Totten Shale Gas Hydraulic Fracturing - Fracking Issues Challenges White Paper 12-05-2013 200

WnI1L ALk
SnALL GAS nDkAULIC IkAC1UkING

(IkACkING) ISSULS & CnALLLNGLS

Mlchael 1ouen, rlnclpal
AsseLsforLlfe.neL
uecember 03, 2013
Secuons
2
4
LlA, naLural Cas
Annual, 2011,
Lnergy lnformauon
AdmlnlsLrauon,
u.S. uepL. of
Lnergy
naLural Cas supply & dlsposluon ln uSA, 2011
!"##

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Egypt
!"#$%& '( )*+$%*, #*- -$..,/ *01 1"-.2-"+"20 "0 +3& 40"+&1 5+*+&-6 '788
:/'0770,% ;6<0; +&&/=
$>/'.;/0,% ?,33
8',33 @0/A2'.B.73
C',- 8.3 .%2 D07 @&773
5,%A)2',;.'<,%
8.3&3 E&-,F&2
G&%/&2HC7.'&2
E&3&'F,0' E&I'&336'0%(
J',26;/0,%
K') 8.3
*-I,'/3
Canada Trinidad/Tobago
Nigeria
5./6'.7 8.3
#/,'.(& C.;070/0&3
$>I,'/3
Japan Canada Mexico
1220/0,%3
@0/A2'.B.73
8.3 *%263/') !3& E&302&%/0.7 L,--&';0.7 *%263/'0.7 G&A0;7& C6&7 $7&;/'0; J,B&'
28.5
0.9
0.2
3.4
3.117 0.129
0.002
0.500 0.937 0.018
22.9
1.1
3.5
3.1
2.0 3.2 6.9 0.03 7.6
0.035
52$%9&-: $%&'() *%+,'-./0,% 12-0%03/'./0,% :$*1=M C,'- $*1NOPM Q$%%&'( )*+,-. ,/ 0'.&-'( '%1 2&++(*3*%.'( 4'5 2&++(6 '%1 785+,58.8,%RS C,'- $*1TU9M Q$%%&'( 9&'%.8.6 '%1
:'(&* ,/ 0'.&-'( 4'5 ;-,1&<.8,% )*+,-.RS C,'- $*1UNVM Q=,%.>(6 0'.&-'( 4'5 ;-,1&<.8,% )*+,-.RS C,'- $*1T9OM Q=,%.>(6 )*+,-. ,/ 0'.&-'( 4'5 ;&-<>'5*5 '%1 7*(8?*-8*5 .,
@,%5&3*-5RS C,'- $*1TNPM Q=,%.>(6 0'.&-'( 4'5 A8B&815 )*+,-.RS C,'- $*1PV1M Q$%%&'( )*+,-. ,/ .>* C-8D8% ,/ 0'.&-'( 4'5 A8B&815 ;-,1&<.8,%RS C,'- $*1NUNWM Q=,%.>(6
E%1*-D-,&%1 4'5 2.,-'D* )*+,-.RS D++0;& ,+ C,3307 $%&'()M !"#" K&I.'/-&%/ ,+ $%&'()M 0'.&-'( 4'5 F3+,-.5 '%1 GH+,-.5S /A& X6'&.6 ,+ #.+&/) .%2 $%F0',%-&%/.7 $%+,';&-&%/ .%2
I'&2&;&33,' .(&%;0&3S C,'- $*1UYZM Q;,I*- ;('%. C+*-'.8,%5 )*+,-.RS C,'- $*1TTPM Q$%%&'( 2&-?*6 ,/ $(.*-%'.8?* J&*(*1 :*>8<(*5RS 3/./& .(&%;0&3S C,'- $*1YZM Q$%%&'( 2&-?*6 ,/
7,3*5.8< C8( '%1 4'5 )*5*-?*5RS ?L*S G&%/)>S .%2 $*1 &3/0-./&3 <.3&2 ,% A03/,'0;.7 2./."
Mexico
0.003
Qatar
0.091
Norway
0.015
4.7
South Korea
0.009
Peru
0.017
Yemen
0.060
Brazil
United Kingdom Spain
0.006 0.003
0.011
ndia
0.013
China Chile
0.007 0.003
!"##

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Egypt
!"#$%& '( )*+$%*, #*- -$..,/ *01 1"-.2-"+"20 "0 +3& 40"+&1 5+*+&-6 '788
:/'0770,% ;6<0; +&&/=
$>/'.;/0,% ?,33
8',33 @0/A2'.B.73
C',- 8.3 .%2 D07 @&773
5,%A)2',;.'<,%
8.3&3 E&-,F&2
G&%/&2HC7.'&2
E&3&'F,0' E&I'&336'0%(
J',26;/0,%
K') 8.3
*-I,'/3
Canada Trinidad/Tobago
Nigeria
5./6'.7 8.3
#/,'.(& C.;070/0&3
$>I,'/3
Japan Canada Mexico
1220/0,%3
@0/A2'.B.73
8.3 *%263/') !3& E&302&%/0.7 L,--&';0.7 *%263/'0.7 G&A0;7& C6&7 $7&;/'0; J,B&'
28.5
0.9
0.2
3.4
3.117 0.129
0.002
0.500 0.937 0.018
22.9
1.1
3.5
3.1
2.0 3.2 6.9 0.03 7.6
0.035
52$%9&-: $%&'() *%+,'-./0,% 12-0%03/'./0,% :$*1=M C,'- $*1NOPM Q$%%&'( )*+,-. ,/ 0'.&-'( '%1 2&++(*3*%.'( 4'5 2&++(6 '%1 785+,58.8,%RS C,'- $*1TU9M Q$%%&'( 9&'%.8.6 '%1
:'(&* ,/ 0'.&-'( 4'5 ;-,1&<.8,% )*+,-.RS C,'- $*1UNVM Q=,%.>(6 0'.&-'( 4'5 ;-,1&<.8,% )*+,-.RS C,'- $*1T9OM Q=,%.>(6 )*+,-. ,/ 0'.&-'( 4'5 ;&-<>'5*5 '%1 7*(8?*-8*5 .,
@,%5&3*-5RS C,'- $*1TNPM Q=,%.>(6 0'.&-'( 4'5 A8B&815 )*+,-.RS C,'- $*1PV1M Q$%%&'( )*+,-. ,/ .>* C-8D8% ,/ 0'.&-'( 4'5 A8B&815 ;-,1&<.8,%RS C,'- $*1NUNWM Q=,%.>(6
E%1*-D-,&%1 4'5 2.,-'D* )*+,-.RS D++0;& ,+ C,3307 $%&'()M !"#" K&I.'/-&%/ ,+ $%&'()M 0'.&-'( 4'5 F3+,-.5 '%1 GH+,-.5S /A& X6'&.6 ,+ #.+&/) .%2 $%F0',%-&%/.7 $%+,';&-&%/ .%2
I'&2&;&33,' .(&%;0&3S C,'- $*1UYZM Q;,I*- ;('%. C+*-'.8,%5 )*+,-.RS C,'- $*1TTPM Q$%%&'( 2&-?*6 ,/ $(.*-%'.8?* J&*(*1 :*>8<(*5RS 3/./& .(&%;0&3S C,'- $*1YZM Q$%%&'( 2&-?*6 ,/
7,3*5.8< C8( '%1 4'5 )*5*-?*5RS ?L*S G&%/)>S .%2 $*1 &3/0-./&3 <.3&2 ,% A03/,'0;.7 2./."
Mexico
0.003
Qatar
0.091
Norway
0.015
4.7
South Korea
0.009
Peru
0.017
Yemen
0.060
Brazil
United Kingdom Spain
0.006 0.003
0.011
ndia
0.013
China Chile
0.007 0.003
1r||||on
cub|c feet,
1CI
lMC81S
LxC81S
Shale gas 800 8lse ln 12 years as
naLural Cas prlces sLeeply decllne
3
36,000 Shale Wells ln uS ln 2012
6

!" $ %&' ()*+,)
-&./ 0&./12 34'56 789 ):+,);*+,)
$<<=>4? @A+)B C+*;:CDC -5'? @A+)B CE+;*)*)
FFF"615G4H=I46/">&J

1
Powell Shale Digest Special Edition International Journalists Aug 13 2012

August 13, 2012

SHALE PRODUCERS IN U.S. TOP 35,000 WELLS, 23 TCF GAS & 682 MMBO
The PoweII ShaIe Digest
was requested by one of the Iargest shaIe operating companies in the U.S. to answer a request
from a newspaper in Paris, France. They desired to know the number of shaIe gas and oiI producers in the United States. We
estimated 40,000 weIIs. Our finaI research numbers were 35,996 producers, 22,970,801,142 MCF gas + 682,073,803 BO/BC.
Subsequently, we totaled our last research of the major shale plays in the United States and below is our summary.
SHALE PRODUCERS IN U.S. MAJOR SHALE PLAYS
SHALE NAME STATE
AGE
YRS.
NO.
WELLS
BEGAN
MO/YR
LAST
PROD
RESEARCH
MO/YR
CUM GAS
MCF
CUM OIL
BO/BC
BARNETT SHALE TX 30.0 17,980 Jun-82 May-12 11,922,273,082 39,444,928
FAYETTEVILLE SHALE AR 7.75 3,730 Mar-04 Nov-11 2,512,089,052 -
HAYNESVILLE SHALE LA 4.3 1,402 Jan-08 Apr-12 4,086,232,822 282,151
HAYNESVILLE SHALE TX 6.25 797 Mar-06 May-12 1,700,959,291 350,099
EAGLE FORD SHALE TX 6.4 3,597 Dec-05 May-12 622,433,431 120,582,966
BAKKEN/THREE FORKS SHALE ND 26.3 3,777 Mar-86 Jun-12 366,805,083 390,030,044
BAKKEN/THREE FORKS SHALE MT 26.4 886 Jan-86 Jun-12 107,666,762 128,981,402
MARCELLUS SHALE PA 2.4 2,312 Jul-09 Dec-11 1,530,087,438 2,070,715
MARCELLUS SHALE WV 5.9 1,515 Jan-05 Dec-10 122,254,181 331,498
TOTALS 35,996 22,970,801,142 682,073,803
Data Source: State Regulatory Agencies

August 13, 2012

owell Shale ulgesL, Speclal Ldluon, lnLernauonal !ournallsLs, Aug 13 2012
uoes noL lnclude Lhe uuca Shale. 1he Marcellus gures are more daLed Lhan for Lhe
oLher shale plays due Lo lagglng reporung by ennsylvanla and WesL vlrglnla regulaLors.
Coal decllned 11 ln 3 years, naLural Cas
lncreased 10 -- wlLh cosL & emlsslon savlngs
7
uCS, Cas Celllng, Assesslng Lhe CllmaLe 8lsks of an Cverrellance on naLural Cas for LlecLrlclLy, SepL. 2013, unlon of Concerned SclenusLs.
Shale lormauons lmmense
8
Map of bas|ns w|th
assessed sha|e o|| &
sha|e gas formanons,
as of May 2013
!"# %&'()*+& ,''&''-&./'0 122345315
Data source: Potential Gas Committee (2013)
6(/78 !(/&./978 "7' %&'()*+&' :;&7. <78)&'=
otenna| Gas Agency, otenna|
Supp|y of Natura| Gas |n the Un|ted
States, keport of the otenna| Gas
Comm|uee (December 31, 2012)
Shale gas producuon ln norLh Amerlca
A bulllsh vlew ln LA1L 2009 Lo 2040
9
1S 1CI
kenneLh 8 Medlock lll, 8arneu Shale Sull has loLs of llfe", !une 11, 2011, 8aker lnsuLuLe Lnergy lorum, sllde presenLed aL Lhe uallas
lederal 8eserve 8ank ln 2009, hup://fuelx.com/blog/2011/06/27/barneu-shale-sull-has-loLs-of-llfe/
Shale gas producuon ln norLh Amerlca
Super-bulllsh vlew by LA8L? 2011 Lo 2040
10
kenneLh 8 Medlock lll, 8arneu Shale Sull has loLs of llfe", !une 11, 2011, 8aker lnsuLuLe Lnergy lorum, sllde presenLed aL Lhe Amerlcan
Assoclauon of eLroleum Lnglneers AAC, 2011, hup://fuelx.com/blog/2011/06/27/barneu-shale-sull-has-loLs-of-llfe/
20 1CI
LxxCnMoblle naLural Cas Clobal & norLh
Amerlca SuL? erspecuve Lo 2040
11
Source: LxxonMoblle, Lnergy CuLlook, 2013,
hup://www.exxonmobll.com/CorporaLe/energy_ouLlook_daLacenLer_eo13gassupply.aspx

3 bas|c steps |n nI rocess
12
Lstab||sh the ad:
ln[ecL hydraullc uld, wlLhouL propplng agenL
(proppanL), lnLo LargeL formauon
umped aL abouL 100 barrels per mlnuLe,
ressure: around 14,000 psl
ressure LesLs conducLed Lo check for leakage
lnLo nelghborlng formauons
Add propp|ng agent "proppant"
roppanL-sand, ceramlcs, wlre mesh,
slnLered bauxlLe
roppanL carrled lnLo fracLures-deslgned Lo
hold Lhe fracLures open for ow
I|ush the reservo|r
20-30 reLurn-alLhough anecdoLal daLa
from lndusLry says 80 or more
roduce Lhe gas normally Lhereaer. roducuve
for 1-2 years. CeomeLrlc decllne over ume.
1oLal amounL of fracklng uld use per well ln Lhe
Marcellus: 1-3 mllllon gallons

key olnLs - u8LlC Cplnlon
1. ubllc oplnlon surveys show dlverse perspecuves.
2. nov 2013 survey nds half Lhe publlc know llule abouL fracklng
3. Several 2013 surveys nd more people are negauve Lowards
fracklng by Lwo Lo one margln
4. negauve amLudes drlven by Loxlc legacy of fossll lndusLry plus lax
or absenL regulaLory sLandards and enforcemenL for ensurlng no
lmpacLs on alr, waLer, land, human healLh and well-belng
3. negauve amLudes drlven by uneven quallLy of lndusLry pracuces
leadlng Lo local lmpacLs
6. ubllc dlvlded over fracklng rlsks/LhreaLs and promlses (e.g.,
cleaner Lhan coal, low cosL fuel, Lax revenue base, securlLy)
7. Soclal [usuce concerns of economlc wlnners vs losers
13
ubllc Cplnlon Surveys
Callfornlans Wary of lracklng
14
Callfornlans Wary of lracklng, poll says
SepLember 26, 2013, 8y Chrls Megerlan

61 of ||ke|y voters sa|d they favor str|cter ru|es, and S3 sa|d they're
aga|nst the expans|on of frack|ng |n the state.

Callfornlans wanL sLrlcLer regulauon of hydraullc fracLurlng, Lhe conLroverslal
meLhod of oll and naLural gas exLracuon, accordlng Lo a new poll from Lhe
ubllc ollcy lnsuLuLe of Callfornla. ln addluon, a ma[orlLy of llkely voLers
surveyed opposed Lhe lncreased use of fracklng, whlch lnvolves ln[ecung
waLer and chemlcals lnLo Lhe ground Lo remove Lhe resources locked
underneaLh. 1he lssue ls galnlng lncreased auenuon ln Callfornla because
energy companles are eyelng an esumaLed 13 bllllon barrels of oll ln Lhe
masslve MonLerey Shale rock formauon.
ennsylvanla
13
new ?ork
16
o||: Irack|ng oppos|non at an a||-nme h|gh |n N
SepLember 30, 2013, 8y !on Campbell

1he gap beLween opponenLs and supporLers of hydraullc
fracLurlng has grown Lo an all-ume hlgh ln new ?ork,
accordlng Lo a new poll.
1he Slena College survey released Monday shows 43
percenL of new ?ork voLers do noL supporL allowlng hlgh-
volume fracklng ln Lhe sLaLe, compared Lo 37 percenL
who do. 18 had no oplnlon or noL enough lnformauon
Lo formulaLe one.
1he gap ls even larger upsLaLe, where 32 percenL oppose fracklng and 34 percenL are
ln favor of lL. 1he gas-rlch Marcellus Shale formauon, whlch spans several sLaLes ln Lhe
norLheasL and Mld-ALlanuc, sLreLches across new ?ork's SouLhern 1ler. A ma[orlLy of
upsLaLers and uemocraLs, and a plurallLy of lndependenLs and new ?ork ClLy voLers
oppose fracklng, whlch ls supporLed by a plurallLy of 8epubllcans and downsLaLe
suburbanlLes," Creenberg sald.
unlLed SLaLes
17
SupporL for regulauon of hydraullc fracLurlng has lncreased ln Lhe pasL Lhree monLhs,
a slgn LhaL Lhe gas-drllllng pracuce ls faclng greaLer publlc scruuny. A 8loomberg
nauonal oll found LhaL 66 percenL of Amerlcans wanL more governmenL overslghL
of Lhe process, known as fracklng, ln whlch waLer, chemlcals and sand are shoL
underground Lo free gas Lrapped ln rock. 1haL's an lncrease from 36 percenL ln a
SepLember poll. 1he poll found 18 percenL favored less regulauon, down from 29
percenL Lhree monLhs ago.

More people are aware of fracklng, and Lhey are a llule blL more opposed Lo lL,"
Sherll klrshenbaum, dlrecLor of Lhe unlverslLy of 1exas Lnergy oll, sald ln an
lnLervlew. 1he school's polls also have asked quesuons on Lhe Loplc, and lL's
becomlng more famlllar," she sald.
u of 1exas oll Shows ulvlde on lracklng
18
Worrles abouL 8oom & 8usL Cycles
19
Lvldence suggesung cauuon ln pro[ecung
long Lerm economlc developmenL from
naLural gas drllllng comes from a sLudy of
26 counues ln wesLern uS sLaLes LhaL
have based Lhelr economlc developmenL
on Lhe exLracuon of fossll fuels (naLural
gas, oll, and coal).

1hls sLudy shows LhaL Lhese counues (LhaL
have aL leasL 7 of Lhelr LoLal [obs ln
resource exLracuon lndusLrles) have noL
performed as well as slmllar counues
wlLhouL exLracuon lndusLrles.
8oLh Lhelr average annual growLh ln
personal lncome and Lhelr employmenL
growLh (1990-2003) were lower Lhan
Lhelr peer counues wlLhouL exLracuon
lndusLrles.

Concerns abouL 8oom & 8usL Cycles
20
1hese energy-dependenL counLy
economles exhlblLed a seL of slmllar
characLerlsucs. 1hey had:
Less economlc dlverslLy
Lower levels of educauonal
aualnmenL
More lncome lnequallLy beLween
households
Less ablllLy Lo auracL lnvesLmenL.
natural gas, and in a 2008 report with
Lash, he estimated that perhaps 10 per
cent of that gas (50 tcf ) might be
recoverable.
13
The following year, he
estimated that recoverable reserves could
be as high as 489 tcf.
14
More recent
estimates of recoverable gas fall in the
200-300 tcf range. From a geologists
perspective, extraction of these total
recoverable reserves could take decades.
Another perspective on the pace and
scale of drilling looks at what are the
likely firm strategies in response to their
profit opportunities in particular shale
plays and among potential extraction sites.
For example, given a limited number of
drilling rigs, they will be deployed in those
places (within a gas play or across gas
plays) where profits are most likely. The
question for an energy company is not
whether a well is viable in terms of
potentially recoverable gas, but whether it
is commercially viable that is, will it
make money for the operator (the owner
of the mineral rights) and the drilling
companies. An understanding of the
choices made by operators and their
subcontractors in a shale play requires an
analysis of the costs and delivery rates of
drilling operations, margins of commercial
profitability, and corporate financial and
competitive relationships.
Production in shale plays is
unpredictable and only a small number of
wells may be able to produce commercial
volumes of gas over time without
re-fracking, which is very costly. Evidence
from the Barnett and Haynesville shale
plays in the USA, for example, indicates
that high initial production rates may drop
off rapidly, making it difficult for operating
companies to cover their finding and
development costs. Industry investment
advisors are cautious about the long-term
productivity of the US natural gas plays.
Their advice to investors is simple: Shale
production is characterised by a steep
decline curve early in its productive life.
Henry Stewart Publications 1756-9538 (2012) Vol. 2, 4, 000000 Journal of Town & City Management 7
How shale gas extraction affects drilling localities
A
m
o
u
n
t
s

g
e
n
e
r
a
t
e
d
Time (whether over months or years)
The pattern of the Boom-Bust cycle in royalties, business income,
tax revenues and jobs
(green line)
Adapted from Tim Kelsey (2011), 'Annual Royalties in a Community'.
Figure 3:
AQ2
Also, a ma[orlLy of Lhe energy lndusLry focused counues (16 of Lhe 26) losL
populauon durlng Lhls perlod. 1hough Lhe reasons for Lhls loss are noL fully
documenLed, anecdoLal lnformauon suggesLs LhaL Lhey may lnclude Lhe hlgher
cosL of llvlng ln Lhese counues and Lhe dlsplacemenL of resldenLs who do noL
wanL Lo llve ln an lndusLrlallzed landscape - for example, reurees.
Susan ChrlsLopherson and ned 8lghLor, Pow shale gas exLracuon aecLs drllllng locallues: Lessons for reglonal and
clLy pollcy makers, !ournal of 1own and ClLy ManagemenL, vol. 2, no. 4, 2012
ueallng w/ 8oom & 8usL Cycles
21
All Lhls suggesLs Lo local governmenLs Lhree cruclal elemenLs
of preparauon:

1. 1he need for base||ne data. WlLhouL Lhe basellne daLa on
roads, waLer LreaLmenL, renLs, Lramc, use of governmenL
equlpmenL, eLc., local governmenLs cannoL hold Lhe well
operaLors or Lhelr subconLracLors accounLable for Lhe
lncreased cosL Lo local servlces LhaL Lhelr acuvlues generaLe,
nor can Lhey make a good case for rellef from Lhe sLaLe.
2. 1he need for a ded|cated revenue stream from gas producnon.
3. 1he need to budget for future costs. !usL as Lhe unfoldlng of demands on locallues
from Lhe eecLs of shale gas developmenL may noL correspond Lo Lhe ow of Lax
revenue from gas producuon or lease/royalLy paymenLs Lo landowners, so Lhe eecLs
of shale gas explorauon may lasL far longer Lhan Lhe boom ln drllllng acuvlLy ln any
glven locallLy. Lowerlng properLy Laxes durlng Lhe revenue boom may only lead Lo
ralslng Lhem even more when Lhe full eecLs on local governmenL operauons are
reallzed. 8euer Lo uullze Lhe varleLy of budgeung lnsLrumenLs - scal lmpacL fees,
LrusL funds, caplLal reserve funds and a healLhy fund balance - deslgned Lo sLablllze
Lhe Lax raLe by semng aslde monles Lo defray fuLure cosLs.
Susan ChrlsLopherson and ned 8lghLor, Pow shale gas exLracuon aecLs drllllng locallues: Lessons for reglonal and clLy pollcy makers, !ournal of
1own and ClLy ManagemenL, vol. 2, no. 4, 2012
ubllc ulsLrusL
8easonable Cause or unlnformed lear?
22
1he oll and gas lndusLry ls Lhe only
lndusLry ln Lhe u.S. LhaL ls allowed by Lhe
LA Lo 'ln[ecL hazardous maLerlals-
unchecked' dlrecLly lnLo or ad[acenL Lo
underground drlnklng waLer supplles."
CLP, 1oxlcs & ulrLy SecreLs
1he lrackers' Well-Clled ollucal Machlne, MoLher !ones, uec. 2012,
hup://www.moLher[ones.com/envlronmenL/2012/10/fracklng-companles-drllllng-pollucal-lnuence-charLs
hup://ceh.org/
key olnLs - SClLnCL Lvldence
ln Lheory, range of lmpacL lssues all resolvable
(waLer use, wasLe, conLamlnauon, CPC
emlsslons, alr polluuon, land use)
ln pracuce, range of lmpacL lssues noL belng
addressed LransparenLly, rapldly, sumclenLly,
comprehenslvely wlLh eye Lowards cumulauve
long-Lerm consequences
ComplexlLy of lssues allows for respecLed
experLs Lo argue for expanslon and for ban
23
Lul/u1 nd emlsslons raLe 0.42 ln
Creen Compleuon" gas wells
24
Lul u1-Ausun found fugluve meLhane emlsslons raLes aL a scanL .42-
percenL, far lower Lhan Lhe nCAA/unlverslLy of Colorado sLudy and
2-4 lower Lhan Lhe PowarLh eL al Cornell sLudy. Lhe Lul/u1-Ausun
sLudy focused on well compleuon slLes Lhe lndusLry calls green
compleuons -- a process ln whlch lmpurlues such as sand, drllllng
debrls, and ulds from hydraullc fracLurlng are lLered ouL and Lhe
gas ls sold, noL wasLed. LA wlll noL mandaLe green compleuons
unul 2013, so Lhey are noL represenLauve of Lhe lndusLry's
performance aL Lhe momenL.

