Shale Gas Water Management – Experiences From North America

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Society of Petroleum Engineers Distinguished Lecturer Programwww.spe.org/dl 1

John Veil

Veil Environmental, LLC

Society of Petroleum Engineers Distinguished Lecturer Programwww.spe.org/dl

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Shale Gas Water Management Experiences from North America

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Topics for Discussion

Importanceofshaleoilandgas Theshalegasdevelopmentprocess Shalegaswaterneeds Managementofflowbackandproduced

water

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Shale Gas -Introduction

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Importance of Shale Gas to the USA

NaturalgasisanimportantenergysourcefortheUnitedStates.Shaleformationsrepresentagrowingsourceofnaturalgasforthenationandareamongthebusiestoilandgasplaysinthecountry.

Source:DOE/EIAAnnualEnergyOutlook2013

Shale Plays in Other Parts of the World

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2013 Report on Global Shale Oil and Gas Reserves U.S.DepartmentofEnergyreleasedanewreportinJune2013thatassessed

137shaleformationsin41countries. PreparedbyAdvancedResourcesInternational

http://www.eia.gov/analysis/studies/worldshalegas/

Risked Shale Gas and Oil In-Place and Technically Recoverable by Continent

Source:AdvancedResources2013

Continent ShaleGas(Tcf) ShaleOil(billionbbl)NorthAmerica(Ex.U.S.) 1,118 21.9Australia 437 17.5SouthAmerica 1,431 59.7Europe 883 88.6Africa 1,361 38.1Asia 1,403 61.1SubTotal 6,634 286.9U.S. 1,161 47.7Total 7,795 334.6

Estimated Technically Recoverable Shale Oil and Gas Resources Top 10 Countries

Source:AdvancedResources2013

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The Shale Gas Development

Process

Steps in the Shale Gas Process

GainingAccesstotheGas(Leasing)

SearchingforNaturalGas

PreparingaSiteDrillingtheWellPreparingaWellforProduction(WellCompletion)

GasProductionandWaterManagementMovingNaturalGastoMarket

WellClosureandReclamation

Stepsinvolvingwaterareshaded

Source:FayettevilleShaleInformationwebsite

http://lingo.cast.uark.edu/LINGOPUBLIC/index.htm

Well Completion Process Mostshalegaswells

aredrilledashorizontalwellswithupto1mileoflateralextentthroughtheshaleformation

Inordertogetgasfromtheformationintothewellbore,companiesmustfollowtwosteps: Perforation HF

Visithttp://videos.loga.la/horizontaldrillinganimation toseeagoodvideoofthesesteps

Source:T.Murphy PennStateMarcellusCenterforOutreachandResearch

Well Completion Process (2)

Onalonghorizontalleg,completionisdoneinaseriesofstages,eachofwhichisafewhundredfeetlong Perforationsaremadeusingsmall

explosivechargesthatareloweredtothedesireddepthonacable

HFisdoneforseveralhoursforeachstage

Pressureisheldonthewellandaplugissettoisolatethatfracturedintervalandallowstimulationofthenextstage

Thenextstageisperfed andfracced Whenallstagesarecompleted,the

plugsaredrilledout,andsomeofthewaterreturnstothesurface

Source:FracFocuswebsite

Source:J.Veil

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Hydraulic Fracturing (HF)

Frac Job Pumps Large Volume of Water, Sand, and Additives into the Well in Stages

Why Is HF Used?

Shalerockisverydenseandhaslowpermeability HFcreatesanetworkofsmallcracksintherockthatextendoutasfaras

1,000feetlaterallyandverticallyawayfromthewell

VirtuallynoshaleoilandgaswellsintheU.S.wouldbedevelopedunlessHFisdone

Itiscontroversialandexpensive,butisacriticalelementincosteffectiveproduction

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Water Needs for Hydraulic Fracturing

Water Needed for Frac Jobs

Mostwellsrequireupto5milliongallons,butthetrendistohavemorestagesandusemorewater Individualvolumeisnotcritical,butcollectively

canbeimportantwithinaregion

Sourceofwater: Stream,river,orlake Well Impoundmentcreatedbyproducer Publicwatersupply

Pipedtositevs.deliveryintanktrucks

Estimate of Water Requirements for Marcellus Shale

MakeestimateofmaximumvolumeofwaterneededtomeetMarcellusShalefraccingneeds Estimatevolumeofwaterperwell Estimatemaximumnumberofwellsinayear

