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1 ASME Hydraulic Fracturing: Water Issues and Opportunities in Midwestern, Texas, and Western Shale Formations Open Research Forum (ORF-5) May 1, 2014 Washington, DC Report & Recommendations

2 Disclaimer 2014, ASME, 2 Park Avenue, New York, NY 10016, USA ( All rights reserved. Printed in the United States of America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher. INFORMATION CONTAINED IN THIS WORK HAS BEEN OBTAINED BY THE AMERICAN SOCIETY OF MECHANICAL ENGINEERS FROM SOURCES BELIEVED TO BE RELIABLE. HOWEVER, NEITHER ASME NOR ITS AUTHORS OR EDITORS GUARANTEE THE ACCURACY OR COMPLETENESS OF ANY INFORMATION PUBLISHED IN THIS WORK. NEITHER ASME NOR ITS AUTHORS AND EDITORS SHALL BE RESPONSIBLE FOR ANY ERRORS, OMISSIONS, OR DAMAGES ARISING OUT OF THE USE OF THIS INFORMATION. THE WORK IS PUBLISHED WITH THE UNDERSTANDING THAT ASME AND ITS AUTHORS AND EDITORS ARE SUPPLYING INFORMATION BUT ARE NOT ATTEMPTING TO RENDER ENGINEERING OR OTHER PROFESSIONAL SERVICES. IF SUCH ENGINEERING OR PROFESSIONAL SERVICES ARE REQUIRED, THE ASSISTANCE OF AN APPROPRIATE PROFESSIONAL SHOULD BE SOUGHT. ASME shall not be responsible for statements or opinions advanced in papers or... printed in its publications (B7.1.3). Statement from the Bylaws. For authorization to photocopy material for internal or personal use under those circumstances not falling within the fair use provisions of the Copyright Act, contact the Copyright Clearance Center (CCC), 222 Rosewood Drive, Danvers, MA 01923, Tel: , Requests for special permission or bulk reproduction should be addressed to the ASME Publishing Department, or submitted online at: Acknowledgements This ASME Hydraulic Fracturing: Water Issues and Opportunities in Midwestern, Texas, and Western Shale Formations Open Research Forum Workshop Report was prepared by Norma Johnston under the guidance of Dr. Michael Tinkleman, Director, Research and Mr. Petr Spurney, Director, Development at the American Society of Mechanical Engineers (ASME). Additional guidance was provided by the Research Committee on Water Management Technology leadership including J. Iwan Alexander, Jane Kucera and Shahid Chaudhry. On behalf of ASME, we would like to express our appreciation to the participants in the ASME Hydraulic Fracturing: Water Issues and Opportunities in Midwestern, Texas, and Western Shale Formations Open Research Forum for their input and recommendations. 2 ASME Hydraulic Fracturing: Report & Recommendations

3 Table of Contents Introduction... 4 Summary of Presentation... 5 Potential Areas for ASME Action Challenges/Barriers/Best Practices How can ASME Help? New Products, services, technology solutions that would benefit the Hydraulic Fracturing Community Links to Other Resources Date and Topic of Next Open Research Forum Appendix A. List of Participants Appendix B. Workshop Agenda Appendix C. Copy of Presentation ASME Hydraulic Fracturing: Report & Recommendations 3

