Global Energy Security ForumMiami, FloridaMarch 26, 2013

Mark K. BolingPresident

HYDRAULIC FRACTURINGOPERATIONS:

SEPARATING FACT FROMFICTION

2

Hydraulic Fracturing Operations

What areHydraulicFracturingOperations?

Hydraulic Fracturing Operations

3

Hydraulic Fracturing Video

Regulatory Considerations

4

Surface Considerations

Subsurface Considerations

Surface Considerations

5

Air Emissions

Water SupplyWater HandlingWater Reuse & Disposal

Surface Impact• Drilling Locations• Truck Traffic & Road Damage• Infrastructure

Subsurface Considerations

6

Protecting Underground Water Resources

Frac Fluid Disclosure

Protecting Underground Water Resources

7

Well IntegrityIs the Key!

Well Integrity

8

Well Construction Standards2Evaluate Stratigraphic Confinement1

Evaluate Mechanical Integrity of Well3 Monitor Frac Job & Producing Well4

FRESH WATER AQUIFER ZONE

SHALLOW PRODUCING ZONE

CONDUCTOR PIPE

SURFACE CASING

PRODUCTION CASING

TARGET PRODUCING ZONE

GOOD MECHANICAL INTEGRITY

CEMENT CHANNELING

PRESSURE BUILDS UP

CONDUCTOR PIPE

SURFACE CASING

PRODUCTION CASING

FRESH WATER AQUIFER ZONE

SHALLOW PRODUCING ZONE

TARGET PRODUCING ZONE

CA

SIN

G

CEM

ENT

FOR

MAT

ION

Surface Considerations

11

Water SupplyWater HandlingWater Reuse & Disposal

Water Supply

12

Location, Rate & Timing of

WithdrawalsCumulative Impact

Assessment

12

Volumes Needed

Water Handling

13

Trucks vs. Pipeline• Truck Traffic• Road Damage Impoundments vs. Tanks

• Closed-Loop Drilling Systems• Recycling Logistics• Air Emissions

Tracking Wastewater• Characterize Wastewater• Record Volumes Produced• Verify Volumes Delivered

Water Reuse & Disposal

Water Recycling & Reuse• Volume and quality of wastewater• Chemical compatibility• Storage and transportation logistics

Water Treatment Facilities• Flowback & produced water

chemistry• Capacity & Capability limitations

(NORM, DBPs, heavy metals)• Central vs. drill site facilities

Water Disposal Wells• Geological & hydrological limitations• NIMBY concerns• Triggered seismicity considerations

14

25,000’

IGNEOUSBASEMENT

LIMESTONE

SHALE

TRIGGERED SEISMICITYWATER DISPOSAL WELLWATER DISPOSAL WELL HORIZONTAL SHALE WELL

SAND

The largest recorded seismic event generates the same amount of energy as would be released when dropping a gallon of milk from chest high to the floor.

SHEAR

STRESS

EXISTINGSTRESS

NORMAL

STRESS

NEWSTRESS

15

Surface Considerations

16

Reduction Technology• Catalytic reduction• Ultra-low sulfur diesel fuel• LNG and CNG fuels• Oxidation catalysts• Green completions, vapor recovery

units, low bleed/no bleed pneumatic devices, plunger lift systems, leak detection

Air Emissions

Emission Type• NOx

• SO2

• CO• PM• CH4

• VOCs (incl. BTEX)

Emission Levels• EPA• Industry• State regulators• Research groups

Surface Considerations

17

Infrastructure• Compressors• Pipelines• Roads• Water treatment

facilities

Truck Traffic & Road Damage

Drilling Locations• Pit construction• Erosion and

sedimentation• Chemical storage

Surface Impact

Global Energy Security ForumMiami, FloridaMarch 26, 2013

Mark K. BolingPresident

HYDRAULIC FRACTURINGOPERATIONS:

SEPARATING FACT FROMFICTION