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Hydraulic Fracturing Operations

Topics

1. Hydraulic Fracturing

2. Fracturing Fluid

3. Proppant

4. Environmental Concerns

5. Marcellus Shale Regulations

6. Earthquakes and Fracking Operations

7. In the News

8. References

Hydraulic Fracturing

The majority of the nation�s new natural gas wells do not produce gas at sufficient rates to make the well economical. Hydraulic fracturing is a technique used to allow natural gas and crude oil to move more freely from the rock pores where it is trapped to a producing well so it can be brought to the surface at higher rates. Hydraulic fracturing technology was developed in the late 1940s and has been continuously improved upon since that time.

In a hydraulic fracturing job, �fracturing fluids� or �pumping fluids� consisting primarily of water and sand are injected under high pressure into the reservoir.  Most of the fracturing fluid (99% of the liquid phase) is water. Some fracturing fluid also contains a �gelling agent� to make the fluid more viscous to carry the sand (or �proppant�) and accommodate the high-pressure.  The proppants are used to hold the fractures, made by the injection of the fluids, open and create new pathways for the oil or gas to flow from the rock to the well bore. Fracturing fluids may also contain very limited amounts of other materials depending on the nature of the formation being fractured. The fluid is pumped into a well bore at high pressures to create fractures in the producing formation. Most of the fracturing liquids are recovered as the oil and gas are produced and do not remain in the ground.

Hydraulic fracturing is considered a stimulation treatment routinely performed on oil and gas wells in low-permeability (having fewer connecting tunnels between the pores containing the oil and gas) reservoirs.  Specially engineered fluids are pumped at high pressure and rate into the reservoir interval to be treated, causing a vertical fracture to open. The wings of the fracture extend away from the wellbore in opposing directions according to the natural stresses within the formation. Proppant, such as grains of sand of a particular size, is mixed with the treatment fluid to keep the fracture open when the treatment is complete.

(Source: Hydraulic Fracturing Process, Chesapeake Energy)

(Source: What is Shale Gas and Why is it So Important?, EIA)

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Fracturing Fluid

A fluid injected into a well as part of a stimulation operation. Fracturing fluids for shale reservoirs usually contain water, proppant, and a small amount of nonaqueous fluids designed to reduce friction pressure while pumping the fluid into the wellbore. These fluids typically include gels, friction reducers, crosslinkers, breakers and surfactants similar to household cosmetics and cleaning products. The additives are selected for their capability to improve the results of the stimulation operation and the productivity of the well.

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Proppant

Proppants are particles mixed with fracturing fluid to hold fractures open after a hydraulic fracturing treatment. In addition to naturally occurring sand grains, man-made or specially engineered proppants, such as resin-coated sand or high-strength ceramic materials like sintered bauxite, may also be used. Proppant materials are carefully sorted for size and sphericity to provide an efficient conduit for production of fluid from the reservoir to the wellbore.

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Environmental Concerns

In April 2011, a report was issued by congressional Democrats that accused oil and gas companies of injecting "hundreds of millions of gallons of hazardous or carcinogenic chemicals into wells in more than 13 states" during 2005 to 2009.

The chemicals were injected as fracturing fluids in the hydraulic fracturing operation.  Hydrofracturing has attracted increased scrutiny from lawmakers and environmentalists because of concerns that the chemicals used can contaminate underground water aquifers.  The report has also cited companies for "injecting fluids containing chemicals that they themselves cannot identify."

The report said that more 650 of the products used in fracturing fluids contained chemicals that are known or possible human carcinogens. Companies injected large amounts of hazardous chemicals including 11.4 million gallons of fluids containing at least on of the toxic BTEX chemicals, benzene, toluene, ethylbenzene, and xylene.

Another report said that the spent hydrocracking fluids are being processed in treatment plants not designed to fully treat the waste before it is discharged into rivers. At one plant in Pennsylvania, the EPA found levels of benzene roughly 28 times higher than the federal drinking level in treated wastewater discharged into the Allegheny River.

(Source: "Oil, gas drillers injected chemicals, report says," The Dallas Morning News, April 17, 2011, p. 9A)

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Marcellus Shale Regulations

Governor Tom Corbett announced plans to implement numerous recommendations of the Marcellus Shale Advisory Commission, including changes to enhance environmental standards, an impact fee, and a plan to help move Pennsylvania toward energy independence.

