FACTS TOP 10 FREQUENTLY ASKED QUESTIONS

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Andra Barber
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1 TOP 10 FREQUENTLY ASKED QUESTIONS FACTS 1. What is horizontal drilling? It was first pioneered in the U.S. and enables the natural gas industry to extract trillions of cubic feet of natural gas from shale formations such as the Marcellus and Utica, both partially located in West Virginia. This technology allows the industry access to natural gas reserves in protected areas without harming what is above the surface. By reaching pockets of natural gas that were once inaccessible, production levels remain high while utility costs remain low. Horizontal drilling allows the industry to develop a producing reservoir with a significantly smaller number of wells. The benefits of this technique are multifold. Each horizontal well pad can support as many as 20 wells. One pad, one road and one pipeline can drain more than 100 times as much as a conventional well site. This means more production with less impact on the surrounding environment. 2. What is hydraulic fracturing? Hydraulic fracturing was first employed in 1948 and enhances the ability to effectively and efficiently produce oil and gas from tight formations without endangering the water supply and environment. Hydraulic fracturing is a technology used to stimulate the flow of energy from oil and gas wells. Wells are lined with cement steel casings and then fractured to create millimeter-thick fissures to connect the reservoir to the well. These new paths increase the rate at which hydrocarbons can be produced from the reservoir formations. State regulation requires a protective cement shield barrier to be installed around the downhole casing to prevent any accidental migration of fluids or gases into the water-bearing zones during the hydraulic fracturing process. Each well is lined with steel pipe casing that keeps fluids or other material in the well bore from entering the surrounding rock formations. 3. What is in the frac fluid? 99.5 percent of the fracturing mixture is water and sand. 0.5 percent of the fluid is additive chemicals that also are used in items such as table salt, laundry detergent, ice cream, household cleaners and more. 4. What is the environmental impact of the natural gas industry? Well construction processes are designed to ensure maximum protection of the water supply and nearby ecosystems. There are at least three strings of steel casing set at strategic locations and reinforced with cement to protect freshwater resources when drilling.

2 TOP 10 FREQUENTLY ASKED QUESTIONS FACTS In more than 60 years, there has never been a documented instance of water contamination caused by hydraulic fracturing. Both the Environmental Protection Agency and the Ground Water Protection Council have released extensive studies declaring the practice safe and the fluids non-threatening. With the use of horizontal drilling technology, gas wells have a much smaller impact on land than drilling vertical wells because multiple wells can be drilled off one well site. All sites must be reclaimed after drilling is complete in accordance with state regulations. All reclamation must be reviewed and approved by a state inspector. 5. What is the Horizontal Well Act? The Horizontal Well Act (HWA) establishes clear permitting and regulatory rules that enable West Virginia to continue to develop this resource and provide job opportunities to residents. It provides the WVDEP with funding through increases in permitting fees. The HWA gives the WVDEP regulatory authority to make adjustments to changing technologies in the process of drilling and casing a well. This legislation also contains additional provisions pertaining to the reclamation of roads, notice of drilling activity to surface owners, and reporting of water and fracturing fluid usage and disposal. It stipulates that no permit can be issued without proof of notice to surface owners and coal owners. Before the Horizontal Well Act, other stringent regulations from state and federal agencies were in place. These regulations still are in place today. 6. How many jobs are created by the natural gas industry in W.Va. and across the country? An American Petroleum Institute survey of 230 oil and natural gas vendors in W.Va. showed the industry supports 80,400 jobs. The natural gas industry supports 9.8 million jobs in the United States. Every job created in the shale gas sector adds three more, representing one of the larger employment multipliers in the U.S. According to a recent study by the American Chemistry Council, potential benefits of shale gas include 200,000 new high-paying jobs in various manufacturing industries.

