Ohio Department of Natural Resources Division of Mineral Resources Management (DMRM) Emergency Management Association Of Ohio- Spring Directors Seminar.

Ohio Department of Natural Resources

Division of Mineral Resources Management

(DMRM)

Ohio Department of Natural Resources

Division of Mineral Resources Management

(DMRM)

Emergency Management AssociationOf Ohio- Spring Directors Seminar

Emergency Management AssociationOf Ohio- Spring Directors Seminar

Director – David Mustine

Assistant Director – Scott Zody

DMRM Chief - John Husted

Presentation by – Tom Tugend

Director – David Mustine

Assistant Director – Scott Zody

DMRM Chief - John Husted

Presentation by – Tom Tugend

On Behalf Of:On Behalf Of:

Division of Mineral Resources Management (DMRM)

Provides for the Safe and

Environmentally Sound Development

and Restoration of Mineral and

Fossil Fuel Extraction

Sites

• Oil/Gas Well Permitting, Drilling, Production, Plugging

• Industrial Mineral Permitting & Mining

• Mine Safety

What We Oversee

• Coal Mine Permitting, Mining and Reclamation

• Abandoned Mined Lands Reclamation

• Orphan Well Plugging

• EPA Certified Lab

What We Oversee - Continued

Our Authority For The Regulation of:

• Oil and Natural Gas Wells• Salt Water Injection Wells• Brine Haulers• Administering the Orphan Well

Program

Ohio Revised Code 1509Ohio Administrative Code 1501

Our Authority For The Regulation of:

• Oil and Natural Gas Wells• Salt Water Injection Wells• Brine Haulers• Administering the Orphan Well

Program

Ohio Revised Code 1509Ohio Administrative Code 1501

Permitting OverviewPermitting Overview

•Leasing Precedes Permitting

•Owner Registration (Bonding/Insurance)

•Permitting: Spacing, Casing, Pre-Permit Site

Review, Permit Conditions, Restoration Plan

•Leasing Precedes Permitting

•Owner Registration (Bonding/Insurance)

•Permitting: Spacing, Casing, Pre-Permit Site

Review, Permit Conditions, Restoration Plan

Spacing Categories Distance

Depth Acres Unit Lines Bet. Wells

0 to 1,000’ 1 100’ 200’

1 to 2K 10 230’ 460’

2 to 4K 20 300’ 600’

4,000 + 40 500’ 1,000’

Field Inspection and EnforcementField Inspection and Enforcement

Inspection• Pre-Permit Site Review• Critical Phases of Drilling and Approval of Preliminary Site Restoration• Routine Inspection of Production Wells• Response to Complaints/Public Assistance• Oversight/Approval of Plugging and Final Restoration

Inspection• Pre-Permit Site Review• Critical Phases of Drilling and Approval of Preliminary Site Restoration• Routine Inspection of Production Wells• Response to Complaints/Public Assistance• Oversight/Approval of Plugging and Final Restoration

Field Inspection Cont.Field Inspection Cont.

Enforcement •Progressive Enforcement with Resolution at Lowest Level: Compliance Notices, Orders, Civil and Criminal Actions and Consent Agreements, Loss of Permitting – Permit Block, Suspension of Producing Operations

Enforcement •Progressive Enforcement with Resolution at Lowest Level: Compliance Notices, Orders, Civil and Criminal Actions and Consent Agreements, Loss of Permitting – Permit Block, Suspension of Producing Operations

Prevention of Impacts to the Environment and Protection of Public SafetyPrevention of Impacts to the Environment and Protection of Public Safety

Key Factors:• Permitting• Well Site Construction • Well Construction !• Well Control !• Fluid Control !• Oversight

Key Factors:• Permitting• Well Site Construction • Well Construction !• Well Control !• Fluid Control !• Oversight

• Complaints Posing Threats to Public Safety and the Environment• Drilling Operations – Protection of Fresh Water/Public Safety/Environment• Plugging Operations• Routine Inspections – Public Assistance

Our Field Enforcement Focus/PriorityOur Field Enforcement Focus/Priority

• Well Site Identification • Idle Wells• Pollution/Contamination• Restoration• Brine Disposal• Gas Leaks

Most Common ViolationsMost Common Violations

Hydraulic Fracturing

Fracking

Fracing

Hydraulic Fracturing

Fracking

Fracing

Good or BadWhat is the Real Story

Good or BadWhat is the Real Story

A Process Using Pressure and Fluid to

Break Open (Fracture) the Oil and or

Natural Gas Formation to Permit Production

that Otherwise Would be Not be Economic.