As a part of this proposal, Corbett announced a series of prudent standards related to unconventional drilling, including:

• Increasing the well setback distance from private water wells from the current 200 feet to 500 feet, and to 1,000 feet from public water systems; Increasing the setback distance for wells near streams, rivers, ponds and other bodies of water from 100 feet to 300 feet;

• Increasing well bonding from $2,000 up to $10,000;

• Increasing blanket well bonds from $25,000 up to $250,000;

• Expanding an unconventional gas operator�s �presumed liability� for impairing water quality from 1,000 feet to 2,500 feet from a gas well, and extending the duration of presumed liability from 6 months after well completion to 12 months;

• Enabling DEP to take quicker action to revoke or withhold permits for operators who consistently violate rules;

• Doubling penalties for civil violations from $25,000 to $50,000; and

• Doubling daily penalties from $1,000 a day to $2,000 a day.

This plan will also allow for an impact fee, which will be adopted by counties for use by local communities experiencing the actual impacts of the drilling. The fee will be used by local governments, counties and state agencies that respond to issues that arise as a result of Marcellus Shale gas drilling.

Each well will be subject to a fee of up to $40,000 in the first year, $30,000 in the second year, $20,000 in the third year and $10,000 in the fourth through tenth years, adding up to a potential total of $160,000 per well.  The impact fee is estimated to bring in about $120 million in the first year, growing to nearly $200 million within six years.

Under this proposal, a county may provide for a fee credit of up to 30 percent if the driller makes approved investments in natural gas infrastructure, which include setting up natural gas fueling stations or natural gas public transit vehicles.

The impact fee revenues will be split with 75% retained at the local level, with 36% of that number retained by the county, 37% distributed to municipalities that host the drilling pads and 27% distributed to all the municipalities within a Marcellus drilling impacted county. The distribution formula will be based on population and highway miles.

The remaining 25% of the fee would be divided, with 70% of that number going to PennDOT for road, bridge, rail and other transportation infrastructure maintenance and repair within counties hosting Marcellus natural gas development, 4.5% to the Pennsylvania Emergency Management Agency for emergency response planning and training, and 3.75% to the Office of State Fire Commissioner for training programs for first responders and for specialized equipment necessary for emergency response.

In addition, 3.75% will go to the Department of Health for collecting and disseminating information, and for health care and citizen provider outreach and education, and for investigating health complaints and other activities associated with shale development, 7.5% to the Public Utility Commission to enhance pipeline safety and increase inspections, and 10.5% to a restricted account at the Department of Environmental Protection to be used for plugging abandoned and unused gas wells, plus other natural gas related regulation and enforcement.

Corbett said that under this plan, counties and municipalities may use these funds on various expenses related to impacts from natural gas development, including:

• Construction, repair and maintenance of roads, bridges and other public infrastructure; Water, storm water and sewer system construction and repair;

• Emergency response preparedness, training, equipment, responder recruitment;

• Preservation and reclamation of surface and subsurface water supplies;

• Records management, geographic information systems and information technology;

• Projects which increase the availability of affordable housing to low-income residents;

• Delivery of social services, including domestic relations, drug and alcohol treatment, job training and counseling;

• Offsetting increased judicial system costs, including training;

• Assistance to county conservation districts for inspection, oversight and enforcement of natural gas development; and

• County or municipal planning.

Corbett�s proposal also seeks to help secure energy independence and reduce reliance on foreign oil by developing �Green Corridors� for natural gas vehicles with refueling stations at least every 50 miles and within two miles of key highways; by amending the PA Clean Vehicles Program to include �bi-fuel� vehicles (diesel and natural gas); by helping schools and mass transit systems to convert fleets to natural gas vehicles; by stabilizing electric prices by using natural gas for generating electricity; and by encouraging the development of markets for natural gas and natural gas byproducts, such as within the plastics and petrochemical industries.

(Source: Pennsylvania Governor Corbett proposes new Marcellus Shale regulations, PennEnergy, October 4, 2011.)

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Earthquakes and Fracking Operations

