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Page 22 The Northeast ONG Marketplace LEGAL & FINANCE By: Kristie Kubovic, Director of Communications, Shale Media Group Edited By: Mindy Gattner, Editor, Shale Media Group Unbeknownst at the time, Range Resources changed southwestern Pennsylvania in 2004 by drilling the first vertical Marcellus Shale well. When Range went public in 2008 with the drillable discovery of the Marcellus Shale, it started a snowball effect, changing the surrounding region and eventually the United States’ energy position in the world. As it turns out, the Marcellus Shale play is now the largest source of natural gas in the United States and the world’s second largest gas supply. A combination of the technological advancements of horizontal drilling and hydraulic fracturing at the time helped propel this process. Horizontal drilling is actually a combination of vertical and horizontal drilling, where producers drill vertically, then turn the well bore and drill horizontally in different directions, similar to the spokes on a wagon wheel. Aſter the well is completed, the process of hydraulic fracturing is employed. Hydraulic fracturing is a technique used to release natural gas and oil from subterranean rock deep under the earth’s surface. In the process, water, which is mixed with other compounds like sand, is pressurized and pumped into the ground to fabricate cracks (also known as fractures or fissures) in the rock. ese cracks act like veins and allow the release of oil and natural gas to the well. e utilization of horizontal drilling in conjuncture with hydraulic fracturing bolsters producers’ ability to draw oil and gas from the nation’s various shale formations and allows even higher volumes of gas to be extracted. e growth of the shale oil and gas industry has elevated environmental and health concerns, including the potential effects on drinking water. Even though hydraulic fracturing occurs thousands of feet below water tables, there have been claims that hydraulic fracturing changes the quality of the local water supply. e Environmental Protection Agency (EPA) has scrutinized the validity of these claims and studied the impact of hydraulic fracturing. Consequently, different studies have drawn the same conclusion: “hydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources.” In 2004, the Evaluation of Impacts to Underground Sources of Drinking Water by Hydraulic Fracturing of Coalbed Methane (CBM) Reservoirs national study final report stated, “EPA has published a final report summarizing a study to evaluate the potential threat to underground sources of drinking water (USDWs) from the injection of hydraulic fracturing fluids into coalbed methane (CBM) production wells. … e Agency has concluded that the injection of hydraulic fracturing fluids into CBM wells poses minimal threat to USDWs. In its review of incidents of drinking water well contamination believed to be associated with hydraulic fracturing, EPA found no confirmed cases that are linked to fracturing fluid injection into CBM wells or subsequent underground movement of fracturing fluids. Further, although thousands of CBM wells are fractured annually, EPA did not find confirmed evidence that drinking water wells have been contaminated by hydraulic fracturing fluid injection into CBM wells.” In 2009, Congress requested the EPA revisit hydraulic fracturing to study the relationship between hydraulic fracturing and drinking water. In 2011, the EPA released a detailed plan of the extensive, multi-year study. On ursday, June 4, the EPA finally released the draſt form of the Potential Impacts to Drinking Water Resources from Hydraulic Fracturing Activities assessment. e assessment followed the water used for hydraulic fracturing from water acquisition, chemical mixing at the well pad site, well injection of fracking fluids, the collection of hydraulic fracturing wastewater (including flowback and produced water), and wastewater treatment and disposal. According to the EPA’s news release, the assessment revealed “hydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources.” As with any industry, there is the potential for and consequences from human mistakes and equipment failures. e assessment also identified important vulnerabilities to drinking water resources from activities associated with hydraulic fracturing. “ese vulnerabilities to drinking water resources include: water withdrawals in areas with low water availability; hydraulic fracturing conducted directly into formations containing drinking water resources; cased or cemented wells resulting in below ground migration of gases and liquids; inadequately treated wastewater discharged into drinking water resources; and spills of hydraulic fluids and hydraulic fracturing wastewater, including flowback and produced water.” “EPA’s review of data sources available to the agency found specific instances where well integrity and waste water management related to hydraulic fracturing activities impacted drinking water resources, but they were small compared to the large number of hydraulically fractured wells across the country. e report provides valuable information about potential vulnerabilities, some of which are not unique to hydraulic fracturing, to drinking water resources, but was not designed to be a list of documented impacts.” ese points are reasonable and valid points; consequently, when the industry focuses on these and properly follows the rules and regulations governing it, these instances can be avoided to avert drinking water contamination. Mike Krancer, former Secretary of the Pennsylvania Department of Environmental Protection (DEP) and now Partner and head of the energy industry team at Blank Rome LLP in the firm’s Philadelphia office, relayed, “e long awaited EPA Assessment of the Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources has been released in draſt form. ere will undoubtedly be a river of ink spilled on analysis of the Assessment in the coming days, weeks, and years.” Krancer explained, “From my chair, the bottom lines are these: e tremendous surge in production made possible by horizontal drilling and hydraulic fracturing has brought economic benefits to many areas of the United States and, through, increased domestic energy supplies has made the United States more secure; EPA RELEASES ASSESSMENT ON HYDRAULIC FRACTURING/WATER STUDY
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Page 1: Page 22 The Northeast ONG Marketplace FINANCE EPA … · 2016-03-26 · In 2004, the Evaluation of Impacts to Underground Sources of Drinking Water by Hydraulic Fracturing of Coalbed

