Hydraulic Fracturing in Virginia Michael A. Skiffington Policy and Planning Manager Virginia Department of Mines, Minerals and Energy League of Women Voters Richmond, VA – October 27, 2016

ORGANIZATIONAL CHART DA = Administration DE = Energy DGMR = Geology DGO = Gas & Oil DM = Mine Safety DMM=Mineral Mining DMLR= Mined Land Reclamation

DMME’s MISSION We enhance the development and conservation of energy and mineral resources in a safe and environmentally sound manner to support a more productive economy.

DMME STRATEGIC PLAN Goal 1: Goal 2: Goal 3: Provide for safe and environmentally sound mineral and energy resource production. Goal 2: Encourage economic development through our customers’ wise management of Virginia’s resources. Goal 3: Enable DMME personnel to perform at their full potential.

2015 Gas Production in Virginia

2015 Producing Gas Wells in Virginia

Trend of Horizontal Wells Number of Producing Wells

WHAT IS HYDRAULIC FRACTURING? Involves the use of pressurized liquids or gases such as nitrogen to stimulate or fracture rock formations to release the natural gas or oil. The composition and volume of fluids used depend on many geological factors.

WHAT IS HYDRAULIC FRACTURING? Sand is often pumped in with the fluids to help prop the fractures open. Fracturing, along with horizontal drilling, has made previously inaccessible natural gas and petroleum resources producible in economic quantities. The application of these technologies has greatly expanded U.S. oil and natural gas production over the past ten years.

FRACKING IN VIRGINIA Technique has been utilized in the Commonwealth since the 1960s. Over 8,000 wells have been fracked in Southwest Virginia. There have been no documented instances of surface or groundwater degradation from fracking in Virginia.

FRACKING IN VIRGINIA Hydraulically fracked wells in Virginia typically require 0-300,000 gallons of water. Increasingly, operators are utilizing nitrogen- based foam to frack wells. By contrast, fracked wells in the Marcellus shale can use 4-5 million gallons of water.

REGULATORY UPDATE A comprehensive re-write of the regulations began in 2007 and was completed in 2013. In the fall of 2013, DMME initiated a new regulatory action to review its requirements for drilling. Chemical disclosure requirements Review of selected industry best practices Review to determine if additional requirements are necessary for different regions of the Commonwealth

NOIRA STAGE The Notice of Intended Regulatory Action was published on January 13, 2014. DMME received over 200 comments during the 30 day public comment period. These comments supported disclosure of ingredients used in fracturing process.

PUBLIC/STAKEHOLDER INVOLVEMENT DMME formed a Regulatory Advisory Panel (RAP) to offer recommendations in selected areas. Wide variety of stakeholders involved. DEQ DGIF Local government Environmental community Gas Industry

RAP MEETINGS Six meetings were held between June 2014 and January 2015 Public meetings across the Commonwealth Three in Richmond Two in Southwest Virginia (Abingdon, Lebanon) One in King George County (Dahlgren)

RECOMMENDATIONS The RAP offered 14 recommendations addressing the following areas: Chemical disclosure Groundwater protection Well integrity Drilling in different regions of the Commonwealth

HIGHLIGHTS All 14 recommendations have been incorporated. Additionally, the proposed regulations codified an existing Memorandum of Agreement between DMME and DEQ related to potential future activity in Tidewater.

PROPOSED STAGE Draft proposed regulations were submitted for executive branch review in April 2015. Proposed regulations were published in October 2015. 60 day comment period opened.

PROPOSED STAGE DMME held three hearings to accept public comment. Richmond Lebanon Dahlgren DMME received over 1,000 comments during the comment period.

FINAL STAGE Final regulations are currently under executive branch review. Department of Planning and Budget Secretary of Commerce and Trade Governor’s Office

FINAL STAGE Once approved by the Governor’s Office, the final regulation will be published in the Register. Becomes effective after a 30 day final adoption period.

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Thank You! Michael A. Skiffington DMME Policy and Planning Manager 804.692.3212 michael.skiffington@dmme.virginia.gov http://dmme.virginia.gov http://dmme.virginia.gov/DGO/RegulatoryActi on.shtml