Hydraulic Fracturing

Is this a New Process – NO

Almost Every Well Drilled in Ohio Since

the Late 1970’s has Been Hydraulic

Fractured (Approximately 80,000 Wells have

Been Hydraulic Fractured in Ohio)

Hydraulic Fracturing Cont.

Hydraulic Fracturing Cont.

The Hydraulic Fracturing Fluids Consist of:• Water• Sand (proppant)• Chemicals (to Make the Water Viscous to

Carry the Sand), Scale Inhibitors, HCL.

99+% Sand and Water

The Hydraulic Fracturing Fluids Consist of:• Water• Sand (proppant)• Chemicals (to Make the Water Viscous to

Carry the Sand), Scale Inhibitors, HCL.

99+% Sand and Water

Hydraulic Fracturing Cont.

Has Hydraulic Fracturing Contaminated

Groundwater in Ohio – NO

With Proper Well Construction, Well Control

and Fluid Control, Impacts to the Environment

are Prevented.

Has Hydraulic Fracturing Contaminated

Groundwater in Ohio – NO

With Proper Well Construction, Well Control

and Fluid Control, Impacts to the Environment

are Prevented.

Hydraulic Fracturing Cont.

The Fracturing Fluids are Maintained Inside

The Steel Cased Well Bore and or in Lined

Pits or Steel Tanks then Recycled (Reused)

Or Properly Disposed of Under the Authority

the Division of Mineral Resources or Ohio

EPA.

The Fracturing Fluids are Maintained Inside

The Steel Cased Well Bore and or in Lined

Pits or Steel Tanks then Recycled (Reused)

Or Properly Disposed of Under the Authority

the Division of Mineral Resources or Ohio

EPA.

FracContainment

Target shale is thousands of feet below any drinkable ground-water layers.

Thick layers of shale and limestone are above and below shale keep fractures from penetrating upward and downward into adjacent formations.

Companies do not want to use excess frac materials and power and do not want to produce water

Very little additives in frac fluid (0.05%)

Fluid is injected into undrinkable brine zones, very unlikely to migrate

Graphic from Kostelnick (2010).

Marcellus Formation

Total Permits Issued: 44,367 Drilling - 21,507 Plugging - 22,860

Wells Drilled: 16,409

Wells Plugged: 15,298

Total Ohio Wells: 64,427

Oil and Gas Activity 1990-2010

Wells Drilled – The Early Years

Wells Drilled – The Early Years

Year Wells Drilled

1890 25931895 61471900 65551930 2134

1980 51001981 60851982 4830

Year Wells Drilled

1890 25931895 61471900 65551930 2134

1980 51001981 60851982 4830

2010 Ohio Oil/Gas Information2010 Ohio Oil/Gas Information

• 431 Wells Were Drilled in 44 Counties

• 429 Wells Were Plugged

• 4.78 Million Barrels of Oil Produced

• 77 Billion Cubic Feet of Gas Produced

• 431 Wells Were Drilled in 44 Counties

• 429 Wells Were Plugged

• 4.78 Million Barrels of Oil Produced

• 77 Billion Cubic Feet of Gas Produced

Horizontal Shale Drilling

Marcellus Shale Utica Shale

Why all the Interest/Press ?

What is the Difference Between a Traditional Well and a Horizontally DrilledShale Well ?

So, why is this a big deal?Potential Production

A “typical” conventional gas well in the Appalachian Basin produces 100–500,000 CF of gas per day and 200–500 MMCF in its life. (500 MMCF x $4/MCF* = $2M gross revenue; creating a $250K royalty payment @12.5% of gross.)

Horizontal Marcellus (or Utica?) well may produce around 2–10 MMCF of gas per day and are projected to average around 4 BCF of gas over their life, per well. (4 BCF x $4/MCF* = $16M gross revenue, creating a $2M royalty payment @ 12.5% of gross.)

KEY M = thousand MMCF = million cubic feet (or 1,000 MCF) MCF = thousand cubic feet BCF = billion cubic feet [Division of Geological Survey 2011]

Differences Between a Horizontal Well andTraditional Vertical Well

Everything is Bigger – It Takes Longer Well Site 3-5 acres vs. 1-2 acres Shale Rig is Much Larger Associated Equipment – More of it One Month/Well to Drill vs. One Week Up to 6 Wells Can be Drilled From One

Well Site

Sou

rce:

U.S

. EIA

, 201

0.

