Challenges in the Evolving Crude Oil Landscape from Shale Plays

Transcription

1 Challenges in the Evolving Crude Oil Landscape from Shale Plays EPA-NEMC 2014 Kesavalu M. Bagawandoss, Ph.D., J.D. August 7,

2 Outline v Introduction v Hydraulic Fracturing v Shale Oil & Gas Resources v Transportation, Quantity, Quality & Safety - Current Landscape v Summary v References 2

3 Introduction Well Stimulation by Hydraulic Fracturing and Horizontal Drilling O & G Exploration has created more than 1 million new jobs More than 1 million HF jobs have been completed Production of Crude Oil Growing (Self Sufficient and Exporting Natural Gas) Transportation Infrastructure We must, at the same time, harness our Natural Resources in a safe manner and protect our environment, health and welfare of our citizens 3 3

4 Hydraulic Fracturing Courtesy of EPA 4 4

5 Global Shale Resources 5

6 Major Shale Plays and their locations 6 6

7 Shale Supply Chain Exploration & Production Gathering & Processing Primary Logistics Refining / Plants Crude Trading Open Market Secondary Logistics Product Trading 3/21/2013 7

8 Oil and Gas Production Courtesy of US EIA 8

9 Current Production Oil ~ 8.4 MBPD Gas ~ 78.1 BCFPD Exports Natural Gas LNG terminals - Crude (2 permits in US) 9

10 Crude Oil Issues - Current Landscape Issues Transportation Quantity Quality Safety 10

11 Transportation of Crude By Rail Traditional Mature Crude Supply Chain Wellhead Gathering Lines Pipeline Storage Vessel/Barge Refinery OR Crude in the Changing Landscape Wellhead Trucks Rail Cars Pipeline Storage Vessel/Barge Refinery 11

12 Transportation of Crude by Rail 12 The Petroleum Administration for Defense Districts (PADDs) are geographic aggregations of the 50 States & DC

13 Crude Oil Types are Evolving A Diverse and Growing Range: Conventional Crudes Virgin Crudes Dumb-Bell Crudes (Blended) Unconventional Crudes Tight Sands aka Shale Plays Altamont, Utah 42 API Nigerian Light 37 API Ninian, North Sea 36 API Barrow Island, Australia 38 API Boscan, Venezuela 10 API Arabian Light 33 API Sumatran Light 35 API Empire Mix, Louisiana Gulf 30 API Offshore California 18 API 13

14 Example Shale Crude Oils 14

15 Bubbling Crude 15

16 Crude Oil Issues - Current Landscape Transportation Issues Pipeline Infrastructure is Scarce Crude transported from Well Head to Rail Cars by Trucks (traffic issues on the road) Quantity of Rail Cars Rail Car Safety DOT Emergency Order Packing Group determinations Risk Communications New DOT NPRM July 23, 2014 HHFT ( high-hazard flammable train ) (20 or more carloads containing a Class 3 flammable liquid) 16

17 Crude Oil Issues - Current Landscape New DOT NPRM July 23, Rail Routing 2. Classification of mined Gas and Liquids 3. Notification to Emergency Responders 4. Speed Restrictions 5. Braking 6. Tank Car Specifications 17

18 Crude By Rail Slate - Classification Tests - IBP & Flash Point - Additional Tests (if offeror doesn t have sufficient knowledge of composition) - Light Ends, Vapor Pressure, Sulfur components/h2s, Corrosivity - Corrosivity UN, NACE - Optional SIM DIS (DOT/Operator) - Sampling - Frequency of Analysis (composition) 18

19 Crude Oil Issues - Current Landscape Quantity Issues Measurements at points of Sale and Receipt Meters Calibrated Pipe Prover LACT 19

20 Crude Oil Issues - Current Landscape Quality Issues Quality checks at Origination Quality at the point of Delivery Effects of Transport Sampling 20

21 Safety Issues Safety Issues Volatility (analytical & sampling methods) H 2 S issues (analytical & sampling methods) Classification of Crude per DOT codes 21

22 Rail Car Safety DOT Specifications Corrosion 22

23 Summary Energy Production is proliferating Petrochemical Industry is enjoying benefits of NG Benefits in both jobs and local economies Technological advancements Need Transportation Infrastructure Safety Energy Independence - sooner than predicted or anticipated 23 23

24 References Proceedings of the Technical Workshops for the Hydraulic Fracturing Study: Well Construction and Operation, EPA 600/R-11/046, May 2011, Webinar-for-Study-plan-release pdf FINAL-STUDY-PLAN-HF_Web_2.pdf hfworkshops.cfm proceedingsofhfchemanalmethodsfinalmay2011.pdf Water Wells in Proximity to Natural Gas or Oil Development, NGWA Information Brief, June 7,

25 References Shale Gas Exploration Session, August 7, Topics in Shale Gas Exploration, August 5, Topics in Shale Gas Exploration, August 6, accessed October 10, Investment-Linked-to-Shale-Gas-Reaches-100-Billion.html article/

26 References Methane contamination of drinking water accompanying gas-well drilling and hydraulic fracturing, Stephen G. Osborn, Avner Vengosh, Nathaniel R. Warner, and Robert B. Jackson Jackson.( (April 2011) Barnett_Hydraulic_Fracturing_Fact_Sheet.pdf hf_with_diesel_guidance_webinar_may_2011.pdf Marcellus Shale Gas cleaner than coal, CMU study says, Don Hopey, Pittsburgh Post Gazette, August 20, 2011 API SmartBrief, Policy Watch, EPA makes initial move to require reporting of fracking chemicals, November 23, 2011 Barnett Shale Hydraulic Fracturing fact sheet, Chesapeake Energy, April

27 References Produced Formation Water Sample Results from Shale Plays, Nancy P. Coleman, presented at the EPA Technical Workshop for the Hydraulic Fracturing Study, Feb 24-25, Practical Quantitation Limits, Method Detection Limits, Interferences and Dilution Challenges, Kesavalu M. Bagawandoss, presented at the EPA Technical Workshop for the Hydraulic Fracturing Study, Feb 24-25, High Rate Hydraulic Fracturing Additives in Non Marcellus Unconventional Shales, Rick McCurdy, presented at the EPA Technical Workshop for the Hydraulic Fracturing Study, Feb 24-25, The Gas Dilemma, Bryan Walsh, Time Magazine, April 11,

28 References George King, Hydraulic Fracturing 101: What Every Representative, Environmentalist, Regulator, Reporter, Investor, University Researcher, Neighbor and Engineer Should Know About Estimating Frac Risk and Improving Frac Performance in Unconventional Gas and Oil Wells, SPE , Rick McCurdy, Chemical Additives and Green Frac Overview, Presentation, Chesapeake Energy, Study of the Potential Impacts of Hydraulic Fracturing on Drinking Water Resources, Progress Report, EPA/601/R-12/011, December accessed January 18, Hydraulic Fracturing Fluid Analysis for Regulatory Parameters - A Progress Report (PDF) Kesavalu Bagawandoss, Accutest Laboratories, Inc. - Eagle Ford Shale Play, accessed October 7, accessed October 7,

29 References cmpid=eefl article_6ebaf1ec-69ae-11e3-8bc8-001a4bcf887a.html? PRESSRELEASE.aspx Various Intertek Presentations Jerry Difede, Bruce Carlile, Chris Burkhalter article_c263db24-cc3c-11e3-a3bf-0019bb2963f4.html

30 Contact Details Kesavalu M. Bagawandoss, Ph.D., J.D. Corporate Technical Director 801 Travis St., Suite 1500 Houston, TX Phone: (713) THANK YOU!!! 30