1. Hydraulic Fracturing Best Management Practices Environmentally Friendly Drilling Program John Michael Fernandez Matthew Gunter

2. Objectives of Presentation Introduce and describe hydraulic fracturing Present environmental concerns Discuss best management practices

3. US Shale Plays

4. Major Shale Plays with Hydraulic Fracturing Bakken o North Dakota, Montana, Canada o Oil Barnett o Texas (DFW Area) o Natural Gas Eagle Ford o South Texas o Oil and Natural Gas Haynesville o Texas, Louisiana o Natural Gas Marcellus o Pennsylvania, Ohio, New York, West Virginia o Natural Gas Woodford o Oklahoma o Oil and Natural Gas

5. What is Hydraulic Fracturing? Hydraulic fracturing is a process used to stimulate wells in tight, shale reservoirs. Uses water, sand and chemicals to extend, prop open fractures to allow for the flow of oil and natural gas.

6. Hydraulic Fracturing Process Drill the well o Some only vertical o Some have horizontal lateral Case and Cement possible hazard areas o Pressure zones o Ground Water Areas Perforate casing and cementing with Perforating Gun o Begins fracture process in rock formation Pump fracturing fluid down hole o High pressured fluid extend fractures Production

7. Casing and Cementing Casing and cementing a wellbore is used to: o Protect groundwater from contamination o Keep integrity of well-bore Casing is steel pipe that is designed to handle: o over- or under-pressured zones and o high tensile stresses down hole Casing is cemented in place to safely deliver hydrocarbons to the surface

8. Perforating the Formation Perforated using a “perf gun” o Perforating guns use explosive charges to fracture: o Casing o Cementing o Formation

9. Fracturing Fluid 98-99.5% Water and Sand The other 0.5-2%: o Additives that enhance fracturing o Many additives are used to protect casing, cementing, and well integrity 3-7 million gallons of fluid used in typical horizontal well

10. Proppant Sand pumped down hole is known as proppant o Keeps fractures “propped” open Comes in three major forms o Untreated sand o Resin-coated Sand  Coated for strength in harsh conditions o Ceramic  Artificial Proppant, very strong at high pressures  Said to be in shortage, more using resin-coated sand Selected based on strength needed and size

11. Chemical Additives Common Additives include: o Acids, Biocides, Gelling Agents, pH Adjusting Agents, Corrosion Inhibitors, Iron Control, Clay Stabilizer, Acid Inhibitor o Other additives could be used depending on well characteristics o Additives considered harmful are often found in household items

12. Hydraulic Fracturing Animation

13. Environmental Concerns Chemical concerns o Pumping chemicals near water table o Failure in pits and liners could leak chemicals High water usage Air Emissions from truck use Surface Area used

14. EPA Study Looking into groundwater protection Major areas of study include: o Water acquisition o Chemical Mixing o Well Injection o Flowback and Produced Water o Wastewater treatment/disposal

15. Water Table Safety – Fracture Facts Fractures are necessary for hydrocarbons to flow from the tight shale formations Fractures are typically thousands of feet below water table They extend only hundreds of feet at most in any given direction

16. Hydraulic Fracturing BMPs “Green Frac” Program Idea o Chesapeake Energy Refracturing wells o Restimulation via fracturing again Closed-loop Fracturing System o Chief Oil and Gas one of many users Pad Drilling o Drills multiple wells from same pad site Centralized Fracturing o Fracturing multiple wells from central pad

17. Green Frac Program Program instituted by Chesapeake Energy o October 2009 Researching additives to: o Find which are unnecessary o Find which are necessary, but harmful o Find more environmentally friendly replacements for harmful additives Specific findings are proprietary information

18. Refracturing Wells Used to restimulate wells with production slowed Reduces surface area taken by taking away need for new well for oil and gas 85% of success found in 15% of total wells drilled o Not universally successful When successful, greatly increases production

19. Closed Loop Fracturing System Rather than using water only once and putting in large pits, the frac fluid is circulated and stored in large steel tanks Solids are removed from water using mechanical and chemical methods Compared to older methods, CLF is o Environmentally friendly o Economically efficient

20. Environmentally Friendly CLF Takes away use of pits and liners o Pits and liners have been known to burst, releasing chemicals onto surface o Stores in large, sturdy steel tanks Uses much less water o Water is reused throughout fracturing process o Reduces water usage by as much as 80% Reduces truck traffic o Truck loads have been observed to reduce by up to 75% o Reduces air emissions and traffic congestion

21. Economically Efficient Water usage is reduced Truck mileage is also reduced Companies who have drilled similar wells using CLF have saved about $10,000 in overall expenses compared to conventional drilling

22. Pad Drilling Drills multiple wells from single pad site Allows for centralized fracturing o Fracturing from single location for multiple wells Reduces acreage necessary for wells Reduces truck traffic for making pad site Enhances closed loop systems

23. Centralized Fracturing Fracing multiple wells on a site from a single, central pad o Fraced up to 140 wells from single site o Fraced up to 3 miles away Significantly reduces truck traffic and time expended o Truck traffic was reduced by up to 30% for a single well, up to 90% for the site as a whole o Time was reduced by up to 80% to drill, complete the well When used with closed loop and pad drilling, saves even more truck traffic and water used

24. Past, Present, and Future Best Management Practices

25. Conclusion Hydraulic fracturing is the future of the energy industry There are environmental risks involved BMPs could be the answer to put unease at rest When used in combination, BMPs can be even more effective. Questions?