Nevada Division of MineralsHydraulic Fracturing in Nevada

CA-NV AWWA AND NWRA WORKSHOP

LAS VEGAS, NVOctober 29, 2015

Richard Perry, Administrator

TOPICS

• OIL PRODUCTION AND EXPLORATION IN NEVADA

• UPDATING NEVADA’S HYDRAULIC FRACTURING PROGRAM AND REGULATIONS

• TERTIARY EXPLORATION TARGETS• WATER USE FOR HYDRUALIC FRACTURING• CURRENT ACTIVITY

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,00019

54

1956

1958

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

NEVADA OIL PRODUCTION1954 - 2014(BARRELS)

CUMULATIVE PRODUCTION53,098,778 BARRELS

2014 Production 316,326 Barrels

FIELD BBLS OIL (2014)

Eagle Springs 34,217.00Trap Spring 136,651.30Bacon Flat 6,223.00Currant 143.00Grant Canyon 46,263.00Kate Spring 28,933.76Duckwater 124.00Sans Spring 1,604.00Ghost Ranch 15,563.93Sand Dune 7,467.00

Total RR Valley 275,341.99

Blackburn 32,217.00Tomera Ranch 1,916.00

Total Pine Valley 34,133.00

Humboldt 2,755.77Huntington 2,247.52

Total Elko County 5,003.29

Total Nevada 316,326.28

PETROLEUM EXPLORATION WELLSAND PRODUCTION FIELDS IN NEVADA826 oil & gas exploration wells drilled since 1907

FLUID MINERALS DRILLING ACTIVITY

• 7 OIL EXPLORATION WELLS DRILLED

• 2 unconventional• 5 conventional

• 23 GEOTHERMAL WELLS DRILLED

• Production• Injection• Observation

FOUR AGENCIES CAN BE INVOLVED WITH DRILLING AN OIL WELL IN NEVADA

• BLM – drilling on Federal lands, leasing process, NEPA process

• NDEP – Air permits for surface area disturbance, UIC permits if water is to be re-injected, water pollution control permits if water is to be discharged outside of containment.

• NDOM – Permits to drill on private/state lands, coordinates w/ BLM for drill permits on Federal lands.

• NDWR – For any water used in drilling, dust control or hydraulic fracturing

Development of Nevada’s hydraulic fracturing program and regulations

• NRS 522.119 Development of program; regulations.

1. The Division of Minerals and the Division of Environmental Protection shall, jointly, develop a hydraulic fracturing program to:

(a) Assess the effects of hydraulic fracturing on the waters of the State of Nevada

(b) Require a person who engages in hydraulic fracturing to disclose each chemical used to engage in hydraulic fracturing; and

(c) Provide for notice to members of the general public concerning activities relating to hydraulic fracturing in this state.

DEVELOPMENT OF NEVADA’S HF REGULATIONS –UPDATE OF NAC 522

1. 7 Member team from NDOM, NDEP and one consultant developed regulations

2. IOGCC - Reviewed regulations of oil-producing states 3. Reviewed BLM proposed rule on hydraulic fracturing4. Staff discussed what works and what does not with

other state regulators in 5. Developed and benchmarked regulations against other

states.6. Legal review7. Held public workshops in CC, LV, Elko in March8. Addressed all comments, modified first draft9. Regulations approved by Commission in August, 201410. Approved by Legislative Commission on 10/24/14

NEVADA HF REGULATIONS SUMMARY(Update to NAC 522)

APPLICATION:

– application to include minimum 1-mile radius Area of Review

– Groundwater baseline sampling and monitoring of up to 4 existing water wells by operator before and 2X after HF.

– Approved applications with COA’s on NDOM web site.

DRILLING

– Cement bond logs and pressure testing to ensure casing integrity

– Intermediate casing required – Minimum 500’ cement for surface, intermediate,

production casing

NEVADA HF REGULATIONS SUMMARY(Update to NAC 522)

HYDRAULIC FRACTURING

– Pre-approval sundry process for chemicals to be used in HF treatment. If a chemical is not on the NDOM approved list, 30 days to evaluate. If denied for use, operator must find an alternative.

– 14 day notification to county commissioners and neighbors

POST-DRILLING

– Operators post HF list on Fracfocus.org within 60 days.

NOBLE ENERGY HUNTINGTON K1L-1V WELL NEAR JIGGS, NV. T.D. = 9,692’

WATER USE FOR HYDRUALIC FRACTURING IN NEVADA

Water Use averaged < 1 acre-foot per hydraulic fracturing treatment

Water for drilling and hydraulic fracturing must be appropriated through the Nevada Division of Water Resources, like any other beneficial use.

No horizontal wells intended to be hydraulically fractured have been drilled to date in Nevada.

AQUA studyBy Noble, NDOMNDEP, DRI.

- Baseline water sampling pre- and post- HF showed no systematic differences

- Hydrologic modeling indicates fracking fluids isolated at depth, would never be detectable in surface groundwater.

- Report available on NDOM and DRI web sites.

CURRENT ACTIVITY

• Noble has wells shut –in• 2 conventional wells have been drilled in C.Y.

2015• No operators drilling at present in Nevada • Price of oil has had a stifling effect on

exploration• As of last month, > ½ of the oil drill rigs in the

U.S. are idled. ½ of all rigs operating in Texas

www.minerals.nv.gov