Transcript Marcellus Shale - Governor's Occupational Safety & Health

Pennsylvania Governor’s
Occupational Safety &
Health Conference
February 19, 2013
The Path and Safety
Challenge Associated
With the Marcellus
Shale in Pennsylvania
Stephanie Catarino Wissman
Executive Director
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Associated Petroleum Industries of Pennsylvania
A Division of the American Petroleum Institute
Who We Are
The American Petroleum Institute (API) is the only national trade association that
represents all aspects of America’s oil and natural gas industry. Our more than 500
corporate members, from the largest major oil company to the smallest of
independents, come from all segments of the industry. They are producers,
refiners, suppliers, pipeline operators and marine transporters, as well as service
and supply companies that support all segments of the industry.
Although our focus is primarily domestic, in recent years our work has expanded
to include a growing international dimension, and today API is recognized around
the world for its broad range of programs.
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Associated Petroleum Industries of Pennsylvania
A Division of the American Petroleum Institute
What We Do
Advocacy
• We speak for the oil and natural gas industry to the public, Congress and the
Executive Branch, state governments and the media.
• We negotiate with regulatory agencies, represent the industry in legal proceedings,
participate in coalitions and work in partnership with other associations to achieve
our members’ public policy goals.
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Associated Petroleum Industries of Pennsylvania
A Division of the American Petroleum Institute
What We Do
Standards
• For more than 85 years, API has led the development of petroleum and
petrochemical equipment and operating standards. These represent the industry’s
collective wisdom on everything from drill bits to environmental protection and
embrace proven, sound, engineering and operating practices and safe,
interchangeable equipment and materials.
• API maintains more than 600 standards and recommended practices. Many have
been incorporated into state and federal regulations; and increasingly, they’re also
being adopted by the International Organization for Standardization.
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Associated Petroleum Industries of Pennsylvania
A Division of the American Petroleum Institute
What We Do
Research and Statistics
• API conducts or sponsors research ranging from economic analyses to
toxicological testing. We collect, maintain and publish statistics and data on all
aspects of U.S. industry operations, including supply and demand for various
products, imports and exports, drilling activities and costs, and well completions.
This data provides timely indicators of industry trends.
• API’s Weekly Statistical Bulletin is the most recognized publication, widely
reported by the media.
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Associated Petroleum Industries of Pennsylvania
A Division of the American Petroleum Institute
What We Do
Certification
• Each day, the oil and natural gas industry depends on equipment to produce, refine
and distribute its products. The equipment used is some of the most technologically
advanced available in the search for oil and gas and allows the industry to operate in
an environmentally safe manner.
• Designed for manufacturers of production, drilling, and refinery equipment, the API
Monogram Program verifies that manufacturers are operating in compliance with
industry standards.
• API also provides quality, environmental, and occupational health and safety
management systems certification through APIQR.
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Associated Petroleum Industries of Pennsylvania
A Division of the American Petroleum Institute
What We Do
Education
API organizes seminars, workshops, conferences, and symposia on public policy
issues. Through API University, we provide training materials to help people in the oil
and natural gas business meet regulatory requirements and industry standards. To
prepare the next generation of Americans to make informed decisions or pursue
careers in our industry, we work with the National Science Teachers Association and
other educational groups to impart scientific literacy and develop critical thinking skills
in the classroom. Resources developed specifically for teachers and students include
Energy & Society, and www.classroom-energy.org, informative and interactive
educational resources in one easy-to-use location.
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Largest, oldest, and most
diverse association of oil
and gas businesses with
over 900 members in PA
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
500 corporate members include
large corporations, smaller
independents, service and
supply companies throughout
the US and the world
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The Keystone Energy Forum was formed through a
partnership of two major oil and gas trade associations in
Pennsylvania. The American Petroleum Institute and the
Pennsylvania Independent Oil & Gas Association represent
over 95% of operators in the Commonwealth.
REACH OUT, INFORM, EDUCATE
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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A New - Yet Old- PA Industry
1859: Drake Oil Well
1878: Haymaker Well in
Murrysville. First
commercial natural gas
well in U.S.
150 YEARS of drilling
history, 60 years of hydro
fracturing.
