NEMC Challenges of Managing Water in the Marcellus Play. Nick Inkenhaus Water Resources Engineer

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1 NEMC Challenges of Managing Water in the Marcellus Play August 5, 2013 December 22, 2011 Nick Inkenhaus Water Resources Engineer

2 Water Requirements for Marcellus Shale Completion typically requires 3-5 million gallons of water Pump rates range from bpm Is that a lot of water? 5 million gallons is 1.8 inches of water over an area of 100 acres, the approximate drainage area of a well PA receives about 40 inches of rainfall per year If the productive area of the Marcellus takes 50 years to drill, annual water use over the productive area would be 0.04 inches of water per year or 1/10 th of 1% of annual rainfall 2

3 Water Requirements for Marcellus Shale Water use per million btu of energy: Deep shale natural gas Marcellus Shale gas avg Nuclear (uranium ready to use in a power plant) Conventional oil Synfuel-coal gasification Coal (delivered power plant) Oil shale Tar sands/oil sands Fuel ethanol from corn Biodiesel from soy gallons 1 gallon 8-14 gallons 8-20 gallons gallons gallons gallons gallons 2,510-29,100 gallons (irrigation) 14,000-75,000 gallons (irrigation) Shale gas production uses less water than any other significant energy source Source: U.S. Dept. of Energy 3

4 Water Usage Comparison Source: USGS, Pennsylvania Water Consumption 4

5 Source Requirements Reliability/Seasonality Quality/Compatibility Location/Proximity 5

6 Sources - Municipal 6

7 Sources Surface Water 7

8 Sources Surface Water 8

9 Water supply sources Larger streams, rivers, and reservoirs PA DEP has adopted SRBC method for analyzing water withdrawal and must approve all water management plans Water can be safely withdrawn at reasonable rates all year with exceptions for very dry periods Protection of downstream uses Cumulative impact considerations Reuse is now a significant water source 29.5% of Range s total PA water usage in 2011 was from reuse 29% of Range s total PA water usage in 2012 was from reuse 9

10 Acid Mine Drainage Sources Alternative Parameter Min Max Average Units Flow 80 45,553 1,638 gpm ph TSS ppm TDS 144 3,486 1,120 ppm Chlorides ppm Sulfate 5 2, ppm Hardness 74 1, ppm Iron (total) ppm Magnesium (total) ppm PA DEP Orphaned Mine Discharge Project 10

11 Sources Alternative Municipal Parameter Value Units ph TSS 30 ppm 5-Day BOD 30 mg/l EPA Secondary Treatment Standard 11

12 Water Transfer 12

13 Water Transfer Minimize Trucking Source water, trucks per well Flowback, ~180 trucks per well Proximity is key Pumping and Pipelines Temporary Integrity Distance Permanent network Link large sources to storage locations Noise Mitigation 13

14 Water Transfer 3 rd Party Engineer Develops Test Pipe rating Component ratings Layout Weather conditions Separate Testing Firm Executes Approximately 8 hours Any failure results in re-test Scheduled 3-7 days prior to frac Procedure/test for each job 14

15 Treatment, Reuse, and Disposal 10-30% of water flows back to surface near-term after completions activities; balance is bound in micro fractures in shale Water flowed back after frac contains salts and other naturally occurring dissolved minerals present in ancient sea water Water is gathered and removed from site by either truck or pipeline Management methods during 2011/2012: Recycle Injection wells Advanced treatment facilities 15

16 Recycling - Challenging Convention Simplified Fluid Design Slickwater with scale inhibitor and biocide Water Quality Shale permeability Production mechanism Water mobility Challenge conventional rules of thumb Parameter Conventional Limits Considerations ph 6.0 to 8.0 Fluid Stability, Scaling Chlorides <20,000 mg/l Fluid Stability Iron <20 mg/l Fluid Stability Ca, Mg, Ba, SO 4, CO 3, ƒ(p,t,ph) (+/- 350 mg/l) Scaling Bacteria Count <100/100 mg/l Bacteria Growth nanodarcy, nd, 1 x 10-9 D Suspended Solids <50 mg/l Skin Oil & Soluble Organics <25 mg/l Fluid Stability millidarcy, md, 1 x 10-3 D 16

17 Timeline Recycling - Challenging Convention Fall 2008 Range formed Water Resources Group April 2009 Started accumulating recycle water August 2009 Competed first recycled water frac 17

18 Range s Water Recycling Program Rapidly Evolving Technology Recycling technology did not develop in other shale gas plays due to abundant opportunities for disposal by injection into deep rock formations Recycling in the Marcellus play has been driven by lack of other disposal options and regulatory framework Technology will continue to improve rapidly Completions designs Chloride tolerant friction reducers 18

19 Industry Recycling Progression in PA PA DEP Oil & Gas Reporting Website Data 19

20 Range s Water Recycling Program Throughout the first half of 2013: Southern Marcellus Operations Flowback Recycle 100% Production Brine Recycle 100% Drilling Fluids Recycle 88.3% Overall Recycle Rate 98.1% 20

21 Thank You Nick Inkenhaus Water Resources Engineer Range Resources Appalachia, LLC Southern Marcellus Shale Division Additional Information: