Hydraulic Fracturing: Regulations and Wyoming Rulemaking

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Ports-to-Plains Energy Summit
Omni Interlocken Resort
Broomfield, CO
April 7, 2011
Hydraulic fracturing has been in the news lately. Learn exactly what the process is and how it is impacting economic growth and energy security.

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Hydraulic Fracturing: Regulations and Wyoming Rulemaking

  1. 1. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission Supervisor2nd Annual Ports‐to‐Plains Energy Summit  WOGCC Overview April 7, 2011
  2. 2. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission Supervisor WY Crude Oil and Condensate Production  65,000,000 Total  60,000,000  55,000,000  50,000,000  45,000,000 !!!Annual Oil Production, BO  40,000,000  35,000,000 Crude Oil  30,000,000  25,000,000  20,000,000 Condensate  15,000,000  10,000,000  5,000,000  ‐ 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
  3. 3. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission Supervisor WY CO2 EOR Oil Production 4,600,000 4,400,000 Salt Creek  2004 4,200,000 4,000,000 3,800,000 3,600,000 3,400,000 3,200,000 3,000,000Annual Production, BO 2,800,000 2,600,000 2,400,000 2,200,000 2,000,000 1,800,000 1,600,000 Lost Soldier  1986 1,400,000 1,200,000 Beaver Creek  2008 1,000,000 800,000 Monell Unit  2004 600,000 400,000 200,000 Wertz  1986 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
  4. 4. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission Supervisor Wyomings Gas Production  250,000,000  200,000,000 Total incl CO2Gas MCF per month  150,000,000 Conv incl CO2 PRB CBM  100,000,000 NON‐CBM  50,000,000  ‐
  5. 5. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission Supervisor Wyoming Drilling Rig Count 250 240 230 220 210 200 190 180 Conventional Rigs Conventional Rigs 170 CBM Rigs 160 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0 ?Jan‐78 Jan‐79 Jan‐80 Jan‐81 Jan‐82 Jan‐83 Jan‐84 Jan‐85 Jan‐86 Jan‐87 Jan‐88 Jan‐89 Jan‐90 Jan‐91 Jan‐92 Jan‐93 Jan‐94 Jan‐95 Jan‐96 Jan‐97 Jan‐98 Jan‐99 Jan‐00 Jan‐01 Jan‐02 Jan‐03 Jan‐04 Jan‐05 Jan‐06 Jan‐07 Jan‐08 Jan‐09 Jan‐10 Jan‐11
  6. 6. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission Supervisor Approved Applications for Permit to DrillMarch 2010 – March 2011 4,169 Active Permits; 1,173 Drilled/Drilling; 303 Permits Expired
  7. 7. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission Supervisor Time to Process APDNew Rule Implementation September 15, 2010
  8. 8. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission SupervisorSundry Notices Processed
  9. 9. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission SupervisorHorizontal APDs by County March 2010‐March 2011 Converse 316 Active Permits 101 Drilled/Drilling 24 Permits Denied 100 In Approval Process Platte
  10. 10. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission SupervisorHorizontal APDs Approved by Operator March 2010‐March 2011 EOG Bill Barrett Chesapeake Mack Anadarko RKI Texas American Noble Devon Samson Resources Cirque MBI
  11. 11. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission Supervisor Horizontal APD’s by Formation  March 2010‐March 2011Frontier Mowry Niobrara Teapot
  12. 12. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission Supervisor Almost 100% of oil and natural gas wells drilled in WY are HF treated to be commercial; the  Wyoming Well Stimulationsexception is shallow CBNG in northeast WY.   WY has no documented cases  Multi‐zone HF of groundwater contamination  technology 7000 1400caused by HF. 6000 1200 Wells Stimulated/Year 5000 1000 4000 800 3000 600 2000 400 1000 200 Individual Stimulations/Year 0 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
  13. 13. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission Supervisor HF Treatments by Formation 1999‐2010 Fort Union,  1,339  Mesaverde,  2,503  Almond,  1,407  Lewis,  752  Frontier,  2,000 Total 1999‐2010 46,799 Treatments 2010 704 wells stimulated 5,974 Treatments Lance,  34,258 
  14. 14. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission SupervisorBASIS FOR THE WELL STIMULATION RULES:Four major issues were addressed: 1. the protection of groundwater and the identification of permitted water supply  wells within ¼ mile of the drilling and spacing unit or Commission approved  drilling unit; 2. clarification of requirements for well integrity, casing setting depths, casing  design and cementing properties; 3. requirements for disclosure of well stimulation fluid chemical additives,  compounds and concentrations or rates – planned and actually injected; 4. and requirements for the handling of the well stimulation load fluid recovered.  
  15. 15. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission SupervisorWell Completion Report  Form 3, Page 1
  16. 16. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission SupervisorWell Completion Report  Form 3, Page 2
  17. 17. Listing of Chemicals Used in Compliance with Chapter 3  Thomas E. Doll Wyoming Oil and Gas Section 45(h) Conservation Commission State Oil and Gas SupervisorWell Completion Report  Form 3 Attachment
  18. 18. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission SupervisorCompletion Reports Processed
  19. 19. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission Supervisor WY 2010 Oil and Gas Sales Royalties/Revenues* Condensate, bbl,   •Does not includeGas Plant Products,  $59,794,550  All Others,  $686,119  Ad Valorem, Severance or  gal,  $63,705,130  Conservation Taxes or  Federal Royalties CBM, MCF,   $170,308,883 Processed Residue Gas,  MCF,  $197,107,828  Unprocessed Wet Gas,  MCF,  $383,560,401  Oil, bbl,  $221,590,167  Total $1,097,127,596 
  20. 20. Thomas E. Doll Wyoming Oil and Gas State Oil and Gas Conservation Commission Supervisor You may view the OGCC rules at http://wogcc.state.wy.us by clicking on “Rules and  Regulations” in the right hand column of the home page. Click on the Bucking Horse Icon “Download Rules and Regulations”. Click on “Agency”, scroll down to “Oil and Gas Conservation  Commission”  then select “Current Rules” then click “Search” to view the rules. Chapter 3  Sections 8, 22 and 45 address the well integrity and hydraulic fracturing requirements. tdoll@wyo.gov 307‐234‐7147

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