350,000 vertical wells
60,000 still in production
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Shale Formations in
Pennsylvania
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Marcellus Shale Formation
• Geological formation created
about 380 million years ago in
Middle Devonian age
• As formation aged and
decayed, natural gas trapped in
the shale
• Formation rests a mile or more
below surface, thickness
between 50-200 feet
• Approximately size of 95,000
square miles
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Marcellus Shale Formation
Estimated recoverable reserves: 500
trillion cubic feet (tcf)
– Current U.S. natural gas
demand
is 23 tcf per year
– Marcellus has potential to serve
not only Pennsylvania, but can
meet 25 percent of total U.S.
natural gas demand
– Natural gas prices would
increase without current
Marcellus Shale production
Economically feasible as a result of:
– Horizontal drilling
– Proximity to northeastern
population centers
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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The Competition
U.S. Department of Energy, U.S. Shale Basins
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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How the Marcellus compares…
…to the largest oil and gas fields in the world
Marcellus reserves could exceed those of the largest oil field in the world
(Saudia Arabia) and be the 2nd largest natural gas field (largest in Qatar/Iran)
(Bubble size approximates
reserves)
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Utica Shale Formation
The Utica Shale formation lies a few
thousand feet below the Marcellus shale and
covers most of Pennsylvania. The Utica
Shale is thicker than the Marcellus, it is more
geographically extensive, and it has already
proven its ability to support commercial
production.
The potential source rock portion of the Utica
Shale is extensive. In the United States it
underlies portions of Kentucky, Maryland,
New York, Ohio, Pennsylvania, Tennessee,
West Virginia and Virginia.
If the Utica Shale is commercial throughout
this extent it will be geographically larger
than any natural gas field known today.
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Utica Shale Formation
The United States Geological Survey (USGS) recently released its first estimates
of undiscovered, recoverable natural gas and natural gas liquids, like ethane and
propane, in the Utica Shale formation. The USGS estimate covered parts of
Maryland, New York, Ohio, Pennsylvania, Virginia, and West Virginia.
Natural Gas – 38 trillion cubic feet
Oil – 940 million barrels
Natural Gas Liquids – 208 million barrels
The Utica Shale formation is in its earliest stages of development in northwestern
Pennsylvania with exploratory wells being drilled in Crawford County. The pace is
a little higher in Ohio, where 19 rigs are currently operating.
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Marcellus Shale
Development
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Phases in Marcellus Shale Development
1. Pre-Drilling
– Exploration
– Leasing
2. Drilling
– Construction
– Horizontal Drilling
– Casing and Groundwater
Protection
3. Completion
– Hydraulic Fracturing/Well
Stimulation
– Flow-Back
4. Production
– Post-Production
– Site Reclamation
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Marcellus Shale Development
Exploration
• Extensive review of
geologic conditions
completed prior to drilling
• Wealth of state and
federal geological data
available
• Two- and threedimensional seismic
testing completed to
better identify formation
details
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Marcellus Shale Development
Exploration
Two and Three-dimensional seismic
• Seismic trucks send shock waves into
the ground - waves bounce off the rock
and reflect back to the surface
• Geophones record vibrations
• Computer processes vibrations and
develops geologic picture
• Small charges placed 15-20 ft below
surface in grid pattern, fired in
succession
• Geophones record vibrations from
charges
• Computer displays images of rock
below
• Improves probability of successful well
development
• Seismic activity has no impact on
property/environment
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Marcellus Shale Development
Leasing
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•
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Producers conduct title search
for mineral rights holders
Land professionals work with
property owners to establish
lease agreements
Leases give developers approval
to explore for natural gas
Leases reflect current market
values and geologic conditions
Property owners urged to contact
attorney prior to entering lease
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Marcellus Shale Development
Groundwater Protection
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•