Pennsylvania Wells Drilled

Year MarcellusShaleWellsDrilled

2007 1132008 3362009 8142010 1,5912011 1,9872012(JanJuly)

883(note: lowerratethanin2011)

Source:PADEPwebsite

Togetahypotheticalmaximum,doublethe2010total=

3,974wells

West Virginia Wells Drilled

Year MarcellusShaleWellsDrilled

2007 408

2008 461

2009 170

2010 1142011 52

Source:WVGESwebsite

Togetahypotheticalmaximumdoublethe2008total=

922wells

New York Wells Drilled

NewYorkhasmoratoriumonMarcellusShalewells Nogoodwaytopredictmaximumnumberofwells ChosetoestimatemaximumNewYorkwellstobethesameasmaximum

WestVirginiawells=922wells

Year Total WellsDrilled

2008 ??2009 ??2010 ??2011 ??

Hypothetical Maximum Water Demand for Marcellus

State HypotheticalMaximumNumberofWellsDrilledinaYear

AnnualVolumeassuming5milliongalsofwaterneededperwell

Pennsylvania 3,974 19.8billiongals/yrWest Virginia 922 4.6billiongals/yrNew York 922 4.6billiongals/yrTotal 5,818 29billiongals/yr

=80MGD

Actual Water Withdrawals for 2005 (in MGD)

Category NewYork Pennsylvania WestVirginia Total

PublicSupply 2,530 1,420 189 4,139Domestic 140 152 34 326Irrigation 51 24

Comparison of Marcellus Shale Water Needs with Actual Withdrawal

Volume PercentageWaterRequiredforShaleGasProductionComparedtoTotalWithdrawal

Waterneededforshalegas

80MGD

Totalwaterwithdrawal 24,577MGD

0.32%

Water Availability in Marcellus and Fayetteville Shales

Inbothoftheseshaleplays,thewaterneededtosupportahypotheticalmaximumwellfracturingyearrepresentsafractionof1percentofthetotalwateralreadyusedintheregions.

Thissuggeststhatsufficientwatershouldbeavailable Notineverylocationoroneverystreamtributary Notduringeveryweekoftheyear

Requiresgoodadvancedplanningtowithdrawwaterfromriverswhenflowsarehighandstorethewateruntilneededforfracturing.

Willrequirelocalorregionalfreshwaterstorageimpoundments.

Water Needs for Barnett Shale

AccordingtoJune2011TexasWaterDevelopmentBoardreport,theactualwaterusedforfracturinginBarnettShalein2008was~8.3billiongals

Source:TexasWaterDevelopmentBoardreport,June2011.

Barnett Shale Water Use and Consumption Projections

Source: J.P.Nicot etal(2012)Oil&GasWaterUseinTexas: Updateto2011report.

Eagle Ford Shale Water Use and Consumption Projections

Source: J.P.Nicot etal(2012)Oil&GasWaterUseinTexas: Updateto2011report.

Water Conflicts for Barnett and Eagle Ford Shales

TheBarnettShaleappearstohaveadequateavailablewaterforthetimebeing.Underthehighdemandscenario,groundwaterresourcesmaynotbeadequate.

LessinformationisavailablefortheEagleFordShalesinceitisanewerplay. ThelocalclimateissomewhatdrierthanintheBarnett Thereissomepotentialforfuturefreshwatershortages

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Chemicals in Frac Fluids

Frac Fluid Composition Watermakesup~90%ofvolume Sandmakesup~10%ofvolume Allotherchemicaladditivesmakeup~0.5%ofvolume

Source:ShaleGasPrimer,GWPCandALL

Why Chemical Additives Are Used


Why Chemical Additives Are Used (2)


Disclosure of Chemical Additives

OneofthemostcontentiousissuessurroundingHFisthatcompanieshavenothistoricallyshareddetailedinformationwithregulatorsorthepubliconwhichchemicalsareactuallyusedinfracjobs

Evenifthechemicalsusedarenotharmful,thepublichasconcernsovertheunknownanddoesnottrusttheindustrytosafeguardthem

SomeinformationcanbeobtainedfromtheMaterialSafetyDataSheets(MSDSs)

Example MSDS

SelectedsectionsoftheMSDSforNALCOEC6116Aareshownhere

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Chemical Disclosure Registry

