The document is 116 pages long and is thus far too much to post here. However, I will be posting sections of it I find relevant to geologists, geophysicists, and engineers most directly involved with the exploration, development, and production of this significant new energy resource. There will be abundant opportunity for further discussion and elaboration on these subjects.
Peter
MODERN SHALE GAS DEVELOPMENT IN THE UNITED STATES: A PRIMER
EXECUTIVE SUMMARY (source)
Natural gas production from hydrocarbon rich shale formations, known as “shale gas,” is one of the most rapidly expanding trends in onshore domestic oil and gas exploration and production today. In some areas, this has included bringing drilling and production to regions of the country that have seen little or no activity in the past. New oil and gas developments bring change to the
environmental and socio-economic landscape, particularly in those areas where gas development is a new activity. With these changes have come questions about the nature of shale gas development, the potential environmental impacts, and the ability of the current regulatory structure to deal with this development. Regulators, policy makers, and the public need an objective source of information on which to base answers to these questions and decisions about how to manage the challenges that may accompany shale gas development.
Natural gas plays a key role in meeting U.S. energy demands. Natural gas, coal and oil supply about 85% of the nation’s energy, with natural gas supplying about 22% of the total. The percent contribution of natural gas to the U.S. energy supply is expected to remain fairly constant for the next 20 years.
The United States has abundant natural gas resources. The Energy Information Administration estimates that the U.S. has more than 1,744 trillion cubic feet (tcf) of technically recoverable natural gas, including 211 tcf of proved reserves (the discovered, economically recoverable fraction of the original gas-in-place). Technically recoverable unconventional gas (shale gas, tight sands, and coalbed methane) accounts for 60% of the onshore recoverable resource. At the U.S. production rates for 2007, about 19.3 tcf, the current recoverable resource estimate provides enough natural gas to supply the U.S. for the next 90 years. Separate estimates of the shale gas resource extend this supply to 116 years.
Natural gas use is distributed across several sectors of the economy. It is an important energy
source for the industrial, commercial and electrical generation sectors, and also serves a vital role in residential heating. Although forecasts vary in their outlook for future demand for natural gas, they all have one thing in common: natural gas will continue to play a significant role in the U.S. energy picture for some time to come.
The lower 48 states have a wide distribution of highly organic shales containing vast resources of natural gas. Already, the fledgling Barnett Shale play in Texas produces 6% of all natural gas produced in the lower 48 States.
Three factors have come together in recent years to make shale gas production economically viable: 1) advances in horizontal drilling, 2) advances in hydraulic fracturing, and, perhaps most importantly, 3) rapid increases in natural gas prices in the last several years as a result of significant supply and demand pressures.
Analysts have estimated that by 2011 most new reserves growth (50% to 60%, or approximately 3 bcf/day) will come from unconventional shale gas reservoirs. The total recoverable gas resources in four new shale gas plays (the Haynesville, Fayetteville, Marcellus, and Woodford) may be over 550 tcf. Total annual production volumes of 3 to 4 tcf may be sustainable for decades. This potential for production in the known onshore shale basins, coupled with other unconventional gas plays, is predicted to contribute significantly to the U.S.’s domestic energy outlook.
Shale gas is present across much of the lower 48 States. Exhibit ES-1 shows the approximate
locations of current producing gas shales and prospective shales. The most active shales to date are the Barnett Shale, the Haynesville/Bossier Shale, the Antrim Shale, the Fayetteville Shale, the Marcellus Shale, and the New Albany Shale.
Each of these gas shale basins is different and each has a unique set of exploration criteria and operational challenges. Because of these differences, the development of shale gas resources in each of these areas faces potentially unique opportunities and challenges.
EXHIBIT ES-1: UNITED STATES SHALE BASINS
The development and production of oil and gas in the U.S., including shale gas, are regulated under a complex set of federal, state, and local laws that address every aspect of exploration and operation. All of the laws, regulations, and permits that apply to conventional oil and gas
exploration and production activities also apply to shale gas development.
