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Michigan Energy Forum - December 6, 2012

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Natural gas has dropped in price drastically in the last several years thanks to new drilling technologies such as "fracking." This change in the economics of power generation is prompting …

Natural gas has dropped in price drastically in the last several years thanks to new drilling technologies such as "fracking." This change in the economics of power generation is prompting manufacturers to explore gas powered co-generation and prompting utilities faced with an aging fleet of coal fired power plants to consider replacing them with gas powered electrical power plants in light of their cheaper costs. Burning less coal could reduce polution and GHG emissions, but fracking raises some concerns about ground water and safety. We will discuss the impact of fracking on natural gas prices and its impact on our fuel source mix and the economic opportunities, environmental impacts, regulations, and concerns being raised by this technology and market dynamics it is facilitating.

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  • Chemicals are undisclosed to the public and sometimes even to regulators (DEQ can currently only obtain information in the event of an emergency or accident).Considered to be a trade secret or proprietary information. Many states are changing this – Wyoming, Arkansas, Texas – Michigan required greater disclosureFRAC Act - Fracturing Responsibility and Awareness of Chemicals Act would regulate fracturing under the Safe Drinking Water Act (SDWA) and require that the types of chemicals injected underground with water in the process be made public. (H.R. 1084/S. 587)
  • Each well requires millions of gallons of water to fracture the well (on average 5 million gallons)In Michigan, by law, surface water withdrawals are prohibited so the source is ground water. Oil and Gas operations are exempt from the registration and permitting requirements under Part 327 which regulates large quantity withdrawals.
  • Once the fracking process is complete, anywhere from 10-70% of the fracture water comes back to the surface. Each well produces millions of gallons of wastewater, called flowback, which have to be disposed of.Michigan law requires the flowback to go to frac tanks and then be disposed of in injection wells. (other states allow evaporation pits and wastewater treatment plants with discharge to surface waters)Less protective requirements for disposalBecause flowback fluids are part of an oil and gas operation, the fluids are designated as an oil and gas waste, even if there are hazardous chemicals in the wastes.Applicants who wish to inject wastes associated with oil and gas operations in a disposal well do not have to identify hazardous waste components in their analysis of the waste product.Not subject to local zoning.
  • Transcript