•
•
•
•
First focus is protection of
groundwater
Compressed air is circulated
down drill pipe to lift rock
cuttings past deepest
groundwater zone
Steel casing cemented in place
along vertical wellbore
Cemented casing isolates
wellbore from groundwater
Casing process continues
vertically with smaller-diameter
steel pipes
Increased regulations to protect
groundwater
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Marcellus Shale Development
Horizontal Drilling
• Marcellus wells can be drilled
vertically and horizontally
• Horizontal drilling yields more natural
gas
– Multiple wells drilled from a single
pad
– “Laterals” drilled horizontally up to
5,000 feet, following natural
fractures in shale
– Multi-well pad: Requires 6 acres
– 24 vertical wells: Requires 100
acres
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
Representation of
horizontal drilling unit
Line = 1,000 feet
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Marcellus Shale Development
Horizontal Drilling
• Well typically drilled vertically to
500 above Marcellus Shale
• Curve from vertical to horizontal
approximately 1,200 linear feet
• Continues horizontally for
several thousand feet
• Final casing string cemented in
place at end of well bore
• Approximately 15 to 30 days
required to drill a horizontal
Marcellus well
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Marcellus Shale Development
Infrastructure Improvements
• Pipelines required to transport
gas to market
• Gathering lines link wells to
processing facilities/
transmission lines
• ROW for lines is negotiated
with property owners
• ROW re-vegetated, restored,
and maintained to ensure
safety of delivery system
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Marcellus Shale Development
Hydraulic Fracturing/Well Stimulation
• Vital to producing minerals from all
geologic formations
• Proven technology, advanced over 60
years
• High-volume fracturing used for
horizontal well development
• Process begins by perforating casing,
cement and shale with perforating
gun
• Charge from gun opens fissures in
shale to release natural gas, sand
necessary to expand and prop open
fissures
• Water, small amount additives
injected under high pressure to carry
sand into fractures
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Marcellus Shale Development
Well Stimulation Fluids
Water and sand make up 99.95% of the well stimulation
Water 90%
Sand 9.95%
Chemicals 0.05%
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Flowback Water Management
20-30% FLOWS BACK FROM WELL
•
Most drillers have achieved or are
approaching 90% recycling
•
98% stored in tanks, no longer open
pits. Open pits are now mostly all
fresh water.
•
Final disposal only in permitted
facilities
•
Must meet drinking water standards for
Total Dissolved Solids (TDS)
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Marcellus Shale Development
Water Usage
• Peak water use will be
60 million gallons/day
• At peak, water use will remain
less than ONE PERCENT of
state’s daily water
consumption
• Less than half the water used
to irrigate Pennsylvania golf
courses
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Marcellus Shale Development
Infrastructure Improvements
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•
•
•
Significant short-term
transportation challenges
Roadways used for drill rig,
support equipment, water truck
and tank, and worker access to
site
Producers work with
municipalities to maintain,
improve roads, investing millions
annually
Local construction companies
receiving most road maintenance
contracts, estimated $200 million
in 2010
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Marcellus Shale Development
Restoration
• Once well is complete and
producing, restoration
begins
• Only a small wellhead on
a constructed pad, less
than one acre, remains
• Property restored to meet
owner’s needs
• Similar to home
construction
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
During Drilling Process
Initial Reclamation
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Marcellus Shale Development
Restoration
• Multi-well Pad:
Before and After
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Financial Impact of the
Oil and Gas Industry
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Financial Impacts of Oil and Gas Development
Nationwide
• The U.S. oil and natural gas industry supports more than 9 million jobs
nationwide.
• The industry supports over 7% of GDP, and contributes more than $86 million to
the Federal Treasury every day.
Pennsylvania (Currently)
• 275,563 total statewide jobs provided or supported by our industry.
• $66,251 average salary for non-gas station oil & natural gas employees.
• $43,325 average annual salary in Pennsylvania across all industries and sectors.
• $15 billion contribution to Pennsylvania labor income.
• $28.4 billion contribution to Pennsylvania economy.
