What Is Acceptable Shale Oil and Gas Development

What Is
Acceptable Shale Oil and Gas
Development?

Shale gas characteristics
• Two key technologies: Horizontal drilling and
hydraulic fracturing
• Large areas
• Vast numbers of wells
• The true extent of reserves in a given play emerges only with
Multiple wells
Source: Geology.comSource: Irvine Energy plc

Important distinctions
Conventional vs unconventional
High
quality
conventional
gas
Low quality conventional
gas
Tight gas
Coalbed methane Shale gas
Gas hydrates
Volume
Technologicalrequirements,costs
Free vs associated
• Natural gas may be free or associated, i.e., dissolved in
oil or located in a cap of free gas above the oil
• Associated gas may have low production costs but may
also as a by-product present inflexibility problems
– A challenge to OPEC oil producers
• Associated gas may be marketed but is often reinjected
or flared
Source: World Bank’s GGFR Programme

Shale gas opportunities outside North
America
• Most screening to date has amounted to looking for analogues to the successful US shale basins
• Key criteria:
– Onshore
– Gas prone
– Organically rich
– Volumetrically extensive
– Thermally mature
– Passable permeability
– Brittle
– Frac barriers
– Shallower than 4000 m
• Also favourable fiscal framework conditions, availability of land, availability of services, infrastructure, gas
demand, local support…
• Tough to find opportunities that match all requirements!

What is ACCEPTABLE?
The right set of practices?
The right set of regulations?

Current Practices
Community and
Environmental Risks
Community and
Environmental Risks
Which Risk Scenario Do You Believe?
A B
Current Practices
Designed to
Mitigate Risks

Center for Strategic and International Studies
Washington D.C.
Strategic insight, bipartisan policy

Key Finding 1: Resource base is enormous
and readily available but industry and
regulators are in the early stages of
learning how to optimize the value of the
resource.
Key Finding 2: Availability of
relatively affordable natural
gas can create jobs, spur
economic growth and support
important manufacturing
sectors.

Gas
Crude Oil
Pipeline
Associatedgas
Non-Associated gas
Liquefaction
Syngas
Gas To Liquids (GTL)
Refined
Oil Products
Chemical
Reaction
Gas to Power/ Residential &
Commercial
LNG for Export
LNG for Transport
Gas to Chemicals
Possible Gas Pathways
Key Finding 3: Several key domestic energy and
environmental policies will drive greater U.S. domestic gas
consumption and, along with natural gas exports, can
provide an important stabilizing element for gas
development.
Copyright Royal Dutch Shell

Key Finding 4: Development risks are
manageable today but understanding risks
and evolving cost-effective risk management
approaches is a long term, continuous
process.
Image courtesy of Anadarko
Key Finding 6: Public acceptance of
unconventional gas development is a
critical issue and the ability to manage
risks must be demonstrated.
Key Finding 5: Technology innovation is
key to production, risk management and
demand.

Excess
noise, road
damage
Induced
Seismicity
Air Quality
Non-
attainment
State
regulations
Injection
volumes
Increased
traffic
accidents
% water
recycled
Excessive
GHG
Emissions
Disposal
methods/volumes
GW
Degradation
Surface
Water
Degradation
Regional
Water
Depletion
Ecosystem
Degradation
Land
Disturbance
PW/FF
volumes
Shale Gas
Develop
ment
RISKS
RISK FACTORS
Air Issues
Community Impacts
Water Issues
Land Issues
Rule
violations
Regional
water use
% water
recycled
Federal
regulations
Well casing
procedure
Fresh
water use
# of
wells
Rule
violations
# of
horizontal
wells
Fresh
Water use
State
regulations
PW/FF
volumes
# of
horizontal
wells
# of wells
% water
recycled
Disposal
methods/volumes
# of
wells
Pad density
Disposal
methods/volumes
% green
completions
% water
recycled
% water
recycled
% water
recycled
% water
recycled
% water
recycled

