19
WESTERN STATES PETROLEUM ASSOCIATION Hydraulic Fracturing and Energy Production in California Western States Petroleum Association June 2013 WESTERN STATES PETROLEUM ASSOCIATION
WESTERN STATES PETROLEUM ASSOCIATION
Hydraulic Fracturing and Energy Production in California
Western States Petroleum Association June 2013
WESTERN STATES PETROLEUM ASSOCIATION
WESTERN STATES PETROLEUM ASSOCIATION
2
Monterey 15.4 Billion
Barrels 63% of US Shale Oil
Bakken 4 Billion Barrels
17% of US Shale Oil
Eagle Ford 3 Billion Barrels
12% of US Shale Oil
Avalon/Bone Springs
2 Billion Barrels 8% of US Shale
Oil
Shale Oil Resources in the United States
WESTERN STATES PETROLEUM ASSOCIATION
An Extraordinary Opportunity
“The fossil fuel deposits in California are incredible. “ Governor Jerry Brown
• “The potential is extraordinary,
but between now and their development lies a lot of questions that need to be answered.” Governor Jerry Brown.
3
WESTERN STATES PETROLEUM ASSOCIATION
A San Joaquin Valley California Opportunity According to the EIA, 15.4 billion
barrels of oil trapped in the pores of shale rocks in the San Joaquin Valley
Advanced-extraction oil technology: potential in CA
1750 square mile area represents 2/3rds of U.S. shale resources
Hydraulic fracturing used extensively in other states and in California for 60 years without harm to the environment
4
WESTERN STATES PETROLEUM ASSOCIATION
The Monterey Shale & California’s Economic Future
512,000 Jobs by 2015 and 2.8 million by 2020
2.6% to 14.3% State GDP Increase
$40.6 billion to $222.3 billion personal income increase
$4.5 - $24.6 billion state and local tax revenues increase
5
WESTERN STATES PETROLEUM ASSOCIATION
Shale Oil Benefits in Texas and North Dakota
Eagle Ford Shale Play (Texas)1 $61 billion economic
impact (2012) 116,000 jobs supported
(2012) $89 billion forecasted
economic impact (2022) 127,000 forecasted jobs
supported (2022)
Bakken Shale Oil Exploration (North Dakota)2
60,000 Jobs created (2011) $30.4 billion in economic
impact (2011) $2.65 billion in government
revenues (2011)
1: Economic Impact of the Eagle Ford Shale, Center for Community and Business Research-The University of Texas at San Antonio
2: North Dakota State University’s Department of Agribusiness and Applied Economics 6
WESTERN STATES PETROLEUM ASSOCIATION
What is Hydraulic Fracturing
Source: FracFocus, Courtesy of Texas Oil and Gas Association
7
WESTERN STATES PETROLEUM ASSOCIATION WESTERN STATES PETROLEUM ASSOCIATION
Hydraulic Fracturing: How Much, Where
568 wells fractured in 2012 according to FracFocus
2,705 well permits issued in 2012
48,970 wells currently producing oil and/or gas in CA
97 percent of hydraulic fracturing operations were in 2012 were in Kern County
Source: WSPA survey of FracFocus website 2012 data 8
WESTERN STATES PETROLEUM ASSOCIATION
A Well Completion Process
Permits are provided Well is drilled Well service company prepares well
for completion Pump trucks deliver pressurized
water into well, 99.5 percent of which is water and sand
Fluid is collected and disposed of pursuant to permits
Entire process takes 3 to 5 days Shale oil gathered
9
WESTERN STATES PETROLEUM ASSOCIATION
Hydraulic Fracturing and Water Use
10
In 2012, the average amount of water used during hydraulic fracturing operations was 116,000 gallons of water
The average golf course requires 312,000 gallons per day
The total amount of water used in the 568 wells that were hydraulically fractured in 2012 was 202 acre feet
Farming in California 2012 uses approximately 34 million acre feet of water annually
WESTERN STATES PETROLEUM ASSOCIATION
11
In October, 2012, an exhaustive year-long study at Inglewood Oil Field in Los Angeles looked at 14 environmental issues, including public health, groundwater, air quality, seismic, noise, vibration
All fractures separated from fresh water by at least 7,700 feet (1.5 miles) or more
No impacts to any of the 14 areas studies
October 10, 2012
Addressing Hydraulic Fracturing Concerns
WESTERN STATES PETROLEUM ASSOCIATION
Current Oversight
12
California Division of Oil, Gas & Geothermal Resources (DOGGR) proposed regulations
Draft regulations require: Advance notice to DOGGR before a well is fractured Enhanced testing and monitoring of fractured wells Safe storage and handling requirements of fracturing fluids Disclosure of chemicals
Provides protection of trade secrets
WESTERN STATES PETROLEUM ASSOCIATION
Additional State and Local Oversight
“The Water Boards’ existing statutory authorities and regulations are sufficient to minimize potential risks to water quality related to hydraulic fracturing activities.” February 6, 2013 letter from the State Water Resources Control Board to Senators Pavley and Rubio on regulating hydraulic fracturing.
