Early Indicators of Shale Energy Development: A Framework for County Readiness

Transcription

1 May 2, 2013 Early Indicators of Shale Energy Development: A Framework for County Readiness 1

2 The Scoop on Shale: A County Primer on Shale Energy and Hydraulic Fracturing June 27,

3 Today s Moderator Therese Dorau Program Manager Infrastructure and Sustainability tdorau@naco.org 3

4 About the National Association of Counties Advances issues before the federal government Improves understanding of county government Assists counties in finding and sharing innovative solutions Provides value-added services to save counties money For more information visit NACo's new Website: 4

5 2013 County Solutions and Marketplace July Fort Worth Convention Center Tarrant County - Fort Worth, TX Register today! 5

6 How to Participate 6

7 Tips for viewing this webinar: The questions box and buttons are on the right side of the webinar window. This box can be hidden to better view the presentation. To unhide the box, click the arrows on the top left corner of the panel. If you are having technical difficulties, please send us a message via the questions box on your right. Our organizer will reply to you privately and help resolve the issue. 7

8 Question & Answer Session Instructions Type your question into the questions box at any time during the presentation, The moderator will read the question on your behalf during the Q&A session. 8

9 Upcoming Shale Programming Solutions for Shale-Impacted Counties, Forum (at NACo s County Solutions and Marketplace), July 21st. Natural Gas Development Toolkit, Online resource, late

10 Today we will: Get an overview of the process and technology of shale energy development and where hydraulic fracturing fits in. Understand the range of potential environmental concerns and what steps can help prevent or minimize impacts. Receive a county perspective on preparing for development and communicating with/engaging constituents with varying opinions and concerns. 10

11 Agenda: Technical overview process and technology Environmental concerns and strategies for addressing County approaches to preparing for development 11

12 Today s Speakers Stephanie Meadows Upstream Senior Policy Advisor American Petroleum Institute Andrew Williams State Regulatory and Legislative Affairs Manager Environmental Defense Fund Erick Coolidge Commissioner Tioga County, Pennsylvania 12

13 13

14 OUR CONVERSATION TODAY Why Shale Resources Are Important for a Secure Energy Future & What that Can Mean for You How Existing Regulations & Industry Standards Promote Safety Where Environmental Safeguards Occur Throughout Development How We Can Work Together to Secure Our Energy Future 14

15 PLANNING FOR A SECURE ENERGY FUTURE World s Growing Population Increasing Global Energy Demand People in Billions Quadrillion BTU Oil Natural gas Coal Nuclear Renewables Reuters.com and US Census Bureau, United Nations, Socioeconomic Data and Applications Center, and Populationaction.org US Energy Information Administration Global Outlook 2011 The USA will overtake Russia to become the world s largest natural gas producer by 2015 and pass Saudi Arabia as the world s largest oil producer by International Energy Agency (IEA) 15

16 SHALE ENERGY PROVIDES A NATIONAL OPPORTUNITY Shale Resources, Lower 48 States Current Shale Resources Prospective Shale Resources Basins Stacked Resources Shallowest/ Youngest Mid-Depth/ Mid-Age Deepest/Oldest Current and prospective resources and basins in the continental US Source: EIA based on data from various published studies updated May 9,

17 WHO BENEFITS FROM SHALE ENERGY DEVELOPMENT? Tens of millions of Americans, such as teachers, police, and firefighters own over 97% of oil and natural gas shares. 0% Shale energy development is creating diverse job opportunities for local communities. Individual Investors 21% Pension Funds 31% Other Institutional Investors 7% IRAs 18% Corporate Management of Oil and Natural 3% Asset Management Companies (including Mutual Funds) 20% Who Owns Oil and Gas? (Holdings of Oil Stocks, 2011) 17

18 SHALE ENERGY CAN LEAD TO ECONOMIC GROWTH & AMERICAN JOBS Jobs supported by shale energy development in 2012 (IHS Global Insight) Average hourly pay of workers associated with shale energy development 34% higher than wages in the general economy (IHS Global Insight) American consumers annual savings due to lower gas prices resulting from shale energy development (Energy In Depth) Amount saved by US manufacturers by 2025 on energy expenditures through lower feedstock and energy costs (National Association of Manufacturers) 18 Revenues created in 2012 alone for federal, state and local governments created from oil and gas resources in the US (Pittsburgh Post-Gazette)

19 MOVING TOWARD FACT-BASED DISCUSSIONS 19

20 FEDERAL REGULATIONS PROVIDE A BROAD REGULATORY FOUNDATION Key federal regulations governing shale development include: Clean Water Act Clean Air Act Safe Drinking Water Act National Environmental Policy Act Resource Conservation and Recovery Act Emergency Planning and Community Right to Know Act Endangered Species Act Occupational Safety and Health Act 20

21 STATE REGULATIONS ARE TAILORED TO GEOLOGICAL & REGIONAL NEEDS Key state regulations include: Review and approval of permits Well design, location and spacing Drilling operations Water management and disposal Air emissions Wildlife impacts Surface disturbance Worker health and safety Inspection and enforcement of day-to-day oil and gas operations 21

