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Marcellus Shale in Our Community:    What’s in it for All of Us?Joint Landowner Coalition of NY Inc.         February 25, ...
Source MIT Study of the Future of Natural
Energy Today: New York State Energy      Consumption Pattern, 200837.4%30.0%6.0%24.6%Σ 98%!
Shale has always been thehydrocarbon source rockNew technologies make shalea viable drilling target fornatural gas.Tighten...
Where Can We Get the Natural Gas ?  Unconventional Resource Plays                                  How Much               ...
Source: NYSERDA
New York Stratigraphy                     The popular shale                    Herkimer Sandstone                    Oneid...
Marcellus Structure Contour Map
Unconventional Gas Accumulation                                  Source-USGS        Occurs over lager areas
Characteristics of unconventional gas                shales Usually the source rock for other reservoirs Organic rich Less...
TOC (Total Organic Content)                           Rock Sample                                                         ...
Utica SEMPorosity is very small and the void are not well connected
Oneida thin sectionPorosity here is about 10% and the voids are connected
Regional cross section
The Devonian Marcellus Shale                                                           (Rickard, 1989)Primarily interested...
Marcellus Union SpringsOrganic rich thinly bedded blackish grey toblack shale with thin silt bandsThe member is between th...
Marcellus Union SpringsUnion Springs with vertical calcite filled fractures in the OnesquethawCreek, Albany County, NY
Marcellus Cherry ValleyConsists of skeletal limestones andshaly intervalsWestward thinning of the MarcellusFormation in we...
Marcellus Cherry ValleyCherry Valley dark shaly interval and limestone near Cherry Valley, NY
Marcellus Chittenango Member• Upper member of the Marcellus Formation in  Western and central New York• Becomes Cardiff an...
Marcellus Oatka CreekOatka Creek shale in Oatka Creek, LeRoy, NY
Marcellus (Cherry Valley Isopach)       ?The Cherry Valley Limestone Member also thickens to the east
Marcellus (Union Springs Isopach)    ?  The Union Springs Member thickens to southeast
Net Thickness of Organic Rich Section of Marcellus                             (Piotrowski & Harper, 1979)
Shale is Source, Seal and Lately … Reservoir Rock                                                                         ...
HORIZONTAL DRILLINGCombined with Stimulation by HYDRAULIC FRACTURING
HORIZONTAL DRILLINGMultiple Wells from One Drill Pad   6 to 9+ Wells on One PadLong Laterals   1,000 to 8,000 feet
Innovation: Horizontal DrillingFirst horizontal well: 1929First horizontal shale well: 1988(Antrim Shale in Michigan)First...
200 - 500’             Fresh water aquifers are                       generally less than 500 feet                       d...
Drilling Rig            Fresh Water Aquifers                                          Vertical depth 5,000 – 9,000 feet   ...
HYDRAULIC FRACTURINGLarge Volume Hydraulic Fracturing Treatments  50,000 to 500,000 gallons per stageMultiple Stages  4 to...
Volume Comparison SRBC
Comparable Water Usage Entire Basin
Water Useage For Shale Development                                      vs                            Total Water Withdraw...
HYDRAULIC FRACTURING    WHAT’S IN THE WATER
Additive        Main                 Purpose               Common Use Type        Ingredients            Polyacrylamide   ...
Complements Atlas Energy DUG East 2010
ECONOMIC IMPACTJobsLandowner RoyaltiesLease Bonus PaymentsState Income TaxesLocal Property Taxes
It’s Happening in Pennsylvania Marcellus          Economic Impact ‐ 2010                         $3.9 billion in total    ...
What About Broome County, NY?               Let’s Project:Let’s use the 3 counties       Use NY’s current ad‐closest to NY...
NY Real Property Taxes Gas ProductionProjection for Marcellus Drilling (1 Well, Town of Maine, Broome Co.)Avg Well Prod.  ...
Key Points1 Well on Town Property In         Binghamton  $498,002 1st yr Local Property Taxes  $771,613 1st yr Royalty Pay...
New York’s Regulatory Environment Oil and Gas Drilling and Development has been Regulated by the NYS Department of Environ...
Welcome to New York Regulation   State Environmental Quality Review ActGovernment agency must review theenvironmental impa...
New York Regulation  Review & Guidance1992 GEIS 12 yr effort 4 Volume 937 page document (review and study 1980‐1992 includ...
