Dr. Jim Thomas Desert Research Institute “Fracking In Nevada” Dr. Jim Thomas Desert Research Institute

“Fracking in Nevada” Noble Energy is first company to do unconventional (hydraulic fracturing: “fracking”) oil exploration in Nevada Nevada Division of Mining is the state regulator for oil exploration in Nevada Nevada Division of Environmental Protection is state regulator for water quality

http://www. nobleenergyinc http://www.nobleenergyinc.com/_filelib/FileCabinet/PDFs/Presentations/Investor_Handout.pdf

Typical Life Cycle of Nevada Well Site Preparation: 30 − 60 Days Drilling: Typical development wells take 7 – 14 days Exploration wells may take up to 60 days Hydraulic Fracturing: 2 − 3 Days Evaluation of Facility Build: 30 − 60 Days Long-term Production: 20 − 30 Years Life of Well 7 – 60 days 2-3 days

Image source: www.cred.org

Conventional Reservoirs: Oil and gas get generated in the Shales, then migrates until it hits a permeability barrier, where it is trapped. If the Porosity and permeability of the rocks are sufficient, wells can be drilled to recover the hydrocarbons. Unconventional Reservoirs: Oil and gas generated in the shales, but can’t all migrate away since permeability is very low. Image source: http://www.wsgs.wyo.gov/research/energy/oil-gas/Reservoirs.aspx

OIL PRODUCTION & ACTIVITY IN NEVADA Field: bbls oil Eagle Springs 39,819 Trap Spring 143,909 Bacon Flat 6,447 Currant 194 Grant Canyon 50,517 Kate Spring 29,401 Duckwater 119 Sans Spring 1,318 Ghost Ranch 17,231 Sand Dune 2,567 Total RR Valley 291,522 Blackburn 40,392 Tomera Ranch 3,757 Total Pine Valley 44,149 Total Nevada 335,672 -8.8% from 2012

7 OIL EXPLORATION WELLS DRILLED 4 treated with HF 5 GEOTHERMAL EXPLORATION OR PRODUCTION

FOUR AGENCIES CAN BE INVOLVED WITH DRILLING AN OIL WELL IN NEVADA BLM – drilling on Federal lands, leasing process, NEPA process NDEP – Air permits for surface area disturbance, UIC permits if water is to be re-injected, water pollution control permits if water is to be discharged outside of containment. NDOM – Permits to drill on private/state lands, coordinates w/ BLM for drill permits on Federal lands. NDWR – For any water used in drilling, dust control or hydraulic fracturing

SB 390 NRS 522.119 NRS 522.119 Development of program; regulations. The Division of Minerals and the Division of Environmental Protection shall, jointly, develop a hydraulic fracturing program.

NRS 522.119 (SB390) Program to be developed by July 1, 2014 Regulations to implement the program to be adopted by January 1, 2015

DEVELOPMENT OF REGULATIONS Reviewed regulations of 32 current oil-producing states Reviewed BLM proposed rule on hydraulic fracturing Utilized Interstate Oil and Gas Compact Commission (IOGCC) resources on HF Staff discussed what works and what does not with regulators in Arkansas, California, Colorado, Kansas, North Dakota, Ohio, Pennsylvania, Texas and Utah. Borrowed portions of “rule 609” from Colorado’s recent update: water well sampling. Benchmarked regulatory elements with other States Comments from public workshops in March in CC, Elko, LV

HOW PROGRAM AND REGULATIONS ADDRESS SB390 (a) Assess the effects of hydraulic fracturing on the waters of the State of Nevada Permit application to include 1-mile radius Area of Review (AOR) Groundwater baseline sampling and monitoring of up to 4 available water sources within one mile radius of proposed well by operator before, and twice after HF treatment Source-control monitoring of well bore Aqua Study at DRI

Well construction regulations

HOW PROGRAM AND REGULATIONS ADDRESS SB390 (b) Require a person who engages in hydraulic fracturing to disclose each chemical used to engage in hydraulic fracturing; Division has approved list of HF chemicals on web site: http://minerals.nv.gov/Programs/Oil_and_Gas/ForOperators/ 30-day approval process for additions to list Division can deny use of any chemical proposed if deemed unsafe Operator to post information and chemicals used on a publically-available chemical disclosure registry http://fracfocus.org

HOW PROGRAM AND REGULATIONS ADDRESS SB390 (c) Provide for notice to members of the general public concerning activities relating to hydraulic fracturing in this state Approved Applications for Permit to Drill (APD’s) and Conditions of Approval (COA’s) on Division web site: http://minerals.nv.gov/ 14-day notification to land owners, county commission and Division prior to HF by operator