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Hydraulic Fracturing in Canada

Hydraulic Fracturing in Canada

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  • This slide shows historical and forecasted gas production for North America broken out by type. The four types included are Conventional, Tight Gas, Coalbed Methane, and Shale. For the period Dec 2005 – Dec 2010Conventional gas production decreased 8.9 Bcf/d (17%)Tight gas production increased 2.5 Bcf/d (22%)Coalbed methane gas production increased 0.8 Bcf/d (40%)Shale gas production increased 13 Bcf/d (736%)For the period Dec 2010 – Dec 2015Conventional gas production decreases 8.2 Bcf/d (20%)Tight gas production increases 2.2 Bcf/d (15%)Coalbed methane gas production decreases 0.9 Bcf/d (29%)Shale gas production increases 16.7 Bcf/d (111%)For the period Dec 2015 – Dec 220Conventional gas production decreases 3.6 Bcf/d (11%)Tight gas production increases 2.8 Bcf/d (16%)Coalbed methane gas production decreases 0.4 Bcf/d (17%)Shale gas production increases 15.9 Bcf/d (50%)For the period Dec 2005 – Dec 2020Conventional gas production decreases 20.7 Bcf/d (40%)Tight gas production increases 7.5 Bcf/d (65%)Coalbed methane gas production decreases 0.5 Bcf/d (23%)Shale gas production increases 45.5 Bcf/d (2,587%)Key MessageContinued growth in shale plays will offset the declines in conventional supply areas.
  • Natural gas offers long term energy cost savings; PwC estimates US manufactures could save upwards of $11B annually*. Source: PwC, December 2011, Shale Gas- A renaissance in US manufacturing? * Estimated values based on projections to 2025Life-cycle GHG emissions from gas-fired electricity production are 36% lower than for coal-fired electricity productionhttp://www.capp.ca/getdoc.aspx?DocId=215278&DT=NTV “In a surprising turnaround, the amount of carbon dioxide being released into the atmosphere in the U.S. has fallen dramatically to its lowest level in 20 years, and government officials say the biggest reason is that cheap and plentiful natural gas has led many power plant operators to switch from dirtier-burning coal.” http://www.eia.gov/todayinenergy/detail.cfm?id=7350
  • On January 30, CAPP released a supporting set of six Hydraulic Fracturing Operating Practices to put the Principles into action. Overview of each one.“Say what you do, and do what you say”They explain the industry practices and regulations that are already in place, as well as raise the bar to drive environmental performance improvement.The Operating Practices apply to all CAPP member companies and are consistent across CanadaThe Practices are voluntary but strongly encouraged; however, they are widely respected indicators of strong operations and therefore routinely mandated by member companies even where compliance is not legally required.They are evergreen and will be periodically reviewed and implementation monitored.Other jurisdictions, as far away as New Zealand, have approached CAPP about adopting these Practices.While these practices focus on natural gas, industry is already moving to adapt and apply them to tight oil later this year.
  • Must disclose those chemical ingredients which are identified on the Material Safety Data Sheet.Trade secrets: if you promote innovation, you must protect it. Discouraging innovation encourages the use of antiquated, known technology.AB – mandatory this yearNB – mandatory to regulators, with intent to make public disclosure mandatory eventually
  • Increase awareness and understanding of potential product hazards so that appropriate measures can be taken to decrease the likelihood of adverse impacts.Where possible, fracturing fluids with lower risk profiles can be selected.This ultimately increases the market demand for the most environmentally sound fracturing fluids
  • Sound wellbore design and construction is fundamental to protecting groundwater resources. Wellbore design is strictly regulate by individual provincial regulators.Companies have procedures in place to ensure wellbore integrity prior to initiating hydraulic fracturing operations.
  • Selection of water sources that are first evaluated from an environmental, social and economic standpoint.Collection and reporting of actual withdrawals as per licence requirements and to CAPP’s Responsible Canadian Energy Program.Maximizing the reuse of all water sources.
  • Sound wellbore design and construction is fundamental to protecting groundwater resources. Wellbore design is strictly regulate by individual provincial regulators.Companies have procedures in place to ensure wellbore integrity prior to initiating hydraulic fracturing operations.
  • In 2011, Encana experienced a series of anomalous induced seismicity events in North East BCPreliminary investigation showed low-level seismic activity occurred about 2.6 km underground in a contained zone close to completions operationsInstalled microseismic arrays to monitor the eventsThe British Columbia Oil & Gas Commission (OGC) initiated an investigation
  • Transcript