Potential Impacts not Addressed by               GEISHigh-volume fluid management  Water withdrawals and consumption  Tran...
Status of Hydraulic Fracturing in New York                       Water use                   Permitting statusHorizontal d...
2009 dSGEIS – Disclosures and Mitigation (1)Concern or      2009 dSGEISpotentialimpactWater           Impacts of low-flow ...
2009 dSGEIS – Disclosures and Mitigation (2)Concern or       2009 dSGEISpotentialimpactGround water     From surface activ...
2009 dSGEIS – Disclosures and Mitigation (3)Concern or           2009 dSGEISpotential impactChemical             dSGEIS li...
THANK YOU
Marcellus Shale in Our Community: What's in it for All of Us?
Marcellus Shale in Our Community: What's in it for All of Us?
Marcellus Shale in Our Community: What's in it for All of Us?
Marcellus Shale in Our Community: What's in it for All of Us?
Marcellus Shale in Our Community: What's in it for All of Us?
Marcellus Shale in Our Community: What's in it for All of Us?
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Marcellus Shale in Our Community: What's in it for All of Us?

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The slides shared at a public meeting held on March 4, 2011 at the West Middle School Auditorium. The meeting was sponsored by the Joint Landowner's Coalition of New York. Note: The cover slide says Feb 25, 2011. The meeting was delayed a week due to inclement weather and was actually held on March 4.

Speakers included: Scott Kurkoski, attorney for the JLCNY; John Holko, president of Lenape Resources; Richard Nyahay, manager of geology for New York State, Gastem; Michael Joy, attorney and oil & gas law professor at SUNY Buffalo; and Bob Williams, landowner and coalition member from the Windsor, NY area.

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Transcript of "Marcellus Shale in Our Community: What's in it for All of Us?"

  1. 1. Marcellus Shale in Our Community: What’s in it for All of Us?Joint Landowner Coalition of NY Inc. February 25, 2011
  2. 2. Source MIT Study of the Future of Natural
  3. 3. Energy Today: New York State Energy Consumption Pattern, 200837.4%30.0%6.0%24.6%Σ 98%!
  4. 4. Shale has always been thehydrocarbon source rockNew technologies make shalea viable drilling target fornatural gas.Tightening North Americansupply is making“unconventional resources”more attractive.The Barnett showed us thatshale can be exploited.Numerous domestic shaleopportunities exist
  5. 5. Where Can We Get the Natural Gas ? Unconventional Resource Plays How Much Lewis & Mancos: 97 Tcf New Albany: 86-160 Tcf Barnett: 25-252 Tcf Antrim: 35-76 Tcf Upper Devonian: 225-248 Tcf 5
  6. 6. Source: NYSERDA
  7. 7. New York Stratigraphy The popular shale Herkimer Sandstone Oneida Sandstone New York’s other shale
  8. 8. Marcellus Structure Contour Map
  9. 9. Unconventional Gas Accumulation Source-USGS Occurs over lager areas
  10. 10. Characteristics of unconventional gas shales Usually the source rock for other reservoirs Organic rich Less permeable Nuisance gas shows while drilling through the formation Unusual pressure regimes Produced over larger areas produce natural gas by stimulation -Hydrofracturing Economically produced by using horizontal drilling technology
  11. 11. TOC (Total Organic Content) Rock Sample Dispersed TOC Organic Matter: the “source” of oil + assoc. gas Total Organic Carbon (T.O.C.) Live Carbon Dead Carbon Oil Organic Matter (Kerogen) Dead CarbonGas (Jarvie, 1991) Rock-Eval Terminology
  12. 12. Utica SEMPorosity is very small and the void are not well connected
  13. 13. Oneida thin sectionPorosity here is about 10% and the voids are connected
  14. 14. Regional cross section
  15. 15. The Devonian Marcellus Shale (Rickard, 1989)Primarily interested in Union Springs and Lowermost Oakta Creek Members
  16. 16. Marcellus Union SpringsOrganic rich thinly bedded blackish grey toblack shale with thin silt bandsThe member is between the Cherry Valleyand Onondaga limestoneCharacterized as a pyritiferous, further eastthe Union Springs becomes the Bakovenmember that becomes grayer, less organicand has few limestone membersLenses in and out in localities in far WesternNew York