Page 22 The Northeast ONG Marketplace

LEGAL &FINANCE

By: Kristie Kubovic, Director of Communications, Shale Media GroupEdited By: Mindy Gattner, Editor, Shale Media Group

Unbeknownst at the time, Range Resources changed southwestern Pennsylvania in 2004 by drilling the first vertical Marcellus Shale well. When Range went public in 2008 with the drillable discovery of the Marcellus Shale, it started a snowball effect, changing the surrounding region and eventually the United States’ energy position in the world. As it turns out,

the Marcellus Shale play is now the largest source of natural gas in the United States and the world’s second largest gas supply.

A combination of the technological advancements of horizontal drilling and hydraulic fracturing at the time helped propel this process. Horizontal drilling is actually a combination of vertical and horizontal drilling, where producers drill vertically, then turn the well bore and drill horizontally in different directions, similar to the spokes on a wagon wheel.

After the well is completed, the process of hydraulic fracturing is employed. Hydraulic fracturing is a technique used to release natural gas and oil from subterranean rock deep under the earth’s surface. In the process, water, which is mixed with other compounds like sand, is pressurized and pumped into the ground to fabricate cracks (also known as fractures or fissures) in the rock. These cracks act like veins and allow the release of oil and natural gas to the well. The utilization of horizontal drilling in conjuncture with hydraulic fracturing bolsters producers’ ability to draw oil and gas from the nation’s various shale formations and allows even higher volumes of gas to be extracted.

The growth of the shale oil and gas industry has elevated environmental and health concerns, including the potential effects on drinking water. Even though hydraulic fracturing occurs thousands of feet below water tables, there have been claims that hydraulic fracturing changes the quality of the local water supply. The Environmental Protection Agency (EPA) has scrutinized the validity of these claims and studied the impact of hydraulic fracturing. Consequently, different studies have drawn the same conclusion: “hydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources.”

In 2004, the Evaluation of Impacts to Underground Sources of Drinking Water by Hydraulic Fracturing of Coalbed Methane (CBM) Reservoirs national study final report stated, “EPA has published a final report summarizing a study to evaluate the potential threat to underground sources of drinking water (USDWs) from the injection of hydraulic fracturing fluids into coalbed methane (CBM) production wells. … The Agency has concluded that the injection of hydraulic fracturing fluids into CBM wells poses minimal threat to USDWs. In its review of incidents of drinking water well contamination believed to be associated with

hydraulic fracturing, EPA found no confirmed cases that are linked to fracturing fluid injection into CBM wells or subsequent underground movement of fracturing fluids. Further, although thousands of CBM wells are fractured annually, EPA did not find confirmed evidence that drinking water wells have been contaminated by hydraulic fracturing fluid injection into CBM wells.”

In 2009, Congress requested the EPA revisit hydraulic fracturing to study the relationship between hydraulic fracturing and drinking water. In 2011, the EPA released a detailed plan of the extensive, multi-year study. On Thursday, June 4, the EPA finally released the draft form of the Potential Impacts to Drinking Water Resources from Hydraulic Fracturing Activities assessment.The assessment followed the water used for hydraulic fracturing from water acquisition, chemical mixing at the well pad site, well injection of fracking

fluids, the collection of hydraulic fracturing wastewater (including flowback and produced water), and wastewater treatment and disposal. According to the EPA’s news release, the assessment revealed “hydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources.”

As with any industry, there is the potential for and consequences from human mistakes and equipment failures. The assessment also identified important vulnerabilities to drinking water resources from activities associated with hydraulic fracturing. “These vulnerabilities to drinking water resources include: water withdrawals in areas with low water availability; hydraulic fracturing conducted directly into formations containing drinking water resources; cased or cemented wells resulting in below ground migration of gases and liquids; inadequately treated wastewater discharged into drinking water resources; and spills of hydraulic fluids and hydraulic fracturing wastewater, including flowback and produced water.”