MSDSsprovidesomebutnotnecessarilyalloftheinformationthatregulatorsandthepublicwantorneed

InApril2011,theGroundWaterProtectionCouncilandtheInterstateOilandGasCompactCommissionopenedanewonlinesystemtohostinformationaboutthechemicaladditivesusedinfracfluidsandtheiringredients

Anyinterestedpersoncanvisitthewebsiteandsearchfordataonaspecificwell

AsofendofOctober2013,datahadbeenenteredonmorethan57,000wellsrepresentingover540oilandgascompanies

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www.fracfocus.org

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Frac Focus Homepage

Example of Registry Record for Well in Texas

39ChesapeakeResourcesWellBSOA141415H1,DeSotoCounty,LA,fracdate3/21/11

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Flowback Water Management

Processes

Disproportionate Media Emphasis on Shale Gas Wastewater

Assumptions (triedtochooseconservativeestimates) 20,000shalegaswellsarefracturedinayear Eachfracjobrequires5milliongallons Only50%ofthefracfluidvolumereturnsasflowbackandproducedwater

TotalshalegasflowbackandproducedwaterfortheU.S.= 50billiongallonsperyear

Disproportionate Emphasis on Shale Gas Wastewater (2)

U.S.producedwatervolumein2007foralloilandgas=21billionbbl(Source:ClarkandVeil,2009)

=882billiongal/year Compareshalegaswatertoallproducedwater

50billion/882billionorabout5.7%. Puttingthisinperspective,shalegasreceivesmorethan90%oftheattentionyetitconsistsoflessthan6%ofallthevolumeofproducedwater.

What Happens to the Injected Water after the Frac Job Is Finished? Someofthewaterreturnstothesurfaceoverthefirstfewhourstoweeks.

Thisfracflowbackwaterhasahighinitialflow,butitrapidlydecreases Overthesameperiodoftime,theconcentrationofTDSandotherconstituentsrises

Source:TomHayes,2009.

TDSvalues(mg/L)inflowbackfromseveralMarcellusShalewells

*Day0representsthestartingfracfluidconditions

Flowback Water (1)

Largevolumeofflowbackreturnstothesurfaceinfirstfewhourstofewdays Typicallycollectinpits/ponds

Flowback Water (2)

Manysitescollectflowbackinbrinetanksordedicatedponds Filteredandreusedin

fracfluidforfuturewell

Produced Water Overtime,smallervolumeofproducedwaterflowstosurface

Collectedinonsitetanks Pickedupbytrucksandremovedforoffsitemanagement

Management of Frac Flowback Water Collectedwatermustberemovedfromsite Typicallyiscollectedbytanktrucksandhauledoffsitefor:

Injectionintodisposalwell(offsitecommercialwellorcompanyownedwell) Treatmenttocreatecleanbrine(e.g.,chemicaladdition,flocculation,clarification;

advancedoxidation) Treatmenttocreatecleanfreshwater(oneofthethermaldistillationprocesses) Evaporationorcrystallization(allowszerodischargeoffluids) Filtrationofflowbacktoremovesuspendedsolids(i.e.,sandgrainsandscale

particles),thenblendwithnewfreshwaterforfuturestimulationfluid.

Longtermconcernswhenthenumberofnewfracjobsisrelativelylowcomparedtothetotalvolumeofflowback andproducedwaterfromthousandsofproducingwells Crossoverpoint

Injection into Disposal Well

Injectionwellsofferseveraladvantages,whichleadproducerstofavorthemwherepossible: Theyarerelativelyinexpensive. Theycanbelocatednearbytomanyshalegasplays. Regulatorsarealreadyprovidingoversightofinjectionwells. Operatorsunderstandthistriedandtruetechnology.

