© 2012 Chevron U.S.A. Inc. All rights reserved.
Sustainable Development of Natural Gas from Shale
Gregory HildChevron U.S. Marcellus Operations
APEC Workshop on Unconventional Natural GasWashington, D.C.6 November 2012
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Bringing Global Knowledge and ExperienceDriving sustainable development
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Focusingon prevention is key to safe & responsible development
Applyinglessons learned and best practices globally
Enablingeconomic growth while protecting the environment
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World-Class Natural Gas Field in our Backyard
Recoverable Reserves (Tcf)
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South Pars/ 1,235North DomeIran & Qatar
Marcellus 489United States
Urengov 222Russia
Yamburg 138 Russia
Hassi R’Mel 123Algeria
Marcellus Shale: The 2011 Playbook, July 2011 edition, www.hartenergy.com.
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>700,000 net acres of Marcellus Shale
60% operator of a Marcellus Shale JV
49% non-operating interest inLaurel Mountain Midstream
Active exploration in Utica trend
Growing development capability
Overview of Chevron’s Marcellus Operations Premier acreage – a future legacy asset
Marcellus Trend
Utica Trend
0 50 100 MI
161 KM
© 2012 Chevron U.S.A. Inc. All rights reserved.
Marcellus ShaleA Great Public Resource and Responsibility
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Tremendous positive impact in Pennsylvania. In 2010: Supported nearly 140,000 jobs Generated $11.2 billion in the regional equivalent
of gross domestic product Added $1.1 billion to state and local tax revenues
Chevron is committed to: Responsible development globally Keeping people safe and protecting the
environment Working closely with local governments,
respecting our neighbors and investing in the community
© 2012 Chevron U.S.A. Inc. All rights reserved.
Combining Two TechnologiesHydraulic Fracturing and Horizontal Drilling
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Provided by Marcellus Shale Coalition
Over the past decade, we have used innovation to combine hydraulic fracturing with another technology - horizontal drilling, to unlock natural gas from shale rock.
Hydraulic fracturing occurs several thousand feet away from groundwater zones.
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Hydraulic FracturingA Proven and Safe Technology
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• Used safely in the U.S. since 1949 on more than 1.2 million wells• 90 percent of oil and gas wells use hydraulic fracturing technology
worldwide• Not a technique used exclusively on shale gas wells
© 2012 Chevron U.S.A. Inc. All rights reserved.
Shale DevelopmentNew Application of Existing Technologies
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Multiple layers of steel casing and cement are used to protect the water table – both during drilling and for the life-of-well.
Shale DevelopmentNew Application of Existing Technologies
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The well is drilled horizontally into the shale formation and is cased and cemented.
Shale DevelopmentNew Application of Existing Technologies
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The production casing and cement in the horizontal section is perforated to establish communication with the shale rock.
Shale DevelopmentNew Application of Existing Technologies
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Water and sand – with a small amount of chemicals – are pumped into the shale to create a network of fractures to release the gas.
Shale DevelopmentNew Application of Existing Technologies
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The well is put on production - it will produce gas and small amounts of water for decades.
Shale DevelopmentNew Application of Existing Technologies
© 2012 Chevron U.S.A. Inc. All rights reserved.
Responsible DevelopmentFocus on Prevention
Protecting groundwater
Protecting surface water and land
Reducing environmental impact
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© 2012 Chevron U.S.A. Inc. All rights reserved.
Well Design – SW PennsylvaniaProperly designed wells protect groundwater over life of well
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Steel Barriers Cement Barriers
Fresh water protectionCoal seam isolation and protection
Intermediate casing: hole stability and well control
Max. groundwater
Max. coal
350'700'
2,700'
>7,000'to groundwater
7,500' – 8,500'TVD
Not shown to scale
Lateral length
(Shale)Fracture
(Well)
Mixture of water, sand and chemicals, under pressure, form fractures
Natural gas flows from fractures into well
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A
Designing Wells to Protect Groundwater Multiple barriers of protection
16” Casing: Fresh Water ProtectionExtends + 350’ from the surface
11 ¾” Casing: Coal Seam Isolation & ProtectionExtends + 700’ from the surface
8 5/8” Intermediate Casing: Hole Stability & Well ControlExtends + 2700’ from the surface
5 ½” Production CasingExtends 10,500’ – 14,500’ from the surface to end of horizontal section
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All strings cemented back to surface
© 2012 Chevron U.S.A. Inc. All rights reserved.
Protecting Surface Water and LandMultiple Steps Taken to Prevent Fluid Release
Multiple barriers, such as containment liners and berms, used to prevent leaks and spills
Erosion and sedimentation controls protect surface water
Significant regulatory oversight at state level
Robust internal environmental compliance inspection process
Baseline water quality tests within 3,000 feet of each well
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Reducing Environmental ImpactGood Practices
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Pad drillingReduce footprintAccelerate reclamation process with hydro-seeding
Centralized impoundmentsMinimize freshwater use:
• Recycle water from wells• Use of non-potable water
© 2012 Chevron U.S.A. Inc. All rights reserved.
Minimizing Our Environmental FootprintMultiple wells from a single pad
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Reclamation of LandRestoring the land to its original contours
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Work closely with landowners and regulators to develop reclamation plan
Reclamation process begins immediately after operations are complete
Indigenous grass using a process called hydro-seeding accelerates re-growth
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Life of a Well Active Development vs. Production
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~98% well life: minimal footprint
~2% well life: development activity
• Shale gas wells are expected to produce for ~50 years• Long-term footprint of a well pad is typically less than 1 acre• Shale gas wells typically require minimal future well work
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Safe and Responsible Resource DevelopmentDrive continuous improvement across the industry
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Ensureour own operations are safe and environmentally responsible
Engageregulators to share new technologies and practices
Advancesustainable shale development across the globe
Establishhigh standards and practices across industry
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