4 Introduction The American Society of Mechanical Engineers (ASME) Open Research Forum, a joint effort of the Center for Research and Technology Development (CRTD) and Emerging Technologies (ET), is designed to bring together industry, government, and research leaders to identify and evaluate the challenges and opportunities in a select set of key focus areas: energy-water-nexus, integrated/sustainable building equipment and systems, thermal energy storage, sustainable manufacturing, risk management, hydraulic fracturing, advanced manufacturing, and nanoengineering for medicine and biology. On May 1, 2014, ASME conducted an Open Research Forum on Hydraulic Fracturing: Water Issues and Opportunities in Midwestern, Texas, and Western Shale Formations. The forum was held virtually. This is the second of a series of three open research forums to be held by ASME on water issues and opportunities in hydraulic fracturing. A broad cross section of experts from industry, government, national laboratories, academia, and the association community were invited to identify and evaluate the challenges, opportunities, and best practices in hydraulic fracturing water issues. The forum focused on the most pressing issues such as water availability in areas with water scarcity, challenges with flow back and produced water, and appropriate treatment of flow back and produced water for reuse. At the forum experts discussed the technology needs of the industry for hydraulic fracturing, existing commercially available technologies, and ongoing and planned research and development (R&D) activities from government, industry, and academic researchers. The goal of the ASME Forum was to produce a concept paper and action plan highlighting 3-4 relevant challenges and to identify solutions in the fracturing industry that can be effectively addressed by the interdisciplinary knowledge and expertise of engineers and scientists. The Forum also explored how ASME can contribute to advancing these technologies to the global engineering community via research, education, knowledge dissemination, and new codes and standards and guidelines. This Hydraulic Fracturing: Water Issues and Opportunities in Midwestern, Texas, and Western Shale Formations Open Research Forum Workshop Report & Recommendations provides a summary of the Forum discussions, including highlights from the Forum presentations, the key challenges and opportunities for the hydraulic fracturing community, and key initiatives ASME can undertake to facilitate these opportunities. Outlining these challenges and opportunities will enable ASME members and the larger fracturing community to apply their interdisciplinary knowledge and expertise toward addressing identified challenges. 4 ASME Hydraulic Fracturing: Report & Recommendations

5 Summary of Presentation Steve Monroe, Product Line Manager, Water Management-Surface Treatment at Baker Hughes gave a presentation during the meeting aimed to both inform participants about current efforts to advance hydraulic fracturing research, development, and commercial applications and to brainstorm ideas and thoughts on what actions ASME can potentially take to facilitate further advancement of this field. At the end of his presentation, participants discussed these challenges and identified potential roles for ASME. Mr. Monroe opened with some water facts. There are 366 million trillion gallons of water in the world and only 2.5% of this is fresh water. Only one-third of this water available for use; the remainder is frozen. In North America, the oil and gas industry spends approximately $28 billion in acquiring, storing, treating, and disposing of water. Two billion barrels of water per year are used for fracking. Public perception is that hydraulic fracturing uses too much water, but it actually uses less than 2% of the total water demand. Mr. Monroe discussed the major shale plays in the Western U.S., specifically the Barnett and Eagle Ford in Texas, the Woodford in Oklahoma, the Piceance in Colorado, the Monterey in California, and the Bakken in North Dakota. Water shortage is a major issue in some areas such as Texas which has a drought problem. Most drilling today is done in areas with severe to drastic water shortage. Another challenge from the hydraulic fracturing process is produced water which is a byproduct of hydrocarbon production. It is either in-situ water or as a result of water flooding that is usually high in chlorides and has high levels of dissolved elements from the formation and thus needs treatment before reuse. It was estimated that in 2012 the oil industry would spend almost $40 Billion on produced water on land and another $14 Billion treating and discharging water offshore. In the United States that number is almost $8 Billion and that doesn t include lifting or separation cost. In 2012 it was estimated that 318 million barrels/day worldwide were produced, or 3 barrels of water (bbl) for every barrel of oil equivalent (boe). In the U.S., almost 47 million barrels/day were generated, or about 9 barrels of water for every boe. To put that in comparison, at the mouth of the Mississippi (New Orleans) water flow is 150 million barrels/day. Mr. Monroe also noted that water is already the oil and gas industry s largest waste product and that the rate of water production is increasing faster than the increase in hydrocarbon production. The five year projection in 2011 was 25% growth in produced water vs. 18% in oil. He reported that the dilemma the industry faces is the use of water in every aspect of drilling, completing (fracturing), and producing oil or gas wells and significant costs associated with that water. High costs of water are effected by the regulations that control water sourcing, logistics, and disposal and the number of these regulations is increasing; disposal options that are being severely limited; new tracking requirements as part of environmental monitoring and safety which are being implemented; and water restrictions in many areas. All of these drive costs up and leaves the industry with the challenges of finding innovative solutions that will help reducing water needs during production to preserve well integrity, improved flow, and lower costs; control the water that can t be blocked to minimize scale, corrosion, and bacteria; and to reuse ASME Hydraulic Fracturing: Report & Recommendations 5