Water Sources and Demand for the Hydraulic Fracturing
of Oil and Gas Wells in Colorado from 2010 through 2015
Colorado Division of Water Resources
Colorado Oil and Gas Conservation Commission
Colorado Water Conservation Board
http://cogcc.state.co.us/Library/Oil_and_Gas_Water_Sources_Fact_Sheet.pdf

WATER ACQUISITION
Approximately 3 MG is required for HF of horizontal wells
Potential Impact:
• Regional water supplies can be depleted
• Transport of water can lead to excess truck traffic
CHEMICAL MIXING
Water is combined with proppant and chemicals to make
HF fluid.
Potential Impact:
• Spills or leaks can contaminate ground or surface water
WELL INJECTION
Pressurized HF fluid is injected into well to create fractures
Potential Impact:
• Breach of well casing can contaminate aquifer
• Fractures can intersect natural fractures contaminating aquifers
FLOWBACK AND PRODUCED WATER
When pressure in the well is released, HF fluid, formation water
and gas flow back. These fluids are temporarily stored on site.
Potential Impact:
• Spills or leaks can contaminate ground and surface water.
• Gases can be released
WASTEWATER TREATMENT AND DISPOSAL
Wastewater must be disposed either through injection,
evaporation or recycling/reuse.
Potential Impact:
• Faulty disposal methods could lead to contamination of water
resources.

Excess
noise, road
damage
Induced
seismicity
Air quality
non-
attainment
State
regulations
Injection
volumes
Increased
traffic
accidents
% water
recycled
Excessive
GHG
emissions
Disposal
methods/volumes
Drinking water
contamination
Water
quality
degradation
Regional
water
depletion
Ecosystem
degradation
Land
disturbance
PW/FF
volumes
Shale Gas
Develop
ment
RISKS
RISK FACTORS
Air Issues
Community Impacts
Water Issues
Land Issues
Rule
violations
Regional
water use
% water
recycled
Federal
regulations
Well casing
procedure
Fresh
water use
# of
wells
Rule
violations
Degree of
monitoring
Fresh
Water use
State
regulations
PW/FF
volumes
# of
horizontal
wells
# of wells
% water
recycled
Disposal
methods/volumes
# of
wells
Pad density
Disposal
methods/volumes
% green
completions % water
recycled
HAP health
impacts
Degree of
monitoring
Rule
violations
Setback
rule
Setback
rule

Materials and Energy Balance for Oil and Gas Well
Cflowback
Well
Edrilling Efrac
Ein
Eoil
Egas
Qdrill
Qfrac
Qflowback
Qproduced
Cproduced
Water
Treatment and
Disposal
Qrecycle
Crecycle
Etreat
QevapQinject
ENERGY IN
ENERGY OUT
WATER
IN
WATER OUT

Water Intensity
Cflowback
Well
Edrilling Efrac
Ein
Eoil
Egas
Qdrill
Qfrac
Qflowback
Qproduced
Cproduced
Water
Treatment and
Disposal
Qrecycle
Crecycle
Etreat
QevapQinject
ENERGY IN
ENERGY OUT
WATER
IN
WATER OUT

Fluids
Management
Air Toxics
Frac flowback
handling
Water
Disposal
Truck
Traffic
Water
Acquisition
Road
Damage
GHG
Emission
s
Surface
Spills
GW
Degradation
Surface
Water
Impacts
Water
Use
Regional
Water
Depletion
Ecosystem
Impact
Air Issues
Community Impacts
Water Issues
Land Issues
Land
Disturbanc
e
Well pad
design
Leaks
Truck
traffic

RISK or CONCERN
Air toxics released during well
development/operation impact
health
Develop baseline, is it being
maintained? MEASURE & REPORT
Real-time monitoring of VOCs
in air
Compare measurements to
baseline
BEST PRACTICES
1) Utilize reduced emission
“green completion”
techniques
2) Use closed loop fluid handling
methods to prevent release of
VOCs
Use air quality data to evaluate
practice efficacy
Potential Solution Framework

Potential Solution Framework
Water quality
sensors
Air quality
sensors Telemetry
Public Web
Interface

What Is Acceptable Shale Oil and Gas Development

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