Lower 48 Shale Experience –Will It Translate to Alaska? Speakers: Craig P. Wilson – Partner & Practice Group Coordinator – Environmental, Land and Natural Resources, K&L Gates, Harrisburg David Spigelmyer – Vice President, Government Relations, Chesapeake Energy; Chair, Marcellus Shale Coalition J. Daniel Arthur – Managing Partner, ALL Consulting Audience Discussion Facilitators: Ankur K. Tohan – Associate, K&L Gates, Seattle Patrick S. Galvin – Vice President, External Affairs and Deputy General Counsel, Great Bear Petroleum

July 31, 2012 Anchorage Marriott Downtown

Contents “Lower 48 Shale Experience – Will It Translate to Alaska?”....................... A

Biographies ................................................................................................. B

Craig P. Wilson David Spigelmyer J. Daniel Arthur Ankur K. Tohan

Supplemental Information ........................................................................... C

Diesel Fuel EPA: Call for Comment on Draft Permitting Guidelines for Oil and Gas

Hydraulic Fracturing Activities Using Diesel Fuels. 77. Fed. Reg. 27451 (May 10 2012).

Effluent Guidance EPA: Notice of Final Effluent Guidelines Program Plan. 76. Fed. Reg. 66286.

(Oct 26, 2011). Fact Sheet: EPA Initiates Rulemaking to Set Discharge Standards for

Wastewater from Shale Gas Extraction (Oct. 2011).

Memorandum of Understanding EPA – DOE – DOI Memorandum of Understanding (Apr. 13 2012).

Air Rules EPA Fact Sheet: Overview of Final Amendments to Air Regulations for the

Oil and Natural Gas Industry. (Apr. 17, 2012).

Federal Lands Bureau of Land Management: Proposed Rule to Regulate Hydraulic

Fracturing on Federal and Indian Lands. 77 Fed. Reg. 27691. (May 11, 2012).

Additional Supplemental Information..............Available on Thumb Drive

Permitting - Army Corps of Engineers Reissuance of Nationwide Permits. 77 Fed. Reg. 10184 (Feb. 21 2012). Sierra Club Action for Declaratory and Injunctive Relief and Petition for

Review of Agency Action. (Jun. 29 2012).

Diesel Fuel EPA: Permitting Guidance for Oil and Gas Hydraulic Fracturing Activities

Using Diesel Fuels – Draft: Underground Injection Control Program Guidance #84. EPA 816-R-12-004 (May 2012).

K&L Gates LLP

Effluent Guidance EPA: Notice of Final Effluent Guidelines Program Plan. 76. Fed. Reg. 66286.

(Oct 26, 2011). Fact Sheet: EPA Initiates Rulemaking to Set Discharge Standards for

Wastewater from Shale Gas Extraction (Oct. 2011). Fact Sheet: EPA Effluent Guidelines Program Plan (Oct. 2011).

Drinking Water EPA Progress Update: Study of the Potential Impacts of Hydraulic Fracturing

on Drinking Water Resources. (Feb. 2012). EPA Plan to Study to the Potential Impacts of Hydraulic Fracturing on

Drinking Water Resources. (Nov. 2011). EPA Memorandum: Guidance for Review and Approval of State UIC

Programs and Revisions to Approved State Programs. GWPB Guidance #34.

Memorandum of Understanding EPA News Release: Obama Administration Announces New Partnership on

Unconventional Natural Gas and Oil Research (Apr. 13 2012). EPA – DOE – DOI Memorandum of Understanding (Apr. 13 2012).

Greenhouse Gas Emissions EPA Final Rule - Mandatory Reporting of Greenhouse Gases: Petroleum and

Natural Gas Systems (Nov. 30, 2010). API/ANGA Fact Sheet: Methane Emissions From Hydraulic Fracturing of

Unconventional Natural Gas Wells Are Half What EPA Estimated (June 2012).

API/ANGA Report: Characterizing Pivotal Sources of Methane Emissions from Unconventional Natural Gas Production (June 2012).

