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Cornell johnson shale gas feb 28 2013 final final


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  • 1. Hydraulic Fracturing and Green TechnologiesA Raymond G. Thorpe Lecture Series event featuring Joseph Degenfelder , CEO of Atlantic Green Fuels “I would found an institution where any person can find instruction in any study.” —Ezra Cornell, October 1868 opening-day address Produced By: Hanson Boyd Mark Engstrom Joe Mohn
  • 2. A diverse portfolio of energy will power the future While global energy demand is estimated to grow by almost 50% by 2030, the energy portfolio will remain highly diversified Millions of Barrels of Oil per DaySource: EIA International Energy Outlook 2012
  • 3. Europe and Asia import liquefied natural gas at a significant premium to the price currently paid in America The United States has enjoyed low natural gas prices for the past several years, and new proven reserves have given rise to the possibility for exportations to higher priced marketsSource: EIA International Energy Outlook 2012
  • 4. Discovers + Green Hydraulic Fracturing Technology will position the US to be a natural gas exporterUS Natural Gas production willexceed demand, presentingtwo opportunities forexportationExportation via LNG to Europeand Asia to capitalize on highpricesExportation via currentlyexisting pipelines to Mexico By 2035, the US is projected to export 4 billion cubic feet per daySource: EIA International Energy Outlook 2012
  • 5. The Marcellus Basin is a pivotal shale gas play, representing 30% of all recoverable shale gas in the United StatesSource: EIA International Energy Outlook 2012
  • 6. New York State represents 28% of the recoverable shale gas in the Marcellus Basin Top States Pennsylvania – 63% 88,182 BCF New York – 28.5% 40, 124 BCF West Virginia – 6% 8,182 BCF BCF = Billion cubic feetSource: EIA International Energy Outlook 2012
  • 7. Pennsylvania and West Virginia have been drilling wells in theMarcellus Shale basin since 2007 2500 Number of Wells Drilled by State and Year 2000 NY State has had a 1500 Pennsylvania moratorium 1000 West Virginia on Hydraulic Fracturing for 500 more than 4 years 0 2007 2008 2009 2010 2011 As other states ramp up production and recognize economic benefits to localeconomies, New York state has been slow to acknowledge technological advances in Hydraulic Fracturing
  • 8. Hydraulic FrackingThe rate we can pump natural gasout of a single well is too slow to bevaluableHorizontal drilling and hydraulicfranking increases the rate whichnatural gas can be extractedHorizontal drilling – the natural gaswell is drilled at an angle deepunderground to follow the shalelayer containing natural gasHydraulic fracking – a mixture ofwater, sand, and additives ispumped into the well to create anetwork of paths for natural gas toflow to the surface
  • 9. How does fracking work?• A vertical well is drilled• Layers of steel pipe is lowered into the well and cemented in place to create a barrier to drinking water sources• After a “kick-off” point the well is drilled horizontally• The horizontal portion of the well is perforated by shaped charges• Fracking fluid is pumped in at high volume and pressure to fracture a network of passages in the rock to allow natural gas to flow into the wellbore
  • 10. What’s in fracking fluid and why?Once a well is fracked the fissures need to be propped open for gas to flow thoughAdditives help carry the proppants and maintain the well Improves the rate pumps can Friction Reducer deliver fracking fluid Surfactant Helps blend additive ingredients Delays the breakdown of gel Water Salt polymer chains Thickens the water to suspend 90% Gelling Agent the sand Prevents deposit buildup in the Scale Inhibitor pipe in operation Helps disolve minerals and Acid initiate fissure in the rockProppant (sand) pH, breaker, crosslinker, iron 9.5% Other 0.034% control, corrosion inhibitor
  • 11. Like all energy sources, shale gas does not come without risk or concern Water usage and contamination Surface spills, managing waste Methane emissions from natural gas systems Top concerns with hydraulic fracturing Road wear and community impact Increased seismic activity Legal implications and involvement of courtsSource: Ecologix Environmental Systems
  • 12. Water & Fracking • The average fracking well requires about 4M gallons of water • Typically 15-20% can be reused • At least 30% of the 4M gal used is unrecoverable • Billions of gallons used each year • Treating wastewater is expensive and must be done at licensed facilities • Risks include : • Potential to contaminate waterways through surface discharge • Open air storage poses risks to wildlife
  • 13. Surface spills and leaksSituation• Flowback water is stored in tanks and open-air pits for many days• Casings isolate the well and prevent leakage to groundwaterConcern• Spills could contaminate shallow water sources and pose threat to wildlife and biodiversity• Well casing could fail and causing fracking fluid to leak, possibly contaminating groundwater
  • 14. Methane emissions for fracking sites• Methane is a green house gas and second largest contributor to climate change behind CO2• During the weeks following hydraulic fracking, frac-return liquids flow back to the surface along with large volumes of methane• Flowback emissions are estimated at 1.9% of the lifetime production• This methane is either captured, flared, or vented which increases the carbon footprint compared to conventional gas wells
  • 15. Road Wear, Noise, Traffic – Each well requires 600 one-way truck trips – Truck traffic causes significant road damage, especially on county roads that were not designed to handle the traffic volume and weight - Typically, provisions for road repair
  • 16. Key Legal Issues Being LitigatedIs hydraulic fracturing an “ultrahazardous” or“unreasonably dangerous” activity?• If so, strict liability may apply.• Courts have not yet ruled on this issue.