1he sLudy ls based only on evaluauon of slLes and umes
chosen by lndusLry, and reecLs Lhe leadlng or besL acLors,
nC1 Lhe super-emluers.
uavld 1. Allen eL al., MeasuremenLs of meLhane emlsslons aL naLural gas producuon slLes ln Lhe unlLed SLaLes," roc naLl
Acad Scl uSA, 44, CcLober 29, 2013.

MeLhane emlsslons double
whaL LA esumaLes
23
november 2013 sLudy found CPC emlsslons from fossll fuel
exLracuon and processlng (l.e., oll and/or naLural gas) are
llkely a facLor of Lwo or greaLer Lhan clLed ln exlsung
sLudles." ln parucular, Lhey concluded, reglonal [(e.g., 1exas,
Cklahoma] meLhane emlsslons due Lo fossll fuel exLracuon
and processlng could be 4.9 2.6 umes larger Lhan ln LuCA8,
Lhe mosL comprehenslve global meLhane lnvenLory."

1hls suggesLs Lhe meLhane leakage raLe from naLural gas
producuon, whlch LA recenLly decreased Lo abouL 1.3 ls ln
facL 3 or hlgher.

!oe, 8omm, 8rldge CuL: 8ombshell SLudy llnds MeLhane Lmlsslons lrom naLural Cas roducuon lar Plgher 1han LA LsumaLes,
CllmaLerogress, november 23, 2013, clung Scou Mlller eL al, AnLhropogenlc emlsslons of meLhane ln Lhe unlLed SLaLes, roceedlngs of
Lhe nauonal Academy of Sclences uSA, november 23, 2013, 0.1073/pnas.1314392110

3 nCAA sLudles nd hlgher leakage
raLes of meLhane emlsslons
26
nCAA researchers found ln 2012 LhaL naLural-gas producers ln Lhe uenver area
are |os|ng about 4 of the|r gas to the atmosphere - noL lncludlng addluonal
losses ln Lhe plpellne and dlsLrlbuuon sysLem."
A|r samp||ng by NCAA over Co|orado I|nds 4 Methane Leakage, More 1han 2k Industry C|a|ms
eLron, C., eL al. (2012), Pydrocarbon emlsslons characLerlzauon ln Lhe Colorado lronL 8ange - A plloL sLudy, I. Ceopbys.
kes., dol:10.1029/2011!u016360
27
A 2013 sLudy by nCAA found leaks from oll
and gas explorauon and exLracuon ln Lhe
L.A. basln represenung about 17 of the
natura| gas produced |n the reg|on, slmllar
Lo Lhe leak raLe esumaLed by Lhe Callfornla
Alr 8esources 8oard uslng oLher meLhods."
AlmosL all Lhe gas produced ln Lhe basln ls
assoclaLed" wlLh oll producuon (raLher
Lhan, say, fracked).

AssoclaLed gas ls sull abouL a h of LoLal
u.S. gas producuon.
1he NCAA W-3D research a|rcrah |es a|ong the
San Gabr|e| mounta|ns |n the Los Ange|es bas|n
dur|ng the Ca|Nex exper|ment |n summer 2010. 1he
a|rcrah |s much ||ke a "y|ng chem|ca| |aboratory,"
conta|n|ng spec|a||zed |nstrumentanon that can
he|p sc|ennsts beuer understand a|r qua||ty and
c||mate change.
elschl, !. eL al., Cuanufylng sources of meLhane uslng llghL alkanes ln Lhe Los Angeles basln, Callfornla, I. Ceopbys. kes.
Atmos., dol:10.1002/[grd.30413, 2013.
6 to 12 methane em|ss|ons |eakage rate
|n U|ntah County sha|e gas producnon
28
Lleven yovers across well producuon slLes ln an enure shale
gas basln ln uLah deLermlned Lhe raLe of meLhane emlsslons ln
ulnLah CounLy Lo be 6 Lo 12 percenL of Lhe average hourly
naLural gas producuon durlng Lhe monLh of lebruary 2012.

1hls emlsslons esumaLe ls 1.8 Lo 38 umes lnvenLory-based
esumaLes from Lhls reglon and ve umes Lhe uS LA
nauonwlde average esumaLe of leakage from Lhe producuon
and processlng of naLural gas.

AlLhough Lhe emlsslons for ulnLah reporLed here may noL be
represenLauve of oLher naLural gas elds, Lhls sLudy
demonsLraLes Lhe lmporLance of verlfylng emlsslons from
naLural gas producuon Lo enable an accuraLe assessmenL of lLs
overall cllmaLe lmpacL.
karlon, A., eL al. (2013), MeLhane emlsslons esumaLe from alrborne measuremenLs over a wesLern unlLed SLaLes naLural
gas eld, Ceophys. 8es. Leu., 40, 4393-4397, dol:10.1002/grl.30811.
lallsafe lracklng - feaslble?
29
TOWARD AN EVIDENCE-BASED
FRACKING DEBATE
Science, Democracy, and Community Right to Know
in Unconventional Oil and Gas Development
The Center for Science and Democracy at the Union of Concerned Scientists
Sclence-drlven, evldence-based,
emplrlcal Lesung, monlLorlng
and evaluauon ls essenual Lo
help:
lllumlnaLe Lhe lssues
1ransparenLly dlscuss all
dlmenslons
romoLe lnnovauve soluuons
8esearch beuer pracuces
lnform pollucal debaLe
Culde consensus bulldlng
process
key olnLs - CLl1lCAL 8esponse
lederal & mosL SLaLes 8ulllsh on economlc galns
and Lax revenue base, Local govLs. mlxed
referenual LreaLmenL Lo fossll fuels & fracklng
lndusLry ln subsldles and lncenuves
referenual LreaLmenL ln exempung from
compllance of 8 federal envlronmenLal laws
referenual LreaLmenL ln lgnorlng long-Lerm,
cumulauve lmpacLs on alr, waLer, land use
Lalssez-falre approach (e.g., lndusLry self-pollclng,
sLaLe-based regulaLory declslons)
30
uS Pouse of 8epresenLauves leglslaLes
Lo acceleraLe fracklng - nov 2013
31
1wo Pouse bllls passed: one, Lo
reduce federal "red Lape" and cuL
down on "frlvolous lawsulLs LhaL acL
as sLumbllng blocks Lo [ob creauon &
energy developmenL" was approved
by a voLe of 228-192. resldenL 8arack
Cbama promlsed Lo veLo Lhe bllls,
saylng Lhey are unnecessary and run
counLer Lo proLecuons puL ln place for
oll and gas drllllng.
1he oLher blll deems a drllllng appllcauon approved lf no declslon ls made wlLhln
60 days, seL a mlnlmum Lhreshold for lands leased by Lhe 8LM, charge a $3,000
fee Lo groups LhaL proLesL lease permlLs, and resLrlcL Lhe lnLerlor ueparLmenL
from enforclng proposed rules Lo regulaLe fracklng on publlc lands.
Mauhew ualy, Pouse Approves blll Lo speed up oll and gas drllllng, PumngLon osL, nov 20, 2013,
hup://www.humngLonposL.com/2013/11/20/house-oll-and-gas-blll_n_4312118.hLml?uLm_hp_refgreen
P81963, lederal Lands !obs and Lnergy SecurlLy AcL,
P82728, roLecung SLaLes' 8lghLs Lo romoLe Amerlcan
Lnergy SecurlLy AcL
Skewed governmenL subsldles, and
lgnorlng moneLary exLernallues
burdened on Laxpayers & raLepayers
32
lossll fuels recelve preferenual Lax and scal pollcles LhaL resulL
ln accrulng more Lhan half a Lrllllon dollars per year ln Lhe uSA,
and nearly $2 Lrllllon worldwlde, accordlng Lo lMl assessmenLs.
Soclal CosL of carbon
"kepott. uomoqes ltom ocb Clqotoo Of cotboo
lollouoo Moy xceeJ 5950 blllloo o yeot "

33
A recenL analysls of Lhe soclal cosL of carbon (SCC) - Lhe LoLal economlc damage
done by CPC polluuon - nds omclal govL. esumaLes are dangerously low.
uslng a range of more credlble numbers for Lhe
physlcs of cllmaLe change and dlerlng
economlc dlscounL raLes, nd LhaL Lhe SCC lles
beLween $30 and $936 per Lon, and wlll rlse ln
2030 Lo beLween $69 and $1,660 a Lon (ln
2013$).
lrank Ackerman and LllzabeLh SLanLon , CllmaLe 8lsks and Carbon rlces, Lconomlcs for LqulLy and LnvlronmenL neLwork
reporL, !uly 2011

1he AdmlnlsLrauon, ln federal guldance, esumaLes
SCC Lo be $36 per Lon CC2 emlsslons, abouL $0.23
per gallon of gasollne, and roughly 4 cenLs per kWh
polluuon fee on coal-red elecLrlclLy and 2/kWh
on naLural gas-red elecLrlclLy.
Soclal CosL of Carbon
34
"5bell Oll 5elf-lmposes cotboo lollouoo 1ox nlqb oooqb 1o ctosb cool,
tose Nototol Coss voloe-AJJeJ"

8oyal uuLch Shell lncludes a hlgh prlce
for CC
2
when evaluaung new pro[ecLs.
1he $40 a meLrlc Lon prlce LhaL Shell
uses would - lf wldely adopLed -
reshape domesuc and lnLernauonal
energy consumpuon and lnvesLmenL
Lrends.

CLher corporauons are also lmposlng
lnLernal prlces on Lhelr carbon
emlsslons. ulsney has adopLed a $10
Lo $20 prlce per Lon CC
2
, and
Mlcroso has adopLed a $7 per Lon
CC
2
.

key olnLs - lnuuS18? osluon
8euer aL self-pollclng Lhan governmenL
mandaLed sLandards and regulauons
lncenuves are noL subsldles, essenual for dolng
buslness, susLalnlng lnnovauon
ubllc concerns can be, are belng, addressed
Lhrough ongolng lnnovauons (e.g., reduclng
waLer use, wasLe, chemlcals, emlsslons, land
fooLprlnL)
All publlc concerns are resolvable, and besL
addressed Lhrough lndusLry-drlven lnluauves
33
36
Vertical Wells (pink) develop 23 acres per well with 19% land disturbance.
Horizontal (green) develop 500 acres per pad with 2% surface disturbance
CenLrallzed Cperauons, Less Land ulsLurbance, Lower ConsLrucuon CosLs
lndusLry case: Lconomlc & LnvlronmenLal
AdvanLages of PorlzonLal urllllng
kelvln 8 Cregory, navlgaung Lhe WaLer ManagemenL Challenges uurlng Pydraullc lracLurlng for Shale Cas roducuon, Carnegle-Mellon,
LnvlronmenLal and Soclal lmpllcauons of Pydraullc lracLurlng and Cas urllllng ln Lhe unlLed SLaLes: An lnLegrauve Workshop for Lhe Lvaluauon of
Lhe SLaLe of Sclence and ollcy", uuke unlverslLy !anuary 9, 2012
lndusLry volunLary self-reporung
l8ACklnC lLulu - 20-MonLh Lrend
hup://ecowaLch.com/2012/09/23/waLer-for-fracklng/
8ased on lndusLry volunLary self-reporung Lo lraclocus beLween !an. 2011 and SepL. 2012.
noL all lndusLry wells are reporLed. As of Lhe end of 2012 an esumaLed 47 of wells are
reporLed Lo lraclocus, Lhe oLher 33 noL reporLed for proprleLary chemlcal reasons.
37
l8ACklnC lLulu - CCMCSl1lCn
hup://www.shalegaswlkl.com/lndex.php/lracLurlng_uld
38
l8ACklnC lLuluS - no problem
"?ou can drlnk lL. We dld drlnk lL
around Lhe Lable, almosL rlLual-
llke, ln a funny way," Plckenlooper
Lesued before Lhe SenaLe
Commluee on Lnergy and naLural
8esources.
hup://www.humngLonposL.com/2013/03/07/hlckenlooper-says-sLaLe-w_n_2828221.hLml
PalllburLon CLC uavld Lesar ralsed
a conLalner of PalllburLon's new
fracklng uld made from maLerlals
sourced from Lhe food lndusLry
(CleanSum), Lhen called up a
fellow execuuve Lo demonsLraLe
how safe lL was by drlnklng lL.
39
key olnLs - CCMLLx 8eallues
Shale resources occur ln dlverse locauons maklng generlc
sLaLemenLs dlmculL
! LxLreme dry Lo abundanL waLer locauons
! Low Lo hlgh waLer use requlremenLs per well
! Low Lo hlgh waLer wasLe dlscharges per well
! Pow Lo safely dlscharge and sLore wasLes long-Lerm
! Sparse populauon Lo hlgh denslLy communlues
! 8are Lo abundanL capped and uncapped Abandoned Wells
! Low land value Lo hlgh-valued land purposes
! Local amLudes Lowards fracklng lndusLry ranglng from sLrongly pro
expanslon Lo sLrongly pro ban, oen ln equal amounLs
! 24-fold dlerence ln CPC emlsslon levels from well operauons
Shale gas preferenual LreaLmenL, pollcles, subsldles &
regulauons vs. compeuLors (lower cosL end-use emclency,
wlnd, solar power

40
Marcellus Shale
Complex lssues
41
WaLer needed for Pl and dlsposal of
produced load waLer are becomlng serlous
obsLacles for Marcellus developmenL.
roblem wlLh waLer sourclng ls noL
avallablllLy buL gemng waLer mgnL plans
approved for Lhe hlgh volume wlLhdrawals
(3-4 mllllon gals).
ArLhur L. 8erman, Shale gas-Abundance or mlrage? Why Lhe Marcellus Shale wlll dlsappolnL expecLauons, CcLober 2010.
lew wasLe LreaLmenL planLs, drlvlng up Lhe cosL of Lransporung dlsposal waLer.
Wldespread bellef LhaL Pl wlll conLamlnaLe aqulfers -- a rlsk LhaL cannoL be LoleraLed.
opulauon denslLy ls hlgh ln many areas, helghLenlng sensluvlLy Lo percelved drllllng and
produclng hazards.
Any spllls or blowouLs ralse rlsk of shuL down or curLalllng operauons ln a larger area Lhan
Lhe problem well.
Abandoned wells compllcaLe lssue of prlor conLamlnauon vs. new Pl lmpacLs.
urllllng ln suburban areas wlll compllcaLe pumng acreage blocks LogeLher.
More poLenual ob[ecuons Lo drllllng Lhe Lhousands of locauons necessary Lo hold leases
and prove reserves.
lacLors do noL mean LhaL developmenL won'L proceed, buL lL ls llkely Lo move forward
more slowly and aL greaLer cosL Lhan ln oLher shale plays.
key olnLs - lssues & Level of Concern
"
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Low
key olnLs - lssues & Level of Concern
"
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43
lrreconcllable dlerences?
War of Words & ConfronLauons
44
hup://earLhrooL.neL/frackconference/
hup://www.lhs.com/lnfo/ecc/a/amerlcas-new-energy-fuLure-reporL-vol-3.aspx
vS.
MLkCnAN1S CI ILAk?
MLkCnAN1S CI DCU81?
key olnLs - lLuL8AL ollcy
lracklng lndusLry exempuons from key provlslons of
federal laws (so-called PalllburLon Loophole")
1. Clean WaLer AcL (CWA)
2. Safe urlnklng WaLer AcL (SuWA)
3. nauonal LnvlronmenLal ollcy AcL (nLA)
4. 1oxlc SubsLances ConLrol AcL (1SCA)
3. 8esource Conservauon & 8ecovery AcL (8C8A)
6. Pazardous MaLerlals 1ransporLauon AcL (PM1A)
7. Lmergency lannlng & CommunlLy 8lghL Lo
know AcL (LC8A)
8. Comprehenslve LnvlronmenLal 8esponse,
Compensauon and LlablllLy AcL (CL8CLA)
43
key olnLs - LCCAL 8AnS 8lSlnC
400 8AnS
ln 21
S1A1LS
46
hup://www.foodandwaLerwaLch.org/waLer/fracklng/fracklng-acuon-cenLer/map/
key olnLs - SLaLe vs Local Cmclals
47
Some sLaLes have lnLroduced leglslauon LhaL llmlLs Lhe ablllLy of munlclpallues Lo
use zonlng Lo proLecL cluzens from exposure Lo polluLanLs from hydraullc fracLurlng
by proLecung resldenual areas. Such laws have been creaLed ln ennsylvanla, Chlo
and new ?ork, Colorado, and 1exas are baullng over relaLed leglslauon.
lorL Colllns Mayor pro Lem kelly Chlson had no klnd words
for CC Cov. Plckenlooper, saylng he has no credlblllLy, nor do
sLaLe regulaLors. l belleve Lhe governor should spend hls
ume proLecung Lhe healLh and safeLy and welfare of cluzens
of Colorado raLher Lhan acung llke Lhe chlef lobbylsL for Lhe
oll and gas lndusLry," Chlson sald. ln facL, l Lhlnk he should
llLerally qulL drlnklng Lhe fracklng kool-Ald."
CC Gov. n|cken|ooper has sa|d the state w||| sue any |oca|
government that bans frack|ng. "Someone pa|d money to
buy m|nera| r|ghts under that |and [and] ou can't harvest
the m|nera| r|ghts w|thout do|ng hydrau||c fractur|ng."
Cvervlew PorlzonLal urllllng from
Anu-lracklng perspecuve
49
Walklng 8lg"
Muluple wells on same pad
uncerLalnLy of Cngolng, Long-Lerm erformance:
lndusLry has Leader ClusLer and
Long 1all of oLenual oor erformers
30
L
e
a
d
e
r
s
h
|
p

&

G
r
e
a
t

e
r
f
o
r
m
a
n
c
e

1he Long 1a||
Laggers & oor erformers
l8ACklnC lLulu - 20-MonLh Lrend
hup://www.youLube.com/waLch?v[MPr6LCh18L
vlsuallzlng 63.9 8llllon Callons of lrackwaLer
730,000 gallons per second ow
over Lhe lconlc nlagara lalls
durlng Lhe summer. 1he charL on
Lhe rlghL lndlcaLes waLer volume
used for fracklng ln equlvalenL
nlagara lalls LourlsL hours".
31
l8ACklnC lLulu - 30 noL reporLed
More Lhan half of new wells wenL unreporLed on lraclocus ln each of Lhree
sLaLes: 1exas, Cklahoma and MonLana
ln all, 1,126
companles had
aL leasL one well
ln Lhe analysls
perlod.
1,038 of Lhem,
or 92 percent,
d|dn't report
any we||s on
IracIocus.
32
urllllng Addluves & funcuons
ln Shale gas exLracuon
10

"#$% &' ()*+,-#. #/0 1,2.23,-#. 4#5#$06 7$2+ 8#%9$#. :#6 ;<%$#-%,2/

=$,..,/3 >00,%,?*6'

"#$% &'()*&#+ ,-./0&12 #-( 02(/ *$ 1'( /(3(+.,)($1 .4 # 5#2 6(++7 8.)( (9#),+(2:
#+.$5 6*1' 1'(*- ).21 &.)).$ #,,+*&#1*.$2: #-( 2'.6$ *$ @#A.* BB7