  17. 17. Marcellus Union SpringsUnion Springs with vertical calcite filled fractures in the OnesquethawCreek, Albany County, NY
  18. 18. Marcellus Cherry ValleyConsists of skeletal limestones andshaly intervalsWestward thinning of the MarcellusFormation in western and central NewYork leads to the condensation andunion of the Cherry Valley limestoneswith limestones in the upper part of theUnion Springs
  19. 19. Marcellus Cherry ValleyCherry Valley dark shaly interval and limestone near Cherry Valley, NY
  20. 20. Marcellus Chittenango Member• Upper member of the Marcellus Formation in Western and central New York• Becomes Cardiff and Chittenango members in Central and Eastern New York• Is confined in Western New York by Stafford and Onondaga limestones• Further east it is between the Stafford and Cherry Valley limestones when it is present• Dark grey to black organic rich shale
  21. 21. Marcellus Oatka CreekOatka Creek shale in Oatka Creek, LeRoy, NY
  22. 22. Marcellus (Cherry Valley Isopach) ?The Cherry Valley Limestone Member also thickens to the east
  23. 23. Marcellus (Union Springs Isopach) ? The Union Springs Member thickens to southeast
  24. 24. Net Thickness of Organic Rich Section of Marcellus (Piotrowski & Harper, 1979)
  25. 25. Shale is Source, Seal and Lately … Reservoir Rock Mihai A. Vasilache, 2010 “More mature samples show well-developed nanopores concentrated in micron-scale carbonaceous grains. Large numbers of subelliptical to rectangular nanopores are present, and porosities within individual grains of as much as 20% have been observed. Shallowly buried, lower thermal maturity samples, in contrast, show few or no pores within carbonaceous grains. These observations are consistent with decomposition of organic matter during hydrocarbon maturation being responsible for the intragranular nanopores found in carbonaceous grains of higher maturity samples. As organic matter (kerogen) is converted to hydrocarbons, nanopores are created to contain the liquids and gases. With continued thermal maturation, pores grow and may form into networks. The specific thermal maturity level at which nanopore development begins has not been determined. However, current observations support nanopore formation being tied to the onset of conversion of kerogen to hydrocarbons.”Picture and text from Robert M. Reed, Bureau of Economic Geology | John A. and Katherine G. Jackson School of Geosciences, The University of Texas at Austin, Austin, TX | Robert G. Loucks , Bureau ofEconomic Geology, The University of Texas at Austin, Austin, TX | Daniel Jarvie , Worldwide Geochemistry, Humble, TX | Stephen C. Ruppel , Bureau of Economic Geology, University of Texas at Austin, Austin, TX Picture and text from Robert M. Reed, Bureau of Economic Geology | John A. and Katherine G. Jackson School of Geosciences, The University of Texas at Austin, Austin, TX | Robert G. Loucks , Bureau of Economic Geology, The University of Texas at Austin, Austin, TX | Daniel Jarvie , Worldwide Geochemistry, Humble, TX | Stephen C. Ruppel , Bureau of Economic Geology, University of Texas at Austin, Austin, TX
  26. 26. HORIZONTAL DRILLINGCombined with Stimulation by HYDRAULIC FRACTURING
  27. 27. HORIZONTAL DRILLINGMultiple Wells from One Drill Pad 6 to 9+ Wells on One PadLong Laterals 1,000 to 8,000 feet
  28. 28. Innovation: Horizontal DrillingFirst horizontal well: 1929First horizontal shale well: 1988(Antrim Shale in Michigan)First NYS horizontal: 1989 (andhundreds drilled since)“Today, about 2/3rds of the U.S.rig count is non-vertical, andclose to 50% of the rig count isdrilling horizontal wells.” (Triepke2010)Makes multiwell pads possible National Energy Board (Canada), A Primer for Understanding Canadian Shale Gas November 2009
  29. 29. 200 - 500’ Fresh water aquifers are generally less than 500 feet deep Every casing string is 400 - 1,200’ cemented to surface by pumping cement down pipe and circulating back up between the outside of pipe and the wellbore More than a million pounds of steel casing in each well2,000 - 2,500’ To total depth Source: Range Resources 30 30