6 water whenever possible. The benefits are to extend the economic life of the well, reduce nonproductive time, and lost production; and lower operating expenses. Mr. Monroe stated that of the 9 barrels of water for every barrel of oil equivalent almost 90% of that comes from just five states. 98% of that water is reinjected, with 58% for enhanced oil recovery (EOR)/Pressure Management and 40% in disposal wells. In 2010, the EPA estimated that 35,000 wells were fractured using over 3.3 Billion bbls of fresh water. The 40% that was disposed of in disposal wells represented over 6.4 Billion bbls of produced water in 2010 that was not reused. Mr. Monroe reported industry does treat and reuse water. When discussing the reuse of produced water in fracturing, the questions that generally come up include how will it affect the well? Will it damage the formation? Will it contaminate the well? What about production? If an operator decides to recycle water, they start asking questions like how to store the water, what are the regulations, or what are treatment or logistics options? The challenges that must be addressed can seem overwhelming and run the gamut of issues such as location choices, decisions on water quality needed, technology options, and the amount of water. The payback, however, is very real and generally results in lower overall operating expenses and better production. In looking at water treatment options, there are three fundamental water treatment location options available: 1. Setup a central plant to bring all of the water to one location and then distribute it back out to the fracturing jobs, 2. Near field setup of smaller plants using modular equipment near the drilling activity, or 3. Mobile Treatment Systems to treat water where the water is or where it is needed. In terms of industry trends, where an operator has the space and time, near field facilities are growing. In such cases, large impoundments are built, but modular equipment is used to treat and transfer water. Where space is constrained, mobile systems are typically preferred. Produced water is hard to recycle due to its variability across the shale plays. Thus the trick for hydraulic fractured fluid is to treat it to the degree to make good it enough for the site specific reuse. Sometimes, a lower level treatment may work well but allowing some contaminants to stay in the fractured fluid poses potential risks such as damage to the well, poor performance from the fractured fluid, danger to personnel, and setting up the well for major remediation later. Current hydraulic fracturing fluid systems are changing, however, and with today s chemical solutions water doesn t have to be returned to a potable standard for reuse in the fracturing operations. Also, slick water systems use friction reducers to lower the horsepower requirements in pumping the fluid downhole. Today, filtration to remove solids and a bacterial control agent are all that may be required in many cases. Likewise, cross link systems today can be made with produced water to address almost any environmental conditions. In other words, the trick is to do just enough in order to lower costs and create an effective fluid system. 6 ASME Hydraulic Fracturing: Report & Recommendations

7 Water treatment options have not changed much in traditional industrial or commercial systems. The three options commonly used are to: 1. Clarify the water to remove solids, bacteria, and organics. This is mostly slick water and low temperature cross link systems are needed; 2. Soften it to reduce hardness or other selective ions. Boron removal is one such ion that is critical to remove in order to allow proper cross link system performance; and 3. Desalination which is the most expensive option today with prices up to $10/bbl to create a water with <500ppm total dissolved solids (TDS). Thermal desalination technologies are most widely used today, but are expensive and to bring the costs down necessitates installing high volume facilities that may not be close to where the water is needed. On the other hand, mobile systems are still expensive (on a per barrel basis) and provide low volumes compared to the demand. In this context, meeting water demand is a new problem industry faces today; i.e. how to get enough of it, in the right place, at the right time, and with the right quality to perform hydraulic fracturing at a quick pace. Extraction of shale gas through hydraulic fracturing requires large quantities of water to fracture the gas-bearing shales and unleash their potential for production. A typical well requires 2.5 to 4 million gallons (MG) of water for hydraulic fracturing, but the volumes vary significantly by basin and by well profile. If produced water will be used for completion, then this water needs to be stored. Two popular options for water storage today are traditional in-ground impoundments and modular large volume storage tanks. Ground pits have been used for a long time to store fresh water. Produced water, however, brings in a whole new layer of complexity, not to mention regulations from both the federal and state level. Not all states even allow pits for produced water; for example, they are banned in New Mexico. New rules have allowed some salt water pits, but the rules are still very restrictive. In all permitted cases pit liners, monitoring, fencing, and in some cases pit covers must be used. In West Texas, evaporation becomes a very non-trivial issue with water losses of up to 5% per day have been reported. A growing trend for water storage is the use of modular large volume storage tanks, or MVST. Sometimes these are referred to as Poseidon style tanks as a reference to one of the first companies to introduce the concept. Today there are dozens of suppliers trying to pin down an advantage over others by touting everything from capacity to construction techniques. However, MVSTs are not without their issues. Between October 2011 and June 2013, five catastrophic failures of MLVTs containing fresh water in Colorado were reported to the Colorado Oil & Gas Conservation Commission (COGCC). The causes of the failures were problems with the liner seam, improper liner installation, steel weld failure, poor location, and unsuitable or underprepared substrate. There have also been multiple unauthenticated reports of similar failures in several other states which lead to questions as to the standards for tanks like MVST inspection requirements, construction best practices, and impacts of storing produced water in these tanks. ASME Hydraulic Fracturing: Report & Recommendations 7