@#A.* BB' >00,%,?* 79/-%,2/6 ,/ C)#.* :#6 ;<%$#-%,2/

>00,%,?* @DE* ;<#+E.*6 "9$E26* F6*0 B/
;-*&1*.$ <(/0&(- '(#3% $#,'1'#: ,.+%)(-
)*&-.()0+2*.$
+0=-*&#1( /-*++ '(#/:
,($(1-#1( 4*220-(2
/-*++*$5 )0/2:
4-#&10-*$5 4+0*/2
>*.&*/( 5+01#-#+/('%/(: ?>@AB:
/*=-.).#&(1.$*1-*+(
,-(3($1 =*.4*+)
4.-)#1*.$
/-*++*$5 )0/2:
4-#&10-*$5 4+0*/2
8&#+( C$'*=*1.- (1'%+($( 5+%&.+: D?EB:
&*1-*& #&*/
,-(3($1 2&#+(
=0*+/0,
/-*++*$5 )0/2:
4-#&10-*$5 4+0*/2
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C$'*=*1.-
,-.,#-5%+ #+&.'.+:
!:!"/*)(1'%+4.-)#)*/(
,-(3($1 &.--.2*.$
.4 )(1#+ ,#-12
/-*++*$5 )0/2:
4-#&10-*$5 4+0*/2
F+#% 81#=*+*G(- 1(1-#)(1'%+#)).$*0)
&'+.-*/(
,-(3($1 &+#%
26(++*$5
/-*++*$5 )0/2:
4-#&10-*$5 4+0*/2
H(++*$5 B5($1 =($1.$*1(: 50#- 50):
gemini quat amine
,-(3($1 2+0),*$5
.4 2.+*/2
/-*++*$5 )0/2:
4-#&10-*$5 4+0*/2
F.$/*1*.$(- #)).$*0) &'+.-*/(:
,.1#22*0) &#-=.$#1(:
*2.,-.,%+ #+&.'.+
#/I021 ,J:
#/I021 #//*1*3(
2.+0=*+*1%
/-*++*$5 )0/2:
4-#&10-*$5 4+0*/2
80-4#&1#$1 KL=01.9%(1'#$.+:
(1'.9%+#1(/ .&1%+,'($.+
,-.).1( 4-#&10-(
,($(1-#1*.$
/-*++*$5 4+0*/2:
4-#&10-*$5 4+0*/2
F-.22LM*$N(- 2./*0) ,(-=.-#1(:
#&(1*& #$'%/-*/(
,-.).1( 5(++*$5 4-#&10-*$5 4+0*/2
>-(#N(- '()*&(++0+#2(:
#)).$*0) ,(-20+4#1(:
O0(=-#&'.
breaks gel to
,-.).1( 4+.6L=#&N
.4 4+0*/
,.21L4-#&10-*$5
4+0*/2
F+(#$(- '%/-.&'+.-*& #&*/ /*22.+3( /(=-*2 21*)0+#1*.$ 4+0*/:
,-(L4-#&10-( 4+0*/
A-.&(22.- (1'%+($( 5+%&.+:
,-.,%+($( 5+%&.+
21-*, *),0-*1*(2
4-.) ,-./0&(/ 5#2
,.21L,-./0&1*.$
,-.&(22*$5 4+0*/2

8. L. 8lshop, Chemlcal and 8lologlcal 8lsk AssessmenL for naLural Cas LxLracuon ln new ?ork
hup://wellwaLch.les.wordpress.com/2011/03/rlsk-assessmenL-naLural-gas-exLracuon.pdf.
33
Large-scale Chemlcal use
34
1he large-scale use of chemlcals wlLh slgnlcanL LoxlclLy
has glven rlse Lo a greaL deal of publlc concern, and an
lmporLanL aspecL of Lhe debaLe concerns Lhe level of
proof requlred Lo assoclaLe an envlronmenLal change
wlLh acuvlues assoclaLed wlLh gas drllllng.
80,000 fracklng wells slnce 2003
280 bllllon gallons Loxlc wasLewaLer ln 2012
2 bllllon gallons chemlcals ln 2012
Chemlcal lssues
33
8arlum
Lead
Arsenlc
8enzene
8romlde
Cver 200 d|erent chem|ca| products
More than three-fourths are hea|th hazards:
tespltototy Jlseoses, eoJoctloe Jlseoses, lofetullty
ooJ blttb Jefects, klJoey, beott, llvet, btolo Jomoqe,
coocet
2-buLoxyeLhanol (2-8L)
CluLaraldehyde
Pydrogen Sulde
4-nlLroqulnollne-1-oxlde (4-nCC)
Chem|ca|s of Spec|a| Concern
rofessor 8onald L. 8lshop, h.u., C.P.C. ChemlsLry & 8lochemlsLry, Sun? College aL CneonLa, Shale Cas lmpacLs on WaLer
CuallLy, lncldenL lrequencles oLenual aLhways Chemlcals of Concern
lracklng llulds - Chemlcals
36
8ased on lraclocus daLa, chemlcals used
ln Marcellus Shale Lyplcal hydraullc
fracLurlng [ob, a 3u vlsuallzauon of
volume of varlous chemlcals used ln Lhe
process. 1rade secreL" chemlcals noL
ldenued are symbollzed by Lhe large
quanuLy of red barrels.
hup://blog.skyLruLh.org/2012/06/meeL-frack-famlly.hLml
l8ACklnC lLuluS - are a problem
veLerlnarlan Mlchelle 8amberger and rofessor 8oberL Cswald of molecular
medlclne aL Cornell's College of veLerlnary Medlclne, publlshed Lhe rsL and only
peer-revlewed reporL Lo suggesL a llnk beLween fracklng and lllness ln food anlmals.
1he auLhors complled 24 case sLudles of farmers ln slx shale-gas sLaLes whose
llvesLock experlenced neurologlcal, reproducuve and acuLe gasLrolnLesunal
problems aer belng exposed - elLher accldenLally or lncldenLally - Lo fracklng
chemlcals ln Lhe waLer or alr.
Mlchelle 8amberger & 8L Cswald, lmpacLs of gas drllllng on human and anlmal healLh, new Soluuons: A !ournal of
LnvlronmenLal and Cccupauonal PealLh, 2012,22(1):31-77.
hup://www.youLube.com/waLch?vl?deWh-u_4
37
lracklng llulds - Cluzens wanL more
compleLe LransparenL lnformauon
38
hup://blog.skyLruLh.org/2012/11/skyLruLh-releases-fracklng-chemlcal.hLml
Cluzen-generaLed map
based on exLracLed daLa
from more Lhan 27,000
"chemlcal dlsclosure
reporLs" volunLarlly
submlued by lndusLry Lo
lraclocus, beLween !an.
2011 and Aug. 2012.
1he Sky1ruLh lracklng
Chemlcal uaLabase ls
Lhe rsL free publlc
resource enabllng
research and analysls of
Lhe chemlcals used ln
fracklng operauons
nauonwlde.
Lxposed llvesLock are maklng
Lhelr way lnLo Lhe food sysLem,
and lL's very worrlsome Lo us,"
8amberger sald.
1hey llve ln areas LhaL have
LesLed posluve for alr, waLer
and soll conLamlnauon. Some
of Lhese chemlcals could
appear ln mllk and meaL
producLs made from Lhese
anlmals."

LllzabeLh 8oyLe, LlvesLock falllng lll ln fracklng reglons, n8Cnews, november 29, 2012
39
LCUISIANA, 17 cows dled aer an hour's exposure Lo spllled
fracklng uld, whlch ls ln[ecLed mlles underground Lo crack
open and release pockeLs of naLural gas.
NLW MLkICC, halr Lesung of slck caule LhaL grazed near well
pads found peLroleum resldues ln 34 of 36 anlmals.
NC. CLN1kAL LNNSLVANIA, 140 caule were exposed Lo
fracklng wasLewaLer when an lmpoundmenL was breached.
ApproxlmaLely 70 cows dled, and Lhe remalnder produced
only 11 calves, of whlch Lhree survlved.
LllzabeLh 8oyLe, LlvesLock falllng lll ln fracklng reglons, n8Cnews, november 29, 2012
60
lnsurance 8lsk?
61
nauonwlde MuLual lnsurance Co.
spokeswoman nancy SmelLzer sLaLed
LhaL personal and commerclal pollcles
"were noL deslgned Lo cover" rlsk
f rom Lhe drllllng process, called
fracklng.
memo reads: "Aer monLhs of research and dlscusslon, we have deLermlned LhaL
Lhe exposures presenLed by hydraullc fracLurlng are Loo greaL Lo lgnore. 8lsks
lnvolved wlLh hydraullc fracLurlng are now prohlblLed f or Ceneral LlablllLy,
Commerclal AuLo, MoLor 1ruck Cargo, AuLo hyslcal uamage and ubllc AuLo
(lnsurance) coverage."
lL sald "prohlblLed rlsks" apply Lo landowners who lease land for shale gas drllllng
and conLracLors lnvolved ln fracklng operauons, lncludlng Lhose who haul waLer Lo
and from drlll slLes, plpe and lumber haulers, and operaLors of bulldozers, dump
Lrucks and oLher vehlcles used ln drlll slLe preparauon.
Irack|ng 8oom G|ves
8anks Mortgage neadaches

62
AL leasL Lhree lnsuLuuons - 1ompklns
llnanclal ln lLhaca, n.?., Spaln's SanLander
8ank and SLaLe Lmployees' CredlL unlon ln
8alelgh, n.C. - are refuslng Lo make
morLgages on land where oll or gas rlghLs
have been sold Lo an energy company.
Andy eLers, lracklng 8oom Clves 8anks MorLgage Peadaches, nov. 12, 2013, hup://www.amerlcanbankers.com/
"1haL alone would make lL a problem." 1he morLgage agreemenL says home-
owners can sell an oll or gas lease Lo an energy rm wlLh prlor consenL from a
lender, buL May says, "l don'L know any lenders who are granung LhaL rlghL now."
1he unlform new ?ork sLaLe morLgage agreemenL, used by lannle Mae and
lreddle Mac, sLaLes LhaL "you cannoL cause or permlL any hazardous maLerlals
Lo be on your properLy and lL speclcally references oll and gas," says Creg May,
v of resldenual morLgage lendlng aL 1ompklns.
8anks Mortgages & Iann|e Mae
63
lf lannleMae owns Lhe morLgage, lL's unllkely lL would approve such a
Lransfer. lannleMae generally does noL "allow surface lnsLrumenLs,"
such as an oll rlg, on properLy lL owns, says spokeswoman Callle
uosberg.
A landowner could apply for prlor approval, and Lhere "may be a work-
around, buL generally Lhe agency does noL approve such requesLs," she
says.
A greaLer concern for homeowners ls LhaL lannle Mae or lreddle Mac
could force Lhe enure ouLsLandlng loan balance Lo become due
lmmedlaLely.
8anks Mortgage & Iredd|e Mac
64
lreddle Mac ls wlLhln lLs legal auLhorlLy Lo exerclse a morLgage's "due on sale"
clause lf a borrower enLers lnLo a mlneral-rlghLs agreemenL. no "publlc
lnformauon" ls avallable Lo show lf LhaL has ever happened.

An ablllLy Lo exerclse Lhe "due on sale" clause ls Lrlggered lf a landowner
Lransfers a rlghL auached Lo Lhe properLy, or Lhrough language LhaL bars
"hazardous condluons" on Lhe slLe. A clause ln lreddle Mac's sLandard securlLy
lnsLrumenL bars "Lhe borrower from Laklng any acuon LhaL could cause Lhe
deLerlorauon, damage or decrease ln value of Lhe sub[ecL properLy."
So Lhe borrower cannoL enLer lnLo a mlneral lease wlLhouL express approval.

Not rob|em |n Western States w|th
8anks, Mortgages & Irack|ng
63
Severed mlneral rlghLs has noL been an lssue ln Lhe wesLern unlLed SLaLe,
where homeowners have always assumed LhaL Lhelr land had a mlneral rlghL
LhaL was separaLe from Lhelr morLgage, says kenL SlegrlsL, a 1ulsa, Ckla., lawyer.
"ln Cklahoma, lL's vlrLually lmposslble Lo buy properLy wlLh Lhe mlnerals sull
auached Lo lL," says SlegrlsL, who represenLs oll companles and landowners.

no bankers ln wesLern norLh uakoLa, where Lhe oll lndusLry ls cenLered, have
ralsed concerns abouL fracklng and morLgage lendlng, says 8lck Clayburgh,
presldenL and CLC of Lhe norLh uakoLa 8ankers Assoclauon.

Mld-nlghL & Mld-day lllegal uumplng
66
1wo Chlo sLaLe regulaLory
agencles conducLed a crlmlnal
lnvesugauon lnLo how and
why 20,000 gallons of fracklng
wasLes were dumped lnLo a
sLorm draln near Lhe slLe of
Lhe u&L Lnergy Croup
headquarLers on SalL Sprlngs
8oad, near ?oungsLown, Chlo.

ApparenLly CLC 8en W. Lupo
dlrecLed employees Lhere Lo
dump Lhe wasLewaLer down a
sLorm draln.
hup://www.vlndy.com/vldeos/2013/feb/03/2173/sLhash.aCx8C1vq.dpuf
Wllderness & nauonal ark lmpacLs
67
Footprintwildlife!"#$%&#'
) * + ) , - ) . / ) 0 1 2 , 3 4 ) , - / 3
Footprintwildlife!"#$%&#'
) * + ) , - ) . / ) 0 1 2 , 3 4 ) , - / 3
enoyer, SLray Cas Mlgrauon lssues ln Well ueslgn and ConsLrucuon, Conslderauons ln Avoldlng MeLhane lmpacLs Lo urlnklng WaLer Aqulfers and/or Alr
Lmlsslons, nauonal ark Servlce, u.S. uepL. of lnLerlor
u1AP Wllderness
Wonderland 1hreaLened
1he 8LM deferred 99,960 acres
of proposed oll and gas leases
ln and around Lhe uLah's
magnlcenL San 8afael Swell.
1hls reglon has been
consldered for everyLhlng from
nauonal MonumenL Lo
nauonal ark sLaLus. lL's a
wonderland of red rock Lowers,
splres and canyons.
68
nlghL Sky olluuon & nolse
69
Legacy problems
unplugged abandoned wells
70
nearly a quarLer cenLury ago Lhe
LA esumaLed LhaL Lhere were
more Lhan 1 mllllon abandoned oll
and gas wells nauonwlde, wlLh
nearly 1 ln 3 belng porLals for
polluuon Lo reach Lhe surface.
Legacy problems
71
new ?ork sLaLe regulaLors
esumaLe Lhere are 37,000
orphan/abandoned wells ln Lhe
sLaLe, wlLh half of Lhelr locauons
unknown. ln 2009 more orphan/
abandoned wells were newly
dlscovered Lhan were plugged.
NYS DEC - Division of Mineral Resources 24 Nineteenth Annual Report
New York State Oil, Gas and Mineral Resources, 2002

!"#$"#%& !()**#+* ,#-%

Historically, abandoned wells have been discov-
ered at playgrounds and parking lots, inside
buildings, in wetlands, underwater in creeks and
ponds, in wooded and brushy areas and in resi-
dential yards. Every year DEC staII discover
additional abandoned wells during scheduled
inspections or while investigating complaints.
DEC staII evaluate the environmental and pub-
lic saIety threats posed by each well and place
the most serious cases on the Priority Plugging
List to be plugged whenever Iunds become
available.

Currently, there are 634 wells in 18 counties on
the Priority Plugging List. Allegany and Catta-
raugus County have a considerable number oI
abandoned old oilIield wells on the Priority
Plugging List, but problem oil and gas wells oI
all ages are on the list.

To date, only a small percentage oI Priority
Plugging List wells have ever been removed
Irom the list. Wells removed Irom the list were
plugged and abandoned with monies Irom the
Oil and Gas Account and Environmental Audit
Funds.

.+/#"$+01+%2( 3)4#% !"$51--

The Environmental Audit Program requires that
each State Agency annually report any environ-
mental problems associated with the lands and
Iacilities they manage. Many agencies such as
DEC, Parks, Urban Development, DOT and
Mental Health have recently plugged leaking or
abandoned wells identiIied in the Enviromental
Audit (see page 23 Ior DEC plugging on State
lands). However, many abandoned wells located
on State lands are still not being reported, such
as those Iound on DOT right-oI-ways.

In February Division staII made a presentation
at a State Agency Environmental Audit Work-
shop. Division staII explained the need to report
abandoned wells and showed the workshop at-
tendees examples oI abandoned wells and the
wide variety oI settings where they can be
Iound.
This Priority Plugging List well in the City oI
Rome, Oneida County was discharging brine at
a rate oI Iive gallons per minute into a wetland
adjacent to Brandy Brook and had already
killed over an acre oI vegetation in 1998.
The mostly wooden structure is an older style oI
drilling rig known as a cable tool rig. It is being
used to plug a well in a DOT right-oI-way next
to a stream.

The Division issued 177 Well Plug-
ging Permits in 2002. All wells must
be plugged and abandoned at the end
oI their productive liIe. The Division
ensures that the proposed plugging
procedures will protect ground and
surIace water and the site will be
properly reclaimed and revegetated.
!()**#+* !1"0#%-
rofessor 8onald L. 8lshop, h.u., C.P.C. ChemlsLry & 8lochemlsLry, Sun? College aL CneonLa, Shale Cas lmpacLs on WaLer CuallLy,
lncldenL lrequencles oLenual aLhways Chemlcals of Concern , slung new ?ork SLaLe ueparLmenL of LnvlronmenLal Conservauon,
ulvlslon of Mlneral 8esources, New otk 5tote Oll, Cos ooJ Mloetol kesootces, 2002, !uly 2004, pp. 22-24,
hup://www.dec.ny.gov/docs/maLerlals_mlnerals_pdf/prod023.pdf
Cne case lnvolved an old gas well LhaL dlscharged brlne aL a raLe
of ve gallons per mlnuLe lnLo a weLland near 8ome, kllllng over
an acre of vegeLauon.
Legacy problems
72
AnoLher lnvolved Lhe enure vlllage
of 8ushvllle, on Lhe border
beLween CnLarlo and ?aLes
Counues, where Lwo dozen
unplugged abandoned wells were
responslble for wldespread
emanauon of gas from Lhe soll, so
LhaL meLhane accumulaLed Lo
exploslve levels ln some sLrucLures.

Zoar Well Plugging Site. The construction oI
the access road and well site was designed to
minimize disturbance to the surrounding area.
!"#$%& ()*+, - Using State Environmental
Audit Iunds, the Department plugged seven
problem abandoned wells on a wide range oI
public lands. DEC plugged three abandoned
gas wells on the Three Rivers WildliIe Man-
agement Area in Onondaga County. One well
had been Ilowing natural gas and another was
discharging brine. In addition, DEC plugged
Iour abandoned wells in Cattaraugus County,
three on Cattaraugus ReIorestation Area #22 in
the Town oI Allegany and one on the Zoar
Multiple Use Area in the Town oI Persia.

In a separate incident, another abandoned well
was discovered on property that The Nature
Conservancy purchased Ior possible addition to
the Deer Creek WildliIe Management Area in
Oswego County.
-.*.&) ()/. - Through Iield and
oIIice work, Division staII discovered
seven abandoned salt wells at the US
Salt Iacility in the Town oI Reading,
Schuyler County. The wells had been
abandoned Ior decades.

All the wells were less than 50 Ieet
Irom the shore and adjacent to a steep
grade which raised concerns about po-
tential impacts to the lake. Rig access
was very diIIicult, but the responsible
party successIully plugged all the wells.
0*12%*1 !32#$.4, 5 Many abandoned well issues take several years to resolve as the Di-
vision pursues legal action against those responsible. The Moore Lease in Allegany County
is a good example with more than 200 abandoned wells involved in legal actions. The
Moore wells occur in a variety oI settings (residential areas, roadside, woodland, Iield etc)
and many are leaking oil.

Abandoned wells can leak oil, gas and/or brine. They can contaminate groundwater and sur-
Iace water, kill vegetation and cause saIety and health problems. Underground leaks may go
undetected Ior years beIore their damage is discovered.

"#"$%&$'% ('))*
+,-./,01.23 "4,2 - Pipeline company
employees detected natural gas emanating
Irom two residential lawns in the Village
oI Rushville, Ontario and Yates County.
Explosive gas levels were also Iound in-
side a garage. Division staII uncovered
two natural gas wells in the vicinity. Gas
in the soil declined when the wells were
vented under DEC direction. Roughly 24
gas wells were drilled in the village in the
1900's and need to be plugged when
Iunds are available. The backhoe is exca-
vating a leaking well next to a building.
*56773 - During construction oI a new
bus garage at the Bolivar-Richburg High
School in Allegany County, several buried
abandoned wells were uncovered. Since
no well records were available, the school
had to bring in a small service rig (red
equipment in Ioreground) to check the
condition oI the wells. All the wells had to
be plugged beIore construction could re-
sume. This is not the Iirst school well inci-
dent that the Division has handled. For
example, in nearby Wyoming County
DEC plugged a gas well that was leaking
brine in the parking lot oI Wyoming
County Central School in 1991.
The Division estimates that over 75,000 oil and gas wells
have been drilled in New York State since the 1820s.
Most oI the wells were drilled beIore New York established
a regulatory program and many were never plugged. Every
year the Division oI Mineral Resources deals with a 'new
group oI problem abandoned wells in a wide variety oI
settings. Here is a selection oI abandoned wells Irom 2002.
rofessor 8onald L. 8lshop, h.u., C.P.C. ChemlsLry & 8lochemlsLry, Sun? College aL CneonLa, Shale Cas
lmpacLs on WaLer CuallLy, lncldenL lrequencles oLenual aLhways Chemlcals of Concern
Legacy problems
73
lugglng or excavauon of
abandoned wells on school
properues ln Allegany and
Wyomlng Counues cosL Lhose
school dlsLrlcLs Lhousands of
dollars.