Air Rules EPA Fact Sheet: Overview of Final Amendments to Air Regulations for the

Oil and Natural Gas Industry. (Apr. 17, 2012). EPA Final Rule: New Source Performance Standards and National Emission

Standards for Hazardous Air Pollutants Reviews. (Apr 17, 2012). EPA: Summary of Requirements for Equipment at Natural Gas Compressor

Stations. EPA: Summary of Requirements for Processes and Equipment at Natural

Gas Gathering and Boosting Stations. EPA: Summary of Requirements for Equipment Used in Oil Production. EPA: Summary of Requirements for Processes and Equipment at Natural

Gas Processing Plants. EPA: Summary of Requirements for Processes and Equipment at Natural

Gas Well Sites.

Toxic Substance Control Act Earth Justice: Petition Under TSCA Regarding Chemical Substances and

Mixtures Used in Oil and Gas Exploration or Production. (Aug. 4, 2011). EPA: Receipt of Earth Justice Petition. (Aug 15, 2011). EPA: Initial Response to Earth Justice Petition. (Nov. 2, 2011). EPA: Final Response to Earth Justice Petition; Partial Grant of TSCA

Request. (Nov. 23, 2011).

Marcellus Shale Environmental Impact Statement Citizen Petition Requesting the Completion of a Programmatic Environmental

Impact Statement and Regulations Addressing the Cumulative Impacts of Drilling in the Marcellus Shale Formation in the Chesapeake Bay States. (Apr. 4, 2011).

Resource Conservation and Recovery Act (RCRA) NRDC: Petition for Rulemaking Pursuant to Section 6974(a) of the RCRA

Concerning Regulation of Wastes Associated with Exploration, Development or Production of Crude Oil or Natural Gas or Geothermal Energy. (Sep. 8, 2010).

1

Lower 48 Shale Experience –Will It Translate to Alaska ?

Alaska Shale Oil and Gas Conference

July 31, 2012

Agenda

• Perspective: The Speakers’ Experiences• Overview of Lower 48 Plays• Development Context & Setting• Key Issues• State Reaction• Increasing Federal Involvement• NGO Engagement

• Open Discussion: How Does This Translate to Alaska?

2

Perspective: The Speakers’Experiences

• J. Daniel Arthur, P.E., S.P.E.C.Managing Partner & Program/Project Manager, ALL

Consulting

• David SpigelmyerVice President, Government Relations, Chesapeake

Energy Corporation

Chair, Marcellus Shale Coalition

• Craig P. WilsonPartner & Practice Group Coordinator – Environmental,

Land and Natural Resources, K&L Gates

3

Development Context & Setting

• Areas with no historic O&G drilling– Some with prior conventional development

– Statutes /rules designed for conventional development

• Rural, suburban and urban areas– Economic conditions

– Strength of local government

– Infrastructure

• Areas with historic mining & legacy impacts

• Areas with highly protected waters / resources

• Areas susceptible to drought

Key Issues

• Water Sources & Use– Alternative sources

• Water Disposal & Reuse• E&S Control – Wetlands – Water Quality• Roadway Maintenance• Groundwater Protection• Well Control – Spill Protection• Chemical Use & Storage• Noise, Lighting, Traffic

4

State Reaction• Major recent legislative enactments

– North Carolina– Ohio– Pennsylvania– West Virginia

• Enactments address severance taxes, uniformity-preemption, and modernization of standards for unconventional development and horizontal drilling, surface owner and groundwater protection, chemical disclosure, waste handling, etc.

• Regulatory updates on wide ranges of topics – active state agencies, particularly in eastern plays

• Ongoing studies by New York State and Delaware River Basin Commission– Development on hold pending regulatory action

Increasing Federal Involvement• EPA National Enforcement Initiative 2011-2013

– focus on compliance by energy extraction sector

• EPA hydraulic fracturing study• EPA draft guidance for use of diesel fuels in HF fluids • EPA shale gas effluent limitation guideline rulemaking• EPA NSPS/NESHAPs & GHG reporting rules• EPA TSCA disclosure rulemaking• BLM rule proposed for well stimulation on federal and

Indian lands• Changes to Army Corps midstream permitting• Other pending items

– NRDC 2010 petition to regulate produced water pursuant to RCRA Subtitle C

– CBF 2011 Petition to CEQ for programmatic EIS

5

NGO Engagement• American Rivers• Clean Air Council• Earthjustice• Earthworks• Environmental Defense Fund• National Wildlife Federation• Natural Resources Defense Council• Sierra Club• WildEarth Guardians

• Many other national, regional & local organizations

Open Discussion: How Does This Translate to Alaska

?