22 PROTECTING OUR SHARED VALUES USING INDUSTRY STANDARDS WATER QUALITY & AVAILABILITY CHEMICAL MANAGEMENT AIR QUALITY & REDUCED EMISSIONS PEOPLE, FAMILIES, & COMMUNITIES American Petroleum Institute (API) Standards Uphold Shared Values API Standards documents include: API has over 65 of API s existing standards and recommended practices for onshore oil and gas development, including hydraulic fracturing operations. They address topics ranging from environmental protection through planning and design of wells to post-production reclamation. API is pioneering a recommended practice for effective community engagement and clear dialogue throughout the development process. API HF1, Hydraulic Fracturing Operations Well Construction and Integrity Guidelines (2009) API HF2, Water Management Associated with Hydraulic Fracturing (2010) API HF3, Practices for Mitigating Surface Impacts Associated with Hydraulic Fracturing (2011) API 51R, Environmental Protection for Onshore Oil and Gas Production Operations & Leases (2009) API 65-2, Isolating Potential Flow Zones During Well Construction (2010) 22

23 TAKING ACTION TO IMPLEMENT STANDARDS & PRACTICES Shared Values Sample Company Development Strategies WATER QUALITY & AVAILABILITY Companies often test surface and ground water and evaluate potential water sources and disposal options prior to drilling. Companies reuse fracturing water and increasingly use non-potable water sources to reduce water use. CHEMICAL MANAGEMENT Companies invest to develop greener additive alternatives and disclose the additives used in fracturing fluids on Carefully trained and specialized employees manage fluids according to established protocols. AIR QUALITY & REDUCED EMISSIONS Companies often use cleaner burning fuels or renewables to power on-site equipment. Emission mitigation technologies (e.g. green completion systems) separate gas and liquid hydrocarbons from well flowback to reduce greenhouse gas emissions. COMMUNITY CULTURE & AESTHETIC Companies hold meetings with community members before drilling begins to understand community culture and concerns and to coordinate specific work hours to address traffic, lighting and noise concerns. Companies work with local universities and vocational/technical schools to help train workers for new jobs coming online due to shale energy and to conduct new research to continuously improve operational practices and environmental performance. 23

24 HYDRAULIC FRACTURING USUALLY TAKES LESS THAN A WEEK APPROXIMATE DEVELOPMENT TIMELINE * DISCOVER, EVALUATE & GAIN ACCESS PLAN & PERMIT WELL CONSTRUCTION HYDRAULIC FRACTURING PRODUCTION RECLAIM & REMEDIATE 3 5 Years Months 2 Months 3 5 Days Years Ongoing * Timeline is not depicted to scale. 24

25 A COMMUNITY S PERSPECTIVE OF SHALE ENERGY DEVELOPMENT 25

26 DISCOVER, EVALUATE & GAIN ACCESS 3 5 YEARS Companies diligently review local geology and hydrology both in the field and through records research. 2 Engineering and environmental teams evaluate opportunities according to environmental and infrastructure considerations. 3 Company representatives engage with landowners and stakeholders. 26

27 PLAN & PERMIT MONTHS Company dialogue with communities and regulators continues. 2 Horizontal drilling permits flexibility in well site selection. 3 Multiwell pads mean fewer roads and drilling locations. 4 Regulations establish a safe distance for wells. 5 Before issuing permits, regulators review detailed corporate plans covering factors like safety, water use, and waste disposal. 6 Baseline testing of private water wells and surface water may occur. 7 Companies may establish a field office. 27

28 WELL CONSTRUCTION: PREPARATION & DRILLING 2 MONTHS All operations at the site must comply with federal law, state law, and corporate policies incorporating good industry practices. 4 2 Companies plan with communities to reduce noise and traffic disruptions. 3 The land needed for well construction is cleared and the well is drilled. 4 To protect water, state regulations based on local geology may specify important construction details like the depth, strength, and cementing of casing. 5 Any waste from the well site is disposed of according to federal and state safety and environmental regulations. 6 The well must pass operator testing and inspection before hydraulic fracturing. 28

29 HYDRAULIC FRACTURING: ABOVE GROUND 3 5 Days Hydraulic fracturing occurs during completion. To protect groundwater, personnel at the well site continually monitor chemical mixing and management as well as variables including fluid injection rates and pressures throughout the fracturing process. 2 Local water sources may be tested again in accordance with regulatory requirements and the extensive corporate environmental programs that govern routine site maintenance at drilling sites. 29