"#"$%&$'% ('))*
+,-./,01.23 "4,2 - Pipeline company
employees detected natural gas emanating
Irom two residential lawns in the Village
oI Rushville, Ontario and Yates County.
Explosive gas levels were also Iound in-
side a garage. Division staII uncovered
two natural gas wells in the vicinity. Gas
in the soil declined when the wells were
vented under DEC direction. Roughly 24
gas wells were drilled in the village in the
1900's and need to be plugged when
Iunds are available. The backhoe is exca-
vating a leaking well next to a building.
*56773 - During construction oI a new
bus garage at the Bolivar-Richburg High
School in Allegany County, several buried
abandoned wells were uncovered. Since
no well records were available, the school
had to bring in a small service rig (red
equipment in Ioreground) to check the
condition oI the wells. All the wells had to
be plugged beIore construction could re-
sume. This is not the Iirst school well inci-
dent that the Division has handled. For
example, in nearby Wyoming County
DEC plugged a gas well that was leaking
brine in the parking lot oI Wyoming
County Central School in 1991.
The Division estimates that over 75,000 oil and gas wells
have been drilled in New York State since the 1820s.
Most oI the wells were drilled beIore New York established
a regulatory program and many were never plugged. Every
year the Division oI Mineral Resources deals with a 'new
group oI problem abandoned wells in a wide variety oI
settings. Here is a selection oI abandoned wells Irom 2002.
Abandoned wells have been found
leaklng oll lnLo creeks and
weLlands ln SLeuben and Allegany
Counues, and lnLo resldenual
ponds and lawns ln Allegany and
Cauaraugus Counues
rofessor 8onald L. 8lshop, h.u., C.P.C. ChemlsLry & 8lochemlsLry, Sun? College aL CneonLa, Shale Cas lmpacLs on WaLer CuallLy, lncldenL lrequencles
oLenual aLhways Chemlcals of Concern
Legacy problems creaLe confuslon
wlLh currenL developmenL
74
Case on o|nt - Lddy Iam||y
Arc of new gas wells developed by u.S. Lnergy 8esources abouL
14 mlle away Lddy famlly's land.
Lddy's waLer well polluLed by oll -- noL brlne or oLher gas
lndusLry chemlcals
robable cause: abandoned oll well near Lhelr home
ulsposluon: cause noL relaLed Lo gas developmenL

u.S. Lnergy uevelopmenL oered a waLer LreaLmenL sysLem,
whlle acknowledglng no culpablllLy. u.S. Lnergy also oered a
nanclal seulemenL ln reLurn for slgnlng a non-dlsclosure
agreemenL.
1he LreaLmenL sysLem was accepLed, buL noL Lhe cash.
WhaL Lo uo abouL legacy problems?
73
C|ean up the o|d mess before we start a new one.
" rohlblL non-dlsclosure agreemenLs unul Al1L8
lnvesugauons are compleLe.
" uramaucally lncrease sLamng of 8ureau of Cll and
Cas 8egulauon
" ln n? over 13,000 oll/gas wells, only 16 eld
agenLs: over 800 wells per lnspecLor
" romoLe research on healLh lmpacLs.
" lauslble denlablllLy ls noL preferable Lo
sclenucally-based rlsk assessmenL.
Summary
Shale Cas MeLhane Lmlsslons
77
1. Shale gas ls abundanL, emlLs half Lhe CC
2
emlsslons as coal, ls currenLly low-cosL, resulung ln rapld
expanslon. 8uL meLhane ls a far more poLenL CPC Lhan prevlously esumaLed, and lf leakages
surpass a cerLaln percenLage of producuon Lhen cllmaLe advanLages over coal dlsappear.
2. Aggregaung gas emlsslons from pre-producuon, producuon, processlng, Lransmlsslon (plpellne)
and end-use combusuon (e.g., power planL) ls complex, and a myrlad of assumpuons resulL ln a
wlde range of esumaLes.
3. 1here ls wldespread agreemenL LhaL Lhere ls lnsumclenL monlLorlng and measuremenL Lo
accuraLely or preclsely deLermlne Lhe gas lndusLry's meLhane emlsslons. LA esumaLes emlsslons
aL 2 Lo 3 of producuon, buL esumaLes from eld research span 24-fold - from 0.43 Lo 12.
4. lndusLry leaders belleve below 1 ls a senslble goal and would galn wlde supporL from
envlronmenLal and clvlc groups. CllmaLe sclenusLs see Lhls as a necessary lmperauve, buL noL
sumclenL, glven Lhe carbon consLralned budgeLs Lhe world musL adopL ln order Lo prevenL
exceedlng 2C rlse ln global average LemperaLure. ero emlsslons ls an lmperauve, so gas
expanslon musL shl Lo zero emlsslons wlLhln Lhe nexL decade-plus.
3. Coal ls noL Lhe ulumaLe comparlson for gas, buL now confronLs cosL-eecuve compeuuon from
Lhree emlsslon-free opuons - end-use emclency, wlnd and solar power. And meLhane emlsslons ls
only one among a dozen aurlbuLes LhaL clvlc, corporaLe and publlc leaders use Lo evaluaLe Lhe
leasL-cosL-and-rlsk meLhods of dellverlng energy servlces Lo Lhe polnL of use.
osslble mechanlsms for leakage of
sLray gas Lo waLer resources
78 enoyer, SLray Cas Mlgrauon lssues ln Well ueslgn and ConsLrucuon, Conslderauons ln Avoldlng MeLhane lmpacLs Lo urlnklng WaLer Aqulfers and/or Alr
Lmlsslons, nauonal ark Servlce, u.S. uepL. of lnLerlor
MeLhane mlgrauon
vla abandoned wells
79
Cas Leakage along a Well
Wellbore Leakage
Wellbore leakage is separated
into two distinct areas of the
wellbore
Shallow leakage generally due
to poor cementing practices
Deep leakage generally due to
stimulation or perforating
Only deep leakage is generally
associated with CO
2
CO
2
leakage in the shallow
areas are due to secondary
events
1heresa L. WaLson, 1.L. WaLson & AssoclaLes, and SLefan 8achu, AlberLa Lnergy 8esources Conservauon 8oard,
Lvaluauon of Lhe oLenual for Cas and CC2 Leakage Along Wellbores, [ournal SL urllllng & Compleuon, SL 106817-A
80
Wellbore leakage ls
separaLed lnLo Lwo dlsuncL
areas of Lhe wellbore.
Sha||ow |eakage ls generally
due Lo poor cemenung
pracuces.
Deep |eakage ls generally
due Lo sumulauon or
perforaung. Cnly deep
leakage ls generally
assoclaLed wlLh CC
2
.
Cas Leakage along a Well
1heresa L. WaLson, 1.L. WaLson & AssoclaLes, and SLefan 8achu, AlberLa Lnergy 8esources Conservauon 8oard, Lvaluauon of Lhe oLenual for
Cas and CC2 Leakage Along Wellbores, [ournal SL urllllng & Compleuon, SL 106817-A
81
Shallow Leakage
Surface Casing Vent Flow
Gas Migration
Casing Failure
Shallow Leakage
Surface Casing Vent Flow
Gas Migration
Casing Failure
Surface Caslng venL llow, Cas Mlgrauon,
Caslng lallure.
onal AbandonmenL fallure example
82
Zonal Abandonment Failure
Cas Mlgrauon along a Well
!

Since the earliest gas wells, uncontrolled migration of hydrocarbons to
the surface has challenged the oil and gas industrymany of todays wells
are at risk. Failure to isolate sources of hydrocarbon either early in the
well-construction process or long after production begins has resulted in
abnormally pressurized casing strings and leaks of gas into zones that
would otherwise not be gas bearing.

Figure 1. Simplified schematic showing phenomenon of upward gas migration
along a casing string. From Dusseault et al., 2000.

Figure 2. Schematic of details of possible fluid migration paths in and around a cased/cemented
well.
1heresa WaLson & SLefan 8achu, Wellbore Leakage oLenual ln CC2 SLorage or LC8, lourLh Wellbore lnLegrlLy neLwork
Meeung arls, lrance,, March 19, 2008. 83
Cement Type
Data and photograph courtesy Barbara Kutchko, DOE
Cne ?ear uegradauon
of neaL Class P CemenL
Deep Leakage to Surface and
Groundwater |n Centra| A|berta
84
Deep Leakage to Surface and Groundwater
in Central Alberta
WhaL's Lhe roblem wlLh
PorlzonLal Well Mulu-sLage lracLurlng?
83
1heresa WaLson, AlberLa 8egulauons: Wellbore lnLegrlLy lssues urlvlng 8egulaLory Change, norLh
Amerlcan Wellbore lnLegrlLy Workshop CcL. 16-17, 2013
" lncreaslng numbers of horlzonLal, mulu-
sLage hydraullc fracLured wells
" Large numbers of pre-exlsung wellbores ln
Lhe provlnce
" oLenual Lo lmpacL asseLs and
groundwaLer
Where's Lhe roof?
86
1heresa WaLson, AlberLa 8egulauons: Wellbore lnLegrlLy lssues urlvlng 8egulaLory Change, norLh Amerlcan Wellbore lnLegrlLy Workshop CcL.17, 2013
8lue: all wells drllled
ln AlberLa slnce
1933
LlghL orange: all
wells fracLured
uark orange: all
horlzonLal
wells sumulaLed by
mulusLage hydraullc
fracLurlng
Wheres the Proof? Where s the Proof?
Blue: all wells
drilled in Alberta
since 1955
Light orange: all
wells fractured
Dark orange: all
h i l horizontal
wells stimulated by
multistage hydraulic g y
fracturing
Watson, Theresa, Presented at University of Calgary, Schulich School
of Engineering Alumni 2013 Distinguished Speakers Panel, March
14, 2013.
Where's Lhe proof?
87
Wheres the Proof Where s the Proof
Kim.Thomas, Overview of Interwellbore Communication
Incidents: An ERCB Perspective. Presented at the Canadian
Society of Unconventional Resources 14th Annual Conference
October 3-4, 2012, Calgary Alberta
klm.1homas, Cverv|ew of Inter-we||bore Commun|canon Inc|dents: An Lnergy kesources Conservanon 8oard of Canada erspecnve.
resenLed aL Lhe Canadlan SocleLy of unconvenuonal 8esources 14Lh Annual Conference CcLober 3-4, 2012, Calgary AlberLa
Wheres the Proof Where s the Proof
Kim Thomas Overview of Interwellbore Communication Kim.Thomas, Overview of Interwellbore Communication
Incidents: An ERCB Perspective. Presented at the Canadian
Society of Unconventional Resources 14th Annual Conference
October 3-4, 2012, Calgary Alberta
D|stance between

we||bores:
C|osest 30 meters
Iurthest 2400 m
Mean 3SS m
Med|an 2S0 m

Where's Lhe proof?
88
klm.1homas, Cverv|ew of Inter-we||bore Commun|canon Inc|dents: An Lnergy kesources Conservanon 8oard of Canada erspecnve.
resenLed aL Lhe Canadlan SocleLy of unconvenuonal 8esources 14Lh Annual Conference CcLober 3-4, 2012, Calgary AlberLa
20 reported |nc|dents s|nce 2009
- 18 |nc|dents: fracture snmu|anon
commun|canng to a produc|ng we||
- 2 |nc|dents: fracture snmu|anon to a
dr||||ng we||
- SS of the |nc|dents had no sp|||s,
equ|pment damage, or |ong-term adverse
eects on producnon
20 reported incidents
since 2009
18 incidents: fracture
stimulation communicating
to a producing well
stimulation to a drilling well
55% of the incidents had no
spills equipment damage or spills, equipment damage, or
long-term adverse effects on
production
since 2009
to a producing well
production
since 2009
to a producing well
production
Legacy of Abandoned Wells
89
"
Urban encroachment on o|d

abandoned o||

he|ds
"
ub||c safety concerns about |eak|ng

we||s

and gas accumu|anons |n basements
"
Numbers of |mpacts grow|ng
"
No permanent |nd|cator of abandoned we||s
on the |and or on nt|e

Photos Courtesy Doull Site Inc
90
We||bore Str|ke by Iarm|ng Lqu|pment
Wellbore Strike by Farming Equipment
Wellbore Strike by Farming Equipment
91
We||bore Str|ke dur|ng Deve|opment
Wellbore Strike during Development
Wellbore Strike during Development
92
Urban Lxpans|on & Lncroachment
Urban Encroachment
City
Well 2
Well 1
2006 City Boundary
Estimated 2056
City Boundary
2 people
per km
2
8 people
per km
2 100 people
per km
2
Population growth by expanding urban centres
INCkLASLD CULA1ICN. LsumaLed growLh from 3 mlllllon Lo 6 mllllon by
2036.
INCkLASLD WA1Lk WLLL8CkLS. lL ls esumaLed LhaL Lhere wlll be 939,000
wells ln AlberLa provlnce by 2036 compared Lo 343,000 ln 2006.
WhaL Soluuons?
93
" 8equlres a 3 meLer seLback from an abandoned well
" 8equlres developers Lo check for abandoned wells
and conLacL llcensees Lo make developmenL plans
" LlablllLy remalns wlLh llcensee
" 8equlres abandoned wells Lo be LesLed for gas
mlgrauon
" 8lsk assessmenL and ongolng Lesung
A|berta rov|nce's D|recnve 79:
Surface Deve|opment |n rox|m|ty to Abandoned We||s
CLher regulaLory changes?
94
" Change ln abandoned well capplng requlremenLs
" Changes ln surface caslng requlremenLs
" ulscusslon and research ongolng Lo deLermlne a level of accepLable
leakage
" lleld research lnvesugaung surface measureable gas leakage of
abandoned wells
" Cngolng changes ln abandonmenL requlremenLs
" LlmlLs on ln-slLu oll sands developmenL due Lo pre-exlsung
" wellbores ln Lhe sLeam ACl.
" Changes Lo wellbore consLrucuon requlremenLs for ln[ecuon wells
A|berta rov|nce examp|e
lncrease ln new WaLer Wells
93
Increase in Water Wells Associated
with Population Increase
An increase in
the number of
water wells
increases the
likelihood that
gas, due to
migration
through shallow
zones, can
accumulate in
buildings.
lncreaslng number of waLer wells lncreases
llkellhood gas, due Lo mlgrauon Lhrough
shallow zones, can accumulaLe ln bulldlngs.
ueep Leakage lacLors
96
Deep leakage factors.
Factor Criterion Meets
Criterion
Value
Default
Value
Fracture count =1 1.5 1
Fracture count >1 2 1
Acid count=1 1.1 1
Acid count=2 1.2 1
Acid count>2 1.5 1
Perforations count>1 2 1
Abandonment type Bridge Plug 3 1
Abandonment type Not
abandoned
2 1
Cement types and values.
Cement Type
Assigned
Value
Description
1:1 POZ MIX 1 Cement and fly ash
1:1:# POZ
3 Cement, fly ash and various quantities
of bentonite
BLACKGOLD 1 Unknown
CAP (NEAT)
1 Cap pumped on top of foam cement,
not applicable.
CLASS X NEAT 1 Various neat cements
FILL ECP
1 Cement to fill annular packer, not
applicable
FOAMED 1 Cement foamed with nitrogen
G + # PC SALT
1 Cement with various percent salt
additive
G + # PC SAND
1 Cement with various percent silica
sand additive
GPSL/GPCEM/THX 3 Gypsum and gel additives
LIGHT WEIGHT 3 Assumed gel additive to reduce density
SELF STRESS
3 No cement, hole allowed to slough in
on casing
SLAG
1 Blast furnace slag, reduces cement
porosity
SLOTTED LINER 3 No cement
SLURRY 6D 1 Unknown
TAPERED CASING 3 No cement
TH CEM/CEM FNDU
1 Thermal cement, usually sand or silica
additive
UNCEM CSG/LINER 3 No cement
Deep Leakage
Factors
Meeung arls, lrance,, March 19, 2008.
Scorlng
Shallow & ueep Leakage oLenual
97
Meeung arls, lrance,, March 19, 2008.
Scores
Deep leak potential.
Deep Leak Potential (DLP) Score
Low <2
Medium 2-6
High 6-10
Extreme >10
Shallow leak potential.
Shallow Leak Potential (SLP) Score
Low <50
Medium 50-200
High 200-400
Extreme >400
DLS= v(fracture count) X v(acid count) X v(perforated interval count) X v(aban type) X v(cement type)
SLP = v(spud date) X v(aban date) X v( SC size) X v(well type) X v(location) Xv( TD) X v(dev) X v(cement top) X v(additional plugs)
Scores
Deep leak potential.
Deep Leak Potential (DLP) Score
Low <2
Medium 2-6
High 6-10
Extreme >10
Shallow leak potential.
Shallow Leak Potential (SLP) Score
Low <50
Medium 50-200
High 200-400
Extreme >400
DLS= v(fracture count) X v(acid count) X v(perforated interval count) X v(aban type) X v(cement type)
SLP = v(spud date) X v(aban date) X v( SC size) X v(well type) X v(location) Xv( TD) X v(dev) X v(cement top) X v(additional plugs)
SL Score = v(spud date) k v(abandoned date) k v( SC s|ze) k v(we|| type) k
v(|ocanon) kv( 1D) k v(dev) k v(cement top) k v(add|nona| p|ugs)
DL Score = v(fracture count) k v(ac|d count) k v(perforated |nterva| count)
k v(aban type) k v(cement type)
Leakage Case SLudy - AlberLa
98
Case Studies
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Zama Field
Pembina Field
Edmonton
Calgary
ALBERTA
Field data and results summary.
Pembina Zama
Number of cased wells 9860 607
Number of wells drilled and abandoned 1050 106
% of wells with cement data 40% 64%
% of wells with high DLP cement score 28% 20%
% of wells fractured 75% 2%
% of wells acidized 47% 80%
% of wells abandoned 12% 13%
% of wells with multiple completions 11% 55%
% of wells with extreme DLP 14% 28%
% of wells with extreme SLP 7% 18%
% of wells with extreme SLP and DLP 1.6% 4.3%
Zama Deep Leakage Potential
0
20
40
60
80
100
120
140
0 5 10 15 20 25 30+
DLP Score
N
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b
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r

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f

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SLaLe of Colorado Lakes nauonal lead
ln regulaung Pl meLhane emlsslons
99
ln november 2013, Colorado healLh omclals
proposed new regulauons for Lhe oll and gas
lndusLry. 1he rules would requlre operaLors Lo
capLure almosL all meLhane, equlvalenL Lo 92,000
Lons per year, from boLh oll and gas wells and
sLorage Lanks. CC has more Lhan 30,000 wells,
one-Lhlrd drllled beLween 2006-2011.

Mlchael Wlnes, Colorado Covernor roposes SLrlcL LlmlLs on Creenhouse Cas Leaks lrom urllllng, november 18, 2013, new ?ork 1lmes
CperaLors wlll be responslble for deLecung meLhane leaks and reduclng emlsslons by 93
percenL, especlally near populauon cenLers. 1he Colorado regulauons would be Lhe rsL
ln Lhe unlLed SLaLes Lo regulaLe meLhane emlsslons.
Areas around wells have seen an lncrease ln ground-level ozone formed from meLhane
and oLher chemlcals, whlch can cause and exacerbaLe asLhma. ln recenL years, a smoggy
haze has crepL across Lhe fronL range of Lhe 8ocky MounLalns norLh of uenver, where
new wells are concenLraLed, parLly as a resulL of gas leaks LhaL have reacLed wlLh oLher
chemlcals Lo form ozone. nlne counues ln Lhe area, lncludlng much of 8ocky MounLaln
nauonal ark, exceed federal ozone llmlLs.
SLaLe of Colorado Pl meLhane regs
Lougher Lhan nauonal regs
100
1he lndusLry's meLhane emlsslons are mosLly
unregulaLed. Lhe CC proposal goes well beyond Lhe
resLrlcuons LhaL LA began enforclng lasL year.
1he federal rules apply prlmarlly Lo new wells,
leavlng Lhousands of older slLes exempL from
regulauon, and cover only leaks of volaule organlc
compounds.

Mlchael Wlnes, Colorado Covernor roposes SLrlcL LlmlLs on Creenhouse Cas Leaks lrom urllllng, november 18, 2013, new ?ork 1lmes
1hey do noL dlrecLly llmlL leaks of meLhane, alLhough requlremenLs Lo llmlL emlsslons of
volaule organlc compounds also end up reduclng meLhane. nor do Lhe federal rules
requlre companles Lo check for leaks aL well slLes and repalr Lhem.
Whlle some lndusLry experLs belleve Lhe cosLs wlll be burdensome Lo operaLors, clung
compllance cosLs of up Lo $80 mllllon per year, Lhe leglslauon was draed wlLh lndusLry
lnpuL. 1ed 8rown, Sr v aL noble Lnergy, sald Lhe rules are Lhe rlghL Lhlng Lo do" for Lhe
envlronmenL and Lhe healLh of Coloradans." Cov. Plckenlooper developed Lhe proposal ln
negouauons wlLh 3 of Lhe sLaLe's largesL oll and gas developers - Anadarko eLroleum
Corp., Lncana Corp. and noble Lnergy - and Lul. lormal hearlngs on Lhe proposal wlll
begln lebruary 2014.
naLural Cas vs. Coal
A CllmaLe erspecuve
101
Source: adapLed from lLA, Colden Age of Cas" speclal reporL (llgure 1.3)
L
e
a
k
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G|oba| Warm|ng otenna| (GW) for methane
naLural Cas MeLhane
Leakage 8aLes & CW
102
naLural Cas vs. Coal
A CllmaLe erspecuve
9
Source: adapLed from lLA, Colden Age of Cas" speclal reporL (llgure 1.3)
!
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6-+F#- G#'893% H+("32#- )6GH4 ,+' 8"(I#3"
3 key factors of how naLural gas compares Lo coal from a cllmaLe sLandpolnL:

1. GW for Methane (a sc|ence and po||cy quesnon)
2. Methane Leakage kate (a data quesnon)
3. Lnd-use combusnon emc|ency (|ead|ng or |agg|ng tech)
SLudles esumaLe u.S. leakage raLes span large range 2 - 3, wlLh some
sLudles and monlLorlng lndlcaung 3 Lo 12 leakage levels aL some
locauons.
1o rema|n |ess GnG-|ntens|ve than coa|, methane |eakage rates
must rema|n be|ow 2, sens|b|e goa| to ach|eve be|ow 1.
Lsumaung Lmlsslons from Shale Cas SysLems
103
g
r
a
m
s

C
C
2
e

p
e
r

M
e
g
a
I
o
u
|
e

(
M
I
)

0
S
10
1S
20
Source: !ames 8radbury eL al, Clearlng Lhe Alr: 8educlng upsLream Creenhouse Cas Lmlsslons from u.S. naLural Cas SysLems, Aprll 2013, World 8esources lnsuLuLe
1here are dlerlng
assumpuons regardlng how
frequenLly Lhe average well
requlres Pl and llqulds
unloadlng, and Lhe exLenL
Lo whlch conLrol
Lechnologles are used. Pl ls
an emlsslons-lnLenslve
process used Lo lnluaLe
producuon and ln
workovers Lo re-sumulaLe
producuon muluple umes
durlng Lhe well's 20- Lo 30
year llfespan.
Why such d|erent esnmates among stud|es?
SLudles done prlor Lo nCAA
and Lul/u1 Ausun sLudles
L|fe cyc|e methane |eakage rate esnmates for natura|
gas from onshore convennona| & sha|e gas sources
104
CCNVLN1ICNAL
CNSnCkL
kANGL
SnALL]
UNCCNVLN1ICNAL
kANGL
LCW nIGn LCW nIGn
8urnham 2.7S 0.97 S.47 2.01 0.71 S.23
nowarth 3.8S 1.7 6 S.7S 3.6 7.9
Weber 2.8 1.2 4.7 2.42 0.9 S.2
Logan - - - 1.3 0.8 2.8
Leakage rate esnmates are h|gh|y sens|nve to cho|ce of LUk
(esnmated u|nmate recovery).
8urnham, A., !. Pan, C.L. Clark, eL al. 2011. Llfe cycle greenhouse gas emlsslons of shale gas, naLural gas, coal, and peLroleum." Lnvlron Scl
1echnol., hup://pubs.acs.org/dol/pdfplus/10.1021/es201942m.
nowarth, 8., and 8. SanLoro, and A. lngraea. 2011. MeLhane and Lhe Creenhouse-Cas looLprlnL of naLural Cas from Shale lormauons."
Cllmauc Change 106(4): 679-690, hup://www.sprlngerllnk.com/conLenL/e384226wr4160633/.
Logan, !., C. PeaLh, !. Macknlck, eL al. 2012. naLural Cas and Lhe 1ransformauon of Lhe u.S. Lnergy SecLor: LlecLrlclLy." n8LL
8eporL-6A30-33338, hup://www.nrel.gov/docs/fy13osu/33338.pdf [Logan esumaLe based on daLa from Lhe 8arneu basln].
Weber, C., and C. Clavln. 2012. Llfe Cycle Carbon looLprlnL of Shale Cas: 8evlew of Lvldence and lmpllcauons." Lnvlron Scl 1echnol,
hup://pubs.acs.org/dol/ abs/10.1021/es300373n .

