1. University of Colorado Law School June 6, 2014 Mark K. Boling President EXPLORING NEW FRAMEWORKS OF REGULATION: NEGOTIATING MODEL REGULATIONS

2. The Economy The Environment Energy Security Hydraulic Fracturing Debate Public Distrust and Fear Natural Gas Industry Certain Environmental Activists/Groups Politics Guiding Policy THE PERFECT STORM THE PERFECT STORM

3. Refocusing the Debate Dial Down the Rhetoric Identify the Real Obstacles to Responsible Development of this Resource Develop Workable Solutions to Overcome these Obstacles 2

4. Development Considerations 3 Surface Considerations Subsurface Considerations

5. Surface Considerations 4 Air Emissions VOC’s/Methane Criteria Pollutants Hazardous Air Pollutants Water Impacts Water Use Water Handling Water Reuse & Disposal Surface Impact Drilling Locations Truck Traffic & Road Damage Infrastructure

6. Subsurface Considerations 5 Protecting Underground Water Resources Frac Fluid Disclosure

7. Protecting Underground Water Resources 6 Well Integrity Is the Key!

8. Well Integrity 7 Well Construction Standards 2 Evaluate Stratigraphic Confinement 1 Evaluate Mechanical Integrity of Well 3 Monitor Frac Job & Producing Well 4

9. FRESH WATER AQUIFER ZONE SHALLOW PRODUCING ZONE CONDUCTOR PIPE SURFACE CASING PRODUCTION CASING TARGET PRODUCING ZONE GOOD MECHANICAL INTEGRITY

10. CEMENT CHANNELING PRESSURE BUILDS UP PRESSURE BUILDS UP CONDUCTOR PIPE SURFACE CASING PRODUCTION CASING FRESH WATER AQUIFER ZONE SHALLOW PRODUCING ZONE TARGET PRODUCING ZONE CASING CEMENT FORMATION

11. Negotiating Model Regulations – Other Examples Frac Fluid Disclosure VOC/Methane Emissions Wastewater Treatment Water Disposal/Triggered Seismicity 10

12. PERCEIVED RISK ACTUAL RISK INFORMATION GAP Smart Regulation = Effective Risk Management 11 ACTUAL RISK PERCEIVED RISK COLLABORATION AND RISK COMMUNICATION SMART REGULATION PERCEIVED RISK ACTUAL RISK PUBLIC TRUST & ACCEPTANCE ACTUAL RISK PERCEIVED RISK SMART REGULATION PERCEIVED RISK ASSESSED RISK COLLABORATION AND RISK COMMUNICATION PUBLIC TRUST & ACCEPTANCE

13. University of Colorado Law School June 6, 2014 Mark K. Boling President EXPLORING NEW FRAMEWORKS OF REGULATION: NEGOTIATING MODEL REGULATIONS