The U.S. Environmental Protection Agency administers most of the federal laws, although development on federally-owned land is managed primarily by the Bureau of Land Management (part of the Department of the Interior) and the U.S. Forest Service (part of the Department of Agriculture). In addition, each state in which oil and gas is produced has one or more regulatory agencies that permit wells, including their design, location, spacing, operation, and abandonment, as well as environmental activities and discharges, including water management and disposal, waste management and disposal, air emissions, underground injection, wildlife impacts, surface disturbance, and worker health and safety.
Many of the federal laws are implemented by the states under agreements and plans
approved by the appropriate federal agencies. A series of federal laws governs most environmental aspects of shale gas development. For example, the Clean Water Act regulates surface discharges of water associated with shale gas drilling and production, as well as storm water runoff from production sites. The Safe Drinking Water Act regulates the underground injection of fluids from shale gas activities. The Clean Air Act limits air emissions from engines, gas processing equipment, and other sources associated with drilling and production. The National Environmental Policy Act (NEPA) requires that exploration and production on federal lands be thoroughly analyzed for environmental impacts.
Most of these federal laws have provisions for granting “primacy” to the states (i.e., state agencies implement the programs with federal oversight). State agencies not only implement and enforce federal laws; they also have their own sets of state laws to administer. The states have broad powers to regulate, permit, and enforce all shale gas development activities—the drilling and fracture of the well, production operations, management and disposal of wastes, and abandonment and plugging of the well.
State regulation of the environmental practices related to shale gas development, usually with federal oversight, can more effectively address the regional and state-specific character of the activities, compared to one-sizefits-all regulation at the federal level. Some of these specific factors include: geology, hydrology, climate, topography, industry characteristics, development history, state legal structures, population density, and local economics. State laws often add additional levels of environmental protection and requirements. Also, several states have their own versions of the federal NEPA law, requiring environmental assessments and reviews at the state level and extending those reviews beyond federal lands to state and private lands.
A key element in the emergence of shale gas production has been the refinement of cost-effective horizontal drilling and hydraulic fracturing technologies. These two processes, along with the implementation of protective environmental management practices, have allowed shale gas development to move into areas that previously would have been inaccessible. Accordingly, it is important to understand the technologies and practices employed by the industry and their ability to prevent or minimize the potential effects of shale gas development on human health and the environment and on the quality of life in the communities in which shale gas production is located.
Modern shale gas development is a technologically driven process for the production of natural gas resources. Currently, the drilling and completion of shale gas wells includes both vertical and
horizontal wells. In both kinds of wells, casing and cement are installed to protect fresh and
treatable water aquifers. The emerging shale gas basins are expected to follow a trend similar to
the Barnett Shale play with increasing numbers of horizontal wells as the plays mature.
Shale gas operators are increasingly relying on horizontal well completions to optimize recovery and well economics. Horizontal drilling provides more exposure to a formation than does a vertical well. This increase in reservoir exposure creates a number of advantages over vertical wells drilling. Six to eight horizontal wells drilled from only one well pad can access the same reservoir volume as sixteen vertical wells. Using multi-well pads can also significantly reduce the overall number of well pads, access roads, pipeline routes, and production facilities required, thus minimizing habitat disturbance, impacts to the public, and the overall environmental footprint.
The other technological key to the economic recovery of shale gas is hydraulic fracturing, which
involves the pumping of a fracturing fluid under high pressure into a shale formation to generate
fractures or cracks in the target rock formation. This allows the natural gas to flow out of the shale to the well in economic quantities. Ground water is protected during the shale gas fracturing process by a combination of the casing and cement that is installed when the well is drilled and the thousands of feet of rock between the fracture zone and any fresh or treatable aquifers.
For shale gas development, fracture fluids are primarily water based fluids mixed with additives that help the water to carry sand proppant into the fractures. Water and sand make up over 98% of the fracture fluid, with the rest consisting of various chemical additives that improve the effectiveness of the fracture job. Each hydraulic fracture treatment is a highly controlled process designed to the specific conditions of the target formation.