Compar|ng Deta||ed Lsnmates of L|fe Cyc|e GnG Lm|ss|ons:
Sha|e Gas & Convennona| Cnshore Natura| Gas Sources
103
4 |
MeunwIIIe, recenL reseurcI bused on heId meusuremenLs
oI umbIenL uIr neur nuLuruI gus weII-heIds In CoIorudo und
!"#$ &'(()&" "$#" *+,) "$#- . /),0)-" +1 2)33 /,+4'0"5+-
*#6 7) 3)#85-( 5-"+ "$) #"*+&/$),) #" &+*) /,+4'0"5+-9
&"#() +/),#"5+-&:
;
<5"$ $'-4,)4& +1 "$+'&#-4& +1 2)33& #-4
"$+'&#-4& +1 -#"',#3 (#& /,+4'0),& +/),#"5-( 5- "$) !:=:>
"$5& 2533 358)36 ,)*#5- #- #0"5?) 4)7#")> )?)- #& 1+,"$0+*9
5-( 4#"# 1,+* @AB #-4 +"$), &+',0)& #5*& "+ 03#,516 "$)&)
C')&"5+-& 5- "$) 0+*5-( *+-"$&: D+, )E#*/3)> 5-4)/)-4)-"
,)&)#,0$),& #" "$) !-5?),&5"6 +1 F)E#& #" B'&"5- #,) ")#*9
5-( '/ 25"$ "$) @-?5,+-*)-"#3 G)1)-&) D'-4 #-4 &)?),#3
5-4'&",6 /#,"-),& "+ 45,)0"36 *)#&',) *)"$#-) )*5&&5+-&
1,+* &)?),#3 8)6 &+',0)&: <$)- ,)&'3"& #,) /'735&$)4 5-
HIJK #-4 HIJ.> "$)&) 4#"# 2533 /,+?54) ?#3'#73) /+5-"& +1
,)1),)-0) "+ $)3/ 5-1+,* "$5& 5*/+,"#-" 45&0'&&5+-:
D5(',) =9H L Comparing Detailed Estimates of Life Cycle GHG Emissions from Shale Gas and Conventional
Onshore Natural Gas Sources
* Data available from Marcellus only
** Other Production and Other Processing each include point source
and fugitive emissions (mostly from valves)
*** Includes all combustion and fugitive emissions throughout the entire transmission
system (mostly from compressor stations)
Notes: Recent evidence suggests that liquids unloading is a common practice for both shale gas
and onshore conventional gas wells (Shires and Lev-On 2012). Therefore, contrary to data originally
published by NETL, showing zero emissions, liquids unloading during shale gas development may
result in GHG emissions that are comparable to those associated with conventional onshore natural
gas development. GWP for methane is 25 over a 100-year time frame.
Source: National Energy Technology Laboratory.
15 10 5 5 10 15
Pipelines & Compressor
Stations***
Pipeline
Construction
TRANSMISSION
CRADLE-TO-GATE
Compressors
Other Processing**
Acid Gas Removal
Dehydration
PROCESSING
Liquids Unloading
Other Production**
Workovers
PRODUCTION
Well Completion
Well Construction
Water (treatment
and transport)*
PRE-PRODUCTION
GHG Emissions (g CO
2
e/MJ) GHG Emissions (g CO
2
e/MJ)
SHALE GAS
CONVENTIONAL
ONSHORE GAS
CH
4
CO
2
kL-kCDUC1ICN
kCDUC1ICN
kCCLSSING
1kANSMISSICN
CkADLL-1C-GA1L
Cn
4
CC
2
GnG Lm|ss|ons gCC
2
e]MI GnG Lm|ss|ons gCC
2
e]MI
13 13 10 10 3 3
Source: !ames 8radbury eL al,
Clearlng Lhe Alr: 8educlng
upsLream Creenhouse Cas
Lmlsslons from u.S. naLural
Cas SysLems, Aprll 2013,
World 8esources lnsuLuLe
CpporLunlues Lo 8educe lugluve MeLhane
106
New LA ru|es - NSS]NLSnA*
volaule Crganlc Compounds(vCCs)
Pazardous Alr olluLanLs (PAs)

1wo Scenar|os w|th add|nona| reducnons
Low-hanglng frulL
Co-geuer" scenarlo
nSS - new Source erformance SLandards
nLSPA - nauonal Lmlsslon SLandards for Pazardous Alr olluLanLs
ro[ecnons of GnG Lm|ss|ons from A|| Natura|
Gas Systems Aher Add|nona| Abatement
107
6 |
FURTHER POTENTIAL TO
REDUCE METHANE EMISSIONS
!"#$ #$& "'()&'&*#+#",* ,- ./0# #$1&& #&2$*,),3"&0 #$+#
2+(#/1& ,1 +4,"5 -/3"#"4& '&#$+*& &'"00",*06 7& &0#"'+#&
#$+# /(0#1&+' '&#$+*& &'"00",*0 +21,00 +)) *+#/1+) 3+0
080#&'0 2,/)5 9& 2,0#:&--&2#"4&)8 2/# 98 /( #, +* +55"#",*+)
;< (&12&*# =>"3/1& ?:@AB C$& #&2$*,),3"&0 "*2)/5& =+A
#$& /0& ,- ()/*3&1 )"-# 080#&'0 +# *&7 +*5 &D"0#"*3 7&))0
5/1"*3 )"E/"50 /*),+5"*3 ,(&1+#",*0F =9A -/3"#"4& '&#$:
+*& )&+G ',*"#,1"*3 +*5 1&(+"1 +# *&7 +*5 &D"0#"*3 7&))
0"#&06 (1,2&00"*3 ()+*#06 +*5 2,'(1&00,1 0#+#",*0F +*5 =2A
1&()+2"*3 &D"0#"*3 $"3$:9)&&5 (*&/'+#"2 5&4"2&0 7"#$ ),7:
9)&&5 &E/"4+)&*#0 #$1,/3$,/# *+#/1+) 3+0 080#&'0B H8 ,/1
&0#"'+#",*6 #$&0& #$1&& 0#&(0 7,/)5 91"*3 5,7* #$& #,#+)
)"-& 282)& )&+G+3& 1+#& +21,00 +)) *+#/1+) 3+0 080#&'0 #, ./0#
+9,4& I (&12&*# ,- #,#+) (1,5/2#",*B C$1,/3$ #$& +5,(#",*
oI hve uddILIonuI ubuLemenL meusures LIuL eucI uddress
0'+))&1 &'"00",*0 0,/12&06 #$& I (&12&*# 3,+) 7,/)5 9&
1&+5")8 +2$"&4&5B
NEXT STEPS TO REDUCE
METHANE EMISSIONS
J&7 (/9)"2 (,)"2"&0 7")) 9& *&&5&5 #, 1&5/2& '&#$+*&
&'"00",*0 -1,' 9,#$ *&7 +*5 &D"0#"*3 &E/"('&*# #$1,/3$:
,/# KB?B *+#/1+) 3+0 080#&'0 9&2+/0& '+1G&# 2,*5"#",*0
uIone ure noL suIhcIenL Lo compeI IndusLry Lo udequuLeIy
,1 E/"2G)8 +5,(# 9&0# (1+2#"2&0B L"*"'/' -&5&1+) 0#+*:
5+150 -,1 &*4"1,*'&*#+) (&1-,1'+*2& +1& + *&2&00+18 +*5
+((1,(1"+#& -1+'&7,1G -,1 +551&00"*3 21,00:9,/*5+18
(,))/#",* "00/&0 )"G& +"1 &'"00",*0B >&5&1+) MNN 1&3/)+:
#",*0 +1& 3&*&1+))8 5&4&),(&5 "* 2),0& 2,*0/)#+#",* 7"#$
"*5/0#18 +*5 0#+#& 1&3/)+#,10 +*5 +1& ,-#&* "'()&'&*#&5
by sLuLes. TIIs Irumework uIIows udequuLe exIbIIILy Lo
&*+9)& 0#+#& (,)"28 )&+5&10$"( +*5 2,*#"*/,/0 "'(1,4&:
'&*# "* &*4"1,*'&*#+) (1,#&2#",* ,4&1 #"'&B
We Iuve IdenLIhed u runge oI ucLIons LIuL cun be Luken Lo
1&5/2& '&#$+*& &'"00",*0B
O
C$&0& #,,)0 +1& )"0#&5 "* #$"0
0/''+186 +*5 5"02/00&5 "* ',1& 5&#+") "* 0&2#",* PB
Federal Approaches to Address Emissions
Q* +55"#",* #, #$& 1&2&*#)8 &*+2#&5 J?R?SJT?UNR 1/)&06
TRN $+0 + */'9&1 ,- +55"#",*+) #,,)0 #, &"#$&1 5"1&2#)8 ,1
"*5"1&2#)8 1&5/2& '&#$+*& &'"00",*0 -1,' KB?B *+#/1+) 3+0
080#&'06 ',0# ,- 7$"2$ 7,/)5 +)0, 0/((,1# ',1& (1,#&2:
#"4& +2#",*0 +# #$& 0#+#& )&4&)B >,1 &D+'()&6 TRN 2,/)5 5,
#$& -,)),7"*3V
Direct reulction oj GHG emissions. TRN 2,/)5
5"1&2#)8 1&3/)+#& WUW &'"00",*0 /*5&1 0&2#",* III ,-
#$& MNN6 7$"2$ 2,/)5 +2$"&4& 31&+#&1 1&5/2#",*0 "*
'&#$+*& +*5 MX
Y
&'"00",*0 -1,' *&7 +*5 &D"0#"*3
0,/12&0 #$+* 7,/)5 ,#$&17"0& 9& +2$"&4&5 "*5"1&2#)8
#$1,/3$ 0#+*5+150 -,1 ZXM0 ,1 UNR0B
Emissions stcndcrds jor cir toxics. K*5&1 0&2#",*
IIY ,- #$& MNN6 TRN 2,/)5 0&# &'"00",*0 0#+*5+150
-,1 UNR0 -1,' (1,5/2#",*:0#+3& "*-1+0#1/2#/1& +*5
,(&1+#",*0 "* /19+* +1&+0B
>"3/1& ?:@ [ Projections of GHG Emissions
from All Natural Gas Systems
after Additional Abatement
Notes: Potential for additional upstream methane emissions reductions for all natural
gas systems based on implementation of a hypothetical rule in 2019 requiring
plunger lift systems, leak detection and repair, and replacing existing high-bleed
pneumatic devices with low-bleed equivalents (purple line); or a rule requiring those
technologies and ve additional abatement measures (green line). The light blue
dashed line shows the total amount of GHG emissions (MMt CO
2
e) that would result
from 1 percent fugitive methane emissions relative to total dry gas production in each
year, plus estimated annual CO
2
.
M
M
t

C
O
2
e
350
250
300
200
150
100
50
400
450
2005 2010 2015 2020 2025 2030 2035
Pre-NSPS
BAU (with NSPS)
BAU (with NSPS),
with Three Abatement
Technologies
Go-Getter Scenario
1% Leakage Rate
Loom|ng quesnon: now
to get ennre |ndustry
pursu|ng abatement
opportun|nes, not [ust
the |eaders.

What w||| |t take?
Stronger regu|anons?
Subs|d|es?
Comb|nanon of carrots
and sncks?
W8l 8eporL key 1akeaways on
Shale gas meLhane emlsslons
108
1. 8educe emlsslons Lo below 1 Lo ensure fuel-
swlLchlng Lo naLural gas ls beneclal
2. lugluve meLhane occurs aL every sLage of Lhe
naLural gas llfe cycle, more dlrecL measuremenLs
are lmperauve
3. 8ecenL LA rules wlll sLem meLhane leakage, buL
deeper reducuons can be achleved cosL-eecuvely
4. 1he Clean Alr AcL ls an approprlaLe Lool for pollcy
acuon, responslve Lo lndusLry and exlble for
sLaLes
110
AL some polnL down Lhe road Lowards Lhe
red llghL of 2C lL ls enurely plauslble, even
predlcLable, LhaL conunulng Lo hold equlues
ln fossll fuel companles wlll be ruled
negllgence."
8evls LongsLreLh,
former SLC Commlssloner
appolnLed by resldenL 8eagan

CC
2
e budgeL for 2C LlmlL
111
Listed Fossil Fuel
Reserves & Resources
Global Non-Listed
Fossil Fuel Reserves
Remaining Available
2C Carbon Budget
Through 2100
2500
2000
1500
1000
500
0
Unburnable
Carbon
Reserves
G
t

C
O
2
E
s
t
i
m
a
t
e
A signifcant portion of the worlds fossil fuel reserves
will need to remain in the ground in 2050
if we are to avoid catastrophic levels of climate change.
Fossil fuel companies, however, continue to develop reserves
that may never be used.
1541
987
2098
Fossil Fuel Assets at Risk
Unburnable Carbon Reserves
www.ceres.org www.carbontracker.org
lf humanlLy ls Lo prevenL global average
LemperaLure rlse from exceedlng 2C , Lhen
80 of fossll fuel asseLs (now owned by
corporauons or governmenLs) musL noL be
burned.

1hls means leavlng Lhe ma[orlLy ln Lhe
ground as sLranded asseLs, or Lhose LhaL are
consumed musL be done wlLh zero emlsslon
releases, such as carbon capLure and
sLorage (CCS).

WlLh CCS, boLh coal and mosL gas-red
power planLs are Lechnlcally and
economlcally unnecessary, glven robusL
compeuuon LhaL can dellver elecLrlclLy
servlces aL Lhe leasL-cosL-and-rlsk LCCL
(levellzed cosL of elecLrlclLy).
CharL source: CL8LS & Carbon1racker, lnvesLors ask fossll fuel companles Lo assess how buslness plans fare ln low-carbon fuLure -- coalluon of 70 lnvesLors worLh
$3 Lrllllon call on world's largesL oll & gas, coal and elecLrlc power companles Lo assess rlsks under cllmaLe acuon and 'buslness as usual' scenarlos, nov 2013
Carbon 8udgeL per generauon for 2C
112
Used to
Create Soc|ety
kema|n|ng budget
kest of humank|nd
Lars 8oelen, World Lnergy CuLlook
2013 - WhaL lL uoesn'L Say,
SLormglas, nov 12, 2013, ,
hup://sLormglas.wordpress.com/
2013/11/12/world-energy-
ouLlook-2013-whaL-lL-doesnL-say/
Very few ears Away from keach|ng
2C Carbon 8udget
113
2C Carbon 8udget & Lm|ss|ons Growth
114
(Annua| g|oba| carbon em|ss|ons GtC by year|y em|ss|ons growth rate)
noLe: Lhe ls Lhe chances of llmlung warmlng Lo 2C
uaLa: 8udgeL - lCC WC1 A8S, PlsLorlcal - Clobal Carbon ro[ecL
noLe: assumes llmlLed non-CC2 forclng changes (8C 2.6) hup://shrlnkLhaooLprlnL.com

uncerLalnLy pervades whaL
declslons are made ln Lhe
comlng years and decades.
UNCLk1AIN1
113
Source: uk MeL Cmce, Padley CenLre,
hup://www.meLomce.gov.uk/cllmaLe-gulde
LosL opporLunlues from
lnacuon ln reduclng CC
2

emlsslons are esumaLed Lo
lncur hundreds of Lrllllons of
dollars ln fuLure economlc
value foreclosed,
ln addluon Lo hundreds of
Lrllllons of dollars ln economlc
losses caused by lncreased
desLrucuon from exLreme
weaLher caLasLrophes.
uncerLalnLy lf/when pollcles wlll averL
8Au caLasLrophlc cllmaLe lmpacLs
116
CC
2
LC8 lacLs
117
More Lhan 1 bllllon Lons of CC
2
have been used
for Lnhanced Cll 8ecovery (LC8) over Lhe pasL 40
years. Some 3,600 mlles of plpellnes acuvely
LransporL CC
2
Loday.

ln Lhe uS, 30 CC
2
plpellnes currenLly operaLe,
Lransporung 33 mllllon Lons of CC
2
ln 2010.
1hese onshore plpellnes cross 6 provlnclal/sLaLe
boundarles and Lhe uS-Canada border. Much of
Lhe exlsung plpellne lnfrasLrucLure ln Lhe uS was
bullL ln Lhe 1980s & 1990s for energy securlLy
reasons.
Clobal CCS lnsuLuLe, 1he Clobal SLaLus of Carbon CapLure and SLorage, 2013
THE GLOBAL STATUS OF CCS | 2013
73 of CC
2
used ln norLh Amerlcan LC8 operauons ls derlved from geologlcal sLrucLures
conLalnlng vasL amounLs of NA1UkALL CCCUkkING CC
2
LhaL can be obLalned relauvely
lnexpenslvely. 1hls readlly avallable geologlc CC
2
ls, ln parL, Lhe reason Lhe CC
2
-LC8
lndusLry developed ln souLhern sLaLes. CA1UkLD (AN1nkCCGLNIC) CC
2
conLrlbuLes Lhe
remalnlng 23, hlsLorlcally derlved from gas processlng and ferullzer planLs.
CC
2
Lnhanced Cll 8ecovery (LC8)
Long-Lerm CpporLunlLy or ShorL-Lerm 8eneL?
118
National Enhanced Oil Recovery Initiative
10
Journal, 2011).
Increasing CO
2
-EOR also stimulates the economy
more broadly. Recent estimates show that expanded
CO
2
-EOR could provide up to $12 trillion in economic
benefts to the U.S. over the next three decades, based
on the multiplier effects of oil production on economic
activities (Carter, 2011). In fact, a report by the University
of Texas Bureau of Economic Geologys (TBEG) Gulf
Coast Carbon Center quantifes the total economic activ-
ity of oil production for Texas to be 2.9 times the value
of the oil produced. In other words, almost two dollars of
additional economic activity is created for every dollar of
oil produced. Moreover, TBEG estimates 19 jobs for every
$1 million of oil produced annually (TBEG, 2004).
An increase in oil production from EOR has the
potential to reduce net crude oil imports by half and
provide up to $210 billion in increased state and federal
revenues by 2030. Under a robust policy, EOR could
reduce the U.S. foreign trade defcit by $11-$15 billion
dollars (2007 dollars) in 2020 and $120-$150 billion by
2030. Cumulatively, this reduction in oil imports would
keep $600 billion here at home, generating additional
economic activity, jobs and revenues, rather than fowing
out of the U.S. economy to other countries (ARI, 2010).
Regarding the benefts of EOR for reducing CO
2

emissions, using CO
2
captured from industrial sources
to produce oil has the potential to help the United States
reduce the CO
2
intensity of the industrial and power
generation sectors. Over the life of a project, for every
2.5 barrels of oil produced, it is estimated that EOR can
safely prevent one metric ton of CO
2
from entering the
atmosphere.
1
Current CO
2
use for EOR ranges between 65 million
tonnes per year (Melzer, 2012) to 72 million tonnes per
year (ARI, 2011). ARI states that 55 million tonnes of
CO
2
come from natural sources and 17 million tonnes
come from anthropogenic sources. But the potential for
EOR to contribute to CO
2
reduction goals is great. The
volume of CO
2
that could be captured and sequestered
from industrial facilities and power plants to support
next generation EOR could be 20- 45 billion metric
tons (ARI, 2011).This is equal to the total U.S. CO
2
pro-
duction from fossil fuel electricity generation for 10 to 20
years (EPA, 2011). Figure 5 illustrates the oil production
potential and CO
2
demand i.e., CO
2
stored through
EOR from next generation EOR technologies.
Properly managed EOR projects have demonstrated
that injecting CO
2
into producing oil felds can safely
store CO
2
in geologic formations without leaking to
groundwater resources or escaping to the atmosphere.
EOR is governed by federal regulations that require the
protection of underground sources of drinking water,
under the U.S. Environmental Protection Agencys
(EPAs) Underground Injection Control (UIC) program.
Many states have obtained authority from EPA to ad-
minister the UIC program and have laws that meet or go
further than EPAs requirements. Permits issued by the
EPA or states require that EOR operators manage their
site in a manner that will prevent CO
2
(and other forma-
tion fuids) from migrating out of the subsurface confn-
ing formation and into drinking water aquifers (Code of
Federal Regulations (CFR) 40 CFR 144).
1 Industry Sources
Source: ARI, 2011
Figure 5: Domestic Oil Supplies and CO
2

Demand (Storage) Volumes from Next
Generation CO
2
-EOR Technology**
*At an oil price of $85/B, a CO
2
market price of $40/mt and a 20%
ROR, before tax.
**Includes 2,300 million metric tons of CO
2
provided from natural
sources and 2.6 billion barrels already produced or being devel-
oped with miscible CO
2
-EOR.
1he poLenual volume of
CC
2
LhaL could be capLured
and sequesLered from
lndusLrlal faclllues and
power planLs Lo supporL
nexL generauon" LC8
could be 20-43 bllllon Lons,
equal Lo 1 Lo 2 decades of
u.S. CC
2
producuon from
fossll fuel power planLs.
AL an oll prlce of $83 per bbl, a CC
2
markeL prlce
of $40 per Lon and a 20 8C8, before Lax.
Cne ton of CC
2
LCk produces 2.S barre|s of o||, wh|ch |n
turn, em|t 1.1 tons of CC
2
when combusted.
nauonal Lnhanced Cll 8ecovery lnluauve (nLC8l), Carbon uloxlde Lnhanced Cll 8ecovery: A Crlucal uomesuc Lnergy, Lconomlc,
and LnvlronmenLal CpporLunlLy, leb 2012
Large CC
2
LC oLenual -
buL aL whaL cosL and rlsk?
119
16
Untapped Domestic Energy Supply and Long Term Carbon Storage Solution
A 2009 study by Advanced Resources International (ARI) for DOE assessed
the role that best practices CO
2
EOR technologies could play in U.S. oil
recovery. ARI noted that introducing best practices technology to regions
where it is currently not yet applied, lowering risks by conducting research,
pilot tests and field demonstrations in geologically challenging fields,
providing state production tax incentives, federal investment tax credits,
and royalty relief, and establishing low-cost, reliable, CO
2
supplies, could
result in an additional 85 billion barrels of technically recoverable oil from
the 400 billion barrels of oil remaining in large reservoirs across 11 basins.