  • 17. Key Legal Issues Being Litigated• Should courts issue Lone Pine orders?Such orders can save litigation costs bybringing a quick end to litigation whenplaintiffs lack evidence to prove certainelements of their claims when they file suit.But plaintiffs argue such orders can be unfair.
  • 18. Key Legal Issues Being Litigated• A court in Colorado dismissed a case after plaintiffs failed to adequately respond to a Lone Pine order.• Courts in Pennsylvania have declined to issue Lone Pine orders.
  • 19. Key Legal Issues Being LitigatedNumerous states require public disclosure ofthe composition of fracturing fluid, except forconstituents that are trade secrets.• Are Wyoming regulators adequately vetting trade secret claims ?• Environmental groups have sued, saying Wyoming regulators are too lax in accepting trade secret claims.
  • 20. Key Legal Issues Being LitigatedIs Pennsylvania statute expanding preemptionconstitutional?• In several states, state-level oil & gas statutes and regulations preempt local regulation of oil & gas activity.• A new Pennsylvania statute that expands the preemptive effect of state law is being challenged.
  • 21. Key Legal Issues Being LitigatedDoes grant of “minerals” in a Pennsylvaniadeed include shale gas?• In the context of deeds that grant the right to “minerals,” the word “minerals” does not have a well-established meaning.• The issue can be critical to determining who has the right to drill in the Marcellus.
  • 22. Treating Wastewater from FrackingFrack water contains:• Chemicals and salts found in the • Naturally occurring radioactive fracking fluid material (NORMs)• Other minerals picked up when • Heavy metals the water comes in contact with the fracture rock
  • 23. Water & Fracking Going Forward • Replacing water with gelled liquefied petroleum gas (LPG) or compressed air • Eliminates the need for: • Post-frac cleanup • Water disposal • Frack tanks • Various pieces of heavy equipment • Developing environmentally friendly fracking fluid • ingredients source from the food industry, to offer an extra margin of safetySource: Technology Advances Push Greener Side of Fracking (2010)
  • 24. Greenhouse gas emissions • Portable equipment called reduced emissions completions (RECs) developed to capture well flowback (mix of fracking fluid and methane) • Separates frack water and methane • Reduces methane, VOC, and HAP emissions • Significantly reduces or eliminates the need for flaring • Capture and sell the gas – on average 3,300 McfSource: EPA Lessons Learned from Natural Gas STAR Partners
  • 25. Remaining environmentally sustainable is the top priority for leading shale gas site developers • In 2010, Schlumberger commercialized the OpenFrac fully disclosed hydraulic fracturing fluids, a family of fluids that avoid the use of analytes listed on the US EPA Priority Pollutants and National Primary Drinking Water Contaminants • Schlumberger HiWAY hydraulic fracturing technique, which is a process for fracture construction that delivers a step-change in fracture conductivity and uses 45% less proppant material • Halliburton uses an electrocoagulation technology to treat frac water on site for re-use. It features a mobile electrocoagulation unit that uses electricity to treat up to 26,000 bbl/day of water • Baker Hughes’ VaporFrac fracturing fluid also eliminates post-frac cleanup, water disposal costs, frac tank rentals, sand haulers and proportioning units • Weatherford reclaims water through a two-step process that involves the physical separation of the solids from the water and further filtering and clarificationSource: usage is for educational purposes only and does not signify the companies listed above endorse any parts of this presentation