HARRISBURG OFFICE

717.231.4509 TEL

717.231.4501 FAX

craig.wilson@klgates.com

Craig P. Wilson

AREAS OF PRACTICE

Mr. Wilson is a partner and Practice Group Coordinator for K&L Gates’ global Environment, Land and Natural Resources practice group. Mr. Wilson concentrates his practice in the areas of energy, environment and natural resources, and has counseled clients who are exploring for, producing and transporting natural gas, clients who are developing and operating energy projects and other commercial and industrial projects, clients who are seeking environmental permits and zoning and land development approvals from government agencies, and clients who are parties to business transactions or litigation involving potential environmental liabilities.

PROFESSIONAL BACKGROUND

Mr. Wilson has been associated with K&L Gates since 1992 and a partner with the firm since 2001.

PRESENTATIONS

Hydraulic Fracturing, presented at Great Lakes Water Conference, November 2011.

New Permitting Challenges – Pennsylvania State Programmatic General Permit (PASPGP-4), panel moderator, Shale Gas Insight, September 2011.

Water & Wetland Crossings – The Role of the State vs. U.S. Army Corps in Permitting Linear Projects, presented at Fourth Annual Appalachian Basin Oil & Gas Seminar, May 2011.

Environmental Impact of Marcellus Shale Drilling on Groundwater and Drinking Water, presented at Pennsylvania Bar Institute’s Environmental Law Forum, April 2011.

Water & Wastewater Issues in Shale Development, presented in connection with Short Course on the Law of Shale Gas Plays, sponsored by The Institute for Energy Law, The Center for American and International Law, June 2010.

Priorities for Permitting & Compliance in PA, WV and NY, panel moderator at K&L Gates Third Annual Appalachian Basin Oil & Gas Seminar, April 2010.

Understanding Water Management Regulations, presented at Key Environmental Issues Compliance Conference, Pennsylvania Chamber of Business and Industry, October 2009.

Infrastructure Development – Navigating the Regulatory Maze, presented at K&L Gates Second Annual Appalachian Basin Oil & Gas Seminar, April 2009.

Marcellus Shale – Water Resources Challenges, presented at Pennsylvania Oil & Gas Association Annual Meeting, September 2008.

Legal/Regulatory Update of Matters Impacting Water Industry, presented at Water Finance & Investment Summit, 2007.

Case Studies Involving Special Protection Waters, presented at Water Resources Association of the Delaware River Basin Fall Conference, November 2007.

New Post-Rapanos Federal Wetlands Guidance, telebriefing by Law Seminars International, June 2007.

Complying with New and Changing Water Regulations, presented at Key Environmental Issues Compliance Conference, Pennsylvania Chamber of

Craig P. Wilson

Business and Industry, October 2006.

PUBLICATIONS

“What do a Mountain, a Keystone and a Buckeye Have in Common?”, Oil & Gas Alert, by George A. Bibikos, David R. Overstreet, Bryan D. Rohm, and Craig P. Wilson. June 2012.

“The Pennsylvania Environmental Hearing Board Clouds the Waters: Should Well Operators Appeal PADEP Determinations that Oil and Gas Activities Have Affected Water Supplies?”, Oil & Gas Alert, by Craig P. Wilson, Anthony R. Holtzman, and Stephen J. Martzura. June, 2012.

“Municipal Mischief in the Marcellus: Challenging Restrictive Local Ordinances,” Oil & Gas Alert, by Walter A. Bunt, Jr., Kenneth S. Komoroski, Pierce Richardson, Craig P. Wilson, and Heather L. Lamparter. March 2010.

Entergy Corp. v. Riverkeeper: What Impact on the Future of Cost-Benefit in Rulemaking?, Legal Backgrounder, by Craig P. Wilson, Robert A. Lawton. June 2009.

“U.S. Supreme Court Upholds Use of Cost-Benefit Analysis in Clean Water Act Rulemaking,” Environmental Alert, by Craig P. Wilson and Robert A. Lawson. April 2009.

“Water Resources,” Chapter 7 in Pennsylvania Environmental Law and Practice, (5th edition 2008).

EPA and Army Corps Respond to Rapanos Decision, Environmental Alert, by Craig P. Wilson, Christopher R. Nestor. June 2007.