However, many factors play a role in the suitability and economics of
CO
2
EOR applicationsnot the least of which are the price of oil and the
cost and availability of CO
2
. Consequently, there can be a substantial gap
between a technically recoverable resource and a proven reserve volume
booked to an oil companys balance sheet. Still, the study points to the
significant potential of CO
2
EOR to contribute to the nations future oil
supply. Increasing the volume of technically recoverable domestic crude oil
could help reduce the Nations trade defcit and enhance national energy
security by reducing oil imports, add high-paying domestic jobs from the
direct and indirect economic efects of increased domestic oil production
and help to revitalize state economies and increase federal and state
revenues via royalties, and corporate income taxes.
Carbon Dioxide Enhanced Oil Recovery
Potential Technically
Recoverable
Incremental Oil
with best practices
CO
2
EOR Technology
nL1L, CC
2
Lnhance Cll
8ecovery, 2010,
nauonal Lnergy
1echnology LaboraLory
CC
2
LC8 ls nC1 CCS
120
CC
2
-LC8 does noL consuLuLe CCS, and ls
dlsslmllar enough from Lrue commerclal-
scale CCS lL ls unllkely Lo slgnlcanLly
acceleraLe large scale adopuon of CCS
Lechnology.

lederal subsldles promoung energy
securlLy played Lhe declslve role ln
creaung Lhe exlsung CC
2
-plpellne
neLwork and LC8 lnluauves, nC1 for CCS.
aul uooley eL al., CC2-drlven Lnhanced Cll 8ecovery as a SLepplng SLone Lo WhaL? !uly 2010, aclc norLhwesL nauonal LaboraLorles (nnL).
1hese hlsLorlcally subsldlzed CC
2
plpellnes are a subsldy for any CC
2
-LC8
ood LhaL relles on Lhem, as Lhe new CC
2
ood does noL need Lo pay Lhe
enure cosL of dellverlng lL Lo a glven eld. 1hus, lL would be prudenL noL
Lo apply Lhe same cosL daLa Lo new CC
2
plpellnes ln reglons of Lhe u.S.
where Lhere ls CC
2
-LC8 poLenual buL no exLanL plpellne lnfrasLrucLure.
CC
2
LC8 Subsldy uncerLalnLy
121
CC
2
-LC8 currenLly accounLs for 6 of annual u.S. oll producuon uslng mosLly
naLurally-occurrlng CC
2
. 1hls ls drlven by Lhe Secuon 43C Lax credlL, whlch provldes
a subsldy of poLenually up Lo $10 per Lon CC
2
for no more Lhan 73 mllllon LCC
2
from
man-made sources used for CC
2
-LC8.

1he nLC8l consoruum ls lobbylng Congress for greaLly expandlng Lhe subsldy Lo
capLure nearly 4 bllllon of Lons of CC
2
from man-made sources LhaL wlll be used Lo
produce for LC8. nLC8l argues Lhe currenL subsldy ls lnsumclenL Lo cover Lhe cosL
gap beLween whaL LC8 operaLors are wllllng Lo pay for CC
2
and Lhe cosL Lo capLure
and LransporL CC
2
from power planLs and lndusLrlal sources, as well as lacklng
sumclenL Lransparency Lo enable CC
2
capLure pro[ecL developers Lo obLaln prlvaLe
secLor lnvesLmenL for Lhelr pro[ecLs. nLC8l provlde sumclenL Lax credlLs.
nLC8l (nauonal LC8 lnsuLuLe), CenLer for CllmaLe Soluuons & CreaL lalns lnsuLuLe, 8ecommended Modlcauons Lo Lhe
43C 1ax CredlL for CC2 SequesLrauon, leb.2012, submlued Lo uSP8 Ways & Means Commluee, Aprll 2013

4 b||||on tons CC
2
LCk produces ~10 b||||on bb|s o||, wh|ch
|n turn, em|t 4.4 b||||on tons of CC
2
when combusted.
Long-Lerm CC
2
supply prlce uncerLalnLy
122

Figure 5: Illustration of supply and demand for pipeline quality CO
2
and the resulting price paid under
two scenarios of assumed scarcity (taken from Dooley, 2004)

If pipeline quality CO
2
remains scarce, then it is reasonable to assume that the supplier (i.e., the
anthropogenic CO
2
point of origin which might be different from the entity that delivers pipeline quality
CO
2
at the boundary of a CO
2
flood) will have some ability to set the price of pipeline quality CO
2
and
receive some positive price (i.e., payment) for supplying this commodity. While potentially dated,
Norman (1994) examined the market for pipeline quality CO
2
in West Texas in the early 1990s and found
the market to be oligopolistic in nature (i.e., a small number of sellers were able to control supply and
therefore influence the price paid). This is what one would expect in a market characterized by scarcity
and high barriers to entry. However when CCS systems are deployed on a large scale because of GHG
emissions constraints, a very different market structure for pipeline quality CO
2
should exist. When the
supply of pipeline quality CO
2
on offer significantly exceeds demand, the rents from CO
2
-EOR do not
accrue to the upstream supplier of CO
2
-EOR. Under these market conditions, while CO
2
-EOR may
remain profitable, the revenue streams would no longer accrue to the anthropogenic CO
2
point source
supplier and the cost of capturing the CO
2
would not be offset. For a more rigorous treatment of the
evolving pricing of pipeline quality CO
2
for CO
2
-EOR in a greenhouse gas constrained world readers are
encouraged to consult Leach et al. (2009).

Page | 18

When CC
2
supply ls scarce relauve Lo demand a posluve prlce for CC
2
resulLs. 8uL
when plpellne quallLy CC
2
ls ls far ln excess of any poLenual Lhen Lhe prlce pald
decllnes and evenLually becomes negauve (l.e., lncurrlng dlsposal fee). xx's currenL
CC
2
for LC8 ls posluvely prlced, buL for how long?
CC
2
LC8 prlce
uncerLalnLy
123

When Lhe supply of plpellne quallLy CC
2
on oer slgnlcanLly
exceeds demand, Lhe renLs from CC
2
-LC8 do noL accrue Lo Lhe
upsLream suppller of CC
2
-LC8. under Lhese markeL condluons,
whlle CC
2
-LC8 may remaln proLable, Lhe revenue sLreams
would no longer accrue Lo Lhe man-made CC
2
polnL source
suppller and Lhe cosL of capLurlng Lhe CC
2
would noL be oseL.

Figure 5: Illustration of supply and demand for pipeline quality CO
2
and the resulting price paid under
two scenarios of assumed scarcity (taken from Dooley, 2004)

If pipeline quality CO
2
remains scarce, then it is reasonable to assume that the supplier (i.e., the
anthropogenic CO
2
point of origin which might be different from the entity that delivers pipeline quality
CO
2
at the boundary of a CO
2
flood) will have some ability to set the price of pipeline quality CO
2
and
receive some positive price (i.e., payment) for supplying this commodity. While potentially dated,
Norman (1994) examined the market for pipeline quality CO
2
in West Texas in the early 1990s and found
the market to be oligopolistic in nature (i.e., a small number of sellers were able to control supply and
therefore influence the price paid). This is what one would expect in a market characterized by scarcity
and high barriers to entry. However when CCS systems are deployed on a large scale because of GHG
emissions constraints, a very different market structure for pipeline quality CO
2
should exist. When the
supply of pipeline quality CO
2
on offer significantly exceeds demand, the rents from CO
2
-EOR do not
accrue to the upstream supplier of CO
2
-EOR. Under these market conditions, while CO
2
-EOR may
remain profitable, the revenue streams would no longer accrue to the anthropogenic CO
2
point source
supplier and the cost of capturing the CO
2
would not be offset. For a more rigorous treatment of the
evolving pricing of pipeline quality CO
2
for CO
2
-EOR in a greenhouse gas constrained world readers are
encouraged to consult Leach et al. (2009).

Page | 18

When CCS sysLems are
deployed on a large scale
because of CPC emlsslons
consLralnLs, a very dlerenL
markeL sLrucLure for plpellne
quallLy CC
2
should exlsL.
8elauve 8lsk Lxposure new
Cenerauon Sources
123
Source: 8on 8lnz, racuclng 8lsk-Aware LlecLrlclLy 8egulauon: WhaL Lvery SLaLe 8egulaLor needs Lo know, Aprll 2012, CL8LS
8elauve CosL & 8lsk 8anklngs
126
Source: 8on 8lnz, racuclng 8lsk-
Aware LlecLrlclLy 8egulauon:
WhaL Lvery SLaLe 8egulaLor needs
Lo know, Aprll 2012, CL8LS
Cost |s an
essenna| but not
sumc|ent
dec|s|on-mak|ng
cr|ter|on
k|sk |s an
essenna| and
|mperanve
dec|s|on-mak|ng
cr|ter|on as we||
ro[ected Un||ty Generanon kesources
ke|anve Cost & ke|anve k|sk - 201S

127
Source: 8on 8lnz, racuclng 8lsk-Aware LlecLrlclLy 8egulauon: WhaL Lvery SLaLe 8egulaLor needs Lo know, Aprll 2012, CL8LS
ollcles & Subsldles promoLe hlgh-
Lmlsslon lnvesLmenLs over ero-L Cpuons
128
Total Global
Investments in
Renewables
Billions of Dollars Invested
2012 Investments in
Fossil Fuel Reserves Versus Clean Energy
0 100 200 300 400 500 600 700
$674
$281
Corporate Investments
in Developing
Fossil Fuel Reserves
www.ceres.org www.carbontracker.org
Legacy pollcles, subsldles,
and regulauons (or lack
Lhereof) conunue Lo sLeer
lnvesLmenLs lnLo energy
opuons wlLh hlgh-emlsslon
ouLpuL. 1he lMl esumaLes
$2 Lrllllon per year
worldwlde ln subsldles Lo
Lhe fossll fuel lndusLry.
AnoLher $4 Lrllllon per year ln economlc losses are due Lo fossll fuel
exLernallues LhaL go unprlced or unregulaLed, accordlng Lo esumaLes by un
llnance lnluauve. 1hls skewlng of declslonmaklng creaLes uncerLalnLy as Lo
wheLher emlsslons wlll sLeeply rlse (8Au) or ma[or pollcy changes wlll occur.
CharL source: CL8LS & Carbon1racker, lnvesLors ask fossll fuel companles Lo assess how buslness plans fare ln low-carbon fuLure -- coalluon of 70 lnvesLors worLh
$3 Lrllllon call on world's largesL oll & gas, coal and elecLrlc power companles Lo assess rlsks under cllmaLe acuon and 'buslness as usual' scenarlos, nov 2013
Puge opporLunlLy Lo ellmlnaLe coal, mosL gas
wlLh LC8 orollo of emclency, wlnd, solar
129
(LC8 LeasL-CosL-and-8lsk)
8lsk facLor: luel cosL comparlsons
130
!"

Graph 1
(http://blogs-images.forbes.com/jamesconca/files/2012/07/Fuel-Costs.jpg)
To measure the true value of power generation, one must not only take into account the
cost of the fuel but also the cost of installation/construction of the energy providing source along
with the maintenance cost over the lifespan of the resource. To calculate the cost for
construction, the following equation was used:
Total Construction cost
((MW ratting x 1000) x Useful life x (Capacity Factor X 8760)

The megawatt rating was multiplied by 1,000 to convert the energy value to kilowatts and the
8,760 was the number of hours of energy production over the course of a year. While the
production values may vary depending on the provider and area that the resource was used, the
average was taken from multiple years of costs. With all of this information, hydropower was
shown to be the cheapest but is strongly limited by the terrain requirements and the geographical
locations of the dams. Coal and nuclear are the next cheapest with wind being almost double the
price showing that while the alternative energies may be the cleaner form of energy, they are far
vulnerablllLy of naLural Cas Lo
Plgher rlces and volaullLy
131
Accounung for volaullLy
132
Ut|||ty-Sca|e W|nd and Natura| Gas Vo|at|||ty | kocky Mounta|n Inst|tute | kMI.org 8
in the unueilying asset's piice, volatility, time to expiiation, anu iisk-fiee inteiest
iate, anu the sensitivity of uelta to changes in the unueilying asset piice. Sensitivity
to volatility, as measuieu by vega, is one of the most significant factois in piicing
commouity options. In fact, implieu volatility levels can be ueiiveu fiom listeu
option piemiums to ueteimine the magnituue of natuial gas movements "piiceu-in"
by the options maiket at a given futuie uate (Figuie S). Foi example, options aie
cuiiently piicing in a potential iange of $1.18 to $1S.8u pei mmBtu at the 99%
confiuence inteival by }une 2u1S.

!"#$%& () *+",# "-./"&0 12/34"/"45 /&1&/+ 3,0 2.4"2, .%&-"$-+ 42 0&4&%-",& 6$4$%& ,34$%3/ #3+ .%"7&
%3,#&+ 34 89:; <=:; 3,0 <<: 72,6"0&,7& ",4&%13/+
kISk DIS1kI8U1ICN

Assets geneially face two types of iisk: iisk associateu stiictly with the unueilying
asset (alpha), anu iisk coiielateu with the bioauei maiket (beta). A positive beta
value iepiesents a positive coiielation with the bioauei maiket, wheieas a negative
beta value iepiesents an inveise coiielation. Calculating the beta value of natuial
gas has pieviously been attempteu, but most stuuies conuucting this analysis weie
publisheu ovei 1u yeais ago (Table 1). It shoulu be noteu, howevei, that iesults
have consistently shown negative beta values
12
.

12
Bolingei, N. anu Wisei, R. LBNL 2uu2. "Quantifying the value that Winu Powei Pioviues as a Beuge
Against volatile Natuial uas Piices"
513.80

Iune 201S

51.18
Potential NYMEX Henry Hub Prices
8Ml, Un||ty-Sca|e W|nd and Natura| Gas Vo|an||ty: Uncover|ng the nedge Va|ue of W|nd for Un||nes and 1he|r
Customers, 2012
Us|ng |mp||ed vo|an||ty |eve|s and opnon prem|ums to determ|ne future
natura| gas pr|ces ranges at 68, 9S and 99 conhdence |nterva|s.
NMLk nenry nub Iutures 68CI 99CI 9SCI
Accounung for volaullLy
133
CCG1 New 8u||d (No Vo|an||ty rem|um |nc|uded)
CCG1 New 8u||d (Accounnng for Vo|an||ty)
W|nd A (No 1C)
Accounnng for vo|an||ty
shows w|nd out-compenng
gas |n the |ong-term
CCG1 curve
sh|hs up w|th
vo|an||ty
prem|um added
Accounnng for vo|an||ty shows
w|nd out-compenng gas
|n the |ong-term
Low gas pr|ces
seemed to out-
compete w|nd
8Ml, Un||ty-Sca|e W|nd and Natura| Gas Vo|an||ty: Uncover|ng the nedge Va|ue of W|nd for Un||nes and 1he|r
Customers, 2012
vulnerablllLy of naLural Cas Lo Carbon
Lmlsslons 8udgeL CosL lmpacLs
134
uCS 8eference Case (8Au)
1o llmlL some of Lhe worsL consequences of cllmaLe change, Lhe nauonal 8esearch Councll
(n8C) recommended an economy-wlde carbon budgeL for Lhe u.S. of 170 bllllon meLrlc Lons
of cumulauve CC2eq emlsslons from 2012 Lo 2030 (n8C 2010). 1hls budgeL would cuL power
secLor carbon 9 from currenL levels by 2030, wlLh mosL of Lhe reducuons ln Lhe rsL 20
years, as parL of an economy-wlde emlsslons reducuon goal of greaLer Lhan 80 by 2030.
vulnerablllLy of naLural Cas Lo LC8 opuons Lo
meeL carbon budgeL - uCS uSA case
133
uCS, Cas Celllng, Assesslng Lhe CllmaLe 8lsks of an Cverrellance on naLural Cas for LlecLrlclLy, SepL. 2013, unlon of Concerned
SclenusLs, and, Clemmer, S., !. 8ogers, S. Sauler, !. Macknlck, and 1. Mal. 2013. Modellng low-carbon u.S. elecLrlclLy fuLures Lo
explore lmpacLs on nauonal and reglonal waLer use. ovltoomeotol keseotcb leuets 8(1). Cnllne aL lopscleoce.lop.otq/1748-
9J26/8/1/015004

Un|on of Concerned Sc|ennsts (UCS) mode|ed three poss|b|e e|ectr|c|ty
pathways for the Un|ted states to meet the NkC carbon budget. 1he no
1echno|ogy reference pathway |eads to h|gh |eve|s of renewab|es, natura| gas
w|th CCS p|ays a modest ro|e. 1he renewab|es and emc|ency pathway |eads to
the |east-cost-r|sk (LCk) consumer e|ectr|c|ty b|||s. Natura| gas p|ays a more
||m|ted |ong-term ro|e |n a|| three pathways compared w|th the reference Case.

vulnerablllLy of naLural Cas Lo lower-cosL-and-
rlsk (LC8) opuons - !M power pool case
136
Cory 8udlschak eL al, CosL-mlnlmlzed comblnauons of wlnd power, solar power and elecLrochemlcal sLorage, powerlng Lhe grld up
Lo 99.9 of Lhe ume , !ournal of ower Sources 223 (2013) 60e74
unlv. of uelaware englneers modeled wlnd, solar, and sLorage Lo meeL
demand for 1/3 of Lhe uS elecLrlc grld (!M). 28 bllllon comblnauons of
wlnd, solar and sLorage were slmulaLed Lo derlve leasL-cosL. LeasL-cosL
comblnauons have excess generauon (3x load), Lhus mlnlmlzlng more
expenslve sLorage. 99.9 of hours of load can be meL by renewables
wlLh only 9 Lo 72 hours of sLorage. AL 2030 Lechnology cosLs, 90 of
load hours are meL aL elecLrlc cosLs below Loday's.

Cost-minimized combinations of wind power, solar power and electrochemical
storage, powering the grid up to 99.9% of the time
Cory Budischak
a, b,
*
, DeAnna Sewell
c
, Heather Thomson
c
, Leon Mach
d
, Dana E. Veron
c
,
Willett Kempton
a, c, e
a
Department of Electrical and Computer Engineering, University of Delaware, Newark, DE 19716, USA
b
Department of Energy Management, Delaware Technical Community College, Newark, DE 19713, USA
c
Center for Carbon-Free Power Integration, School of Marine Science and Policy, College of Earth Ocean and Environment, University of Delaware, Newark, DE 19716, USA
d
Energy and Environmental Policy Program, College of Engineering, University of Delaware, Newark, DE 19716, USA
e
Center for Electric Technology, DTU Elektro, Danmarks Tekniske Universitet, Kgs. Lungby, Denmark
h i g h l i g h t s g r a p h i c a l a b s t r a c t
<We modeled wind, solar, and
storage to meet demand for 1/5 of
the USA electric grid.
<28 billion combinations of wind,
solar and storage were run, seeking
least-cost.
<Least-cost combinations have excess
generation (3 load), thus require
less storage.
<99.9% of hours of load can be met by
renewables with only 9e72 h of
storage.
<At 2030 technology costs, 90% of
load hours are met at electric costs
below todays.
a r t i c l e i n f o
Article history:
Received 7 June 2012
Received in revised form
13 September 2012
Accepted 15 September 2012
Available online 11 October 2012
Keywords:
Variable generation
Renewable energy
Electrochemical storage
High-penetration renewables
a b s t r a c t
We model many combinations of renewable electricity sources (inland wind, offshore wind, and
photovoltaics) with electrochemical storage (batteries and fuel cells), incorporated into a large grid
system (72 GW). The purpose is twofold: 1) although a single renewable generator at one site produces
intermittent power, we seek combinations of diverse renewables at diverse sites, with storage, that are
not intermittent and satisfy need a given fraction of hours. And 2) we seek minimal cost, calculating true
cost of electricity without subsidies and with inclusion of external costs. Our model evaluated over 28
billion combinations of renewables and storage, each tested over 35,040 h (four years) of load and
weather data. We nd that the least cost solutions yield seemingly-excessive generation capacitydat
times, almost three times the electricity needed to meet electrical load. This is because diverse renew-
able generation and the excess capacity together meet electric load with less storage, lowering total
system cost. At 2030 technology costs and with excess electricity displacing natural gas, we nd that the
electric system can be powered 90%e99.9% of hours entirely on renewable electricity, at costs compa-
rable to todaysdbut only if we optimize the mix of generation and storage technologies.
2012 Published by Elsevier B.V.
* Corresponding author. Department of Energy Management, Delaware Technical Community College, 400 Stanton-Christiana Road, Newark, DE 19713, USA. Tel.: 1 302
453 3099; fax: 1 302 368 6620.
E-mail address: cbudischak@gmail.com (C. Budischak).
Contents lists available at SciVerse ScienceDirect
Journal of Power Sources
j ournal homepage: www. el sevi er. com/ l ocat e/ j powsour
0378-7753/$ e see front matter 2012 Published by Elsevier B.V.
http://dx.doi.org/10.1016/j.jpowsour.2012.09.054
Journal of Power Sources 225 (2013) 60e74
Load met w|th
renewab|e
generanon &
storage 99.9
of hours over 4
years, foss||
backup needed
on on|y hve
occas|ons.
39
The methods just described for reducing energy use and improving efficiency of buildings
can be incorporated into a microgrid, which is a self-contained combined heat and power
(CHP) system for a community, hospital, industrial or military complex, or city block.
Microgrids, which generally produce less than 50 MW of power, are attractive because they
are not centrally planned by a power utility and they reduce reliance on long-distance
transmission and offer protection against large-scale grid failure. The main drawback is that,
with a small CHP system, matching electric power demand with supply is often more
difficult than with a big system with more generators. However, by combining electric
power generation with thermal storage, such as described above, this problem can be
reduced or eliminated. In many cases, the microgrid can rely on the regular grid for backup
as well.

12. Timeline for Implementation of the Plan
Figure 5 shows one timeline scenario for the implementation of this plan in California.
Other scenarios are possible.

Figure 5. Change in percent distribution of California energy supply for all purposes (electricity,
transportation, heating/cooling, industry) among conventional fuels and WWS energy over time based on the
roadmap proposed here. Total power demand decreases over time due to energy reductions due to conversion
to WWS and efficiency. The percentages above the fossils plus nuclear curve are of remaining penetration of
those energy sources each decade. The percentages next to each WWS source are the final estimated
penetration of the source. The 100% demarcation indicates that 100% of all-purpose power is provided by
WWS technologies by 2050, and the power demand by that time has decreased. Neither the percentages each
year nor the final percentages are exact they are estimates of one possible scenario.

Vu|nerab|||ty Natura| Gas to
LCk opnons to meet carbon
budget |n CALIICkNIA
137
Mark !acobson eL al, Lva|uanng the 1echn|ca| and Lconom|c Ieas|b|||ty of kepower|ng Ca||forn|a for a|| urposes w|th W|nd,
Water, and Sun||ght, Lnergy o||cy Iourna|,May 2013.
Mulu-unlverslLy Leam modeled an all-renewable power sysLem
for Callfornla, wlLh naLural gas servlng as back-up reserve
durlng peak perlods. SysLem capaclues are 74 CW of wlnd, 26
CW of CS, 28 CW of solar vs, 3 CW of geoLhermal, 21 CW of
hydroelecLrlc, and 23 CW of naLural gas.