Treatment to Create Clean Brine TherewasanetworkofwastewatertreatmentfacilitiesinPennsylvania

setuptohandleexistingshallowgaswastewaterpriortoMarcellusdevelopment Providedchemical/physicaltreatmenttoremovemetalsandadjustpH Resultedincleanbrine

Thesefacilitiesdischargedtolocalriversunderpermitsissuedbythegovernment

InApril2011,theoilandgasagencywrotetoallgasproducersadvisingthemnottosendflowbackandproducedwatertothesefacilitiesbecausedischargesmayhavehadanimpactofthesurfacewaterquality

Otherfacilitiescameinthatofferedasimilarleveloftreatmentbutreturnedthecleanbrinetothegascompaniesforreuse Nodischargesinvolved

Treatment to Create Clean Fresh Water

Additionaltreatmentprocessescanremovemostofthetotaldissolvedsolidsresultinginfreshwater Thermaldistillationtechnologies Reverseosmosis

Requirepretreatment Morecostlythanothertechnologies Watercanbereusedorpossiblydischarged

Thermal Distillation Technology

Heatsflowbacktowatervapor Condensesoutcleanwaterleavinga

brineconcentratestream Brinemanagementcostscanbe

significant

Canoperateinseveralmodes Permanentfixedfacility Shorttermfixedfacility Mobileunits

Reverse Osmosis

Costeffectiveuptoabout40,000 50,000ppmTDS Potentialuses

ForshaleplayswhereflowbackhaslowtomediumTDS Theinitialvolumeofflowbackinallshaleplaysshouldhavelowtomedium

TDS

Considerationsaboutmembranefouling Needsextensivepretreatment

Evaporation/Crystallization

TechnologycanstartwithhighTDSflowbackorwiththeconcentratedbrinefromanothertreatmentprocess.

Canproducedhighlyconcentratedbrineordrysolids Requiresinputofenergytoevaporatesaltywater

e.g.,excessheatfromgasprocessingplant

Filter Flowback and Reuse

Doesnotrequirehightechfiltrationequipment Oftenasimplesockfilter

BeingusedheavilyinMarcellusduetolackofnearbyinjectionoptions Typicalflowbackvolumeisonly15%oforiginalfracfluidvolume Evenifflowbackisfilteredandreused,willneedtosupply85%newwater.

Maybeusedinotherplayswherefreshwatersuppliesarelimited.

DisposalMethodTotalVolume(bbl) %UsingMethod

CentralizedTreatmentPlantforRecycle 940,692 26.8InjectionDisposalWell 94888 2.7Landfill 2186 0.1ReuseOtherThanRoadspreading 2,457,025 70.1StoragePendingDisposalorReuse 9,227 0.3CentralizedTreatmentthenDischarge 46 0.0Total 3,504,064 100

Pennsylvania Flowback Management 2009 vs 2013

2009

2013(JanuaryJune)

Pennsylvania Produced Water Management 2009 vs 2013

2009

2013(January June)DisposalMethod TotalVolume %UsingMethodCentralizedTreatmentPlantforRecycle 1,367,173 12.8InjectionDisposalWell 1287516 12.0Landfill 197 0.0ReuseOtherThanRoadspreading 8,050,177 75.1StoragePendingDisposalorReuse 15,485 0.1Roadspreading 105 0.0Total 10,720,653 100.0

DecisionFactorsforChoosingaProducedWaterManagementOption

Oilandgascompanieswillusuallychoosethelowestcostoptionthat:

Isphysicallypracticalatalocation

Isapprovedbytheregulatoryagency

Issustainableoveranextendedperiod

Poseslittleriskoflongtermliability

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Category CostComponent(Someorallmaybeapplicable)

PriortoOperations

Preparefeasibilitystudytoselectoption(inhousecostsandoutsideconsultants)Obtainfinancing

Obtainnecessarypermits

Preparesite(grading;constructionoffacilitiesfortreatmentandstorage;pipeinstallation)

Purchaseandinstallequipment

Ensureutilitiesareavailable

Components Contributing to Total Cost of Wastewater Management

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Category CostComponent(Someorallmaybeapplicable)

DuringOperations

Utilities

Chemicalsandotherconsumablesupplies

Transportation

Debtservice

Maintenance

Disposalfees

ManagementofresidualsremovedorgeneratedduringtreatmentMonitoringandreporting

Downtimeduetocomponentfailureorrepair

Cleanupofspills

AfterOperations

Removaloffacilities

Longtermliability

Siteremediationandrestoration

Cost Components (2)

Key Points

Waterisnecessarytosupportdrillingandfracturing Companiesneedtoplanaheadtoensuresufficientwaterresourcesareavailabletosupportlongtermneeds

Managementofflowbackandproducedwaterisasitespecificdetermination Companiesneedtoevaluateoptionstodeterminetheirfeasibility,compliancewithregulations,sustainability,andtotalcost

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Shale Gas Water Management – Experiences From North America