8 Mr. Monroe reported that deep well injection has been a standard practice for the disposal of produced water in the U.S. This process has been managed by the EPA since the 1970s when the Safe Drinking Water Act (SDWA) authorized the EPA to control underground injection to protect subsurface drinking water sources. The method, however, has not been without controversy. Some of these issues include earthquakes, transportation, and accidents which are discussed in more detail below: Earthquakes With recent reports of earthquakes in Oklahoma, Arkansas, Ohio, Texas, and Colorado, public sensitivity is at an all-time high. While the United States Geological Survey estimates more than one million earthquakes with a magnitude of 2.9 or less occur annually, most of these are rarely felt (USGS 2012). However, earthquakes of 5.0 and higher magnitude have been reported in Snyder (Texas) and Trinidad (Colorado) in the same area where several deep injection wells are located. Incidents such as these have led to the ban of disposal wells in a 1,150 sq. mile area in Western Arkansas by the Arkansas Oil and Gas Commission. Transportation The impact of produced water management is not limited to earthquakes. In the Barnett shale, a Denton County task force estimated that the trucking required for water hauling on one well was 364 trips. For a county of over 500,000 residents in 2004 and 1,460 wells, the impact is significant. The study went on to ascribe an economic cost of $40,000 per lane mile for repair and maintenance of these roads due to an increase in traffic and road damage from the heavy vehicles. A similar study conducted in 2009 looking at the Marcellus basin in Pennsylvania estimated 600 heavy truck trips solely for water sourcing and disposal. While the water requirements for each well, the resulting flowback, and the infrastructure in place vary from region to region, the impact is still significant. Accidents The increase in trucking, unfortunately increases the potential for more accidents. An analysis of industry motor vehicle accident rates from 2003 to 2008 found that oil and gas workers are nearly 8.5 times more likely to die from a motor vehicle accident than other industries. A total of 202 fatalities during that 5-year period in comparison to more recent fatalities show this trend. In one 6-month period during 2012, Karnes County, Texas, as part of the Eagle Ford shale boom, reported 12 fatalities. This was a 12-fold increase from The same article reported a 418% increase in LaSalle County since 2008 and a 1,050% increase in McMullen County, both active in the Eagle Ford shale. Several states have taken actions recently that impact the ability of operators to recycle water. In Texas, the rules were clarified to encourage more recycling of produced water by removing permitting barriers. In California, though, stricter guidelines are going to be in place to require more monitoring and disclosure of not only the contents of fracture fluids, but the sources of water used. Similarly, a new proposal in Wyoming could mean an even higherburden on operators by requiring more testing of the water before the drilling begins. 8 ASME Hydraulic Fracturing: Report & Recommendations