Many shale gas plays are now developing across the United States and Canada.

We are not alone….

Marcellus Shale ActivityPennsylvania

Marcellus Shale ActivityPennsylvania

2004: Range Resources Drilled the First Horizontal Marcellus Shale Well

2008: 195 Marcellus Wells Drilled

2009: 763 Marcellus Wells drilled

2010: 1,454 Marcellus Wells Drilled

2004: Range Resources Drilled the First Horizontal Marcellus Shale Well

2008: 195 Marcellus Wells Drilled

2009: 763 Marcellus Wells drilled

2010: 1,454 Marcellus Wells Drilled

Marcellus Shale – Ohio ActivityMarcellus Shale – Ohio Activity

To Date:

Vertical Permits Issued: 67

Vertical Wells Drilled: 44

Horizontal Permits Issued: 10

Horizontal Wells Drilled : 2

To Date:

Vertical Permits Issued: 67

Vertical Wells Drilled: 44

Horizontal Permits Issued: 10

Horizontal Wells Drilled : 2

As of 03-08-11As of 03-08-11

Utica Shale – Ohio Activity*Utica Shale – Ohio Activity*

To Date:

Vertical Permits Issued: 19

Vertical Wells Drilled: 9

Horizontal Permits Issued: 4

Horizontal Wells Drilled : 1

To Date:

Vertical Permits Issued: 19

Vertical Wells Drilled: 9

Horizontal Permits Issued: 4

Horizontal Wells Drilled : 1

As of 03-08-11As of 03-08-11*Permits issued since December 2009*Permits issued since December 2009

Generalized Geology and Profile of a Utica Shale Well

Sandstone: A Typical Reservoir Rock

Sandstone: A Typical Reservoir Rock

A porous sandstone prepared for viewing under amicroscope reveals pore spaces (blue areas).

SANDGRAIN

PORE

PORE

SANDGRAIN

SANDGRAIN

Gra

phic

from

Kos

teln

ick

(201

0).

Shale is extremely fine grained with many very small pore spaces.

UTICA SHALEUTICA SHALE

Risks

Poor Well Site Construction – Erosion and Sedimentation, Impact to Wetlands

Road Impact/Damage Spills (Oil/Brine/Drilling Fluids)

On-Site/Off-Site Uncontrolled Releases of Natural Gas,

Oil, Completion Fluids

Risks Cont.

Fires During Drilling/Well Completion Injury to Rig Hands While Drilling Lightning Strikes Tank Fires

Tank LaunchingTank Launching

ODNR Division of Mineral Resources (DMRM)Management Contact Information

ODNR Division of Mineral Resources (DMRM)Management Contact Information

Columbus Office: 614-265-6633

Uniontown Office: 330-896-0616

New Philadelphia Office: 330-339-2207

Cambridge Office: 740-439-9079

Jackson Office: 740-286-6411

Salem Office: 330-222-1527

Mount Vernon Office: 740-392-4499

Findley Office: 419-429-8304

Lebanon Office: 937-933-6717

Columbus Office: 614-265-6633

Uniontown Office: 330-896-0616

New Philadelphia Office: 330-339-2207

Cambridge Office: 740-439-9079

Jackson Office: 740-286-6411

Salem Office: 330-222-1527

Mount Vernon Office: 740-392-4499

Findley Office: 419-429-8304

Lebanon Office: 937-933-6717

ODNR Division of Mineral Resources (DMRM)Management Contact Information

ODNR Division of Mineral Resources (DMRM)Management Contact Information

See DMRM Web Site for Additional County Contact

Information and Information on Shale Drilling and DMRM’s

Programs

DMRM Web Site: Go to ODNR’s Web Site:

http://ohiodnr.com/, Click on “Other Divisions”,

Click On “Mineral Resources” and Click on “Oil and Gas”

See DMRM Web Site for Additional County Contact

Information and Information on Shale Drilling and DMRM’s

Programs

DMRM Web Site: Go to ODNR’s Web Site:

http://ohiodnr.com/, Click on “Other Divisions”,

Click On “Mineral Resources” and Click on “Oil and Gas”