HYDRAULIC FRACTURING: THE FACTUAL RISKS -AND – THE HYPE

GEORGE E. KING, P.E.

A PRESENTATION TO THE SOUTH TEXAS SECTION OF AMERICAN INSTITUTE OF CHEMICAL ENGINEERS

8 JANUARY 2015

WHAT DO FRACTURES LOOK LIKE DOWNHOLE?

2

Fracturing involves pumping fluids down steel pipes to break rocks – we’re not “blasting” anything apart!

Typical fracture width is 0.01 to 0.25” and height is less than 300 ft in most cases.

HOW MUCH OF THE TOTAL US ENERGY SUPPLY DEPENDS ON FRACTURING?

3

1. Traffic Congestion and Trucks.

2. Water Usage and Consumption.

3. Seismic Disturbances (Earthquakes).

4. Chemicals.

5. Groundwater Protection.

6. Methane Migration.

7. Emissions.

8. Spills.

9. Climate Change Beliefs.

10. Delays Alternate Energy Development.

11. Competing Business Interests.

WHAT ARE THE MAJOR ISSUES IN OIL AND GAS DEVELOPMENTS?

4

Some major drivers behind the organized hysteria?

1. Trucks – temporary pipelines, On-site recycle, dust control, scheduling

2. Water – put water use in perspective & stop using fresh water for fracturing

3. Seismic – pre-lease investigation & lessen disposal needs by recycling.

4. Chemicals – limit use to EPAs D.F.E. or North Sea Gold Band products.

5. Groundwater protection – prevent spills, pre-lease review of pay zone depth and barriers. Know the barriers and warning signs.

6. Gas Migration – highly localized, educate and work through gas issues. Limit air drilling.

7. Emissions – no venting, minimize flaring, use air for controls, not gas.

8. Spills – transport changes, who is driving the trucks?

9. Climate change – educate, efficient gas use reduces all pollutants.

10. Alternate energy – explain cyclic problems & how to use it in recycling. The real issue is that none of the current alternate energy approaches will provide world-scale energy supply without massive environmental impacts and risks.

WHAT ADDRESSES THE ISSUES?

5

FRACTURING RISK EVENTS

1. Spill clean fresh or salt water

2. Spill biocide

3. Spill dry additives

4. Spill of diesel from truck wreck

5. Spill of diesel from a wrecked re-fueler

6. Spill of frac tank of water without additives

7. Spill of frac tank of water with additives

8. Spill of diesel while re-fueling pumpers

9. Spill of frac tank of flowback water

10. Frac press ruptures surface casing

11. Cooling pulls tbg string out of pkr

12. Opens mud channel, well < 2000 ft

13. Opens mud channel, well > 2000 ft

14. Intersects well in the pay zone

15. Intersect properly aband. bore

16. Intersects improperly aban wellbore

17. Frac to surface through rock, well greater than 2000 ft deep.

18. Frac produced earthquake with mag. greater than 5.0

19. Fracture intersects a natural seep

20. Produces emissions greater than normal

21. Normal frac operation – no problems.

SPE 152596 6

Risk variables change by

time, day of the week,

season, weather and

part of the country.

HOW MUCH TIME DOES A WELL OR A DEVELOPMENT TAKE?

8

TRANSPORT ISSUES - ENVIRONMENTAL

Risk Challenges

Roadway Wrecks & Spills Frac Water Transport

Proppant Transport

Frac Chemical Transport

Diesel Fuel Transport

Diesel Fuel from saddle tank

Risk Reduction

Minimize truck traffic, especially at high congestion times and on unsuitable roads.

Reduce truck usage – sharply reduces accidents and emissions

Pipelines, on-site sources of water.

Spill resistant containers.

Dry additives

Regional Variance?

• Very high • Roads

• Distance

• Disposal SPE 152596 9

WATER USE EFFICIENCY OF PRIMARY ENERGY SOURCES (GALLONS/MBTU)

10

What fuel powers every ethanol refinery in the US? Natural Gas

WATER USE EFFICIENCY OF PRIMARY ENERGY SOURCES (GALLONS/MILLION BTU)

Younos, T., Hill, R. Poole, H. (Virginia Tech): “Water Use Efficiency of Energy Production and Power Generation Technologies”, Ground Water Protection Council, http://www.gwpc.org/sites/default/files/event-sessions/FP_Younos_Tamiim.pdf , downloaded 6 November 2014.