9 Mr. Monroe closed his presentation by stressing that water management in the fracturing industry was a complex issue and that it is important to view it from a total lifecycle planning perspective, not just as a sourcing or disposal issue. Having a strategy in place will ensure no disruption in operations and will save money when properly implemented. In this context, he pointed out that: There is no single solution or silver bullet technology that can address all the water challenges. Easy access to fresh water and cheap disposal are still the lowest cost alternatives to water recycling. Many exploration and production companies are looking for environmentally preferred solutions for treating water. Produced water (instead of fresh water) for hydraulic fracturing can enhance initial production. A combination of solutions offers greater efficiency and can reduce the required footprint for treatment. Any water can be treated, it s just a matter of economics as to the value of the treatment required to meet the desired application specifications. Many industrial water treatment technologies can be adapted to treat oilfield wastewater, but some wastewaters are more challenging to treat than others due to the working environment of the oil and gas industry. The most consistent thing about oilfield produced water is its variability, and Storage and logistics of produced water remains the single largest hurdle to its recycling. He suggested a number of areas for ASME consideration related to the management of fractured water which are as follows: Standards Storage and transport of waste water is more difficult than fresh water. There is a lack of standards and best practices when dealing with recycled water products. Regulations Growing federal and state regulations will dictate how water is sourced, stored, transferred, and used. Selection of Materials Corrosion due to bacteria and high chloride fluids limit materials choices. Contractual Issues Contracts with lease holders may dictate available water sources and routing of pipelines and transfer routes. ASME Hydraulic Fracturing: Report & Recommendations 9

10 Potential Areas for ASME Action During the facilitated discussions, participants expressed their appreciation to the speaker for his sharing of information and field experience. Participants commented on areas where they thought ASME might have an impact in the hydraulic fracturing industry. In addition to the speaker s suggested areas in the above section, it was suggested that ASME might also consider identifying new technologies that can be developed for water treatment and disposal and/or modifications of existing technologies as well as developing best practices or guidelines including information on costs to treat and dispose of produced water and the goal that need to be achieved since not all the source waters have to be treated to the drinking water standards. As a professional society, it was suggested that ASME should provide products and services in collecting data and acting as a central repository to educate the stake holders on all aspects of hydraulic fracturing e.g. technologies, cost-benefits analysis, risk and concerns related to the process, water issues, and especially regulations at the Federal and state levels. For example, ASME could maintain databases on key water management issues such as where the water is located or on technologies. ASME can embark on such activities by conducting a series of workshops on produced water management such as the various water treatment technologies available, disposal options, and regulations both current and future. It was mentioned that the Center for Sustainable Shale Development in Pittsburgh has developed eight waste water performance standards as well as a Certification and Verification Program for lease holders and developers. It was suggested that ASME might be able to explore collaborative opportunities with the Center on its certificate program and other similar activities. Other areas mentioned included assistance on material guidelines with regard to pipelines; challenges caused by variability of the quality of flowback water in water management strategy; and water quality in reservoirs. Participants also suggested that ASME and ASME members look at EPA s Study on Hydraulic Fracturing for Oil and Gas and its Potential Impact on Drinking Water Resources report due out in December Challenges/Barriers/Best Practices End users/owners must define water quality standards for A) Fresh water makeup B) At injection well field (Currently, they either don t have it or aren t willing to share it.). Develop a definition of Maintenance Water and estimated volumes. Describe the regulatory environment in different shale formations/regions. Contact the Center for Sustainable Shale Development (Pittsburgh) which writes Wastewater Performance Standards and Air Quality Control. Certification processes...can ASME become a Certification Organization? 10 ASME Hydraulic Fracturing: Report & Recommendations

11 Status of EPA Study of Hydraulic Fracturing for Oil and Gas and Its Potential Impact on Drinking Water Resources (e.g., case studies, certification concept, future federal regulations in this area) Situation is dire in West Texas, because water is just not available. Costs for fresh water are skyrocketing. Define the whole system of fracking. This will provide a fundamental understanding, while also enabling people to better identify the costs and benefits. How can ASME Help? Collect information on ASME.org by posting information or links to resource materials, etc. Develop a database of all water uses and sources on a location basis. Develop a series of workshops in various areas related to water management. Proposed topics could include: o Current regulations and future regulations regarding hydraulic fracturing water management (topic of future ASME Open Research Forum) o Water treatment technologies that are available o Water quality ASME could become a bridge between the various organizations that are creating standards, to bring some sort of consistency on how to treat such wastewaters at a NATIONAL level. Reach out to industry on behalf of this open research forum group to get answers to questions we may all have. Assistance on material guidelines with regards to piping. Index the research that has been done in this space. New Products, services, technology solutions that would benefit the Hydraulic Fracturing Community Case studies Technological discussions ASME Hydraulic Fracturing: Report & Recommendations 11