  • 26. Preventing LeaksTo protect drink wateraquifers, proper drilling, casing andcementing programs are the primaryprotection mechanism.along with the fact that theseaquifers are typically shallow andclose to the surface The other thing we must be cognizant of is that perforating takes place in the hydrocarbon production sections of the wellbore.” - David Adams
  • 27. Environmentally fracking flud: CleanStim• Complete fluid system (Gelling agent, crosslinker/buffer, breaker, and surfactant)• Made with ingredients sourced from the food industry• Excellent performance and reduced environmental risk should a leak or spill occur
  • 28. Microseismic mapping provides significant improvements to model hydraulic fracture growth leading to economic success • Used to map subterranean landscape • Provides tacking ability to monitor the path of treatments and proppants (hydraulic fracturing fluid) • Should a fracture begin to develop in an unwanted direction, that fracturing stage can be shut down immediately • Injection rates and pressures are monitored real time; any abrupt change is an indication the process should be paused for further examinationSource:
  • 29. Ceramic Proppants increase productivity and offer superior stability compared to silica sand • Ideal for slickwater fracturing applications • Can offer 40% more conductivity than higher priced 40/70 resin coated sand • Priced similarly to resin coated sand • Due to a higher porosity within the fracture, a greater amount of oil and natural gas is liberated 40/80 CARBOHYDROPROP capitalizes on the reduced settling rates afforded by small particle diameter, while retaining the benefits of a high quality ceramic proppant. According to Stokes’ Law, pellet diameter has a greater impact on transport than particle density. 40/80 CARBOHYDROPROP provides similar settling velocities to 40/70 sand or resin-coated sand, and exhibits uniform, spherical and rigid particles.Sources: 2011
  • 30. Seismic activity Don’t dispose of frack water to dry wells Reuse it ((((WORK IN PROGRESS))))
  • 31. Economic stimulus in the local community through the introduction of hydraulic fracturing Boulder County Weld County • <50% land protected • Shale gas wells and from public use agriculture co-exist • County carries debt in • Zero bond excess of $250M indebtedness • Moratorium on • >1200 wells drilled in hydraulic fracturing during 2012 • Property taxes = Denver • Property tax = 60% suburbs of Boulder County • 10% sales tax • 5% sales tax • Higher than average • Below average unemployment rate unemployment rate Hydraulic fracturing provides an energy source and brings stimulation to local economies by providing jobs, taxable revenue, and income to local landowners and businessesSource: Discussion with Howard Wheeler, Atlantic Green Fuels, 2013
  • 32. ConclusionHow Natural Gas Fracking is Beneficial to the US? Energy Independence Cleaner (less CO2) compared to coal Advances in green technology for fracking Low Cost Energy EPA emissions.html
  • 33. Hydraulic Fracturing and Green TechnologiesA Raymond G. Thorpe Lecture Series event featuring Joseph Degenfelder , CEO of Atlantic Green Fuels The Johnson Energy Club is proud to welcome Joseph Degenfelder (Chem Eng ‘60) to campus for a panel discussion on the latest Green Technologies in Hydraulic Fracturing. Joining Mr. Degenfelder will be Professor Anthony Ingraffea, Cornell University Engineering, as well as Keith Hall JD, Director of the Louisiana Mineral Law Institute. Funded by the GPSAFC. Open to the entire Graduate Community Thursday February 28 3:00 – 4:00 PM Sage Hall – Room B10 Networking event immediately after
  • 34. - Appendix -
  • 35. Reduced Emissions50% reduction in CO2 emissions, 99.99% reduction in SO2, 72% Reduction in NOx
  • 36. Natural Gas power plants offer low cost energy generation Electricity costs for new power plants, excludin g subsidies, both 2020 and 2035 (in 2010 cents)Source: EIA International Energy Outlook 2012