Hydraulic Fracturing 101 Presented by Jerry Strahan, P.E. Chief, Branch of Fluid Minerals Bureau of Land Management Colorado State Office

Introduction to Hydraulic Fracturing Shale Oil and Gas Development Horizontal Drilling Fracking Process Environmental Concerns Media and Fracking Information Questions

A game changer World’s major gas reserves: Bakken Shale (N.D.) Qatar 1200 TCF Russia 400 TCF US Marcellus 300 TCF US Haynesville 250 TCF US Eagle Ford (emerging) US Niobrara (emerging) Bakken Shale (N.D.) Largest US oil discovery since Alaska at 3.6B bbls US is global leader in shale technology & development and in proven gas reserves! This further augments the last slide. TCF stands for a trillion cubic feet of natural gas. The 3.6 B bbls stands for 3.6 billion barrels of oil. It is imperative to mention that horizontal drilling/hydraulic fracturing has made the US the global leader in proven natural gas reserves.

This slide is for shale gas while the next one is for shale plays a year later. Can we find two maps that show the same thing (either plays or gas) and are the same size (just the US lower 48 states)?

This is just to illustrate all of the “unconventional” oil and gas plays that become economically feasible because of horizontal drilling and hydraulic fracturing practices. Simply put: it has added lots of reserves that can be produced domestically. Note that the play are covering more area that previous year based the use of this technology (and the fact the one is just gas in the US and the other is not).

What is Horizontal Drilling? Hydraulic fracturing is generally associated with horizontal drilling practices. It is defined as deviating the wellbore at least 80 degrees from vertical so that the borehole penetrates a productive formation in a manner parallel to the formation. Or simply “drilling sideways”. Source: ProPublica http://geology.com http://www.oilandgasiq.com/glossary/horizontal-drilling/

What is Hydraulic Fracturing? Well stimulation technique that has been employed by the oil and gas industry since 1947. The technique is used to create spaces in the rock pores deep underground to release the oil and natural gas so that it can flow to the surface. Fracturing fluids are injected at high pressure into the targeted formation, creating fissures that allow oil and gas to move freely from rock pores where it was trapped. Source: ProPublica

This is an aerial photo of a hydraulic fracturing job in North Dakota This is an aerial photo of a hydraulic fracturing job in North Dakota. A similar job performed in Montana would likely be on a much smaller scale. Typical Sanjel Hydraulic Fracture job set-up.

Simplified Steps In Hydraulic Fracturing 1. Water, sand and additives are pumped at extremely high pressures down the wellbore. 2. The liquid goes through perforated sections of the wellbore and into the surrounding formation, fracturing the rock and injecting sand or proppants into the cracks to hold them open. 3. Experts continually monitor and gauge pressures, fluids and proppants, studying how the sand reacts when it hits the bottom of the wellbore, slowly increasing the density of sand to water as the frac progresses. The next two slides provides a simple step-by-step process of what actually occurs during a hydraulic fracturing job. http://hydraulicfracturing.aitrk.com/Process/Pages/information.aspx

Simplified Steps In Hydraulic Fracturing (Cont’d.) 4. This process may be repeated multiple times, in “stages” to reach maximum areas of the wellbore. When this is done, the wellbore is temporarily plugged between each stage to maintain the highest water pressure possible and get maximum fracturing results in the rock. 5. The frac plugs are drilled or removed from the wellbore and the well is tested for results. 6. The water pressure is reduced and fluids are returned up the wellbore for disposal or treatment and re-use, leaving the sand in place to prop open the cracks and allow the oil/gas to flow. http://hydraulicfracturing.aitrk.com/Process/Pages/information.aspx

Why Hydraulic Fracturing and Horizontal Drilling? Combined with horizontal drilling in shale formations, hydraulic fracturing has unlocked vast new supplies of oil and natural gas. The technology has also made production feasible in many areas that were previously considered too deep, too hard, and too expensive to access. The “fracture paths” created by hydraulic fracturing, and the increased surface area exposed by horizontal drilling, can increase production rates up to many hundreds of percent. Hydraulic fracturing and horizontal drilling provide an environmental advantage in that they reduce the amount of wells needed to effectively drain an underground oil/gas reservoir. Less wells mean less roads, less pipeline, less surface disturbance, etc. http://geology.com

Horizontal Drilling Animation http://www.youtube.com/watch?v=fBQCQ6HL2Yw

Hydraulic Fracturing Animation http://www.youtube.com/watch?v=qjP-K1VaI1k

Illustration from EPA’s ‘Potential Relationships Between Hydraulic Fracturing and Drinking Water Resources’ presentation. The purpose of this slide is that this is what people should envision when they think of Hydraulic fracturing. The fracturing occurs at depths that are far below any fresh water aquifers.