  30. 30. Drilling Rig Fresh Water Aquifers Vertical depth 5,000 – 9,000 feet Deep Below the Freshwater Aquifers, protected by multiple layers of steel casing cemented into the ground, water, sand and chemicals are pumped to create fractures allowing the natural gas within the shales to flow into the wellbore and up to the surface through the steel casing. Multiple zones are stimulated to maximize reservoir stimulation During the Treatment, Micro- seismic is assisting in evaluating the results Hydraulically created fractures Marcellus Shale (100 – 300 feet thick) Horizontal lateral length32 3,000 – 5,000 feet
  31. 31. HYDRAULIC FRACTURINGLarge Volume Hydraulic Fracturing Treatments 50,000 to 500,000 gallons per stageMultiple Stages 4 to 14 Stages per well
  32. 32. Volume Comparison SRBC
  33. 33. Comparable Water Usage Entire Basin
  34. 34. Water Useage For Shale Development vs Total Water Withdrawal Appalachian BasinCourtesy John A. Veil Argonne National Laboratory 2010 DUG East Presentation
  35. 35. HYDRAULIC FRACTURING WHAT’S IN THE WATER
  36. 36. Additive Main Purpose Common Use Type Ingredients Polyacrylamide Reduces friction Cosmetics; soilFriction (non-hazardous) between fluid and pipe conditioner; somereducer children’s toysAnti- Eliminates bacteria in Disinfectant; sterilizeMicrobial Glutaraldehyde the water that produce medical and dentalAgent corrosive byproducts equipment and surfaces Automotive anti-Scale Ethylene glycol Prevents scale freeze, householdinhibitor deposit in the pipe cleaners, de-icing agent 7.5% Help dissolve cement Swimming poolDiluted Hydrochloric and minerals and help chemical and cleanerAcid Acid initiate fractures 39
  37. 37. Complements Atlas Energy DUG East 2010
  38. 38. ECONOMIC IMPACTJobsLandowner RoyaltiesLease Bonus PaymentsState Income TaxesLocal Property Taxes
  39. 39. It’s Happening in Pennsylvania Marcellus  Economic Impact ‐ 2010 $3.9 billion in total  value added 2009,  $8 billion 2010 $389 million in state  and local taxes in  2009, $785 million  2010 New jobs 
  40. 40. What About Broome County, NY? Let’s Project:Let’s use the 3 counties  Use NY’s current ad‐closest to NY in PA: Tioga,  valorem tax structureBradford & Susquehanna Use NYSORPS 2010 UOP 117 wells with over 100  value ($10.14/mcf)days production reported  Value actual sales at to PADEP current gas prices Weighted average daily  ($4.77/mcf)production rate of 3,543  For Detail Utilize Tax mcfd allocation from Property Assume 1 well is drilled Tax Bill Town of Maine
  41. 41. NY Real Property Taxes Gas ProductionProjection for Marcellus Drilling (1 Well, Town of Maine, Broome Co.)Avg Well Prod. 3,543 McfdAnnual Prod Total 1,293,195 McfNYS UOP Value $10.14 Per McfUniform % 70% Taxable Value Tax Rate/m$ TaxNYS & Fed Mandate $9,179,098 11.410278 $104,736Other County Taxes $9,179,098 0.000001 $0Town General $9,179,098 0.749814 $6,883Town Highway $9,179,098 2.762604 $25,358Maine Fire $9,179,098 1.932882 $17,742School Tax $9,179,098 37.398362 $343,283Totals 54.253941 $498,002
  42. 42. Key Points1 Well on Town Property In  Binghamton $498,002 1st yr Local Property Taxes $771,613 1st yr Royalty Payments $1,269,619 Annual Payments to Town
  43. 43. New York’s Regulatory Environment Oil and Gas Drilling and Development has been Regulated by the NYS Department of Environmental Conservation Division of Mineral Resources since its Inception around 1969
  44. 44. Welcome to New York Regulation State Environmental Quality Review ActGovernment agency must review theenvironmental impact of its actions. Issuance of a permit to drill (and frac) a natural gas well is an action which Generic Environmental  requires review. Impact Statement: Disclose and address the impacts that canbe reasonably anticipated. Evaluates separate Avoid or minimize adverse environmental actions having common impacts to the maximum extent impactspracticable.The purpose of a SEQRA review is not toban an activity, but to identify potentialadverse impacts and ways to mitigatethem.