The amount of water needed to drill and fracture a horizontal shale gas well generally ranges from about 2 million to 4 million gallons, depending on the basin and formation characteristics. While these volumes may seem very large, they are small by comparison to some other uses of water, such as agriculture, electric power generation, and municipalities, and generally represent a small percentage of the total water resource use in each shale gas area. Calculations indicate that water use for shale gas development will range from less than 0.1% to 0.8% of total water use by basin.
Because the development of shale gas is new in some areas, these water needs may still challenge supplies and infrastructure. As operators look to develop new shale gas plays, communication with local water planning agencies, state agencies, and regional water basin commissions can help operators and communities to coexist and effectively manage local water resources. One key to the successful development of shale gas is the identification of water supplies capable of meeting the needs of a development company for drilling and fracturing water without interfering with community needs. While a variety of options exist, the conditions of obtaining water are complex and vary by region.
After the drilling and fracturing of the well are completed, water is produced along with the natural gas. Some of this water is returned fracture fluid and some is natural formation water. Regardless of the source, these produced waters that move back through the wellhead with the gas represent a stream that must be managed. States, local governments, and shale gas operators seek to manage produced water in a way that protects surface and ground water resources and, if possible, reduces future demands for fresh water.
By pursuing the pollution prevention hierarchy of “Reduce, Re-use, and Recycle” these groups are examining both traditional and innovative approaches to managing shale gas produced water. This water is currently managed through a variety of mechanisms, including underground injection, treatment and discharge, and recycling. New water treatment
technologies and new applications of existing technologies are being developed and used to treat
shale gas produced water for reuse in a variety of applications. This allows shale gas-associated
produced water to be viewed as a potential resource in its own right.
Some soils and geologic formations contain low levels of naturally occurring radioactive material
(NORM). When NORM is brought to the surface during shale gas drilling and production
operations, it remains in the rock pieces of the drill cuttings, remains in solution with produced
water, or, under certain conditions, precipitates out in scales or sludges. The radiation from this
NORM is weak and cannot penetrate dense materials such as the steel used in pipes and tanks.
Because the general public does not come into contact with gas field equipment for extended
periods, there is very little exposure risk from gas field NORM.
To protect gas field workers, OSHA requires employers to evaluate radiation hazards, post caution signs and provide personal protection equipment when radiation doses could exceed regulatory standards. Although regulations vary by state, in general, if NORM concentrations are less than regulatory standards, operators are allowed to dispose of the material by methods approved for standard gas field waste.
Conversely, if NORM concentrations are above regulatory limits, the material must be disposed of at a licensed facility. These regulations, standards, and practices ensure that shale gas operations present negligible risk to the general public and to workers with respect to potential NORM exposure.
Although natural gas offers a number of environmental benefits over other sources of energy,
particularly other fossil fuels, some air emissions commonly occur during exploration and
production activities. Emissions may include NOx, volatile organic compounds, particulate matter, SO2, and methane. EPA sets standards, monitors the ambient air across the U.S., and has an active enforcement program to control air emissions from all sources, including the shale gas industry. Gas field emissions are controlled and minimized through a combination of government regulation and voluntary avoidance, minimization, and mitigation strategies.
The primary differences between modern shale gas development and conventional natural gas
development are the extensive uses of horizontal drilling and high-volume hydraulic fracturing.
The use of horizontal drilling has not introduced any new environmental concerns. In fact, the
reduced number of horizontal wells needed coupled with the ability to drill multiple wells from a
single pad has significantly reduced surface disturbances and associated impacts to wildlife, dust , noise, and traffic. Where shale gas development has intersected with urban and industrial settings, regulators and industry have developed special practices to alleviate nuisance impacts, impacts to sensitive environmental resources, and interference with existing businesses.
Hydraulic fracturing has been a key technology in making shale gas an affordable addition to the Nation’s energy supply, and the technology has proved to be an effective stimulation technique. While some challenges exist with water availability and water management, innovative regional solutions are emerging that allow shale gas development to continue while ensuring that the water needs of other users are not affected and that surface and ground water quality is protected. Taken together, state and federal requirements along with the technologies and practices developed by industry serve to reduce environmental impacts from shale gas operations.
