Shale Gas - Risks & Overview

What IsAcceptable Shale Oil and Gas

Development?

What IsAcceptable Shale Oil and Gas

Development?

Shale gas characteristics

• Two key technologies: Horizontal drilling and hydraulic fracturing

• Large areas

• Vast numbers of wells

• The true extent of reserves in a given play emerges only with Multiple wells

Source: Geology.comSource: Irvine Energy plc

Important distinctions

Conventional vs unconventional

High quality conventional gas

Low quality conventional gas

Tight gas

Coalbed methane Shale gas

Gas hydrates

Conv

entio

nal

Unco

nven

tiona

l

Volume

Tech

nolo

gica

l req

uire

men

ts, c

osts

Free vs associated• Natural gas may be free or associated, i.e., dissolved in

oil or located in a cap of free gas above the oil • Associated gas may have low production costs but may

also as a by-product present inflexibility problems – A challenge to OPEC oil producers

• Associated gas may be marketed but is often reinjected or flared

Source: World Bank’s GGFR Programme

Shale gas opportunities outside North America

• Most screening to date has amounted to looking for analogues to the successful US shale basins• Key criteria:

– Onshore– Gas prone – Organically rich– Volumetrically extensive– Thermally mature – Passable permeability– Brittle– Frac barriers– Shallower than 4000 m

• Also favourable fiscal framework conditions, availability of land, availability of services, infrastructure, gas demand, local support…

• Tough to find opportunities that match all requirements!

What is ACCEPTABLE?

MitigateEnvironmental and Community

Concerns

The right set of practices?

The right set of regulations?

Current Practices

Community andEnvironmental Risks

Community and Environmental Risks

Which Risk Scenario Do You Believe? A B

Current PracticesDesigned to

Mitigate Risks

Center for Strategic and International StudiesWashington D.C.Strategic insight, bipartisan policy

Excess noise, road

damage

Induced Seismicity

Air QualityNon-

attainment

State regulations

Injectionvolumes

Increased traffic

accidents

% waterrecycled

ExcessiveGHG

Emissions

Disposal methods/volumes

GW Degradation

Surface Water

Degradation

Regional Water

Depletion

Ecosystem Degradation

Land Disturbance

PW/FFvolumes

Shale GasDevelop

ment

RISKS

RISK FACTORS

Air Issues

Community Impacts

Water Issues

Land Issues

Ruleviolations

Regional water use

% waterrecycled

Federal regulations

Well casing procedure

Fresh water use

# of wells

Ruleviolations

# of horizontal

wells

Fresh Water use

State regulations

PW/FFvolumes

# of horizontal

wells

# of wells

% waterrecycled

Disposal methods/volumes

# of wells

Pad density

Disposal methods/volumes

% green completions

% waterrecycled

% waterrecycled

% waterrecycled

% waterrecycled % waterrecycled

Water Sources and Demand for the Hydraulic Fracturing of Oil and Gas Wells in Colorado from 2010 through 2015Colorado Division of Water ResourcesColorado Oil and Gas Conservation CommissionColorado Water Conservation Board

http://cogcc.state.co.us/Library/Oil_and_Gas_Water_Sources_Fact_Sheet.pdf

WATER ACQUISITIONApproximately 3 MG is required for HF of horizontal wells

Potential Impact:• Regional water supplies can be depleted• Transport of water can lead to excess truck traffic

CHEMICAL MIXINGWater is combined with proppant and chemicals to make HF fluid.

Potential Impact:• Spills or leaks can contaminate ground or surface water

WELL INJECTIONPressurized HF fluid is injected into well to create fractures

Potential Impact:• Breach of well casing can contaminate aquifer• Fractures can intersect natural fractures contaminating aquifers

FLOWBACK AND PRODUCED WATERWhen pressure in the well is released, HF fluid, formation water and gas flow back. These fluids are temporarily stored on site.