“U.S. Supreme Court Opens Door to EPA Regulation of Greenhouse Gas Emissions,” Environmental Alert, by Craig P. Wilson, Sandra Y. Snyder. April 2007.

“Coping with Carbon Dioxide,” Energy Magazine, by John F. Spinello, Craig P. Wilson, Sandra Y. Snyder. Winter 2007.

“EPA Revises National Ambient Air Quality Standards for Particulate Matter,” Environmental Alert, by Christopher R. Nestor, John F. Spinello, Craig P. Wilson. October 2006.

“Structuring the Brownfields Transaction - Negotiating Transactional Agreements,” Chapter 7 in Brownfields Law and Practice: The Cleanup and Redevelopment of Contaminated Land, by Craig P. Wilson, R. T. Weston. 1998, revised 2006.

“Structuring the Brownfields Transaction - Overall Structure of the Transaction,” Chapter 6 in Brownfields Law and Practice: The Cleanup and Redevelopment of Contaminated Land, by Craig P. Wilson, R. T. Weston. 1998, revised 2006.

PROFESSIONAL/CIVIC ACTIVITIES

American Bar Association (Vice Chair, Water Resources Committee; Co-Chair Annual Water Law Conference 2011)

Federal Bar Association (Member) Pennsylvania Bar Association (Member)

Craig P. Wilson

COURT ADMISSIONS

Supreme Court of Pennsylvania United States Courts of Appeals for the Third Circuit United States Courts of Appeals for the Fourth Circuit United States Court of Appeals for the Sixth Circuit United States Courts of Appeals for the Ninth Circuit United States District Courts for the Eastern District of Pennsylvania United States District Courts for the Middle District of Pennsylvania United States District Court for the Western District of Pennsylvania United States Supreme Court

BAR MEMBERSHIP

New York Ohio Pennsylvania

EDUCATION

J.D., Vermont Law School, 1992 (summa cum laude; Managing Editor, Vermont Law Review)

M.S.E.L., Vermont Law School, 1992 (summa cum laude) A.B., Dartmouth College, 1987

ACHIEVEMENTS

Martindale-Hubbell “AV” rating (very high to preeminent legal ability) Selected by Chambers USA as one of Pennsylvania's leading Environmental lawyers

David Spigelmyer Vice President, Government Relations, Chesapeake Energy Chair, Marcellus Shale Coalition Dave Spigelmyer has invested a 29-year career in the natural gas industry building bridges between state and local government officials, communities and community leaders, philanthropic organizations and advocacy groups. Dave began his career working as a director in his hometown YMCA and then moved into the natural gas industry in 1983. He moved quickly into his government relations role by serving the industry through a two-year loan program with the American Gas Association in Washington, DC. He has an extensive background in natural gas pipeline and production operations and has served key leadership roles in utility operations, legislative and regulatory relations, media and crisis management, and philanthropic giving. Dave currently serves as Vice President of government relations for Chesapeake Energy in its Eastern Division operations, is Chairman of the Marcellus Shale Coalition and is a founding member in the development of that organization. Dave is responsible for Chesapeake Energy’s state government relations program in Pennsylvania, West Virginia, New York, Ohio, Kentucky and Virginia. Dave currently serves on the Board of Directors for the Moraine Trails Council of the Boy Scouts of America, is a former President of the Board of Directors for the West Virginia Oil and Natural Gas Association, serves on the Board of the Pennsylvania Chamber of Business and Industry, serves on the Board of Magee-Womens Research Institute and Foundation, is the Board Secretary for Energize West Virginia, serves on the Board of Directors of the Keystone Elk Country Alliance, serves on the Board of the Greater Pittsburgh Chamber of Commerce and he has served as the Gas Executive Committee Chairman for the Energy Association of Pennsylvania. Dave is a 1982 Graduate of Penn State University with a BS Degree in Public Service. Dave is a Pennsylvania native and resides with his wife Francie and two children in Cranberry Township, Pennsylvania.