“EPA’s review of data sources available to the agency found specific instances where well integrity and waste water management related to hydraulic fracturing activities impacted drinking water resources, but they were small compared to the large number of hydraulically fractured wells across the country. The report provides valuable information about potential vulnerabilities, some of which are not unique to hydraulic fracturing, to drinking water resources, but was not designed to be a list of documented impacts.” These points are reasonable and valid points; consequently, when the industry focuses on these and properly follows the rules and regulations governing it, these instances can be avoided to avert drinking water contamination.

Mike Krancer, former Secretary of the Pennsylvania Department of Environmental Protection (DEP) and now Partner and head of the energy industry team at Blank Rome LLP in the firm’s Philadelphia office, relayed, “The long awaited EPA Assessment of the Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources has been released in draft form. There will undoubtedly be a river of ink spilled on analysis of the Assessment in the coming days, weeks, and years.”

Krancer explained, “From my chair, the bottom lines are these:• The tremendous surge in production made possible by horizontal drilling

and hydraulic fracturing has brought economic benefits to many areas of the United States and, through, increased domestic energy supplies has made the United States more secure;

EPA RELEASES ASSESSMENT ON HYDRAULIC FRACTURING/WATER STUDY

Page 2: Page 22 The Northeast ONG Marketplace FINANCE EPA … · 2016-03-26 · In 2004, the Evaluation of Impacts to Underground Sources of Drinking Water by Hydraulic Fracturing of Coalbed

Page 23July 2015

• There are above and below ground mechanisms that need to be managed responsibly because, like with any other activity, there is a potential, if mismanaged, to adversely impact environmental resources;

• There have been certain isolated incidences where mistakes in practice or accidents (such as spills or faulty well construction) have caused temporary very limited adverse impacts to certain drinking water supplies;

• There is no evidence that these mechanisms have led to widespread, systematic impacts on drinking water resources in the United States; and

• There is no evidence that hydraulic fracturing itself has caused adverse impacts to drinking water resources.

Translation: hydraulic fracturing can be done responsibly and safely.”

Additionally, Krancer expressed, “One part of the Assessment that is particularly happy for me to read is in the section regarding treatment and disposal methods for hydraulic fracturing wastewater. The EPA reports that “treatment of hydraulic fracturing wastewater by POTWs [publicly owned treatment works] was used in the past in Pennsylvania. This decreased sharply following new state-level requirements and a request by the Pennsylvania Department of Environmental Protection (PA DEP) for well operators to stop sending Marcellus Shale wastewaters to POTWs (and 15 CWTs [centralized waste treatments]) discharging to surface water.””

“This was an example of cooperation from one Gubernatorial administration

to the next—one Democrat and mine Republican–in doing the right things to assure responsible energy development and to protect drinking water supplies. It

was Secretary John Hanger’s DEP under Governor Rendell who put into place the new regulations regarding Total Dissolved Solids discharges. Then it was me when I was Secretary, under Governor Corbett, who discovered that the few grandfathered facilities (which had been excluded from the new regulations) were posing a back-door threat and we acted to shut that down with our ‘call’ to drillers which worked to dry up any further supply to those facilities. In what should be a model for the nation, both sides of the aisle can and do cooperate in Pennsylvania in providing for responsible energy development,” added Krancer.

The EPA news release said the “EPA’s draft assessment benefited from extensive stakeholder engagement conducted across the country with states, tribes, industry, non-governmental organizations, the scientific community, and the public to ensure that the draft assessment reflects current practices in hydraulic fracturing and utilizes all data and information available to the agency.” Additionally, Dr. Thomas Burke, Deputy Assistant Administrator of the Office of Research and Development and Science Advisor, EPA, relayed, “It is the most complete compilation of scientific data to date, including over 950 sources of information, published papers, numerous technical reports, information from stakeholders, and peer-reviewed EPA scientific reports.”

In summary, the EPA assessment concluded that hydraulic fracturing is safe, but mistakes associated with hydraulic fracturing closer to the surface could affect drinking water. However, by following proper protocol, these mistakes could be avoided. The study will be finalized after review by the Science Advisory Board and after a period of public review and comment. For a copy of the study, visit www.epa.gov/hfstudy.

Shale Media Group (SMG) is the news, information, and education resource dedicated to the shale oil and gas industries by messaging across video, Internet, publications, events, and radio. For more, check out ShaleMediaGroup.com to access all platforms. In addition, join us on July 30th for our next Elite Energy Event in front of the Holiday Inn Express in Bentleyville, PA from 5-8pm. Kristie Kubovic is the Director of Communications at Shale Media Group. Contact her at [email protected].

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