“While we are not aware of any hydraulic fracturing used in natural gas production well development in the San Joaquin valley, fracturing has been used for at least thirty years in oil production operations, without creating known air issues, beyond those associated with other production methods.”
February 1, 2013 letter from the San Joaquin Valley Air Pollution Control District to Senators
Pavley and Rubio on regulating hydraulic fracturing.
13
WESTERN STATES PETROLEUM ASSOCIATION
U.S. on Hydraulic Fracturing “In no case have we made a definitive determination that the fracking
process has caused chemicals to enter groundwater.” U.S. Environmental Protection Agency Administrator Lisa Jackson, April 30, 2012
“I’m not aware of any proven case where the fracking process itself has affected water.”
U.S. Environmental Protection Agency Administrator Lisa Jackson, May 24, 2011
“There’s a lot of hysteria that takes place now with respect to hydraulic fracking, and you see that happening in many of the states. … My point of view, based on my own study of hydraulic fracking, is that it can be done safely and has been done safely hundreds of thousands of times.”
Former Secretary of the Interior Ken Salazar, February 15, 2012
14
WESTERN STATES PETROLEUM ASSOCIATION
Legislation Defeated AB 1323 (Mitchell) required moratorium while hydraulic fracturing was studies AB 288 (Levine) altered the state policy with regard to oil and gas wells AB 669 (Stone) contained a piece-meal approach on regulating hydraulic fracturing
activities SB 395 (Jackson) required produced water to be handled as hazardous material,
potentially impact all oil production in California AB 982 (Williams) required extensive ground water monitoring AB 649 (Nazarian) imposed immediate moratorium on hydraulic fracturing on any well
located within a certain distance from an aquifer AB 1301 (Bloom) imposed immediate moratorium on hydraulic fracturing until future
regulations are enacted SB 241 (Evans) imposed a 9.9% severance tax on all oil produced in California
15
WESTERN STATES PETROLEUM ASSOCIATION
Legislation
Adopted, Sent to Assembly
SB 4 (Pavley) requires the state’s Natural Resources Agency to conduct a study of hydraulic fracturing and mandates regulation of that practice. Sen. Pavley removed moratorium language and indicated she would work with the oil industry to develop comprehensive regulation of hydraulic fracturing activities.
Pending, Awaiting Committee Action
AB 7 (Wieckowski) provides a comprehensive regulatory structure for hydraulic fracturing, including full disclosure, pre-notification, water testing and produced water disposal provisions go beyond what DOGGR is proposing
16
WESTERN STATES PETROLEUM ASSOCIATION
17
Public Support for Regulated Hydraulic Fracturing
USC Dornsife/LA Times poll, June 7, 2013
Californians support hydraulic fracturing if properly regulated
41% of poll respondents said they supported hydraulic fracturing with additional regulations
19% said hydraulic fracturing was already regulated enough
30 percent opposed hydraulic fracturing under any circumstance
WESTERN STATES PETROLEUM ASSOCIATION
Legislature took a measured and responsible approach to hydraulic fracturing
All parties have a responsibility to acknowledge that:
There are legitimate issues related to hydraulic fracturing that must be addressed by regulators and the Legislature
Production of petroleum energy is a vital and necessary part of the California economy
A comprehensive regulatory package will sufficiently ensure that our state’s environmental health and natural resources are protected while safely using hydraulic fracturing technologies for energy production in California
18
Message: We Support Comprehensive, Fair Regulation
WESTERN STATES PETROLEUM ASSOCIATION WESTERN STATES PETROLEUM ASSOCIATION
THANK YOU!
19
www.wspa.org