    • 1. Michigan Energy Forum: Cheaper Natural Gas & Fracking & theireconomic & environmental Impacts December 6, 2012 © Ann Arbor SPARK
    • 2. Horizontal Drilling +Hydraulic Fracturing:It’s an open bookErik Bauss – EID’s Michigan Field DirectorMichigan Energy Forum: Cheaper NaturalGas & Fracking and their economic andenvironmental impacts12-6-2012
    • 3. A really, really brief overview• Natural gas extraction has increased dramatically as a result of horizontal drilling (HD) and hydraulic fracturing (HF). In 2011, the United States produced 24 trillion cubic feet of natural gas, the most produced in over 30 years.• Without HF ‘tight’ (low permeability and porosity) hydrocarbon resources would not be economic.• HF has been used in Michigan for decades, in excess of 12,000 times, most notably in the Antrim Shale.• HF is expected to be used in about 90% of the O&G well completions in the future.• HF and natural gas opponents use speculative fears to suggest something’s being hidden and must be found out about HF fluids. Opponents suggest that unknown elements are being introduced into groundwater and threatening us all, even though the EPA and dozens of states have repeatedly stated otherwise, but the mere fact anything is ‘unknown’ is being exploited to create doubt.• The natural gas industry responded by participating in a new initiative called FracFocus.org where the composition of hydraulic fracturing fluids are publicly disclosed.• FracFocus.org now includes data on fluids used at more than 31,000 well sites developed by 300 energy-producing companies who have registered with FracFocus.
    • 4. Compound, Purpose, & Common Application
    • 5. An argument, an understanding, an environment for innovation, or not…• HF and natural gas opponents prey upon the fact that some individual constituents are not being fully disclosed, even if the fluids and the additives are.• Proprietary ingredients are what give one HF process an advantage over another. Competitiveness = Innovation• Proprietary ingredients are common in many new products where manufacturers need to protect their formulations to ensure the ability to recover their investment in research. It is the same reason we have patent laws. Absent such protection there would be far fewer technological advances.
    • 6. An example• The truth is that more information is available on HF fluids than some very common products.• For example: Solid Green #78 Glass & Neutral Cleaner which is designated by the EPA’s Design for the Environment program as one of several “products that perform well, are cost-effective, and are safer for the environment.”• Yet, the MSDS sheet does not list a single ingredient and ingredients are being withheld as a trade secret (yellow highlight).
    • 7. SUNBURST CHEMICAL’SSolid Green 78 Glass and Neutral Cleaner
    • 8. More ‘Secrets’• Regardless, a review of the entire MSDS for the product provides all the essential information about the product, including hazards, safety procedures and control measures. Such is the way the system works, even for designated green products. Proprietary information is protected, while essential safety data is disclosed; a balance essential to progress.• Other examples: There is this brick cleaner, for example, which includes an organic salt compound, the constituents of which are not disclosed. Then, there is this hydroponics ph adjuster, where the exact percentages of constituents are protected, this knife honing oil, this “eco-conscious” spot remover, this first aid burn cream, this concrete cleaner and this swimming pool chlorinator. Finally, and perhaps most significantly, there is this water treatment product and this one, both of which are used to ensure drinking water supplies are safe.
    • 9. The book is open, and it’s becoming a better read with every new page…• You can read the rules, which apply to all products, not just hydraulic fracturing fluids, here.• Other companies have their own disclosure programs offering additional information.• Halliburton, for example, has a very user-friendly website offering a thorough explanation of everything in their fracturing fluids.
    • 10. To find more information and signup for Energy In Depth Morning News, visit www.EnergyInDepth.orgErik Bauss, Field Director for EID–Michigan (248) 767-9085 Erik@EnergyInDepth.org For region specific info visit:www.eidmarcellus.org & www.eidohio.org
    • 11. HYDRAULIC FRACTURING AND NATURAL GAS SUPPLYHal FitchChief, Office Oil, Gas, and Minerals
    • 12. HISTORY OF HYDRAULIC FRACTURING IN MICHIGAN•1952 - first hydraulic fracturing•12,000 wells have been fracked  Over400 horizontal wells  Range of depths and volumes•No environmental incidents
    • 13. Oil andGas Wells inMichigan
    • 14. RECENT PUBLIC CONCERNS OVER HYDRAULIC FRACTURING•Increase in use (80 % of wells)•Increase in fracturing fluid/well•Increase in well depth•Used with horizontal drilling  Note: this is NOT new
    • 15. HYDRAULIC FRACTURING – REGULATORY ISSUES Migration of gas or fluids Water use Chemical additives Management of flowback water Surface spills Earthquakes
    • 16. MIGRATION OF GAS OR FRACTURE FLUIDS• Fractures are confined to target zone• Casing and sealing protect groundwater• Causes of gas in aquifers  Naturalsources  Unplugged wells  Inadequate well construction
    • 17. WATER USE• Deep horizontal well: 5,000,000 + gallons• Regulate according to hydrologic setting• DEQ requires Water Withdrawal Assessment• DEQ will not approve if adverse impact
    • 18. CHEMICAL ADDITIVES• Adverse impacts if not properly managed• Some chemicals subject to federal trade secret protections• Adequate information to detect spills• DEQ posts Material Safety Data Sheets
    • 19. MANAGEMENT OF FLOWBACK WATER• Contain salts and other chemicals• Adverse impacts if not properly managed• In Michigan: fluids must be contained in steel tanks and injected into deep disposal wells
    • 20. SURFACE SPILLS• Secondary containment requirements• Spills must be reported and cleaned up promptly• No open pits except fresh water
    • 21. EARTHQUAKES• Small quakes have been triggered by wells (mostly disposal wells)• Existing fault and high stress in crust Not present in Michigan• High pressure and volume of fluid Limit by permit process
    • 22. SUMMARY• Hydraulic fracturing itself is not a threat to the environment• Water use, flowback management, and spill containment/response are critical• Michigan has effective laws and rules for oil and gas development• Hydraulic fracturing has not caused adverse impacts to the environment or public health in Michigan
    • 23. Hydraulic Fracturing: Is Michigan ready for the next wave?James Clift, Policy DirectorMichigan Environmental CouncilDecember 6, 2012
    • 24. Primary Concerns Chemicals Used in Fracking Process Water Use Disposal of Waste Water Other Impacts of Fracking Operations
    • 25. Fracking Chemicals
    • 26. Other Local Issues Air: exhaust emissions, fugitive emissions, flaring, dust Land: well pads, roads, utility corridors Noise: drilling, trucking, compressor stations Visual: clearing of land, equipment, overall viewshed Community: road use increases maintenance needs, influx of workers; economic stimulus
    • 27. Encourage Best Management Practices Recycling of water Noise controlAir emission controlsReclamationAll surface disturbance,permanent facilities, etc. should beaway from surface waters,wetlands, floodplainsWildlife considerationsSubstitutions for toxic oil andgas field materials should be used Insulation Blankets Used to Deaden Noise from Drilling Operationswhen available Source: Chesapeake Energy Corporation
    • 28. Best use of natural gas Pros and cons  Electricity generation  Industrial feedstock  Home heating  Transportation
    • 29. Thank You James Clift Policy DirectorMichigan Environmental Council 602 W. Ionia St. Lansing, MI 48933 517.487.9539james@environmentalcouncil.org

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