April 12, 2012 Shale Gas Extraction

The Utica and Marcellus Plays Utica and Marcellus Shale are in the Appalachian Basin Currently ~14,000 active gas wells in NY State

Relative & Approximate Depth

Drilling Not inconsequential effort 6 acre pad is typical. Drill cuttings, water storage ponds, etc.

Typical Gas Well X-Section Multiple Layers of Steel Casing and Cement Grout

Vertical & Horizontal Drilling Well typically drilled vertically to 500 above Marcellus Shale Curve from vertical to horizontal approximately 1,200 linear feet Continues horizontally for several thousand feet Final casing string cemented in place at end of well bore Approximately 15 to 30 days required to drill a horizontal Marcellus well Example illustrates 7,000 depth to shale (Typical for Pennsylvania)

Multiple Wells from a Single Pad Line = 1,000 feet

Hydraulic Fracturing Intensive 24-hour operation, typically taking place over several days to stimulate the entire horizontal wellbore. High-volume fracturing used for horizontal well development Process begins by perforating casing, cement and shale with perforating gun Charge from gun opens fissures in shale to release natural gas, sand necessary to expand and prop open fissures Water & additives injected under high pressure to carry sand into fractures

Hydraulic Fracturing Perforate the well casing & grout in sections Pressure & Volume highly dependent upon local geology Proppant (typically sand) keeps the fractures open

Hydraulic Fracturing 20% – 30% returns as “Flow-back” water within a few days; “produced water” follows Recycling or T&D Pennsylvania AMD Re-use?? > 1.2 Million wells hydraulically fractured in the US since 1949 “Typical” Fracture Fluid ~ 99.5% Water & Sand Remaining ~0.5% Surfactant Gelling Agent Friction Reducers Acid Biocide & Others 500,0000 to 4.0M gallons water/Marcellus well

Water Consumption 5,930 Millions of Gallons per Day 1,680 1,550 268 6,000 5,000 4,000 3,000 2,000 1,000 Power generation Industrial Public Water systems Other Mining Marcellus Shale Drilling 182 60 Millions of Gallons per Day