Figure 2 The purpose of this slide is that this is what people should envision when they think of Hydraulic fracturing. The fracturing occurs at depths that are far below any fresh water aquifers.

Figure 3 The purpose of this slide is that this is what people should envision when they think of Hydraulic fracturing. The fracturing occurs at depths that are far below any fresh water aquifers.

Figure 4 The purpose of this slide is that this is what people should envision when they think of Hydraulic fracturing. The fracturing occurs at depths that are far below any fresh water aquifers.

Figure 5 The purpose of this slide is that this is what people should envision when they think of Hydraulic fracturing. The fracturing occurs at depths that are far below any fresh water aquifers.

Environmental Concerns Protection of groundwater and surface water from contamination. Chemicals and additives in the fracturing fluid. Large volumes of water needed for hydraulic fracturing. Disposal of spent fracturing fluid (or flow-back fluid). These are the primary concerns that accompany hydraulic fracturing. And the following slides will concentrate on each issue beginning with the protection of surface and groundwaters.

Groundwater Protection Well integrity: Design and construction of the well to ensure isolation in wellbore. Surface casing set below useable groundwater and cemented to surface. Intermediate and Production casing is cemented to isolate hydrocarbon zones, providing further protection to groundwater. Multiple layers of protective steel casing surrounded by cement. Cement Bond Logs verify quality of cement job and centralizers placed on the casing assures uniform cementing. The primary purpose of this slide is to highlight the importance of a well’s design. Every well that is drilled on the reservation is designed to protect any useable water aquifers. BLM reviews the design on tribal and allotted minerals, while the Montana Board of Oil and Gas would review the wells on fee and state minerals.

This is an example of what a cement bond log, or CBL, would look like This is an example of what a cement bond log, or CBL, would look like. The CBL utilizes acoustic wave signals to determine the quality of the cement job and would confirm that the cement is providing a proper seal.

Evaluating Stratigraphic Confinement Microseismic Evaluation of Fracking Evaluating Stratigraphic Confinement ~200’ 1000’ Microseismic evaluation allows the oil and gas company to track exactly where the fractures are occurring in the targeted downhole formation. This is achieved by drilling shallow holes near the horizontal wellbore and placing specialized microphones down in the hole. The microphones are able to detect the rock cracking and the data is interpreted to provide a downhole picture of the fractures. Cross sectional view

Groundwater Protection Make sure to point out the impervious rock layers between the target formation and shallow groundwater.

http://hydraulicfracturing.aitrk.com/Process/Pages/information.aspx

Subsurface Risks are managed by WELL CONSTRUCTION STANDARDS CONDUCTOR PIPE FRESH WATER AQUIFER ZONE SURFACE CASING PRODUCTION CASING SHALLOW PRODUCING ZONE INTERMEDIATE PRODUCING ZONE TARGET PRODUCING ZONE

GOOD MECHANICAL INTEGRITY: No leaks in or behind the casing strings CONDUCTOR PIPE FRESH WATER AQUIFER ZONE SURFACE CASING PRODUCTION CASING SHALLOW PRODUCING ZONE So, the bottom line is that wellbore design and construction are critical to protecting shallow groundwater. INTERMEDIATE PRODUCING ZONE TARGET PRODUCING ZONE

behind production casing CEMENT CHANNELING behind production casing CONDUCTOR PIPE PRESSURE BUILDS UP FRESH WATER AQUIFER ZONE SURFACE CASING PRODUCTION CASING FORMATION SHALLOW PRODUCING ZONE CASING CEMENT INTERMEDIATE PRODUCING ZONE TARGET PRODUCING ZONE

INSUFFICIENT CEMENT COVERAGE CONDUCTOR PIPE PRESSURE BUILDS UP FRESH WATER AQUIFER ZONE SURFACE CASING PRODUCTION CASING SHALLOW PRODUCING ZONE INTERMEDIATE PRODUCING ZONE TARGET PRODUCING ZONE

