Chapter 4B Producing Natural Gas From Shale - Opportunities And Challenges Of A Major New Energy Source

• Jurisdiction: United States

Hydraulic Fracturing
(Nov 2011)
CHAPTER 4B
PRODUCING NATURAL GAS FROM SHALE - OPPORTUNITIES AND CHALLENGES OF A MAJOR NEW ENERGY SOURCE
Mark Zoback
Professor of Geophysics Stanford University
Natural Gas Subcommittee of the Secretary of Energy Advisory Board

MARK ZOBACK is the Benjamin M. Page Professor of Geophysics at Stanford University and is a Member (2011-2012) of the Natural Gas Subcommittee of the Secretary of Energy Advisory Board. He was co-principal investigator of the San Andreas Fault Observatory at Depth project (SAFOD) and has been serving on a National Academy of Engineering committee investigating the Deepwater Horizon accident. He was the chairman and co-founder of GeoMechanics International and serves as a senior adviser to Baker Hughes, Inc. Prior to joining Stanford University, he served as chief of the Tectonophysics Branch of the U.S. Geological Survey Earthquake Hazards Reduction Program. Professor Zoback was elected to the National Academy of Engineering in 2011.

Opportunity: North American Shale Plays

˜2300 TCF (85% Shale Gas)

"100 years of Natural Gas" U.S. Consumption 23 TCF/y

[Page 4B-2]

The Next 5-10 Years

˜100,000 Wells, 1-2 Million Hydrofracs

• How Do We Optimize Resource Development?

• How Do we Minimize the Environmental impact?

Opportunity: Global Shale Plays

˜22,600 TCF of Recoverable Reserves

6600 TCF from Shale (40%)

Current use ˜160 TCF/year

[Page 4B-3]

Global Energy and Environment Challenge

How Do We Provide Accessible, Affordable, and Secure Energy While Protecting the Planet (2x by 2050, 3-4x by 2100)?

Air Pollution and Energy Source^*

CH4	Oil	Coal
CO2	117,000	164,000	208,000
CO	40	33	208
NOx	92	448	457
SO2	0.6	1,122	2,591
Particulates	7.0	84	2,744
Formaldehyde	0.75	0.22	0.221
Mercury	0	0.007	0.016
EIA, 1998

[Page 4B-4]

Drilling/Completion Technology Key To Exploitation of Shale Gas

The Challenges of $4 Gas

[Page 4B-5]

So Do We Know How This Works?

SPE Shale Gas Production Conference - Survey

[Page 4B-6]

Some New Ways of Thinking

Fundamental Science

• How rock properties affect the success of stimulation

• The importance of aseismic deformation mechanisms on reservoir stimulation

• Factors affecting ultimate recovery

Physical and Chemical Properties of Organic Rich Shales

How Do the Properties of Shale Affect the Outcome of Hydraulic Fracturing Stimulation?

5 Wells, 40 Stages, ˜4000 Microseismic Events

[Page 4B-7]

What is Going on Within the Reservoir During Hydraulic Fracturing?

Volume Affected by 4000 Microearthquakes Can Account for Less Than 1% of Gas Production in First 6 Months

Why Is Production Persistent?

[Page 4B-8]

Current Research Collaborations

o ConocoPhillips - Barnett Microseismic and Frac Data, Shale Core, Fault Damage Zones

o Chevron - Geomechanics of Shale Gas and CO2 Sequestration

o RPSEA - Horn River Shale Gas (w/LBNL, Texas A&M)

o Exxon - Heavy Oil, Adsorption and Swelling

o BP - Haynesville Core, Slickwater Frac'ing with CO2, Geomechanics of Paleogene (GOM)

o DOE - CO2 Sequestration in Shale Gas Reservoirs

o Hess - Bakken Shale, Frac'ing, Microseismic and Geomechanics

o Apache/Encana - Horn River Microseismic and Geomechancis Study

Current Research Collaborations

[Page 4B-9]

Some New Ways of Thinking

Fundamental Science

• How rock properties affect the success of stimulation

• The importance of aseismic deformation mechanisms on reservoir stimulation

• Factors affecting ultimate recovery

Operations

o Minimizing the environmental impact of shale gas development

Secretary of Energy Advisory Board

Shale Gas Production Subcommittee 90-Day Report

August 18, 2011

U.S. DEPARTMENT OF ENERGY

[Page 4B-10]

DOE Shale Gas Subcommittee

• John Deutch - MIT

• Stephen Holditch - Texas A&M

• Fred Krupp - Environmental Defense Fund

• Katie McGinty - Pennsylvania DEP

• Sue Tierney - Massachusetts Energy

• Dan Yergin - Cambridge Energy Research

• Mark Zoback - Stanford

New DOE Committee

Secretary Chu Tasks Environmental, Industry and State Leaders to Recommend Best Practices for Safe, Responsible Development of America's Onshore Natural Gas Resources