    • 1. Hydraulic Fracturing in CanadaRichard DunnVice President, Regulatory and Government Relations,Encana Canadian DivisionBrussels| January 22| 2013
    • 2. Overview Encana Profile Industry Response to Stakeholder Shale Gas Concerns Encana’s Experience Shale pics 1 1
    • 3. Encana CorporationAggressively pursuing liquids growth Production Volumes Greater Sierra • 2011 Actual: (inc. Horn River) Natural Gas (MMcf/d) 3,333 Cutbank Ridge Liquids (Mbbls/d) 24 (inc. Montney) Peace River Arch • 2012 Forecast: 3,000 Bighorn Natural Gas (MMcf/d) Liquids (Mbbls/d) 30 Duvernay Coalbed Methane Clearwater Oil Collingwood/Utica Deep Panuke Jonah Niobrara/Mancos DJ Niobrara Piceance Mississippian Lime San Juan Eaglebine Existing Key Resource Play Haynesville Texas New Liquids Play Tuscaloosa 2
    • 4. Western CanadaSignificant Unconventional Plays Western Canada Estimated Gas In PlaceHorn River (GIP):Shale Alberta: 3400 Tcf BC: 1200 Tcf Total: 4600 Tcf Total Canadian Production: Montney Silt ~6Tcf/year Duvernay Deep Basin Shale Tight Gas Coal Bed Methane Encana Land 3
    • 5. North American Gas Production by Type Conventional, Tight Gas/CBM, and Shale Long term growth in shale production offsets conventional declines.Bcf/d Forecast 48 bcf/d ~50% 4 Source: Encana Fundamentals, IHS
    • 6. Benefits of Shale Gas Development Security of supply – New unconventional natural gas reservoirs have uncovered hundreds of years of North American supply Improved competitiveness – LNG exports have the potential to add $ 1 trillion to Canada’s GDP – Sustained low NG prices saving North American manufacturing operations upwards of $11B annually GHG emission reductions – Conversions to natural gas fired power generation have caused U.S. energy-related emissions dropped to a 20 year low in 2012 (1992 levels) 5
    • 7. Working with Canadian Governments  Canadian operators work under rigorous regulatory regimes that have been set out by our provincial and federal regulators – Provide effective and efficient operating frameworks that enable both environmental protection and resource development.  Important for industry (Canadian Association of Petroleum Producers – CAPP) to work with governments to develop mutual understanding of technical, business and social considerations – Leads to improved policy and regulations, delivering “win – win” results  Operating practices developed by CAPP complement robust regulations6
    • 8. Public Concerns About Shale Gas “Frac fluids contain Transparency dangerous chemicals that aren’t disclosed to public” “Fracturing can have Water Quality adverse effects on drinking water” Water “Fracturing uses enormous Quantity amounts of water” “Fracturing & associated Seismicity waste-water disposal cause earthquakes” 7
    • 9. Industry Response to Public ConcernsCAPP Guiding Principles for Hydraulic Fracturing  Guiding Principles: – Protection of quality and quantity of fresh water  Hydraulic Fracturing : – Fracturing fluid additive disclosure – Baseline groundwater testing – Wellbore integrity – Water sourcing and reuse 8
    • 10. CAPP Hydraulic Fracturing Operating PracticesRecognized in the IEA Golden Rules for Hydraulic Fracturing  Fracturing Fluid Additive Disclosure  Fracturing Fluid Additive Risk Assessment  Baseline Groundwater Testing  Wellbore Construction and Quality Assurance  Water Sourcing, Measurement and Reuse  Fluid Transport, Handling, Storage and Disposal  Anomalous Induced Seismicity http://www.capp.ca/canadaIndustry/naturalGas/ShaleGas/Pages/default.aspx#operating 9
    • 11. 1 Fracturing Fluid Additive DisclosurePublic Concern: “Frac fluids contain undisclosed dangerous chemicals”Industry Response:• Publicly disclose, on a well- by-well basis, the chemical ingredients in additives used  Additive name, supplier, purpose, chemical name & maximum concentrations• BC and Alberta have moved to make disclosure mandatory 10
    • 12. 2 Fracturing Fluid Additive Risk AssessmentPublic Concern: “Fracturing can have adverse effects on drinking water”Industry Response:• Identify and manage potential health and environmental risks associated with these additives  Builds awareness  Selection of greener fracturing fluids with lower risk profiles, where possible• Develop risk management plans for each well fractured 11
    • 13. 3 Wellbore Construction and Quality AssurancePublic Concern: “Fracturing can have adverse effects on drinking water”Industry Response:• Comply with rigorous provincial regulatory requirements and good engineering practices• Confirm wellbore integrity prior to fracturing• Undertake remedial actions, when required 12
    • 14. 4 Water Sourcing, Measurement and Reuse Public Concern: “Fracturing uses enormous amounts of water” Industry Response: • Evaluate available water supply sources  Recycled water  Saline groundwater  Wastewater sources  Fresh groundwater  Surface water • Measure and report government regulated water withdrawals • Reuse water as much as practical 13
    • 15. 5 Anomalous Induced SeismicityPublic Concern: “Fracturing & associated waste-water disposal cause earthquakes”Industry Response:• Assess the potential for anomalous induced seismicity• Monitor during operations• Implement procedures to mitigate anomalous induced seismicity as required• Consistent with the recommendations from the regulator’s (OGC) investigation www.bcogc.ca/node/8046/download?documentID=1270 14
    • 16. Encana ExperienceFracturing Fluid Additive Disclosure 15
    • 17. Encana Experience Fracturing Fluid Additive Risk Assessment Developed a Responsible Products Program – Assessed ingredients being used in hydraulic fracturing fluids against government health and environmental criteria Program has influenced product selection and procurement – Eliminated use of diesel, benzene, arsenic, cadmium, chromium, lead & mercury in completions products 16
    • 18. Encana Experience Water Sourcing, Measurement and Reuse Debolt Source Water Plant A result of aquifer mapping of the region − Industry/government effort to understand groundwater capacity Uses water from deep, sub-surface, saline aquifer for hydraulic fracturing operations Benefits include: – Eliminating use of surface water – Less traffic, dust 17
    • 19. Encana Experience Anomalous induced seismicity• Installed microseismic arrays to monitor the events• Results of both Encana and the OGC’s investigations were consistent: − No event posed risk to public safety, worker safety or the environment − Seismic events were contained within the production zone (~2.6 km below surface) − Localized and specific to this particular shale gas formation − Can be safely managed using prescribed operating practices Microseismic activity 18
    • 20. Conclusion• Industry develops natural gas resources responsibly and efficiently – Provides security of energy supply while providing benefits to the economy and environment – Governed by rigorous regulatory regimes, both at the federal and provincial levels – Addressing operational concerns about hydraulic fracturing through CAPP practices, which is driving the right behaviors • Development of greener chemicals • Finding alternative water sources • Managing anomalous seismic events 19
    • 21. 20

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