30 HYDRAULIC FRACTURING: BELOW GROUND 3 5 Days 5 6 Hydraulic fracturing usually takes place over a mile below the surface of the earth. 1 1,000ft 3 Multiple layers of cap rock separate drinking water from formations where hydraulic fracturing occurs. 2 2,000ft 3,000ft 4,000ft Redundant layers of steel casing and cement provide a shield between hydraulic fracturing operations and the environment. The horizontal part of the well is 4 perforated and fluids consisting of mostly water and sand are pumped into the well to create small fissures in the shale held open by sand. 5,000ft Oil or natural gas travels through the enclosed well to the surface where it is collected for production. 5 6,000ft 1 A combination of valves controls flow from 6 the well. Blowout preventers stop all flow in the unlikely event of an emergency. 30

31 PROTECTING GROUNDWATER DURING SHALE ENERGY DEVELOPMENT Lined impoundments and storage tanks provide impermeable barriers between waste water, groundwater, and top soil. 1,000ft 2,000ft 3,000ft 4,000ft Today s gas wells have redundant layers of cemented steel piping, called casing, to provide a shield between gas production, groundwater and the environment. Cap Rock Produced water is collected at the surface and recycled for future use, or carefully disposed of according to regulations. 5,000ft 6,000ft 31

32 PRODUCTION Years Oil or natural gas travels through the enclosed well to the surface where it is collected for processing. 2 All of the drilling equipment is removed - leaving only the well head, storage tanks, and sensors for remote monitoring. 3 The well pad is reduced and reclaimed to the extent practical for production and a fence may be added. 4 Regular site visits and remote sensors (often run by solar power) allow companies to monitor production. 5 Communities can apply increased revenues to school improvement, business development, libraries, etc. 32

33 RECLAIM & REMEDIATE ONGOING Wells are sealed into place with cement according to environmental regulations Well pad areas are restored Land is reclaimed Communities can continue to benefit for decades. 33

34 WORKING TOGETHER TO SUPPORT OUR COMMUNITIES The American Petroleum Institute is developing standards and recommended practices for community engagement and planning. DIVERSIFYING JOB OPPORTUNITIES INVESTING IN ECONOMIC DEVELOPMENT MAINTAINING AND PROTECTING COMMUNITY CULTURE TRAINING AND COUNSELING FOR NEW JOB SKILLS PROMOTING COOPERATION AND EDUCATION RELATED TO DEVELOPMENT CONDUCTING REGIONAL OUTREACH WORKSHOPS & CONTINUED TECHNICAL WORK PROTECTING THE ENVIRONMENT & SHARED VALUES 34

35 PARTICIPATE IN OUR ENERGY FUTURE How can you get involved? LEARN THE FACTS & SCIENCE OF SHALE ENERGY DEVELOPMENT. SHARE WHAT YOU KNOW ABOUT SHALE ENERGY WITH OTHERS IN YOUR COMMUNITY. DEVELOP POLICIES AND PLANS THAT ENABLE SAFE & RESPONSIBLE DEVELOPMENT. SUPPORT THE SHALE ENERGY DEVELOPMENT PROCESS TO ENSURE AMERICA'S ENERGY SECURITY. 35

36 Thank you! Stephanie Meadows Senior Policy Advisor American Petroleum Institute FOR ADDITIONAL INFORMATION: (search hydraulic fracturing ) 36

37 Natural Gas: Opportunity, Challenges, Solutions National Association of Counties June 27, 2013

38 Power plant CO2 isn t the whole story COAL MINING & PROCESSING TRANSPORTATION COAL COMBUSTION NATURAL GAS PRODUCTION PROCESSING TRANSMISSION & STORAGE NATURAL GAS COMBUSTION LOCAL DISTRIBUTION TO OTHER END USERS Source: Adapted from Jaramillo et al., (2007) EST 41, 6290

39 Methane: a powerful GHG

40 Methane: a big slice of the GHG pie 20-year impact US energy 8% 100-year impact US energy 11% Rest of The world Methane, F-gases, All sources total 38% China energy 13% Deforestation and agriculture 11% (excluding methane) Rest of The world Methane, F-gases, All sources total 16% China energy 17% Deforestation and agriculture 22% (excluding methane) Manmade methane and F-gases, non-agricultural sources Methane, agricultural sources

41 EDF methane leakage study modules

42 Where the fracing issues really are

43 Key Risk Management Areas Disclosure Well Integrity Water and Waste Management Communities and Habitats Air Quality

44 Thank You! Andrew Williams, State Legislative and Regulatory Affairs Manager, US Climate and Energy

45 Tioga County, Pennsylvania Commissioner Erick Coolidge

46 Preparing for Drilling in Tioga County Influx of transient, out-of-state workers at outset Increase in traffic volume Community concerns with environmental impact

47 Changes in Tioga County Local business growth Housing, human services and criminal justice impact Emergency response Impact on tourism, agriculture industries Impact on infrastructure Increase in deed searches at courthouse

48 Interacting with the Industry The role of the county in fostering community relationships Bringing parties together Addressing environmental concerns Providing educational forums Benefits of collaborating regionally/ statewide

49 Thank you! Commissioner Erick Coolidge

50 Q&A Thank you for attending today s webinar. To learn more about upcoming NACo webinars, please visit 50