Fuel Source

Low Range Efficiency gallons/mmBTU

High Range Efficiency gallons/mmBTU

Sources

Coal 41 164 USDOE 2006; Gleick 1994; EIA 2008

Natural Gas

3 (~5 million gal. fracturing

water produces ~2 bcf of gas)

USDOE, 2006; Gleick 1994; EIA 2008

Oil 1200 2420 USDOE 2006; Gleick 1994

Corn-ethanol

2510 29100 USDOE 2006; USDA 2004

Soy-Bio diesel

14000 75000 USDOE 2006; USDA 2004

Note: Burning 1 bcf of gas produces 11 million gallons of fresh water

CAN PRODUCED WATER BE RECYCLED?

12

Recycling of produced salt water to use as part or all of fracturing fluid demand may be practical and economical in areas with significant fracturing activity.

FRAC WATER SOURCING, MAJOR ACCOMPLISHMENTS CAL COOPER & GRANT DEFOSSE– APACHE CORPORATE

13

Production and Completions Session – Slide set P23

No fresh water used

80, 000 Truckloads off the road

Avoided water disposal fees and trucking costs

Dependable frac water @ lower cost

IS SEISMIC ACTIVITY INCREASING? [GLEN BROWN PRESENTATION TO OIPA (OKLAHOMA INDEPENDENT PETROLEUM ASSOCIATION)]

1. Seismic activity uptick in Oklahoma over last 5 years is not unprecedented.

2. During 1950’s => another earthquake prone period.

3. Both 1950’s & 2014 earthquake prone periods were coincident with 50% of largest Worldwide quakes of over 8.8 mm (Richter scale) from 1900 to 2014.

4. Increased quake activity over last 5 years is also observed in Virginia, South Carolina, Alaska, Mexico and Gulf of California where no Oil or Gas activity is present.

CURRENT ARRAY PATTERNS

[Sources: Glen Brown Presentation to OIPA ]

70 km spacing 2014 stations

Map of Quake Hazard in 2008

EARTHQUAKE DETECTION [GLEN BROWN PRESENTATION TO OIPA (OKLAHOMA INDEPENDENT PETROLEUM ASSOCIATION)]

Human detection – some can detect >2 MM tremor, the rest of us sense > 3MM tremors.

1st seismograph in Oklahoma in 1961 (previous nearest unit was St Louis)

Addition of 10 stations in 1961 “coincided” with dramatic “increase” of instrument located quakes.

Transportable arrays (US Array System) => 2006.

55 total stations as of 2014.

“In Oklahoma, the only “unprecedented” activity is current ability to detect earthquakes”(Glen Brown).

RELATIVE QUAKE FREQUENCY & STRENGTH

WHY THE INCREASE IN EARTHQUAKES? THE RING OF FIRE MAY BE THE MAJOR CAUSE

Over 90% of earthquakes & 75% of volcanic eruptions occur in the Pacific rim area known as the ring of fire. Known for cyclic behavior.

Started waking up again in mid to late 2012.

18

Right: >100 years of earthquakes glow on a world map. Credit: John Nelson, IDV Solutions. Below: Epicenter is the ground location vertically above a quake, while the focus is the vertical depth to the quake center.

CHEMICALS

Risk Challenges

Biocides

Surfactants

Salt water

“Proprietary”

Planning for the “unknown”

Risk Reduction

Replace with lower impact materials or processes.

Reduce total chemicals used.

Minimize quantity and time of on-site chemical use/storage.

Apply only to parts of the job when needed.

Identify chemical type, amount & alternatives.

Identify chemicals that should not be used.

Regional Variance – Low for chemicals but high for knowledge of chemical needs.

SPE 152596 19

Most Common

Frac Additives

Composition CAS Number Total amt. in avg

frac (10k bbl)

Used in

recycled water?

Alternate Use

Friction

Reducer

Polyacrylamide 9003-05-8 100 to 200

gallons.

50k to 70k ppm

is upper limit

baby diapers, floc for

drink water

Biocide Glutaraldehyde 111-30-8 50 to 100 gallons. decrease w/

increasing

salinity

Medical

disinfectant

Alternate

Biocide

Ozone,

Chlorine

dioxide UV,

10028-15-6 10049-04-4 Turbidity & v.

high salinity

hindrances.

