John F. Peiserich Perkins & Trotter, PLLC [email protected].

Hydraulic Fracturing and the Environment: The

Science and Facts of Responsible Development

John F. PeiserichPerkins & Trotter, PLLC

[email protected]

What is the timeline?

• The Clean Water Act regulates surface water discharges and storm-water runoff.

• The Clean Air Act sets rules for air emissions from engines, gas processing equipment and other sources associated with drilling and production activities.

• The Safe Drinking Water Act regulates the disposal of fluid waste deep underground.

• The National Environmental Policy Act requires permits and environmental impact assessments for drilling on federal lands.

• The Occupational Safety and Health Act sets standards to help keep workers safe. These include requiring Material Safety Data Sheets be maintained and readily available onsite for chemicals used at that location.

• The Emergency Planning & Community Right-to-Know Act requires storage of regulated chemicals in certain quantities to be reported annually to local and state emergency responders.

• The National Pipeline Safety Act sets standards for pipeline construction, operation and maintenance administered by U.S. Department of Transportation.

How are you protected?

Arkansas Department of Environmental Quality

Arkansas Oil & Gas Commission Arkansas Natural Resources Commission –

permitting of water use

* The U.S. Army Corps of Engineers administers 404 permitting which is predominately related to potential impacts to surface water but requires an ADEQ water quality certification.

Additional State* Protections

Protecting Everyone’s Water

Physical: • Well Casing Program• Cement Bond Log• Mechanical Integrity

Testing• Annulus Pressure

Monitoring

Regulations:• Federal Rules and

Regulations• Routinely Updated State

Rules and Regulations

Typical Fluid Constituents

Constituent Name Generic Name Common Use Hazardous as Appears on MSDS

1,2,4 Trimethylbenzene

Aromatic Hydrocarbon

Paint, Mold Making Kit (Arts and Crafts), Unleaded Gasoline Yes

Alcohol, C12-16, Ethoxylated

Alcohols, Ethoxylated

Car Wash Liquid, Laundry Stain Remover, Air Freshener No

Aldehyde Aldehyde Metal Cutting Fluid, Non-Alcoholic Beverages, Ice Cream, Candy, Baked Goods, Chewing Gum, Condiments and Meats

Yes

Ammonium Chloride

Inorganic Salt Hand Wash, Shampoo, Breakfast Cereal Yes

Ammonium Phosphate

Inorganic salt Milk Products No

Crystalline Silica, Quartz

Silica Cat Litter, Tile Mortar, Arts & Crafts Ceramic Glaze Yes

Ethanol Alcohol Ginseng, Deodorizer, Dish Soap, Cologne, Makeup (Mascara), Mouthwash YesEthoxylated Fatty Acid

Ethoxylated Fatty Acid

Household Multipurpose Cleaner, Laboratory Hand Cleaner No

Fatty Acid Tall Oil Blend

Tall Oil Fatty Acid Car Polish, Industrial Hand Cleaner No

Heavy Aromatic Petroleum Naphtha

Hydrocarbon-Petroleum Distillate

Industrial Cleaning Solution, Tire Repair, Agricultural Insecticide Yes

Hydrochloric Acid

Inorganic Acid Table Olives, Unripened Cheese, Cottage Cheese Yes

Hydrotreated Light Petroleum Distillate

Hydrocarbon – Petroleum Distillate

Oil Wood Stain, Air Freshener, Surface Cleaner Aerosol Yes

Isopropanol Alcohol Tape Head Cleaner, Hops Extract used for Beer, Air Freshener YesMethanol Alcohol Furniture Refinisher, Liquid Hand Soap, Windshield Washer Concentrate,

Hops ExtractYes

Methyl Isobutyl Ketone

Ketone Paint Thinner, Wood Stain, Metal Adhesive, Automotive High Heat Paint No

Naphthalene Polycyclic Aromatic Hydrocarbon

Mothballs, Agricultural Insecticide, Heating Fuel Oil Yes

Polyethoxylated Fatty Amine Salt

Ethoxylated Amine Toilet Bowl Cleaner No

Quaternary Ammonium Salt

Quaternary Ammonium Salt

Industrial and Commercial Water Acidity Neutralizing Solution Yes

Sodium Chloride Inorganic Salt Macaroni and Noodle Products, Canned Corn, Tomato Concentrate, Frozen Peas