3 TOP 10 FREQUENTLY ASKED QUESTIONS FACTS The API study also showed the average annual salary of oil and natural gas industry workers is $74,450, compared to the state average of $39,519. West Virginia ranks ninth in natural gas production, making it one of the nation s top energy-producing states. 7. What are the economic benefits? The Marcellus shale play is one of the largest gas fields in the world. West Virginia s oil and natural gas industry paid more than $188 million in severance taxes in 2014, more than doubling the total from In 2014, natural gas state property tax contributions in W.Va. totaled more than $71 million. 53 of W.Va. s 55 counties have oil or natural gas operations, and all 55 counties benefit from state severance taxes paid by the industry. The oil and natural gas industry supports 7.5 percent of the United States economy. 8. What careers are available? There are hundreds of jobs within the oil and natural gas industry both at drilling locations and off-site. Well-paying careers are available for many education levels, as long as the applicant has a high school diploma or equivalent. Some positions require a two- or four-year degree; others require a safe driving record and/or CDL. Being drug-free is a must. For a comprehensive list of careers visit 9. What is an ethane cracker? An ethane cracker takes ethane, one of several components of natural gas, and processes it into ethylene the primary feedstock of the plastics industry. Odebrecht, an international petrochemical company, has made plans for an ethane cracker plant near Parkersburg, W.Va. State officials estimate the supply of ethane in West Virginia would be enough to support two large crackers potentially creating 12,000 full-time W.Va. jobs. The ethane and other byproducts in the Marcellus and Utica shales will allow the chemical industry to boom for years to come. The cracker products provide the basic building blocks of the modern petrochemical industry without ethylene, modern life as we know it would not be possible.

4 TOP 10 FREQUENTLY ASKED QUESTIONS FACTS According to a report from West Virginia University, annual economic benefits of the completed cracker plant include: An estimated 325 full-time jobs per year, representing $35 million in compensation and $585 million in economic output. Annual generation of 1,229 indirect jobs, representing $62 million in compensation and $196 million in economic output. Combined economic output from the one-time construction impacts would be $1.48 billion. 10. What is the industry doing to educate West Virginia students about career opportunities? To date, activities include: A. Teach the Teachers Seminars September 2012 Morgantown October 2013 Charleston October 2014 Wheeling More than 100 teachers and counselors from 17 counties have participated. Activities include an industry overview, career panel, roundtable lunch discussion with industry representatives, young professionals panel and a classroom resources workshop. B. Opportunities for Life Career Days Presentations have been given in high schools across the state. We have reached nearly 4,000 students. The 1 ½ hr. presentation includes an industry overview, career opportunities and a fun, educational video. C. Tom Dunn Energy Leadership Academy The academy was created to honor Tom Dunn, one of IOGA s pioneer members. It takes place each summer at West Virginia Wesleyan College in Buckhannon. There is no cost to selected participants.

5 PARTNERS NEARLY 2,500 ALLIANCE MEMBERS AND 34 SUPPORTING PARTNERS HAVE COME TOGETHER TO PROVIDE A UNIFIED VOICE FOR THE INDUSTRY. American Petroleum Institute Charleston Regional Chamber of Commerce Chemical Alliance Zone Community and Technical College System of WV Contractors Association of WV Energy In Depth HOPE Community Development Corporation Independent Oil & Gas Association of WV Independent Petroleum Association of America Institute for 21st Century Energy Mountaineer Energy Forum Polymer Alliance Zone Utilities, Telecommunications & Energy Coalition of WV (UTEC) WV Business & Industry Council WV Chamber of Commerce WV Department of Education and the Arts WV Manufacturers Association WV Petroleum Council WV Roundtable WV Small Public Utilities Association WorkForce WV WV Economic Development Council 12 Regional Economic Development Authorities

6 energyspeakswv.com Facebook: Just Beneath The Surface

A FLUID SITUATION: TYPICAL SOLUTION USED IN HYDRAULIC FRACTURING * 0.49% ADDITIVES* Potassium chloride 0.06% Isopropanol 0.085% Petroleum distillate 0.088% Guar gum/hydroxyethyl cellulose 0.

$001% Compound* Purpose Common application Acids Glutaraldehyde Sodium Chloride Helps dissolve minerals and initiate ssure in rock (pre-fracture) Eliminates bacteria in the water Allows a delayed$ pharmaceuticals, acrylic bers and plastics Borate salts Polyacrylamide Petroleum distillates Maintains uid viscosity as temperature increases Minimizes friction between uid and pipe Slicks the water

pharmaceuticals, acrylic bers and plastics Borate salts Polyacrylamide Petroleum distillates Maintains uid viscosity as temperature increases Minimizes friction between uid and pipe Slicks the water