Potential Impact:• Spills or leaks can contaminate ground and surface water.• Gases can be released

WASTEWATER TREATMENT AND DISPOSALWastewater must be disposed either through injection, evaporation or recycling/reuse.

Potential Impact:• Faulty disposal methods could lead to contamination of water resources.

Excess noise, road

damage

Induced seismicity

Air qualitynon-

attainment

State regulations

Injectionvolumes

Increased traffic

accidents% waterrecycled

ExcessiveGHG

emissions

Disposal methods/volumes

Drinking water contamination

Water quality

degradation

Regional water

depletion

Ecosystem degradation

Land disturbance

PW/FFvolumes

Shale GasDevelop

ment

RISKS

RISK FACTORS

Air Issues

Community Impacts

Water Issues

Land Issues

Ruleviolations

Regional water use

% waterrecycled

Federal regulations

Well casing procedure

Fresh water use

# of wells

Ruleviolations

Degree ofmonitoring

Fresh Water use

State regulations

PW/FFvolumes

# of horizontal

wells

# of wells

% waterrecycled

Disposal methods/volumes

# of wells

Pad density

Disposal methods/volumes

% green completions % water

recycled

HAP health impacts

Degree of monitoring

Ruleviolations

Setbackrule

Setbackrule

Materials and Energy Balance for Oil and Gas Well

Cflowback

Well

Edrilling Efrac

Ein

EoilEgas

Qdrill

Qfrac

Qflowback

QproducedCproduced

Water Treatment and

Disposal

Qrecycle

Crecycle

Etreat

QevapQinject

ENERGY IN

ENERGY OUT

WATER IN

WATER OUT

Wattenberg Field

Water Intensity

Cflowback

Well

Edrilling Efrac

Ein

EoilEgas

Qdrill

Qfrac

Qflowback

QproducedCproduced

Water Treatment and

Disposal

Qrecycle

Crecycle

Etreat

QevapQinject

ENERGY IN

ENERGY OUT

WATER IN

WATER OUT

Fluids Management

Air Toxics

Frac flowbackhandling

Water Disposal

Truck Traffic

WaterAcquisition

Road Damage

GHG Emission

s

Surface Spills

GW Degradation

Surface Water

Impacts

WaterUse

Regional Water

Depletion

Ecosystem Impact

Air Issues

Community Impacts

Water Issues

Land Issues

Land Disturbance

Well paddesign

Leaks

Truck traffic

Excess noise, road

damage

Induced seismicity

Air qualitynon-

attainment

State regulations

Injectionvolumes

Increased traffic

accidents% waterrecycled

ExcessiveGHG

emissions

Disposal methods/volumes

Drinking water contamination

Water quality

degradation

Regional water

depletion

Ecosystem degradation

Land disturbance

PW/FFvolumes

Shale GasDevelop

ment

RISKS

RISK FACTORS

Air Issues

Community Impacts

Water Issues

Land Issues

Ruleviolations

Regional water use

% waterrecycled

Federal regulations

Well casing procedure

Fresh water use

# of wells

Ruleviolations

Degree ofmonitoring

Fresh Water use

State regulations

PW/FFvolumes

# of horizontal

wells

# of wells

% waterrecycled

Disposal methods/volumes

# of wells

Pad density

Disposal methods/volumes

% green completions % water

recycled

HAP health impacts

Degree of monitoring

Ruleviolations

Setbackrule

Setbackrule

RISK or CONCERNAir toxics released during well

development/operation impact health

Develop baseline, is it being maintained? MEASURE & REPORT

Real-time monitoring of VOCs in air

Compare measurements to baseline

BEST PRACTICES1) Utilize reduced emission

“green completion” techniques

2) Use closed loop fluid handling methods to prevent release of

VOCs

Use air quality data to evaluate practice efficacy

Potential Solution Framework

Potential Solution Framework

Water qualitysensors

Air qualitysensors Telemetry Public Web

Interface