1. As the EPA Investigates Hydraulic Fracturing’s Impact on Drinking Water How Should the State React? © 2011 Heather Ash

2. Resource Geography Orange  Williston Basin Green  Bakken 25,000 sq. mile resource Blue  Three Forks Beneath Bakken Source: Energy Policy Research Foundation © 2011 Heather Ash

3. Bakken Geology A Light Tight Oil Play Upper Shale Black Organic Rich Shale Middle Dolomite Principal Resource Lower Shale Black Organic Rich Shale Source: Energy Policy Research Foundation © 2011 Heather Ash

4. Accessing the Mid-Layer Horizontal Drilling: Conventional vertical well to kickoff Kickoff  500 ft above target Flexible drill string 90 Degree Bend Horizontal Segment  10,000 ft Benefits: Decreased Environmental Footprint Increased Production © 2011 Heather Ash

5. Taping the Shale Hydraulic Fracturing: Horizontal wellbore is perforated Fracturing fluid pumped downhole Water + Propant + Chemical Additives = Fracturing Fluid 40-100 hours of total wellbore pressurization Fluid pumped off of well Propant remains to ensure fractures do not heal Source: DMR Newsletter Vol. 35, No. 1

6. What’s the Big Deal with Fracing? © 2011 Heather Ash

7. National Fracing Concerns Water Quality: Aquifer Contamination Errant Fractures Natural gas migration to drinking water resources Water Use: Approx 5 million gallons EPA Coalbed Methane Study: “No unequivocal evidence” of health risks associated with hydraulic fracturing. (2004) © 2011 Heather Ash

8. Impact Study Prescribed Congress calls upon EPA: Relationship between fracing and drinking water Full lifecycle of fracing H2O Retrospective case studies Prospective analysis © 2011 Heather Ash

9. Full Industrial Cooperation September 2010: EPA issued a voluntary information requests Rumours of non-disclosure November 2010: 8 of 9 operators comply with EPA’s request Halliburton refuses EPA request claiming trade secret December 2010: Halliburton voluntarily complies with EPA © 2011 Heather Ash

10. North Dakota’s Sentiments 2010-2011 1) NDIC encourages formal complaint 2) NDIC spokesman indicates fracing in ND will be abandoned if heightened regulations are imposed 3) House Bill #1216 declares fracing acceptable practice Bill Sponsor : “It is important to have a defensive measure in case there are problems down the road with EPA” Source: Rebecca Beitsch, Gov. Hoeven: Tell EPA that N.D. can Handle Fracturing, B ISMARK T RIBUNE, May 16, 2010. Source: Chevron Texaco Corp. © 2011 Heather Ash

11. Current Permitting Requirements N.D.A.C. 43-02-03-16 Surveyor Certified Plat & Drill Plan: Drill Location Drill Pad Layout & Well Depth Mud, Casing & Cement Programs Information as requested by director © 2011 Heather Ash

12. Note Proposal: Content: Physical & vegetative setting of drill site Current land use & projected disruption Erosion & reclamation plans Benefits: Protects environmentally fragile areas Promotes evaluation of site specific concerns Successful Implementation: Colorado – Green River Basin Alabama – Black Warrior Basin Pennsylvania – Marcellus Shale New York – Marcellus Shale © 2011 Heather Ash

13. Note Proposal: Benefits: Does not effect production numbers Bonds returned to operator with N.D.C.C. compliance Promotes safe practices and operating procedures Successful Implementation: Pennsylvania State Parks Offshore Drilling Operations © 2011 Heather Ash

14. NDIC Proposed Amendments 2012 Single Well Blanket Bond 2 – 9 Wells10+ Wells $50,000$100,000 2+ Wells $100,000 $20,000$50,000 © 2011 Heather Ash

15. Note Proposal: Current ND Regulations: Fluid Composition Disclosure: Offsite Spill On-site Spill in excess of 42 gallons Benefits of Disclosure: Increased Emergency Response Capabilities Ability to Track Contamination No Added Cost to Operators Movement Towards Full Disclosure: Halliburton & Range Resources Electronic Disclosure Successful Implementation – Wyoming © 2011 Heather Ash

16. NDIC Proposed Amendments 2012 New Administrative Code Section: 43-02-03-27.1 - Hydraulic Fracture Stimulation FracFocus Chemical Disclosure Registry: Operator Name Well Location Chemical Ingredients Used to Frac Chemical Supplier Purpose of Chemical Application © 2011 Heather Ash

17. EPA Study Well Underway Science Advisory Board Approval: Public Meetings & Comment Tribal and State Consultations Primary Prospective Test Sites: Haynesville Shale – Louisiana Marcellus Shale – Pennsylvania Retrospective Test Sites: Bakken Shale - Killdeer and Dunn Counties Production well failures Suspected aquifer contamination Interim Study Results – 2012 Published Report – 2014 © 2011 Heather Ash