K&L Gates LLP

J. Daniel Arthur, P.E., SPEC Managing Partner/Chief Engineer ALL Consulting Dan Arthur is a founding member and the Managing Partner of ALL Consulting. Mr. Arthur earned his bachelors degree in Petroleum Engineering from the University of Missouri-Rolla. Professional registrations include Professional Engineer in OK, WY, MT, TX and Certification from the Society of Petroleum Engineers. He is a recognized authority on environmental issues pertaining to unconventional resource development and production. Mr. Arthur has served or is currently serving as the lead researcher on several significant projects involving unconventional resources; environmental considerations pertaining to shale gas development; produced water management and recycling; access to federal lands; and low impact natural gas and oil development. He has also managed two U.S. Department of Energy (DOE) funded research projects involving the development of best management practices utilizing GIS technologies for efficient environmental protection during unconventional resource Development and Production; research to develop a national primer on shale gas; research to develop a national primer on coal bed methane; research to develop a Handbook on the preparation and review of environmental documents for CBM development; and research with the Ground Water Protection Research Foundation (GWPRF) and funded by DOE and BLM involving analysis of produced water management alternatives and beneficial uses of coal bed methane produced water. In 2010, Mr. Arthur was appointed to serve as a Sub-Group Leader for a National Petroleum Council study on North American Resource Development. His Sub-Group focuses on technology that is and will be needed to address development and environmental challenges through the year 2050. Mr. Arthur was also appointed to a U.S. Department of Energy Federal Advisor Committee on Unconventional Resources. Further, Mr. Arthur was nominated by the U.S Department of Energy to serve on the U.S. Environmental Protection Agency’s Advisory Committing on Hydraulic Fracturing. And lastly, Mr. Arthur has been asked to support the U.S. Department of Energy through the Annex III Agreement between the United States and China to provide support relative to coal bed methane and shale development in China. Mr. Arthur has published many articles and reports and has made numerous presentations on environmental, energy, and technology issues. Within the State of Alaska, Mr. Arthur has supported projects from the North Slope to the Kenai Peninsula and supported the Alaska Oil & Gas Conservation Commission with the initial installation of their Risk Based Data Management System (RBDMS). He has supported a variety of projects throughout the state related to oil & gas development, federal land management & access, permitting, soil & groundwater remediation, water sourcing/water management, Native American issues, air permitting issues, regulatory planning and negotiations, as well as other issues.

K&L Gates LLP

SEATTLE OFFICE

206.370.7656 TEL

206.370.6238 FAX

ankur.tohan@klgates.com

Ankur K. Tohan

AREAS OF PRACTICE

Ankur Tohan is an associate in the firm’s Seattle office. He provides counsel to clients on regulatory issues involving a range of environmental statutes, such as the Clean Water Act (CWA), Safe Drinking Water Act (SDWA), Clean Air Act (CAA), Endangered Species Act (ESA), National Environmental Policy Act (NEPA), Administrative Procedure Act (APA), as well as federal Indian Law.

PROFESSIONAL BACKGROUND

Prior to joining K&L Gates, Mr. Tohan was assistant regional counsel for the U.S. Environmental Protection Agency where he worked on complex environmental enforcement, civil defense, and permitting matters. Mr. Tohan served as a lead attorney in Region 10 on wetland enforcement actions and jurisdictional issues under the CWA; oil and gas NPDES permitting; and forestry matters under the CWA and NEPA. In the oil and gas sector, Mr. Tohan counseled the U.S. EPA on several matters: development of the Arctic General NPDES permits for oil and gas exploration in

the Beaufort and Chukchi Seas; development of individual NPDES permits for production facilities on the north

slope; CWA Section 404 permitting for production facilities; SDWA permits for grind-and-inject facilities and oversight of the Alaska Oil and

Gas Conservation Commission - Class II underground injection control program; ESA consultation; and CAA enforcement actions. Mr. Tohan has travelled throughout the Kenai Peninsula and the north slope, which has allowed him to work directly with several native communities as well as the North Slope Borough.

PRESENTATIONS

Presenter, Wetlands in Washington, Law Seminars International CLE, 2007, 2010, 2011.

Presenter, Fundamentals of Environmental Compliance Inspections, National Enforcement Institute, July 2008.

Guest lecturer, Environmental Law Fundamentals, Seattle University Law School, February 2008, 2010.

Presenter, Society for Ecological Restoration and Society of Wetland Scientists Joint Conference, September 2007.

PROFESSIONAL/CIVIC ACTIVITIES

Washington State Bar Association

Ankur K. Tohan

BAR MEMBERSHIPS

Washington

EDUCATION

J.D., Lewis & Clark, 2005 M.S., University of Wisconsin, 2000 B.A., University of Vermont, 1992