  45. 45. New York Regulation Review & Guidance1992 GEIS 12 yr effort 4 Volume 937 page document (review and study 1980‐1992 including public hearings across state) Supplemental GEIS 800+pages, 9 chapters, 26 appendices, 114 refs cited by DEC staff, 473 references cited by NYSERDA consultants (included public hearings)Currrent additional documentation said to be more than 1,000 pages reviewing and commenting on responses to SGEIS hearings.
  46. 46. Potential Impacts not Addressed by GEISHigh-volume fluid management Water withdrawals and consumption Transportation of water to the site Additives On-site facilities and handling Flowback and ultimate dispositionMultiple wells at single site, longerduration of impacts
  47. 47. Status of Hydraulic Fracturing in New York Water use Permitting statusHorizontal drilling, GEIS-consistent Permitted under existing GEISno HVHF First horizontal well drilled in 1989 Horizontal/directional wells average 10% of permits per year No “moratorium”Conventional frac Up to 80,000 gallons/well Permitted under existing GEIS(90% of wells in NY; finding of no significant impact552 total permits Disclosure to DEC of waterissued in 2009) source/disposal and frac chemicals required with application to drillHigh-volume frac Currently defined as 58 applications pending(HVHF) > 80,000 gallons/well completion of SGEIS Activity described in dSGEIS: 2 – 8 million gallons
  48. 48. 2009 dSGEIS – Disclosures and Mitigation (1)Concern or 2009 dSGEISpotentialimpactWater Impacts of low-flow described; pass-by flow methodology proposedwithdrawalsSpills Recognizes enhanced risks relative to high-volume hydraulic fracturing (i.e., larger volume of chemical additives, larger volume of flowback water. Describes NYS spill reporting requirements. Enhanced mitigation: Setbacks, secondary containment, stormwater permit coverage (SWPPP, BMP’s), review of site- layout and fluid disposal plan prior to permit issuanceWastewater Reiterates existing procedures and requirements for permitteddisposal discharges Enhanced mitigation: Review and verification of fluid disposal plan prior to permit issuance; wastewater tracking to be implemented
  49. 49. 2009 dSGEIS – Disclosures and Mitigation (2)Concern or 2009 dSGEISpotentialimpactGround water From surface activities: See spills.contamination, From reserve pits & centralized flowback impoundmentsincluding Enhanced mitigation: Construction and liner specifications/fluid removalnatural gas in requirements for reserve pits; double liners/leak detection/site-specific engineering review for centralized flowback impoundmentswater wells From wellbore: Reiterates existing casing and cementing practices, including annular venting Enhanced mitigation: Cement to surface required on production or intermediate casing; cement bond log; pre-frac certification of wellbore construction From hydraulic fracturing in target zone: Not a reasonably anticipated impact below 2,000 feet or with 1,000 feet of vertical separation between target zone and deepest fresh water Enhanced mitigation: Site-specific review at shallower depths or with less vertical separation Baseline testing and ongoing monitoring of nearby water wells
  50. 50. 2009 dSGEIS – Disclosures and Mitigation (3)Concern or 2009 dSGEISpotential impactChemical dSGEIS lists 197 proposed additives for HVHFdisclosure 6 service companies, 12 chemical suppliers 152 with complete compositional information 260 unique chemicals with CAS #’s disclosed in dSGEIS: includes amides, amines, petroleum distillates, aromatic hydrocarbons, alcohols, glycol ethers, ethoxylated alcohols, microbiocides, organic acids and related chemicals, polymers, minerals, metals and other inorganics and miscellaneous other chemicals DEC is monitoring developments in other states and at the federal level.Air quality Potential well pad impacts: PM, NO2, H2S, benzene Potential off-site compressor impacts: Benzene, NO2, formaldehyde Mitigation: control technologies (fuel, equipment), stack heights, public access restrictions Centralized flowback impoundments: Potential HAP emissions Mitigation options: Eliminate specific compounds (methanol, heavy naptha, benzene), limit duration and use, cover or use tanks instead, physical barriers to public access Will be subject to site-specific review including frac & flowback composition“Industrialization Includes descriptions of well pad & equipment size, longer duration of impacts at multi-well” (noise, visual, pads; truck traffic associated with HVHFtraffic, Mitigation: Visual impacts mitigation plan, noise impacts mitigation plan, road use agreement or trucking plan, review of local planning documents, carefulcommunity access road sitingimpacts) DEC is reviewing many comments on this topic.
  51. 51. THANK YOU
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