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In the News

	Judge temporarily halts hydraulic fracturing approvals in North Carolina - A judge has ordered North Carolina not to approve any fracking operations until the state Supreme Court rules on a legal question about how state panels are formed. The decision  delays the proceedings in a lawsuit by environmental groups that argues that the state's Mining and Energy Commission was formed in violation of the state constitution. - PennEnergy - 5/20/15
	Utah plans to join lawsuit against federal hydraulic fracturing rules - Utah  will join three other states in a lawsuit challenging new rules for oil and gas drilling on federal land. Utah will join Wyoming, North Dakota and Colorado in the lawsuit because the rules unlawfully interfere with state regulations that address the process. - PennEnergy - 5/19/15
	North Dakota oil production up 12,500 barrels daily in March - North Dakota oil drillers produced an average of about 1.19 million barrels of oil a day in March. Production was up about 12,500 B/D from February's average. Western North Dakota's oil patch had a record 12,430 producing wells in March, up from 12,199 in February. The state also produced 47.1 million cubic feet of natural gas in March that is up from 41.3 million cubic feet of natural gas in February. - PennEnergy - 5/13/15
	Company suspends efforts to seize Nebraska land for Keystone oil pipeline - PennEnergy - 2/13/15  le conflicts with the federal Safe Drinking Water Act, exceeds the US Department of the Interior agency�s statutory regulations, and interferes with Wyoming�s own fracking regulations. - Oil & Gas Journal - 3/27/15
	Maryland House, Senate pass hydraulic fracturing bills - Senators voted 29-17 in favor of a bill that holds drilling companies strictly liable for injuries to residents or their property, and in the case of legal action companies would have to disclose what chemicals they use for drilling. In a 93-45 vote in the House, delegates voted to support a three-year moratorium on the drilling practice while more studies are done on fracking's impact on public health. - PennEnergy - 3/24/15
	DOI issues final rule for fracking on public, tribal lands - The US Department of the Interior issued a long-anticipated final rule to govern hydraulic fracturing of onshore oil and gas wells on public and tribal lands. Officials said the regulations will improve safety and help protect groundwater by updating requirements for wellbore integrity, wastewater disposal, and public disclosure of chemicals.  DOI officials said that the key components of the rule, which takes effect in 90 days, include: Provisions for ensuring the protection of groundwater supplies by requiring a validation of well integrity and strong cement barriers between the wellbore and water zones through which the wellbore passes. Increased transparency by requiring companies to publicly disclose chemicals used in hydraulic fracturing to BLM through the web site FracFocus.org, within 30 days of completing fracturing operations. Exceptions for proprietary information would be allowed as long as BLM had access to the information in an emergency. Higher standards for interim storage of recovered waste fluids from fracing�specifically, use of rigid, above-ground containers instead of open, lined pits�to mitigate risks to air, water, and wildlife. Requirements for companies to submit more detailed information on the geology, depth, and location of preexisting wells to give BLM an opportunity to better evaluate and manage unique site characteristics. Oil & Gas Journal - 3/20/15
	New York will move to prohibit hydraulic fracturing - Penn Energy - 12/17/14
	Natural gas development lowers unemployment levels in West Virginia - Natural gas drilling in the Marcellus shale has caused unemployment numbers in West Virginia to decline. Fifty-five counties in the state reported a rise in employment rates during August, according to a report by WorkForce West Virginia. (Source: Natural gas development lowers unemployment levels in West Virginia, PennWell Energy, September 23, 2013.)
	Shale oil producers seeing greater returns - Oil companies with smaller market shares in the United States are seeing a spike in output and profits as they incorporate higher-margin domestic crude oil wells into their portfolios, according to a Bloomberg report. The price increase "is bullish for U.S. shale development and benefits producers with a high U.S. production profile," said Gianna Bern, founder of Brookshire Advisory and Research Inc. Companies such as EOG are competing with larger oil conglomerates at least 15 times their size. And they're winning, at least in terms of profit increases. Pioneer Natural Resources Co. has seen a 70% increase on their balance sheet this year, compared to a 0.9% decline by Shell. The reason EOG and Pioneer are so successful is because they pioneered the practice of shale exploration in the United States. The big oil companies are finally following suit, but they're lagging behind. (Source: Shale oil producers seeing greater returns, PennWell Energy,  August 5, 2013.)

Bakken shale natural gas flaring tops $100 million each month - A new report finds a staggering 1/3 of natural gas produced in the rich Bakken shale region of North Dakota is being burned off into the air. The flared gas is valued at more than $100 million a month. Remote well locations and a lack of adequate pipeline infrastructure are the major forces behind the problem. The historically low price of natural gas isn�t helping, although producers agree that wasted product at any price is still lost money. Flaring is a more environmentally-friendly process than simply releasing the gas into the air, but the amount flared is so high the light can be seen from space, rivaling the light visible from mid-size cities. Flaring has tripled in the last three years, as the region continues to be a major source of success for producers. (Source: Bakken shale natural gas flaring tops $100 million each month, PennWell Energy,  July 30, 2013.)

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References

For more information about the world's oil and gas resources, check out the following references:

	Hydraulic Fracturing - Wikipedia
	Unlocking Tightly Trapped Gas at Shell - Very good video on horizontal drilling, perforating, and fracking
	Hydraulic Fracturing Facts - Chesapeake Energy
	Hydraulic Fracturing 101 - Earthworks
	Hydraulic Fracturing - API
	Hydraulic Fracturing at a Glance - API

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