Disinfectant in

municipal

water

Scale Inhibitor

(if needed)

Phosphonate &

polymers

6419-19-8 & others 10 to 100+ gallons

– depends on

local

Specific ions

like calcium are

a problem.

Some cleaners

and medical

treatment

Gellants

(hybrid / gel)

Guar &

Cellulose

9000-30-0 9004-62-0 Depends on frac type

~1000 to 2000 lb. Ca++ , Fex & TDS

problem.

Thickening ice

cream / soup

Acid 5% TO 15%

hydrochloric

7647-01-0 ~0 to 2000 gals

not universally

Yes food prep, mfg,

swim pools,

Acid Corrosion

inhib.

Quat. Ammonium

salts, Coa Coa

Amines, etc.

Various 2 to 40 gals if acid is

used Yes Industrial

COMMON CHEMICALS USED IN FRACS

20

What are Groundwater Pollutants Today & Where

do Oil & Gas Wells Fit in this Picture?

Slide 21

SPE 166142, Barrier vs. Well Failure, King

Used Texas as a Study Case.

Over a million penetrations

through the 29 major & minor

aquifers in Texas.

Texas is #2 in total

Groundwater withdrawals with

~ 80% going to Agriculture &

Municipalities.

If the water was really polluted

by O&G wells, we’d see it

quickly in Municipal & Ag.

FRAC HEIGHT GROWTH IN ~FOUR THOUSAND JOBS – NOT EVEN CLOSE TO WATER

Microseismic signal from top of fracs in relationship to bottom of fresh water. >3800 fracs tracked in 4 shales

Table 5 – Fracture Height-Growth Limits in Four Major U.S. Shale Plays

(Fisher, 2011)

Shale Number

of fracs

with

micro-

seismic

data

Primary

Pay Zone

Depth

Range

Typical

Water

Depth

and

(Deepest

)

Typical

Distance

Between Top

of Fracture

and Deepest

Water

Closest

Approach of

Top of Frac in

Shallowest Pay

to Deepest

Water

Barnett

(TX)

3000+ 4700’ to

8000’

500’

(1200’)

4800’ 2800’

Eagle

Ford (TX)

300+ 8000’ –

13,000’

200’

(400’)

7000’ 6000’

Marcellus

(PA)

300+ 5000’ to

8500’

600

(1000)

3800’ 3800’

Woodford

(OK)

200+ 4400’ –

10,000’

200

(600)

7500’ 4000’

•Separation is 1 to 2 km. •No breach of fresh water. •The top-most microseismic signals are most likely stress transfer and do not represent fracture growth.

(Reprinted from the July 2010 issue of The American Oil & Gas Reporter with permission from Pinnacle, A Halliburton Service)

SPE 166142, Barrier vs. Well Failure, King

Completed Well - How Many Barriers are Typical?

BARRIER AND INTEGRITY FAILURES: >330,000 US WELLS

Things That Keep Real Integrity Failures Very Low 1. Pressure inside the wells is lower than outside in hydrostatic of water table. 2. Modern wells are built with multiple barriers. 3. Cement reinforces and protects the casing. 4. Regulations are tighter now than 3 years ago. 5. Multi-Fractured horizontal wells replace 5 to 10 vertical wells in shale. Less pollution

potential with fewer water table penetrations.

What Proves it? – rankings of proven groundwater pollutants.

Older well data often skewed by lack of barrier & integrity differentiation.

Proven Another Way - % of Produced Fluids Leaked

From Production Leaks and Spills

Slide 25

All Sources in SPE 166142, Barrier vs. Well Failure, King, 2013

Area Number

of Wells

Type of Wells Barrier Failure Freq. Range (w/

containment)

Integrity Failure (leak

path – in or out)

US Gulf of

Mexico 11,498

(3542 active

Platform based

wells

30% overall

first annulus SCP 50% of cases.

90% of strings w/ SCP have less

than 1000 psi.

10% are more serious form of SCP

(Wojtanowicz, 2012)

0.01% to 0.05% of wells

leaked

----------

0.00005% to 0.0003%

based on produced oil

spilled 1980 thru 2009.