17

Notes: System capacities are 73.5 GW of wind, 26.4 GW of CSP, 28.2 GW of photovoltaics, 4.8 GW of geothermal, 20.8
GW of hydroelectric, and 24.8 GW of natural gas. Transmission and distribution losses are 7% of the demand. The least-
cost optimization accounts for the day-ahead forecast of hourly resources, carbon emissions, wind curtailment, and 8-hour
thermal storage at CSP facilities, allowing for the nighttime production of energy by CSP. The hydroelectric supply is
based on historical reservoir discharge data and currently imported generation from the Pacific Northwest. The wind and
solar supplies were obtained by aggregating hourly wind and solar power at several sites in California estimated from wind
speed and solar irradiance data for those hours applied to a specific turbine power curve, a specific concentrated solar plant
configuration (parabolic trough collectors on single-axis trackers), and specific rooftop PV characteristics. The geothermal
supply was increased over 2005 but limited by California's developable resources. . Natural gas capacity (grey) is a reserve
for backup when needed and was not actually needed during the two simulation days.
Source: Hart and Jacobson (2011).

6.B. Using Demand-Response Grid Management to Adjust Demand to Supply
Demand-response grid management involves giving financial incentives to electricity users
and developing appropriate system controls to shift times of certain electricity uses, called
flexible loads, to times when more energy is available. Flexible loads are electricity
demands that do not require power in an unchangeable minute-by-minute pattern, but
instead can be supplied in adjustable patterns over several hours. For example, electricity
demands for a wastewater treatment plant and for charging BEVs are flexible loads.
Electricity demands that cannot be shifted conveniently, such as electricity use for
computers and lighting, are inflexible loads. With demand-response, a utility may establish
an agreement with (for example) a flexible load wastewater treatment plant for the plant to
use electricity during only certain hours of the day in exchange for a better electricity rate.
In this way, the utility can shift the time of demand to a time when more supply is available.
Similarly, the demand for electricity for BEVs is a flexible load because such vehicles are
generally charged at night, and it is not critical which hours of the night the electricity is
supplied as long as the full power is provided sometime during the night. In this case, a
utility can contract with users for the utility to provide electricity for the BEV when wind is
most available and reduce the power supplied when it is least available. Utility customers
would sign up their BEVs under a plan by which the utility controlled the supply of power
to the vehicles (primarily but not necessarily only at night) in exchange for a lower
electricity rate.

6.C. Oversizing WWS to Match Demand Better and Provide Hydrogen and District Heat
17

Notes: System capacities are 73.5 GW of wind, 26.4 GW of CSP, 28.2 GW of photovoltaics, 4.8 GW of geothermal, 20.8
GW of hydroelectric, and 24.8 GW of natural gas. Transmission and distribution losses are 7% of the demand. The least-
cost optimization accounts for the day-ahead forecast of hourly resources, carbon emissions, wind curtailment, and 8-hour
thermal storage at CSP facilities, allowing for the nighttime production of energy by CSP. The hydroelectric supply is
based on historical reservoir discharge data and currently imported generation from the Pacific Northwest. The wind and
solar supplies were obtained by aggregating hourly wind and solar power at several sites in California estimated from wind
speed and solar irradiance data for those hours applied to a specific turbine power curve, a specific concentrated solar plant
configuration (parabolic trough collectors on single-axis trackers), and specific rooftop PV characteristics. The geothermal
supply was increased over 2005 but limited by California's developable resources. . Natural gas capacity (grey) is a reserve
for backup when needed and was not actually needed during the two simulation days.
Source: Hart and Jacobson (2011).

6.B. Using Demand-Response Grid Management to Adjust Demand to Supply
Demand-response grid management involves giving financial incentives to electricity users
and developing appropriate system controls to shift times of certain electricity uses, called
flexible loads, to times when more energy is available. Flexible loads are electricity
demands that do not require power in an unchangeable minute-by-minute pattern, but
instead can be supplied in adjustable patterns over several hours. For example, electricity
demands for a wastewater treatment plant and for charging BEVs are flexible loads.
Electricity demands that cannot be shifted conveniently, such as electricity use for
computers and lighting, are inflexible loads. With demand-response, a utility may establish
an agreement with (for example) a flexible load wastewater treatment plant for the plant to
use electricity during only certain hours of the day in exchange for a better electricity rate.
In this way, the utility can shift the time of demand to a time when more supply is available.
Similarly, the demand for electricity for BEVs is a flexible load because such vehicles are
generally charged at night, and it is not critical which hours of the night the electricity is
supplied as long as the full power is provided sometime during the night. In this case, a
utility can contract with users for the utility to provide electricity for the BEV when wind is
most available and reduce the power supplied when it is least available. Utility customers
would sign up their BEVs under a plan by which the utility controlled the supply of power
to the vehicles (primarily but not necessarily only at night) in exchange for a lower
electricity rate.

6.C. Oversizing WWS to Match Demand Better and Provide Hydrogen and District Heat
vulnerablllLy of naLural Cas Lo WaLer
uemand from Wellhead Lo ower lanL
139
Environ. Res. Lett. 8 (2013) 015004 S Clemmer et al
Figure 5. Electricity generation in the southeast, by scenario. For purposes of this analysis, the region includes Mississippi, Alabama,
Tennessee, Georgia, South Carolina, North Carolina, and Virginia. Scenario 1, reference case; scenario 2, carbon budget, no technology
targets; scenario 3, carbon budget with coal with CCS and nuclear targets; scenario 4, carbon budget with efciency and renewable energy
targets. Bus-bar demand is the amount of energy that needs to be delivered from the point of generation. Gas includes combustion turbine
and combined cycle (CC) plants. Solar photovoltaics (PV) include residential, commercial, and utility scale systems.
Figure 6. National electricity sector water consumption, by
scenarios. Scenario 1, reference case; scenario 2, carbon budget, no
technology targets; scenario 3, carbon budget with coal with CCS
and nuclear targets; scenario 4, carbon budget with efciency and
renewable energy targets.
trajectory until 2030, as conventional coal plant retirements
reduce consumptive uses. They then diverge, as consumption
increases slightly between 2030 and 2050 under scenario
2 as a result of building new natural gas combined cycle
plants with CCS and continues to steadily decline under
scenario 4 due to a reduction in electricity demand and
increased penetration of renewable technologies. For scenario
4, the result is a reduction of 1.1 trillion gallons (85.2%) by
2050 from 2010 levels. For more detailed results on water
withdrawals and consumption at the national and regional
level, see Macknick et al (2012).
3.4. National electricity and natural gas costs
Because we modeled a carbon budget and specic technology
targets in scenarios 24, showing how those scenarios
impact consumer energy costs can provide policy-relevant
information to decision makers. Average consumer electricity
prices, for example, rise under the reference case, but rise
more sharply under scenarios 2, 3, and 4, with scenario 3
producing the highest prices (gure 7). Changes in overall
consumer electricity bills (price times usage), arguably a more
important measure of the economic impact to consumers, vary
more dramatically. Both scenarios 2 and 3 show increases
in consumer electricity bills consistent with the respective
rate increases because there is little projected change in
consumer electricity use under these scenarios. In contrast,
consumer electricity bills under scenario 4 drop below the
reference case because of energy efciency investments
(gure 8). Because of natural gass importance outside of the
8
nauonal elecLrlclLy secLor waLer consumpuon, by
scenarlos. Scenar|o 1, reference case, scenar|o 2,
carbon budget, no techno|ogy targets, scenar|o
3, carbon budget w|th coa| w|th CCS and nuc|ear
targets, scenar|o 4, carbon budget w|th
emc|ency & renewab|e energy targeLs.
, Clemmer, S. eL al. 2013. Modellng low-carbon u.S. elecLrlclLy fuLures Lo explore lmpacLs on nauonal and reglonal waLer use.
ovltoomeotol keseotcb leuets 8(1), lopscleoce.lop.otq/1748- 9J26/8/1/015004
A|| therma| power p|ants, whether foss||,
nuc|ear or so|ar-therma|-e|ectr|c, use water
for coo||ng. In sharp contrast, w|nd, so|ar V
and so|ar-e|ectr|c d|shes requ|re 9S |ess
water to operate.

1he power sector uses 4S of tota| U.S.
water w|thdrawa|s. W|th expand|ng demand
for both power and water, r|s|ng pr|ces for
water |s occurr|ng. So |s |ncreased pr|ce
vo|an||ty, g|ven weather-tr|ggered water
shortages.

Water-stressed states ||ke Ar|zona now
mandate a|r-coo||ng for new power p|ants,
wh|ch |s more expens|ve.

CCS near|y doub|es the amount of water
requ|red.
vulnerablllLy of Shale Cas Wells Lo
WaLer uemand and ulsposal CosLs
140
Pl shale gas wells vary ln waLer demand by a facLor of four dependlng on a number of
parameLers (see nexL sllde). LA esumaLes Lhe 33,000 oll and gas wells operaung ln 2011
consumed 70 Lo 140 bllllon gal. waLer per year. AbouL Lhe waLer use ln 40 Lo 80 clues wlLh
populauons of 30,000 people, or 1 Lo 2 meLropollLan areas wlLh 2.3 mllllon pop. each.
Clark, CL, Porner 8M, and ParLo, C8. Llfe Cycle WaLer Consumpuon for Shale Cas and Convenuonal naLural Cas, ovltoo. 5cl. 1ecbool., 2013, 47 (20),
pp. 11829-11836, ura lan Lo SLudy Lhe oLenual lmpacLs of Pydraullc lracLurlng on urlnklng WaLer 8esources, Cmce of 8esearch and uevelopmenL
u.S. LnvlronmenLal roLecuon Agency WashlngLon, u.C. lebruary 7, 2011, 8eporL LA/600/u-11/001
Results - Fuel
!"#$"%$&$'( "*+ ,*-.#'"$*'( /$'0$* 1&"(2 $2 "2 3#."' 4# 3#."'.# '0"* %.'/..* 1&"(2
50$&. #.-(-&$*3 $2 $614#'"*' $* 6"*( 1&"(2 7#46 " /"'.# 6"*"3.6.*' 2'"*+14$*'8
&4/ 7&4/%"-9 #"'.2 &$6$' '0. $61"-' 4* '4'"& /"'.# #.:,$#.6.*'2
key arameLers for Llfe Cycle WaLer
Analysls AssoclaLed wlLh naLural Cas
141
ChrlsLopher ParLo, Corrle Clark, 1odd klmmell, and 8oberL Porner, WaLer consumpuon for fossll fuel explorauon and
producuon, Argonne nauonal LaboraLory, CroundwaLer roLecuon Councll Annual lorum SL. Louls, MC, SepLember 23-23, 2013
Key Parameters

"#$#%&'&$

()*'

+,#-& "-#.

/0)1&)'*0)#-

20($/&

3#$)&''

4#.&''&1*--&

5#.)&21*--&

6#$/&--(2
7&-- -*8&'*%& years 30 30 30 30 30
lndusLry and
Argonne
AssumpLlon
3(-9 :#2 %&',#)&
/0)'&)'
80 (40-97) 80 (40-97) 80 (40-97) 80 (40-97) 83 (69-93) 8ef. 4
5.;$#(-*/ 8$#/'($*):
<0=2 >&$ ?&--
[obs/well
1 for low Lu8
3 for hlgh
Lu8
1 for low Lu8,
3 for hlgh Lu8
1 for low Lu8,
3 for hlgh Lu8
1 for low Lu8,
3 for hlgh Lu8
-
a

Argonne
assumpLlon
@2'*%#'&; (-'*%#'&
$&/01&$.
8Cl/well 1.4-3.0 1.7-2.6 3.3-6.3 1.4-3.2 0.79-1.23
Shale: 8efs. 3, 6
Conv.: 8efs. 7,
8
7#'&$ 80$ ;$*--*): gal/well 240,000 170,000 280,000 180,000
78,000-
110,000
AssumpLlons
based upon
well deslgns:
8efs. 9, 10
7#'&$ 80$ /&%&)' gal/well 27,000 19,000 37,000 24,000 7,200-9,800
AssumpLlons
based upon
well deslgns:
8efs. 9, 10
7#'&$ 80$ ,.;$#(-*/
8$#/'($*):
gal/[ob
1,800,000-
6,200,000
3,700,000-
6,700,000
3,400,000-
8,800,000
2,600,000-
3,800,000
-
a

Sampled from:
8ef. 11
4-0?=#/9 8$#/'*0) ABC
DB ;#.2E
gal flowback/
gal/[ob
0.2 0.1 0.03 0.1 -
a
8ef. 12
F&/./-&; 8$#/'*0)
gal recycled /gal
flowback
0.20 0.20 0.00 0.93 -
a
8ef. 12
7#'&$ 80$ :#2
>$0/&22*):
gal/mm8Lu 1.67 8ef. 13
7#'&$ 80$ >*>&-*)&
0>&$#'*0)
gal/mm8Lu 0.84 8ef. 13
7#'&$ 80$ &-&/'$*/*'.
80$ :#2 /0%>$&22*0)
gal/SCl 0.003-0.007 8ef. 14
a
Not applicable. Hydraulic fracturing was not assumed for the conventional natural gas life cycle pathway.
See aper llnked on sllde 10 for references
8anges of wasLewaLer & consumpuve
freshwaLer use ln 3 shale plays:
142

The Next Frontier in United States Shale Gas and Tight Oil Extraction:
Strategic Reduction of Environmental Impacts
52
Figure 17. Estimated reductions in fresh water consumption and wastewater production using optimized
completions for a typical well in each of the three focus plays. Bars are bounded by low case and high case
estimates. In each of the low cases, an injection volume reduction of 10% is assumed; in the high cases, 20%.
Note that the indicated fresh water consumption values account for average regional intra-operator rates of
recycling; that is, water that is sourced from operators recycled stores is not included.
Estimated reduction in water transport-related carbon dioxide emissions using optimized completions
The industrial-scale operations on a hydraulically fractured horizontal well site require several
hundred truck trips for water-related supplies and equipment alone (NY DEC 2011, Prozzi 2011). A
reduction in water volume via an optimized completion would be accompanied by a proportionate
reduction in truck trips and associated carbon dioxide emissions. To model emissions reductions
stemming from reduced water usage, we assumed that all water transport is via truck rather than pipeline,
as this is the dominant practice in all three plays.
28
All truck trips are modeled as two-way; trips both to
and from the well site are included. Fuel economy is assigned as the average across all commercial-
weight truck classes from 2000-2010 (US DOE 2012); differences in miles per gallon based on freight are
ignored. It was assumed that completions additives, such as fracturing chemicals and sand, vary
proportionally with injected water volume, but that completions equipment (e.g., trucks and tanks) does

28
Relative to trucking, piping would almost certainly reduce the carbon cost of all water transportation, though this
would depend on site topography and transport distance. In addition, spill risk concerns exist for the piping of
wastewater.
Clark, CL, Porner 8M, and ParLo, C8. Llfe Cycle WaLer Consumpuon for Shale Cas and Convenuonal naLural Cas, ovltoo. 5cl.
1ecbool., 2013, 47 (20), pp 11829-11836
lmpacL of naLural gas fuel source & power planL Lype on
llfecycle waLer consumpuon for elecLrlclLy generauon.
143
scenario and the second lowest in the maximum scenario. The
EUR and the volume of fracturing uid required appear to have
the greatest impact on the life cycle water consumption per unit
of energy produced. While the recycling of owback water is
often cited as a means to reduce the water footprint of shale,
these results show the eect to be relatively small. This holds
even for the Marcellus shale where 95% of owback water was
assumed to be recycled, due to the limited quantity of owback
water recovered. These numbers could be increased if all
produced water collected over the lifetime of the well were
collected and reused, but this introduces the logistical challenge
of collecting and aggregating smaller volumes of water from
hundreds or thousands of wells across a play that may not be
practical or economical.
Life Cycle Water Consumption for Natural Gas versus
Other Vehicle Fuels. Although natural gas can be combusted
directly with no additional water consumption, additional water
is likely needed if the end use of the gas is a vehicle tank. In the
case of natural gas vehicles, the natural gas may rst be
compressed via an electric compressor prior to entering the
vehicle tank. The electricity required for this compression
consumes 0.60.8 L of water for cooling per LGE (18.325.5
L/GJ) for both natural gas pathways).
22
This is incorporated
into the total life cycle water consumption for natural gas found
in Figure 2.
Of the fuels evaluated, conventional natural gas consumes the
least amount of water over its life cycle with 0.881.12 L
consumed per LGE. Shale natural gas consumes slightly more,
ranging from a minimum of 0.99 L/LGE in the Haynesville
shale to a maximum of 2.02 L/LGE in the Fayetteville shale
when not accounting for owback water recycling (SI Table
S1). Both natural gas pathways ultimately consume less water
than conventional gasoline or the other alternatives reported in
Figure 2. Variations in water consumption estimates for
gasoline are primarily due to the crude oil production stage,
where water consumption is highly dependent upon the age of
the oil well, the type of recovery technology in place, and the
extent that formation water or alternative water is recycled and
reused.
39
Because the majority of wells in Saudi Arabia are
younger and require less injection water to maintain well
pressure than U.S. wells, less water is consumed.
39
The fuel that
consumes the most water per LGE is corn ethanol due to the
irrigation requirements for growing corn, which depend on
location and regional climate.
39
Ethanol produced from
switchgrass requires considerably less water than corn ethanol
due to an assumption of no irrigation. The majority of water
consumption for switchgrass ethanol occurs during the
production stage at the renery. Similarly, while water is
consumed for mining, washing, and transporting coal, Fischer
Tropsch diesel (FTD) produced from coal gasication
consumes the majority of its water during liquids production.
Although water is used directly in the FischerTropsch
process, the majority of water consumption for FTD is due
to cooling water losses at the plant.
40
Life Cycle Water Consumption for Natural Gas
Electricity Generation versus Other Fuels. A large and
growing quantity of natural gas is consumed for electricity
generation. A few recent papers have analyzed water
consumption for electricity production across technologies
and have found that water consumption for natural gas power
plants is on the low end of the range for conventional
thermoelectric power generation.
4143
To dierentiate this
analysis from those studies, the impact of natural gas fuel source
on the life cycle water consumption across dierent natural gas
power plant types was evaluated and is shown in Figure 3.
The results of this analysis show that the addition of water
consumption for fuel production adds incrementally to the total
life cycle impact; the eect, however, is much smaller than that
of the power plant type. In most cases, the variability in water
consumption from the fuel type is less than the variability in
water consumption for the same power plant type shown in
Table 2. While the water consumption for combustion turbines
and power plants utilizing once-through cooling is on the low
end, these power plants have signicant drawbacks. The
eciency of combustion turbines is low, leading to much
higher fuel consumption and operating costs. This makes them
only suitable for short-term operation to meet peak load. Once-
through cooling systems reduce water consumption at the cost
of signicant water withdrawals. High water withdrawal rates
introduce their own ecological impacts, including, but not
limited to, entrainment, entrapment, and increased temper-
atures near the discharge location.
The majority of new natural gas power plants being built are
high-eciency combined-cycle plants utilizing recirculating
cooling. Switching to shale gas from conventional natural gas
in one of these plants would result in an average increase of 7%
in life cycle water consumption. Macknick et al., however,
showed that these power plants have the lowest water
consumption among all power plant types utilizing recirculating
cooling, with just over half the water consumption of the most
water ecient coal power plants, and less than one-third the
water consumption of a nuclear power plant when utilizing the
same cooling technology.
41
Because of this, the net eect of a
shift to increased reliance on natural gas power generation from
shale gas is likely to be positive in terms of overall water
consumption. The incremental increase in water consumption
from shale gas production should be more than oset by the
signicantly lower operational water consumption from natural
gas power plants relative to the other power generation
technologies that they are likely to displace.
IMPLICATIONS
The production of shale gas is more water intensive than
conventional natural gas, primarily due to water consumption
for hydraulic fracturing. How much more water intensive varies
signicantly both across plays and within each play. The
Figure 3. Impact of natural gas fuel source and power plant type on
life cycle water consumption for electricity generation.
Environmental Science & Technology Article
dx.doi.org/10.1021/es4013855 | Environ. Sci. Technol. XXXX, XXX, XXXXXX F
1ecbool., 2013, 47 (20), pp 11829-11836
1he addluon of waLer consumpuon for fuel producuon adds lncremenLally Lo Lhe LoLal llfe
cycle lmpacL, Lhe eecL, however, ls much smaller Lhan LhaL of Lhe power planL Lype. ln mosL
cases, Lhe varlablllLy ln waLer consumpuon from Lhe fuel Lype ls less Lhan Lhe varlablllLy ln
waLer consumpuon for Lhe same power planL Lype.

fracturing improves the ow of gas by creating fracture
pathways. The fracture uid for shale formations is typically
water based and contains a proppant and chemical additives.
The amount of water and the uid constituents used for
hydraulic fracturing vary according to the geology and the
specic characteristics of the fracturing techniques used,
including the length of the lateral portion of the well and the
number of fracture stages.
Typical water volumes required for hydraulic fracturing in
each play were estimated from industry-reported data obtained
from the FracFocus.org Web site.
18
FracFocus is a national
registry of hydraulic fracturing chemical data operated by the
Ground Water Protection Council (GWPC) and the Interstate
Oil and Gas Compact Commission (IOGCC). FracFocus data
are entered either voluntarily by operators or in accordance
with state chemical disclosure laws. In addition to chemical
information, FracFocus also includes the volume of water used
to hydraulically fracture each well.
FracFocus data are not available in an aggregated format.
Data for each well are stored separately in a portable document
format (PDF). This analysis relied upon a data set made
available by Skytruth. The data set consists of data reported in
2012 to FracFocus, and contains hydraulic fracturing data for
activities completed in 2011 and 2012.
19
Wells were selected
geographically by county for the four plays of interest. The data
were screened to remove hydraulic fracturing jobs that may
have been performed on vertical wells in the area, and to
remove obvious typos or erroneous entries (included only
water volumes above 500 000 gallons and below 20 000 000
gallons). The total number of wells evaluated for each play
varied from 1124 for the Haynesville play to 1705 for the
Barnett play (see SI Table S2 for summary statistics for each
play). The range of water consumption shown in Table 1 was
dened as plus or minus one standard deviation away from the
average for each play (see SI Figure S4 for histograms). Overall,
the average water requirements for each play estimated by this
method, particularly for the Haynesville and Fayetteville plays,
are slightly higher than the range of values presented by other
sources.
9,28
Management of Flowback Water. Another component
of fracturing a well is the management of owback water and
produced water. Flowback water is the water that is produced
from the well immediately after hydraulically fracturing the well
and before commencing gas production; produced water is
water that is produced along with the gas over the life of the
well. Outside of the Marcellus play, owback water is collected
and typically disposed of through underground injection.
Within the Marcellus region, however, owback water is
collected and typically reused in hydraulic fracturing activities.
For the Marcellus, 95% of owback was assumed to be recycled
because of the long-distance transport requirements to dispose
of the uid via injection wells. For the other plays, where
injection wells are located nearby, recycle rates were assumed to
be 20% of owback for the Barnett and Fayetteville plays and
0% for the Haynesville play.
20
The total volume of recycled
uid depends on the amount of uid that ows back up the well
after hydraulic fracturing, which varies considerably among the
dierent shale plays. For this study, owback fractions and
recycle fractions were based upon input from industry experts.
Flowback fractions for the Marcellus shale fall within estimates
reported by others.
27,29
Data for Natural Gas Processing, Transmission, and
Use. Downstream from the recovery stage, natural gas passes
through a processing stage in which it is puried for pipeline
transportation. The processed natural gas enters the trans-
mission and storage stage, where natural gas is moved long
distances through high-pressure pipelines. Compressor station
facilities are located along the transmission pipeline network to
force the gas through the large-diameter pipes. After trans-
mission through such pipelines, gas may be stored under-
ground, liqueed, and stored in aboveground tanks, and/or
distributed to customers for use. All of these steps consume
water, primarily for cooling.
30
Estimates for this water use are
taken from a widely cited paper by Gleick,
21
as indicated in
Table 1. This paper is dated, and the values for these processes
are poorly supported. However, there are few alternative
sources for data on these processes. It is recognized that there is
a high level of uncertainty in applying these numbers to
modern practices, and new primary data are needed to better
understand the water consumption from natural gas transport
and processing.
Because this study examines transportation as a specic end
use for natural gas, water used for the compression of natural
gas into vehicle tanks was also considered. To compare the
energy content of natural gas to that of gasoline for
transportation use (assuming 3% ethanol blend), a conversion
of 32 000 GJ/LGE was used.
31
Table 2 gives the parameters
used to compare the impact of natural gas fuel source on water
consumption for electricity generation.
RESULTS AND DISCUSSION OF WATER