LEAK THROUGH CASING CONDUCTOR PIPE FRESH WATER AQUIFER ZONE SURFACE CASING PRODUCTION CASING FORMATION CASING SHALLOW PRODUCING ZONE INTERMEDIATE PRODUCING ZONE TARGET PRODUCING ZONE

CEMENT CHANNELING behind surface casing CONDUCTOR PIPE FRESH WATER AQUIFER ZONE SURFACE CASING COAL SEAM (methagenic) FORMATION PRODUCTION CASING CASING CEMENT SHALLOW PRODUCING ZONE INTERMEDIATE PRODUCING ZONE TARGET PRODUCING ZONE

GOOD MECHANICAL INTEGRITY: No leaks in or behind the casing strings CONDUCTOR PIPE FRESH WATER AQUIFER ZONE SURFACE CASING PRODUCTION CASING SHALLOW PRODUCING ZONE So, the bottom line is that wellbore design and construction are critical to protecting shallow groundwater. INTERMEDIATE PRODUCING ZONE TARGET PRODUCING ZONE

Environmental Concerns Protection of groundwater and surface water from contamination. Chemicals and additives in the fracturing fluid. Large volumes of water needed for hydraulic fracturing. Disposal of spent fracturing fluid (or flow-back fluid).

Chemicals and Additives This graphic portrays that the majority of the fracking fluid is made up of sand and water. http://hydraulicfracturing.aitrk.com/Fracturing-Ingredients/Pages/information.aspx

Water Viscosifiers Guar Gum, Cornstarch, Agar Hydraulic Fracturing Separating the Facts from the Hype Water Viscosifiers Guar Gum, Cornstarch, Agar Guar Bean Cluster Agar – Sea Vegetable Flakes Oilfield Use Thicken water for proppant (sand) transport Home Use Ice Cream Gluten Free Baking Carpet Backing Petri Dishes

Hydraulic Fracturing Separating the Facts from the Hype Crosslinkers Borax, a naturally occurring mineral Oilfield Use Thicken water for proppant (sand) transport Home Use Laundry Detergent Fire Retardants Cosmetics Pesticides Slime

Hydraulic Fracturing Separating the Facts from the Hype Surfactants Oilfield Use Prevent oil and water from forming an emulsion Cause oil and water to form an emulsion Foamers Degreasers and Cleaners Home Use Bathing/Shampooing Salad Dressings Dust Control Gardening Cleaning

Disinfectants Bleach, Biocides Hydraulic Fracturing Separating the Facts from the Hype Disinfectants Bleach, Biocides Oilfield Use Control naturally occurring bacteria or algae Home Use Drinking Water Treatment Household Cleaners Swimming Pools

Hydraulic Fracturing Separating the Facts from the Hype Buffers Sodium Bicarbonate, Sulfamic Acid, Acetic Acid, Citric Acid, Ascorbic Acid, Sodium Hydroxide Oilfield Use Adjusts the pH of the frack fluid which affects the viscosity of the fluid Home Use Baking Soda Remove Grout Haze Vinegar Oranges Vitamin C Drano

Breakers Hydrogen Peroxide, Ammonium Persulfate, Enzymes Hydraulic Fracturing Separating the Facts from the Hype Breakers Hydrogen Peroxide, Ammonium Persulfate, Enzymes Oilfield Use Causes gel to break down after sand is in place allowing fluid to flow back to surface Home Use Septic Tank Maintenance Manufacture of Circuit Boards Hair Bleaching Disinfectant

Iron Control Citric Acid, Ascorbic Acid, Acetic Acid Hydraulic Fracturing Separating the Facts from the Hype Iron Control Citric Acid, Ascorbic Acid, Acetic Acid Oilfield Use Prevent rust which can lead to plugging of the formation Home Use Lemons Vitamin C Vinegar

Chemicals and Additives Wellbore integrity isolates fracture fluids. Fluid “flow-back” adequately stored in lined earthen pits or steel tanks until proper disposal. Material handling on surface is in accordance with requirements and long-standing industry practices. MSDS sheets available for review on well site. When the fracturing fluid flows back to the surface, it is important that the fluid is contained. In most instances, the oil and gas operator would contain this fluid in steel tanks. If it is flowed into an earthen pit on location, that pit would need to be lined and earthen berms would be constructed around the pit as an additional caution in case of overflow.