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Regulation of the Oil
and Gas Industry
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Potential Permits Required for Gas Well
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•
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Well drilling permit (w/ well location •
plat, casing and cementing plan,
•
PNDI for threatened or endangered
species, landowner/water well owner •
notifications, coal owner or operator
notification and gas storage field
•
owner notification)
•
Water management plan for
•
Marcellus Shale wells
•
Proposed alternate method of
casing, plugging, venting or
•
equipping a well
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Bond for Oil and Gas Well(s)
•
(individual or blanket, various bond
types allowed)
•
Waiver of distance requirements
•
from spring, stream, body of water, or
wetland (to put the well closer than
•
200 feet)
Variance from distance restriction
from existing building or water supply •
(to put the well closer than 100 feet)
•
Proposed alternate method or
material for casing, plugging, venting
or equipping a well
•
Approval for alternative waste
management practices
Approval of a pit for control, handling
•
or storage of production fluids
Use of alternate pit liner
NPDES GP-1 for discharges from
•
stripper oil wells
Water Quality Management Permit •
for treatment facilities
Alternative pit liners
•
Inactive status
•
Roadspreading plan approval
Transfer of well permit or registration
•
Orphan well classification
Off-site solids disposal
•
Residual waste transfer stations and
processing facilities
•
Transportation of residual waste
Road use permit – construction of
•
access to state roadway
•
Road use bond (PennDOT or
•
municipality)
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Surface use permit (if in the
•
Allegheny National Forest)
PASPGP-3 or PASPGP-4 for
pipelines crossing streams
(if < 1 acre)
Water Obstruction – Encroachment –
US Army Corps of Engineers Section
404 Joint Permit
Dam permit for a centralized
impoundment dam for Marcellus
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
Shale gas wells
GP-11 for non-road engine air
emissions
GP-05 for natural gas compression
facilities emissions
Earth disturbance permit
(if ˃ 5 acres)
Erosion and sedimentation control
permit (if ˃ 25 acres)
NPDES storm water for construction
activities
Water allocation (SRBC, DRBC or
DEP for Ohio River basin)
GP-3 for bank rehabilitation, bank
protection, and gravel bar removal
GP-4 for intake and outfall structures
GP-5 for utility line stream crossings
GP-7 for minor road crossings
GP-8 for temporary road crossings
GP-11 Maintenance, Testing, Repair,
Rehabilitation or Replacement of
Water Obstructions and
Encroachments
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Marcellus Shale Development
Well Stimulation Additives
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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State Law Now Requires Posting on
www.FracFocus.com
300 North Second Street | Suite 902 | Harrisburg, PA 17101 | www.api.org
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Governor’s Occupational
Safety and Health
Conference
Unsafe Acts are the major
cause of Accidents!
Upstream Americas
Robin Grouette
Production Operations Manager – Shell Appalachia
What do we mean by Safety?
HSE, HSSE,
Personal Safety,
PSM, AI,LOTO,
HAZCOM,
Environment,
BBSM, Security,
STOP, MIE, OCA,
OIA, ERP, PTW,
MOC…
Management of Change
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Safety Philosophy
Is Safety a Priority or a Value?
Why be Safe?
It is humane (The Right Thing to do!)
Legal Obligation
Best for the Business
Why do Unsafe Acts/Condition Occur
Don’t Know!
Not Able
Don’t Care!
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Appalachia TRIR YTD – It is a Journey!
Copyright of Shell Exploration & Production
Upstream Americas - Appalachia
CONFIDENTIAL
Worker Safety Issues
Worker safety issues at a drilling and extraction sites. Discuss the
problems that were encountered and how the industry responded.
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Trips/Slips/Falls – work surface issues (weather)
Hands
Falling Objectives
Equipment Movements
Driving
People Competencies/Skills
Language – Seismic Response
Education/Train, PPE, Investigations,
High Pressure/Fire
Modify trucking Contracts to change
behaviors,
Chemicals
Modify Designs
Learn, learn , learn
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Site Challenges
Reaching remote well sites, transient work, changing workplaces,
transportation, challenges for training, and training program specifics.
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Tight roads
Landowners
Cultural Differences, long way from home
Driving
Response
Open Houses/communications, road work,
Orientation
Education/Train, Incident Investigations,
Modify trucking routes, logistic systems
Competencies
Communicate, communicate, communicate
and learn, learn , learn
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Other Successes
Other successes we have had with industry, counties, improving emergency
response activities, interactions with OSHA, formation of the Pennsylvania
Service, Transmission, Exploration, Production Safety (STEPS) work.
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Opportunity to provide education about the Industry
Participate in Local Emergency Planning Commissions (LEPC)
Work w/ local Emergency Management Services
Road Transportation Safety Groups
Contractor & Industry Forums
Sharing Best Practices with Others
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