rates 9H (RCS): 150 spacing 10H (Standard): 240 spacing Soaked both wells: 30 days Source: Seneca Resources

14 Daily Withdrawals in PA

15 Water Sourcing Most water (~75%) is sourced from surface water with water purchased from public supplies making up most of the remainder Number of factors to consider: Access to water near the drilling project area Proximity to well site: piping vs. trucking Availability-seasonal or perennial Will pass-by flows be required? Water quality Drilling schedule vs. permitting schedule Permitting complexity Power availability (use gas!) Budget

16 Automated Stream Flow Monitoring Automated stream flow monitoring and metering can minimize labor requirements and avoid violations by shutting down pumps when daily limits or pass-by flows reached

17 Streambed Intake Structure

18 Water Transport and Storage

19 Efficiency of Piping Water Each well could require ~1000 truck trips Cost to install 12 km pipeline was ~ $10MM Trucking water cost ~$20MM Recognize ~50% savings while minimizing fuel missions, truck traffic, and road impacts

20 Above Ground Fresh Water Storage Can store ~ 1 million gallons in reusable above ground impoundments with less disturbance

21 Spill Prevention Measures

22 Flowback Water Quality Trends Average Flowback TDS ConcentraLon and Discharge Rate vs. Time TDS (mg/l) Flow rate (gpd) Days Since Hydraulic Fracturing Completed

23 Flowback Water Management Options Flowback management options Ø Direct reuse (blending) Ø On-site treatment w/reuse Ø Off-site treatment w/reuse Ø UIC well disposal Treatment technologies include Ø Chemical precipitation Ø Electrocoagulation Ø Evaporation (MVR) Ø Filtration During 2013 in PA ~90% of shale gas flowback and produced water was recycled and ~10% disposed of via injection wells

24 ~151,000 Class II UIC wells in US 80% are Class II-R wells for enhanced recovery 20% are Class II-D wells for disposal Source: Induced Seismicity PotenYal in Energy Technologies, NaYonal Academy of Sciences, 2012

25 Source: ODNR operating Class IId wells in Ohio w/nearly 200 permitted wells ~14 MMBBLs disposed in OH UIC wells in 2012 Avg. of 211 bbls/d per well 7 operating UIC wells in PA ~10 BBL of produced water for each 1 MMCF of Marcellus gas w/~ 1 BBL disposed via UIC well 95% of the disposed produced fluids from PA injected into 45 of Ohio s UIC wells

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27 Potential Water Quality Impact Pathways Methane migration into groundwater/ surface water due to faulty well construction Direct spill of fluids to ground surface via leaking pipes, impoundments, spills or a blowout Effluent from treatment facility (largely a non-issue with new treatment standards) Erosion and sedimentation from pads and roads Cumulative withdrawal impacts Abandoned wells Fracturing fluid migration (??)

28 Photograph by Ma]hew Conheady ( Gas Happens!

29 Sources of Methane in Groundwater Graphic from PiQsburgh Area Geologic Society, Gas MigraLon in W. Pa. Pre- drilling water sampling crucial to establish baseline water condilons Across PA ~24% of water wells have pre- exislng methane In northeast PA >80% of wells sampled have pre- exislng methane Well integrity is crucial to ensure groundwater proteclon

30 Methane Migration Through Cement Study of the Poten-al Impacts of Hydraulic Fracturing on Drinking Water Resources: Progress Report (EPA, 2012) 16 cases of methane migration with Marcellus wells in PA to date

31 Fracture Growth in US Shale Plays Fresh groundwater to 300 m VerYcal fracture growth typically less than 300 m Davies et al, Marine and Petroleum Geology (2012)

32 Groundwater Impacts from Drilling Some companies have used drilling foams during shallow casing installation These foams can migrate away from the well bore and impact the aquifer, nearby private wells, or springs Several documented cases of drilling foams impacting private wells and springs in PA The industry now uses air drilling when going through fresh groundwater

33 Dimock, Pennsylvania Water Quality Investigation Inadequate well construction/cementing allowed shallower, non-marcellus methane to migrate into groundwater 18 private water wells were determined by regulators to be impacted by stray gas Allegations that fracturing fluids also in groundwater DEP and EPA testing of 61 wells do not to date show any fracturing-derived compounds in groundwater Some naturally-occurring parameters (e.g. arsenic and other metals) have been detected, but not used in natural gas operations. Emphasizes the need to collect pre-drilling data to verify baseline conditions.

34 Methane in Groundwater in NE PA Many of these water wells with increased methane were near Marcellus wells with known methane migration problems. As a result the gas wells were either abandoned or remediated to seal off leaking zones, consequently reducing methane levels in groundwater. Jackson et al, 2013

35 Topographic relationship of methane and groundwater (Molofsky et al 2013)

36 Carbon and Hydrogen Isotope Data (Molofsky et al 2013) (Jackson et al 2013)

37 (Baldasarre, 2011) Isotopic Reversal of C13

38 Study of Groundwater Quality Before and After Drilling Study: The Impact of Marcellus Gas Drilling on Rural Drinking Water Supplies, Center for Rural PA, October 2011 PSU Researchers collected pre- and post-drilling water sample from private wells Collected and analyzed nearly 230 samples within 1,000 feet and within 1 mile of Marcellus wells No significant before/after changes in water quality ~40% of wells fail at least one drinking water standard and background methane found in ~24% of the wells.

39 Groundwater Quality in PA The Impact of Marcellus Gas Drilling on Rural Drinking Water Supplies, Center for Rural PA, October 2011

40 PaDEP Recommended Analytes for Water Supply Testing Considerations for pre-drilling testing: -Have an independent third party collect and analyze samples -Need to have proper chain-of-custody for samples -Need to use state-certified lab for analysis -If change in water quality within 12 months and 2,500 feet of shale well then operator assumed liable and must remedy

41 Effects of Produced Water Discharge-Black Lick Creek Streambed sediments Surface water quality Warner et al (2013)

42 Monongahela River Quality -Noted increases in TDS and bromides impacting down river drinking water and industrial intake supplies -PWSA among water supplies exceeding disinfection by product levels (trihalomethanes) -Produced water discharges thought to be a contributing factor in water quality changes.

43 Use of 87Sr 86Sr isotopic ratios -Chapman et. al. (2012) concluded that 87Sr 86Sr isotopic ratios can be used as a unique tracer for Marcellus produced waters versus other brines or acid mine drainage waters Geochemical evidence for possible natural migra-on of Marcellus Forma-on brine to shallow aquifers in Pennsylvania, Warner, et. al., (2012) -Warner et. al. (2012) suggest that mixing relationships between shallow ground water and a deep formation brine causes groundwater salinization in some locations

44 Water Protection Measures Geologic characterization of shallow geology to determine depth of aquifer and shallower gas-bearing sandstones Proper well construction and grout seal Conduct pre-drilling groundwater sampling to establish baseline groundwater quality Characterizing methane found in water wells Isotopic characterization of methane in water wells vs. in gas wells Comparing ratio of methane and C2+ hydrocarbons Lined well pads, secondary containment and careful storage of fluids at surface Avoid poor effluent quality discharges Sufficient setback distances from water supplies Engage university researchers to conduct unbiased water quality studies!

45 The End Questions?? Thank you!! David Yoxtheimer, P.G. Extension Associate PSU MCOR 320 EES Building University Park, PA (office)