Environmental Concerns Protection of groundwater and surface water from contamination. Chemicals and additives in the fracturing fluid. Large volumes of water needed for hydraulic fracturing. Disposal of spent fracturing fluid (or flow-back fluid).

Water Volumes Typically,10,000-15,000 barrels per well (420,000-630,000 gallons) are needed for fracture stimulation. 30-40% will flow back to surface. Use is temporary, not a long term commitment. The amount of water that is used can be reduced when fracture fluids are recycled. Other water use should be considered with respect to current water uses (i.e. agricultural, municipal, power generation, etc.). Water volumes are based on what we know now for this general area. May change with continued development. Volumes should be updated by region!

Environmental Concerns Protection of groundwater and surface water from contamination. Chemicals and additives in the fracturing fluid. Large volumes of water needed for hydraulic fracturing. Disposal of spent fracturing fluid (or flow-back fluid).

Fluid Disposal Underground injection. Commercial disposal facilities. Surface disposal pits. Treatment/Reuse These are the four basic options that exist now for fluid disposal. Treatment/Reuse is probably the best option; however, these types of systems usually are not employed until the oil and gas operator is in the development phase. Prior to approving a hydraulic fracturing job, the oil and gas operator must display an acceptable plan to dispose of the spent fracturing fluid.

Getting to the Bottom of FRACKING “The truth is rarely pure and never simple” — Oscar Wilde

THE WALL STREET JOURNAL December 9, 2011 EPA Ties Fracking, Pollution. “Chemicals found in a Wyoming town's drinking water likely are associated with hydraulic fracturing, the Environmental Protection Agency said Thursday, raising the stakes in a debate over a drilling technique that has created a boom in natural-gas production.”

THE WALL STREET JOURNAL December 20, 2011 The EPA’s Fracking Scare “…the U.S. Geological Survey has detected organic chemicals in the well water in Pavillion (population 175) for at least 50 years—long before fracking was employed. There are other problems with the study that either the EPA failed to disclose or the press has given little attention to.”

THE WALL STREET JOURNAL April 1, 2012 EPA Backpedals on Fracking Contamination “The Environmental Protection Agency has dropped its claim that an energy company contaminated drinking water in Texas, the third time in recent months that the agency has backtracked on high-profile local allegations linking natural-gas drilling and water pollution.” “In addition to dropping the case in Texas, the EPA has agreed to substantial retesting of water in Wyoming after its methods were questioned.”

THE DENVER POST December 9, 2011 Hydraulic Fracking Linked for First Time to Groundwater Pollution “Hydraulic fracturing, a controversial oil-and-gas production technique used in Colorado and across the country, has been linked for the first time to groundwater pollution in a case near Pavillion, Wyoming.”

THE DENVER POST June 18, 2012 EPA Results on Fracking in Wyoming Continue to Confound “But the findings on fracking while suggestive and important are limited. Water supplies were not contaminated by frack fluids and fracking did not turn out to be the cause per se of the problems that prompted it the residents of Pavillion to seek the EPA’s help”

BOULDER DAILY CAMERA June 20, 2013 EPA Won't Confirm Fracking-Pollution Tie in Wyoming “The U.S. Environmental Protection Agency announced Thursday it is dropping its longstanding plan to have independent scientists review its finding that hydraulic fracturing may be linked to groundwater pollution in central Wyoming. ”

BLOOMBERG More Evidence Shows Drilling Causes Earthquakes April 1, 2013 More Evidence Shows Drilling Causes Earthquakes “There have been a lot of earthquakes recently in parts of the U.S. that traditionally haven’t seen so many, including Arkansas, Texas, Ohio, and Colorado—all states where fracking activity just happens to have increased substantially in the past decade.”

BLOOMBERG Fracking Doesn’t Cause Significant Earthquakes, Study Says April 10, 2013 Fracking Doesn’t Cause Significant Earthquakes, Study Says “Hydraulic fracturing used to access oil and gas from rock and shale hasn’t caused “significant” earthquakes, according to a study by Durham University. “The size and number of felt earthquakes caused by fracking is low compared to other manmade triggers such as mining, geothermal activity or reservoir water storage.” .”

Questions?