US Gulf of

Mexico 4,099 Shoe test failures

required repair

12% to 18% require cement repair

to continue drilling

0 (all repaired before

resuming drilling)

Norway 406 offshore 18% 0

GOM

/Trinidad 2,120 Sand Control 0.5 to 1% 0% subterranean

~0.0001% via surface

erosion potential

Matagorda

Island 623 17 Compaction

failures; casing

shear & sand fail

80% to 100% - the high number is

due to high pressure and

formation compaction.

Wells routinely shut-in

and repaired prior to

restart.

Sumatera 175 without

maintenance

43% 1 to 4%

SPE 166142, Barrier vs. Well Failure, King

How Much Cement is Needed for Isolation?

Every inch of cement is NOT required to be perfect.

Quality of cement is more important than the volume. Isolation can only be measured with a pressure test. Bond logs are not always best tool ~10% channels

missed.

Instances of false negatives.

Slide 26

Over 10,000 psi can be held with less than 50 ft of

cement, but 200 to 300 ft is routinely used.

SPE 166142, Barrier vs. Well Failure, King

Well Study Review >650,000 wells

Failure Factors Recognized: • Type of Well • Maintenance Culture • Era of Construction • Geographical Location • Age of Well • Specifics of Design & Construction • Usage Change

Single barrier

compromised by

tubing leaks.

GAS MIGRATION

Risk Challenges

Inadequate annulus cement

Gas-cut cement

Gas charged shallow coals & shales

Natural gas/oil seeps and geological seep pathways

Local well construction & design

Risk Reduction

Fit-for-purpose cementing

Gas channeling mitigation

Cement above shallowest gas charged formation.

2-stage cement columns

Gas migration mapping

Area specific well designs

Regional Variance - High SPE 152596 28

CEMENT SEAL IS IMPORTANT – CEMENT TOP IS EVEN MORE IMPORTANT

1/9/2015 29

SPE 166142, Barrier vs. Well Failure, King

Methane Seepage from Soils Oil & Gas Seeps are indicators of oil & gas beneath the

surface

Many natural seep flows diminished as wells were drilled &

produced.

Gas migration >>200+ yrs. old, highly

regional, many causes, 1000’s of seeps.

SPE 166142, Barrier vs. Well Failure, King

SPILLS, LEAKS AND EMISSIONS

Risk Challenges

Spills and Leaks Connections

Pipe Integrity – surface lines

Well Barrier Integrity

Emissions Direct

Venting, leaks, pneumatic controls, burning

Indirect Burning diesel (SOx, NOx) for

drilling, fracturing, hauling and production

Risk Reduction

Spill barriers, containments and cleanup

Low pressure gas recovery

Change control power source

Switch to CNG or LNG for local and short term power

Switch to electric where it makes environmental sense. Drilling

Others?

Regional Variance – Moderate to Low

SPE 152596 32

1,000

10,00

0

100

,000

1,000

,000

10,00

0,000

Lakeview Gusher,CA Onshore, 1910

Santa BarbaraBlowout, CA, 1969

Tanker Grounding,MA, 1976

Tanker Grounding,AK, 1989

Tanker Grounding,TX, 1990

Sabotage, Kuwait,1992

Tanker Grounding,LA, 2000

Pipelines Rupturedby Hurricanes,…

Barge Collision, LA,2008

Tanker Collision, TX,2010

Pipeline Corrosion,MI, 2010

Macondo Blowout,GOM, 2010

Natural Seeps,Coal Point, CA, Yearly

Natural Seeps,GOM, Yearly

BARRELS

Single Estimate

High Value Range

Comparing

Spills and

Seeps

Various sources – data

in SPE 166142

Risk = Frequency of

Occurrence vs. Impact

Slide 34

Risk exists in every action.

What is operationally safe?

Occurrence & impact create

a threat level that we can

understand & accept or

reject based on what we

believe: hopefully on

assessment of facts.

SPE 166142, Barrier vs. Well Failure, King

WHAT ARE SOME OF THE REAL RISKS?

Transport spills – same frequency as other chemical transport options (rail, barge, truck).

Wrecks and road damage.

Fracturing old wells w/ questionable casing & cement.

Improperly sited salt water disposal wells.

Fracturing in shallow wells (<2000 ft).

Not using modern technology.

Ignoring well monitoring and maintenance.

General ignorance – on both sides of the issue.

36 First Frac – 1947, Stanolind Co., Houghton, Kansas

Questions?