President Obama directed Secretary Chu to convene this group as part of the President's "Blueprint for a Secure Energy Future"

"Setting the Bar for Safety and Responsibility: To provide recommendations from a range of independent experts, the Secretary of Energy, in consultation with the EPA Administrator and Secretary of Interior, should task the Secretary of Energy Advisory Board (SEAB) with establishing a subcommittee to examine fracking issues. The subcommittee will be supported by DOE, EPA and DOI, and its membership will extend beyond SEAB members to include leaders from industry, the environmental community, and states. The subcommittee will work to identify, within 90 days, any immediate steps that can be taken to improve the safety and environmental performance of fracking and to develop, within six months, consensus recommended advice to the agencies on practices for shale extraction to ensure the protection of public health and the environment."

[Page 4B-11]

90 Day Report Summary

• Shale gas is extremely important to the energy security of the United States

• Shale gas currently accounts for 30% of the total US natural gas production

• Shale gas development has a large positive economic impact on local communities and states

• Shale gas development creates jobs

• Shale gas can be developed in an environmentally responsible manner.

• Improve public information about shale gas operations: Create a portal for access to a wide range of public information on shale gas development...

• Improve communication among state and federal regulators: Provide continuing annual support to STRONGER (the State Review of Oil and Natural Gas Environmental Regulation) and to the Ground Water Protection Council...

• Improve air guality: Measures should be taken to reduce emissions of air pollutants, ozone precursors, and methane as quickly as practicable...

[Page 4B-12]

• Protection of water quality-1: The Subcommittee urges adoption of a systems disclosure of the flow and composition of water at every stage of the shale gas production process.

• Protection of water quality-1: The Subcommittee urges adoption of a systems disclosure of the flow and composition of water at every stage of the shale gas production process.

[Page 4B-13]

• Protection of water quality-2: Hydraulic Fracturing

Will Vertical Hydrofrac Growth Affect Water Supplies?

[Page 4B-14]

Depth of Affected Region Affected by Hydraulic Fracturing

[Page 4B-15]

Will Vertical Hydrofrac Growth Affect Water Supplies?

Representation and Public Opinion

News report following Blackpool Earthquake

[Page 4B-16]

90 Day Report Summary

• Protection of water quality-3:

— Adopt best practices in well development and construction, especially casing, cementing, and pressure management. Pressure testing of cemented casing and state-of-the-art cement bond logs should be used to confirm formation isolation.

[Page 4B-17]

• Protection of water quality-4:

— Water use and water disposal issues are changing rapidly

Water Issues Changing Rapidly

[Page 4B-18]

Figure 13. The Apache 34 pad In the Horn River Development of Northern British Colombia is a total of 6.3 acres where twelve multiple fractured horizontal wells recover gas from approximately 5000 acres.

Courtesy George King, Apache Corp.

90 Day Report Summary

• Disclosure of fracturing fluid composition: The Subcommittee shares the prevailing view that the risk of fracturing fluid leakage into drinking water sources through fractures made in deep shale reservoirs is remote. Nevertheless the Subcommittee believes there is no economic or technical reason to prevent public disclosure of all chemicals in fracturing fluids...

[Page 4B-19]

• Managing short-term and cumulative impacts on communities, land use, wildlife, and ecologies. Each relevant jurisdiction should pay greater attention to the combination of impacts from multiple drilling, production and delivery activities

• Organizing for best practice: The Subcommittee believes the creation of a shale gas industry production organization dedicated to continuous improvement of best practice, defined as improvements in techniques and methods that rely on measurement and field experience, is needed to improve operational and environmental outcomes.

Final Report: Just Released

http://www.shalegas.energy.gov/

[Page 4B-20]

THIS ROCK COULD POWER THE WORLD

But we still have a lot of work to do!

[Page 4B-21]

Secretary of Energy Advisory Board

Shale Gas Production Subcommittee 90-Day Report

August 18, 2011

U.S. DEPARTMENT OF ENERGY

[Page 4 - Reference B-1]

The SEAB Shale Gas Production Subcommittee Ninety-Day Report - August 18, 2011

Executive Summary

The Shale Gas Subcommittee of the Secretary of Energy Advisory Board is charged with identifying measures that can be taken to reduce the environmental impact and improve the safety of shale gas production.

Natural gas is a cornerstone of the U.S. economy, providing a quarter of the country's total energy. Owing to breakthroughs in technology, production from shale formations has gone from a negligible amount just a few years ago to being almost 30 percent of total U.S. natural gas production. This has brought lower prices, domestic jobs, and the prospect of enhanced national security due to the potential of substantial production growth. But the growth has also brought questions about whether both current and future production can be done in an environmentally sound fashion that meets the needs of public trust.

This 90-day report presents recommendations that if implemented will reduce the environmental impacts from shale gas production. The Subcommittee stresses the importance of a process of continuous improvement in the various aspects of shale gas...