12 Links to Other Resources Below are links provided by ORF participants on additional resources for information on hydraulic fracturing water management issues: Horner, R.M., Harto, C.B., Murphy, D.J., Clark, C.E., and Shupyrt, J.P., Water Use and Management in the Bakken Shale Oil Play. Argonne National Laboratory, May Wasylishen, Roberta & Fulton, Sarah; Reuse Of Flowback & Produced Water For Hydraulic Fracturing In Tight Oil, GL , The Petroleum Technology Alliance Canada (PTAC). June Clark, Corrie E., Horner, Robert M. and Harto, Christopher B., (2013) Life Cycle Water Consumption for Shale Gas and Conventional Natural Gas, Environmental Science and Technology, 47(20). pp Clark, C.E., Han, J., Burnham, A., Dunn, J.B., and Wang, M., Life Cycle Analysis of Shale Gas and Natural Gas, ANL-ESD/ Argonne National Laboratory. December Argonne paper behind the article published in Environmental Science and Technology Clark, C.E. and Veil, J.A., Produced Water Volumes and Management Practices in the United States, ANL-EVS-R-09/1. Argonne National Laboratory, September An Integrated Framework for Treatment and Management of Produced Water, RPSEA- Project Colorado Schools of Mines. A good overview of produced water treatment technologies: Technical Summary of Oil & Gas Produced Water Treatment Options, ALL Consulting, LLC. March The Bureau of Economic Geology at University of Texas-Austin website has a list of many water and oil & gas publications ASME Hydraulic Fracturing: Report & Recommendations

13 Date and Topic of Next Open Research Forum The topic of the third Open Research Forum on Hydraulic Fracturing Water Issues will cover the varying state regulatory environment based on the different shale formations, regions, water situations, etc. The focus will be on current and future state and Federal regulations and lessons learned. The date is June 19, 2014 from 1:30-3:00 PM EDT. ASME Hydraulic Fracturing: Report & Recommendations 13

14 Appendix A. List of Participants Speaker: Steve Monroe Product Line Manager, Water Management - Surface Treatment Baker Hughes Attendees: Shahid Chaudhry Program Mgr., Water-Energy Efficiency California Energy Commission Margaret Cook Graduate Research Assistant, Environmental & Water Resources Engineering & Public Affairs University of Texas Austin Robert Goldstein Technical Executive, Water & Ecosystems Electric Power Research Institute (EPRI) Richard Jacobsen Executive Director for Research and Technology Transfer Idaho State University G. Todd Langford Unconventional Gas Domain Leader-Americas GE Water & Process Technologies John Lloyd Distinguished Visiting Professor Naval Postgraduate School Wayne Micheletti President Wayne C. Micheletti, Inc. Ken Pandya President Advanced Water Technologies Services Shaurya Prakash Assistant Professor, Mechanical & Aerospace Engineering Ohio State University Jenna Schroeder Policy Analyst/Energy and Environmental Systems Specialist Argonne National Laboratory E. Timothy Smith Science Information & Research Institute Retired (USGS) Roberta Wasilyshen President Fluid Intelligence Inc. ASME Staff: Michael Tinkleman Director, Research, ASME Norma Johnston Manager, CRTD, ASME Petr Spurney Director, ASME Foundation, ASME Walt Sandmeyer CRTD Intern, ASME 14 ASME Hydraulic Fracturing: Report & Recommendations

15 Appendix B. Workshop Agenda May 1, :30 1:40PM Welcome and Introductions 1:40 2:05 PM Hydraulic Fracturing Water Issues Overview Stephen Monroe, Product Line Manager, Water Management Surface Treatment, Baker Hughes 2:05 2:45 PM Facilitated Discussions - Initially Once Around the Room Once Around the Conference Call Goal Discussion & Identification of Challenges / Barriers / Best Practices. How can ASME help? What new ASME products, services, further Open Research Forums, technology solutions, etc. would benefit the Water Hydraulic Fracturing community? 2:45 3:00 PM Review Outcomes of Facilitated Discussions Identify Next Steps ASME Hydraulic Fracturing: Report & Recommendations 15

16 Appendix C. Copy of Presentation 16 ASME Hydraulic Fracturing: Report & Recommendations

17 ASME Hydraulic Fracturing: Report & Recommendations 17

18 18 ASME Hydraulic Fracturing: Report & Recommendations

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