No

Sodium Iodide Inorganic salt Light Bulbs, Infant Food NoSorbitan Monoleate Fatty Acid Ester Vitamin A Supplements, Sun Block Towels NoSorbitan Monooleate Ethoxylated

Fatty Acid Ester Ethoxylate

Shortening, Ice Cream, Chocolate and Chocolate Products No

Tall Oil Acid Diethanolamide

Fatty Acid Tall Oil Amide

Liquid Wax, Antiseptic Hand and Body Wash No

Terpene Hydrocarbon By-products

Terpenes and Terpenoids

Laundry Soap, Furniture Oil, Thickened Stripper for Grease, Paint, Ink, and Gum Removal

No

Terpenes and Terpenoids, Sweet Orange-Oil

Terpenes and Terpenoids

Commercial Bathroom Disinfectant Cleaner, Dishwashing Detergent, Multi-surface Cleaner

No

MSDS Hazardous?As defined by OSHA Standard 1910.1200 (the OSHA Haz-com standard), a hazardous chemical is one which is a physical hazard or a health hazard.

Health hazard means a chemical for which there is statistically significant evidence based on at least one study conducted in accordance with established scientific principles that acute or chronic health effects may occur in exposed employees. The term "health hazard" includes chemicals which are carcinogens, toxic or highly toxic agents, reproductive toxins, irritants, corrosives, sensitizers, hepatotoxins, nephrotoxins, neurotoxins, agents which act on the hematopoietic system, and agents which damage the lungs, skin, eyes, or mucous membranes.

Physical hazard means a chemical for which there is scientifically valid evidence that it is a combustible liquid, a compressed gas, explosive, flammable, an organic peroxide, an oxidizer, pyrophoric, unstable (reactive) or water-reactive.

Some of My Favorite Hazardous Materials - at Least those with Guar Gum

A Few of My Favorite Carcinogens – Things We Like to Eat

EPA Administrator Jackson’s Congressional Testimony on May 25, 2011 Jackson said natural gas creates less air pollution than other fossil

fuels “so increasing America’s natural gas production is a good thing.” She said Congress told the EPA to study the relationship between

fracking and drinking water. “We are doing that, with input from technical experts, the public and industry,” she said.

“In the meantime, EPA will step in to protect local residents if a driller jeopardizes clean water and the state government does not act.”

Under questioning from a Pennsylvania Republican, Jackson said she was “not aware of any proven case where the fracking process itself” had affected water.

UPDATE – April 2012 – Jackson says “in no case have we made a definitive determination that the fracing process has caused chemicals to enter groundwater.” This is after Pavillion, WY.

A “Greening” O&G Industry

It is responsible for creating 2.8 million American jobs. It is forecast to add 1 million U.S. manufacturing jobs over the next 15 years. It has led to an annual increase in U.S. household disposable income of $926. Shale gas alone is forecast to contribute $933 billion revenues to federal,

state and local government coffers over the next 25 years, including helping pay for schools, law enforcement and other essential municipal priorities.

It is the transportation fuel of choice of American cities large and small—as they seek to save money and promote clean air through their bus fleets.

It has helped reduce U.S. power sector carbon emissions to levels not seen in 20 years as communities embrace this energy as a cleaner electricity choice.

It allowed the top 100 U.S. power producers to reduce by one-third emissions of sulfur dioxide and smog-forming nitrogen oxide—in just a two-year period.

And, as a transportation fuel it is allowing city bus fleets, large company fleets (AT&T, UPS, Verizon, Waste Management, et al) to rely on an American fuel that costs on average 40% less than diesel or gasoline.

North Little Rock and Mayor Hays have brought PUBLIC CNG to Central Arkansas at $1.44 per gasoline gallon equivalent!

Economic Benefits from Natural Gas Production including Arkansas

What Should the Industry Consider? It appears historic operations are the most likely

cause of potential groundwater and drinking water issues. The O&G Industry risk of potential water issues is no different from any other industry that manages fluids.

The development of new technologies, improved drilling and completion techniques, and “green” completion fluids all add layers of protection for water issues.

Public outreach is a necessary component of any industrial activity and one that needs substantial additional effort in the O&G Industry.