7 A FLUID SITUATION: TYPICAL SOLUTION USED IN HYDRAULIC FRACTURING * 0.49% ADDITIVES* Potassium chloride 0.06% Isopropanol 0.085% Petroleum distillate 0.088% Guar gum/hydroxyethyl cellulose 0.056% Ethylene glycol 0.043% Acid 0.123% Sodium/Potassium carbonate 0.011% Sodium chloride 0.01% Borate salts 0.007% Citric acid 0.004% N,n-dimethyl formamide 0.002% Glutaraldehyde 0.001% Compound* Purpose Common application Acids Glutaraldehyde Sodium Chloride Helps dissolve minerals and initiate ssure in rock (pre-fracture) Eliminates bacteria in the water Allows a delayed break down of the gel polymer chains Swimming pool cleaner Disinfectant; Sterilizer for medical and dental equipment Table Salt N, n-dimethyl formamide Prevents the corrosion of the pipe Used in pharmaceuticals, acrylic bers and plastics Borate salts Polyacrylamide Petroleum distillates Maintains uid viscosity as temperature increases Minimizes friction between uid and pipe Slicks the water to minimize friction Used in laundry detergents, hand soaps and cosmetics Water treatment, soil conditioner Make-up remover, laxatives, and candy On average, 99.5% of fracturing uids are comprised of freshwater and compounds are injected into deep shale gas formations and are typically con ned by many thousands of feet or rock layers. Guar gum Citric Acid Thickens the water to suspend the sand Prevents precipitation of metal oxides Thickener used in cosmetics, baked goods, ice cream, toothpaste, sauces, and salad dressing Food additive; food and beverages; lemon juice Potassium chloride Creates a brine carrier uid Low sodium table salt substitute Ammonium bisul te Sodium or potassium carbonate Proppant Removes oxygen from the water to protect the pipe from corrosion Maintains the e ectiveness of other components, such as crosslinkers Allows the ssures to remain open so the gas can escape Cosmetics, food and beverage processing, water treatment Washing soda, detergents, soap, water softener, glass and ceramics Drinking water ltration, play sand Ethylene glycol Prevents scale deposits in the pipe Automotive antifreeze, household cleansers, deicing, and caulk Source: DOE, GWPC: Modern Gas Shale Development In the United States: A Primer (2009) Isopropanol Used to increase the viscosity of the fracture uid Glass cleaner, antiperspirant, and hair color * The speci c compounds used in a given fracturing operation will vary depending on source water quality and site, and speci c characteristics of the target formation. The compounds listed above are representative of the major material components used in the hydraulic fracturing of natural gas shales. Compositions are approximate.

8 ABOUT US Energy Speaks is a campaign sponsored by the Just Beneath the Surface Alliance. The purpose of the Alliance is to provide the public with facts, clarify false information and offer an in-depth look into the natural gas industry. Our goal is to provide a source of factual information and two-way communication on the subjects of economic benefits, environmental standards and regulations, safety, and the future of energy in W.Va. BY BECOMING A MEMBER OF THE JUST BENEATH THE SURFACE ALLIANCE AND PARTICIPATING IN ENERGY SPEAKS, YOU ARE SHOWING SUPPORT FOR THE NATURAL GAS INDUSTRY AND FOR WEST VIRGINIA JOBS AND ECONOMIC GROWTH. West Virginia s oil and natural gas industry, and specifically the shale development, makes it possible for tens of thousands of West Virginians to work, providing hundreds of millions of dollars in employee compensation to our residents. The industry supports West Virginia and its people. This is why we ve created Energy Speaks a statewide public awareness effort of the Just Beneath the Surface Alliance. With education as its driving force, the goal of Energy Speaks is to become a unified voice in West Virginia, providing industry experts as a resource for factual and relevant information to the public. You can join the Alliance as an individual or as a company. If you would like to support the industry that supports West Virginia, please join us by signing up at or by filling out the form below and sending it to Energy Speaks, 300 Summers Street, Suite 820, Charleston, WV Yes, I want to become a member of the Just Beneath the Surface Alliance Energy Speaks. Individual Company Name Phone Employer Address City State Zip

North Dakota Department of Mineral Resources

North Dakota Department of Mineral Resources NDGS Research Arm OGD Regulatory Arm https://www.dmr.nd.gov/oilgas/ https://www.dmr.nd.gov/ndgs/ 600 East Boulevard Ave. - Dept 405 Bismarck, ND 58505-0840