CONSUMPTION
The life cycle water consumption of both shale and
conventional natural gas pathways was evaluated according to
three functional unitsL/GJ produced, L/LGE, and L/kWh of
electricity generated. The results in L/GJ are displayed by life
cycle stage, and overall water consumption in L/LGE is
compared to that for other transportation fuels. The results in
L/kWh are presented across natural gas fuel sources and power
plant types. Parameter variability and uncertainty are discussed,
and some key factors aecting water consumption estimates are
identied.
Water Consumption by Life Cycle Stage. An overview
of water consumption for the shale gas and conventional gas life
cycles per GJ is presented in Figure 1. Results are presented by
life cycle stage and utilize the minimum and maximum
parameter values in Table 1 to illustrate the range of
uncertainty and variability among wells within each play. The
Table 2. Power Plant Water Use Parameters
plant type cooling type
power plant
eciency
a
operational water
consumption (L/kWh)
b
steam turbine
(ST)
once through
(OT)
32.3 1.11.3 (1.2)
recirculating
(RC)
32.3 1.82.6 (2.2)
combustion
turbine (CT)
NA
c
29.5 0.19
combined cycle
(CC)
once through
(OT)
44.9 0.38
recirculating
(RC)
44.9 0.681.2 (0.91)
a
Based on higher heating value (HHV) Source: ref 32.
b
Range of
literature values; value in parentheses is average value used in analysis.
Sources: refs 21, 3338.
c
NA, do not require water for cooling but
often require water for emission control.
Environmental Science & Technology Article
dx.doi.org/10.1021/es4013855 | Environ. Sci. Technol. XXXX, XXX, XXXXXX D
ower lanL WaLer use arameLers
a 8ased on hlgher heaung value (PPv) Source. b 8ange of llLeraLure values, value
ln parenLheses ls average value used ln analysls. c nA, do noL requlre waLer for
coollng buL oen requlre waLer for emlsslon conLrol.

!"#$% ' ()*+,#-./ 01-23"4-5 !%,6#7%28 9-7: !13./ ;%<)2 =1-%+ =)-)5%>%-.
!/)"% ?")+2 @#27322%$ 9- ;/#2 ?,%2%-.)41-
LsumaLes of waLer use for hydraullc
fracLurlng vary (medlan values)
144
2.8 mllllon gal per horlzonLal well for Lhe 8arneu
4.3 mllllon gal for Lhe Lagle lord
3.7 mllllon gal for 1exas poruon of Lhe Paynesvllle
4.3 mllllon gal for Lhe Marcellus
Whlle sLaLewlde waLer use for
shale gas developmenL ls
expecLed Lo be less Lhan 1 of
LoLal waLer wlLhdrawals ln
1exas, local lmpacLs may vary
dependlng upon seasonal waLer
avallablllLy, wasLewaLer
managemenL sLraLegles, and
compeung demands.

1ecbool., 2013, 47 (20), pp 11829-11836.
WasLeWaLer ConLamlnauon
A MounLaln or a Molehlll?
143
wlLh over 20,000 shale wells drllled
from 2001-2010, Lhe envlronmenLal
record of shale gas developmenL has
for Lhe mosL parL been a good one-
only 43 'wldely reporLed' waLer
conLamlnauon lncldenLs-- buL lL ls
lmporLanL Lo recognlze Lhe lnherenL
rlsks and Lhe damage LhaL can be
caused by [usL one poor operauon.... ln
Lhe sLudles surveyed, no lncldenLs are
reporLed whlch concluslvely
demonsLraLe conLamlnauon of shallow
waLer zones wlLh fracLure ulds."

Ml1 Cas 8eporL 2011, Massachuseus lnsuLuLe of 1echnology
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6/0/ $/;04"#> 30-"/)# /(6 "#;-"0'()*
K $"-338-;#"/0-"> 9/3'(81'6# 3-&40'-(
1-4&6 /&3- $-(:'"2 $-(3'30#(0 9/3'(8
1'6# "#;-"0'() 30/(6/"63 /$"-33
24&0';&# 3'0#3 /(6 -;#"/0-"3*
Groundwater contamination
On-site surface spills
Water withdrawal and air quality issues,
and blowouts
Off-site disposal issues
48%
33%
10%
9%
6/7*+% 89 5:-+. (2 ;-.%+ 4(0.-3/0-./(0 /04/<%0.) +%1-.%< .( 7-) ;%11 <+/11/079
I-4"$#U V/33/$743#003 ,(30'040# -: =#$7(-&-)% WEXX ?/3 B#;-"0*
!
"#$%$&'()* ,((-./0'.# 1/0#" 2/(/)#2#(0
3-&40'-(3 /"# "#54'"#6 0- /66"#33 07#
&-()80#"2 3430/'(/9'&'0% -: 1/0#" 43# '(
37/&# )/3 ;"-64$0'-(*
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)/3 -;#"/0'-(3 ;"#3#(03 / 3')(':'$/(0
&-)'30'$3 $7/&&#()#* ?'.#( 07# "#2-0#
(/04"# -: 2-30 &-$/0'-(3 /(6 07#
:"#54#(0 -;#"/0'-(3 2-.#2#(03 /$"-33
7')7&% 6'3;#"3#6 /(6 (42#"-43 1#&& 3'0#
&-$/0'-(3> :&#@'9'&'0% '3 "#54'"#6 '( 07#
0"/(3;-"0 2-6#& 2/A'() "-/6 0"/(3;-"0
07# &-)'30'$3 2-6#& -: $7-'$# :-" 2-30
#(.'"-(2#(03* <7'&# ;';#&'(# /(6 "/'&
2-.#2#(03 $/( 9# #::#$0'.# :-" &-()8
6'30/($# -" ;-'(080-8;-'(0 2-.#2#(03>
07# :'(/& 6'30"'940'-( 0- /(6 :"-2 07#
1#&& ;/6 '3 /&2-30 #@$&43'.#&% 2/(/)#6
.'/ "-/6 0"/(3;-"0* B-/6 0"/(3;-"0
.-&42#3 /(6 0%;#3 ./"% 3')(':'$/(0&%
6#;#(6'() -( 07# -;#"/0'-(/& ;7/3# -:
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;#"$#(0 -: 0-0/& 0"/(3;-"0 .-&42#3*
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0"4$A 2-.#2#(03 ;#" 6/% 1'07'( /
3'()&# 9/3'(> 17'$7 '3 07# #54'./&#(0 -:
/ ;/(8"#)'-(/& 0"/(3;-"0 -;#"/0'-( '(
2/(% -07#" 3#$0-"3* =7'3 $-($#(0"/0'-(
$"#/0#3 3')(':'$/(0 $7/&&#()#3> 1'07
-(83'0# $-()#30'-( $/43'() '334#3 0- 07#
-;#"/0'-(3 0#/23 /(6 &-$/& "#3'6#(03>
/(6 &#/6'() 0- 3')(':'$/(0 $-30 #@;-34"#
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$7/&&#()#3 :-" -;#"/0-"3* K 37-"0/)#
-: 0"/(3;-"0 -;#"/0-"3 1'07 34::'$'#(0
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94"6#( -( 30"/'(#6 "-/6 '(:"/30"4$04"#>
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/(6 "#)4&/0-"% 6/0/ $/( /&& &#/6 0-
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N(.'"-(2#(0 OMIINP #@;-34"#> /(6
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;4"34#6> 940 /"# $4""#(0&% 4(/9&# 0-
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/6-;0'-( /(6 '(0#)"/0'-( -: &-)'30'$3
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30"/')70:-"1/"6> 0#$7(-&-)%8"#/6%
/;;"-/$7 0- "#64$'() 0"/(3;-"0 $-30
/(6 "#)4&/0-"% /(6 MIIN #@;-34"#*
,2;"-.#2#(03 '( 1/0#" 2-.#2#(03
/&3- 7/.# /( '2;/$0 -( -07#" /3;#$03
-: 37/&# -;#"/0'-(3> 3;#$':'$/&&% MIIN
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3%30#23 $/( ;"-.'6# "#/&80'2# .'3'9'&'0%
-: 0"4$A 2-.#2#(03 /(6 6"'.#"
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/(6 #(/9&# $-(0'(4-43 '2;"-.#2#(0
'( 9-07 6"'&&'() /(6 0"/(3;-"0/0'-(*
R-)'30'$3 $-303 $/( 9# "#64$#6 07"-4)7
#::'$'#($% )/'(3 O#*)*> "#64$0'-( -:
1/'0'() 0'2#P /(6 /40-2/0#6 ;"-$#33#3
$/( "#64$# /62'('30"/0'.# $-303* S/30
'2;&#2#(0/0'-(3 7/.# 37-1( 07/0
$-(3'30#(0 /6-;0'-( -: &-)'30'$3 &#/6'()
;"/$0'$#3 $/( 6#&'.#" 4; 0- TH ;#"$#(0
"#64$0'-( '( 0"/(3;-"0 $-303*
5(3'1/-04%
=7# 43# -: / 1/0#" '(.#(0-"% 2-('0-"'()
0--& $/( 34;;-"0 1/0#" 2/(/)#2#(0
"#)4&/0-"% $-2;&'/($# 07"-4)7 .'3'9'&'0%
-: 1/0#" 6"/1> 43/)# /(6 2-.#2#(03*
K40-2/0#6 #(680-8#(6 ;"-$#33#3 /(6
3%30#23 #(/9&# /$$4"/0# /(6 "/;'6
6/0/ $/;04"#> 30-"/)# /(6 "#;-"0'()*
K $"-338-;#"/0-"> 9/3'(81'6# 3-&40'-(
1-4&6 /&3- $-(:'"2 $-(3'30#(0 9/3'(8
1'6# "#;-"0'() 30/(6/"63 /$"-33
24&0';&# 3'0#3 /(6 -;#"/0-"3*
Groundwater contamination
On-site surface spills
Water withdrawal and air quality issues,
and blowouts
Off-site disposal issues
48%
33%
10%
9%
6/7*+% 89 5:-+. (2 ;-.%+ 4(0.-3/0-./(0 /04/<%0.) +%1-.%< .( 7-) ;%11 <+/11/079
I-4"$#U V/33/$743#003 ,(30'040# -: =#$7(-&-)% WEXX ?/3 B#;-"0*
lracklng & LarLhquake Llnks
146
uSCS and Cklahoma Ceologlcal Survey
lssued a warnlng of lncreased rlsk of
earLhquakes ln cenLral Cklahoma. 1he
quakes are llkely due Lo lnduced selsmlclLy
from deep ln[ecuon of wasLewaLer from
unconvenuonal oll an gas drllllng LhaL can
lubrlcaLe geologlc faulLs and Lrlgger man-
made earLhquakes.

More Lhan 200 earLhquakes of magnlLude
3.0 or larger have shaken cenLral Cklahoma
slnce 2009 -- abouL 40 a year. 8efore LhaL,
Lhere were usually one Lo Lhree earLhquakes
ln LhaL reglon annually. LarLhquakes are now
slx umes more llkely ln cenLral Cklahoma
Lhan prlor Lo 2009.

SL. Cregory's unlverslLy ln Shawnee, Ckla. on
nov. 6, 2011. 1wo earLhquakes ln Lhe area ln
less Lhan 24 hours caused one of Lhe Lowers Lo
Lopple, and damaged Lhe remalnlng Lhree.

1hls lncreased selsmlc rlsk from fracklng wasLewaLer dlsposal adds Lo Lhe ever-growlng
need or wldespread adopuon of alLernauve, waLerless Lechnologles.
!ohn P Culgley, ln Cklahoma, a whole loua shakln' goln' on,
hup://[ohnhqulgley.blogspoL.com/2013/10/ln-oklahoma-whole-loua-shakln-goln-on.hLml
lracklng & LarLhquake llnks
147
110 105 100 95 90 85 80 75 70 65
30 30
35 35
40 40
45 45
110 105 100 95 90 85 80 75 70 65
Dallas-Ft. Worth, Texas
May 16, 2009 - M 3.3
Guy, Arkansas
Feb. 27, 2011 - M 4.7
Youngstown, Ohio
Dec. 31, 2011 - M 4.0
Colorado/NewMexico
Aug. 23, 2011 - M 5.3
49 49
26 26
M
a
p
b
y
M
a
r
k
D
. Z
o
b
a
c
k
, d
a
t
a
f
r
o
m
U
.S
. G
e
o
lo
g
ic
a
l S
u
r
v
e
y
vaslevaler in|eclion occurred on Chrislmas Ive
and Nev Year's Ive near Youngslovn, Ohio, lhe
Iargesl of vhich vas a magnilude 4.0. AIlhough
lhere has been secuIalion lhal lhe magnilude-5.6
earlhquake lhal occurred in OkIahoma on Nov. 5
may have been lriggered by simiIar fIuid in|eclion,
no Iinkage belveen lhis earlhquake and fIuid
in|eclion has been eslabIished.
The occurrence of in|eclion-reIaled earlhquakes
is underslandabIy of concern lo lhe ubIic, govern-
menl reguIalors, oIicymakers and induslry aIike.
Yel il is imorlanl lo recognize lhal vilh roer
Ianning, moniloring and resonse, lhe occurrence
of smaII-lo-moderale earlhquakes associaled vilh
fIuid in|eclion can be reduced and lhe risks associ-
aled vilh such evenls effecliveIy managed.
!"#$%& %() !*+%$
No earlhquake lriggered by fIuid in|eclion has
ever caused serious in|ury or significanl damage.
Moreover, aroximaleIy 140,000 vaslevaler
disosaI veIIs have been oeraling safeIy and
vilhoul incidenl in lhe U.S. for many decades.
Thal said, ve have knovn for more lhan
40 years lhal earlhquakes can be lriggered by
fIuid in|eclion. The firsl veII-sludied cases vere
earlhquakes lriggered by vasle disosaI al lhe
Rocky Mounlain arsenaI near Denver, CoIo.,
in lhe earIy 1960s, and by valer in|eclion al lhe
RangeIy oiIfieId in veslern CoIorado in lhe Iale
'60s and earIy '70s.
Such quakes occur vhen increasing ore res-
sure al delh caused by fIuid in|eclion reduces
lhe effeclive normaI slress acling erendicuIar
lo re-exisling fauIls. The effeclive normaI slress
on a fauIl can be lhoughl of as a force lhal resisls
shear movemenl much as hov ulling a veighl
on a box makes il more difficuIl lo sIide aIong lhe
fIoor. Increasing ore ressure reduces lhe effec-
live normaI slress, aIIoving eIaslic energy aIready
slored in brillIe rock formalions lo be reIeased
in earlhquakes. These earlhquakes vouId some-
day have occurred anyvay as a resuIl of sIovIy
accumuIaling forces in lhe earlh resuIling from
naluraI geoIogic rocesses in|eclion |usl seeds
u lhe rocess.
,- )*#%(./*0) %#"11)#)2 34 56/"2 "78)+%"-7 (*$
)9)# +*/$)2 $)#"-/$ "78/#4 -# $"17"5"+*7% 2*:*1);
Earthquakes above magnitude-3.0 have been recorded by the U.S. Geological Survey in the Central
and Eastern United States and southeastern Canada since 1960. The dates and largest magnitudes
associated with recent earthquakes apparently triggered by fluid injection are noted.
!"#$% April 2012 39 www.earthmagazine.org
LarLhquakes above magnlLude-3.0
have been recorded by Lhe uSCS ln
Lhe CenLral and LasLern u.S. and
souLheasLern Canada slnce 1960. 1he
daLes and largesL magnlLudes
assoclaLed wlLh recenL earLhquakes
apparenLly Lrlggered by uld ln[ecuon
are noLed.

1hese earLhquakes would someday
have occurred anyway as a resulL of
slowly accumulaung forces ln Lhe
earLh resulung from naLural geologlc
processes - ln[ecuon [usL speeds up
Lhe process.

no earLhquake Lrlggered by uld ln[ecuon has ever caused serlous ln[ury or slgnlcanL
damage. Moreover, approxlmaLely 140,000 wasLewaLer dlsposal wells have been
operaung safely and wlLhouL lncldenL ln Lhe u.S. for many decades. 1haL sald, lL has been
known for 40 years LhaL earLhquakes can be Lrlggered by uld ln[ecuon.
Marun u. oback, Managlng Lhe Selsmlc 8lsk osed by WasLewaLer ulsposal, LarLh magazlne, Aprll 2012
8educlng robablllLy Cf
1rlggerlng LarLhquake
148

1. Avold ln[ecuon lnLo acuve faulLs and faulLs ln brlule rock.
2. lormauons should be selecLed for ln[ecuon (and ln[ecuon raLes should
be llmlLed) Lo mlnlmlze pore pressure changes.
3. Local selsmlc monlLorlng arrays should be lnsLalled when Lhere ls a
poLenual for ln[ecuon Lo Lrlgger selsmlclLy.
4. roLocols should be esLabllshed ln advance Lo dene how operauons wlll
be modled lf selsmlclLy ls Lrlggered.
3. CperaLors need Lo be prepared Lo reduce ln[ecuon raLes or abandon
wells lf Lrlggered selsmlclLy poses any hazard.
Marun u. oback, Managlng Lhe Selsmlc 8lsk osed by WasLewaLer ulsposal, LarLh magazlne, Aprll 2012
LxperLs polnL Lo 3 sLralghorward
sLeps Lo reduce Lhe probablllLy of
Lrlggerlng selsmlclLy whenever ln[ecung
any uld lnLo Lhe subsurface:

B
r
e
n
n
a
S
. T
o
b
l
e
r
/
A
G
I
same saIine aquifers from vhich lhe
valer used for hydrauIic fracluring
vas roduced, ressure in lhe aquifers
decreases over lime as more valer is ro-
duced for hydrauIic fracluring lhan in|ecled
foIIoving fIovback.
AIlernaliveIy, veak, oorIy cemenled and
highIy ermeabIe sandslone formalions vouId
aIso be ideaI for in|eclion. Such formalions deform
IaslicaIIy and do nol slore eIaslic slrain energy
lhal can be reIeased in olenliaIIy damaging
earlhquakes. No earlhquakes have been lriggered
in lhe 15 years during vhich a miIIion melric lons
er year of carbon dioxide from lhe SIeiner gas-
and oiIfieId in lhe Norlh Sea has been in|ecled
inlo lhe Ulsira sand, a highIy orous, regionaIIy
exlensive saIine aquifer.
ObviousIy, cases viII arise vhere veII-cemenled,
Iess ermeabIe and more brillIe formalions musl
be used for in|eclion. In lhose cases, care musl be
laken lo avoid Iarge ore ressure changes. This
can be done lhrough modeIing rior lo in|eclion
once lhe ermeabiIily and caacily of lhe in|eclion
inlervaIs have been delermined. WeII-eslabIished
rocedures have been deveIoed over many
decades by elroIeum engineers lo do lhis.
!"#$ &' ()*"+,, -./+, !#0*10/
2.)0".30)4 533+6*
IolenliaIIy aclive fauIls lhal mighl cause Iarge
and damaging earlhquakes shouId be idenlifiabIe
during lhe sile characlerizalion hase of ermil-
ling olenliaI in|eclion veIIs. ecause smaIIer
fauIls can escae deleclion, seismic moniloring
arrays shouId be deIoyed in lhe vicinily of in|ec-
lion veIIs vhen lhere is a cause for concern lhal
in|eclion mighl lrigger seismicily.
The Iocalions and magniludes of naluraIIy
occurring earlhquakes are roulineIy delermined
on a reaI-lime basis in numerous seismicaIIy
aclive regions around lhe vorId. The inslrumenla-
lion, dala leIemelry and anaIysis lechniques used
lo accomIish lhis moniloring are veII deveIoed
and easiIy imIemenled al reIaliveIy Iov cosl.
y suIemenling regionaI nelvorks vilh IocaI
seismic arrays near in|eclion veIIs, accurale Ioca-
lions of earlhquakes lhal mighl be lriggered by
in|eclion can be used lo delermine lhe Iocalions
and orienlalions of lhe causalive fauIls.
AIlhough smaII fauIls cannol cause Iarge
earlhquakes, even smaII earlhquakes feIl by
lhe ubIic viII be a cause for concern and shouId
be monilored.
!"#$ 7' 8*"+9,0*: 2.;0<0/+"0.)
=3."./.,* 0) 5;>+)/#
IoIIoving recedenls eslabIished lo deaI vilh
earlhquakes lriggered during lhe deveIomenl
of enhanced geolhermaI syslems, oeralors and
reguIalors shouId |oinlIy eslabIish oeralionaI
rolocoIs for in|eclion siles Iocaled in areas vhere
lhere is concern aboul lhe olenliaI for lriggered
seismicily. These rolocoIs are somelimes referred
lo as lraffic Iighl syslems.
Green means go: Once oeralionaI rolocoIs
and IocaI seismic nelvorks are in Iace and
in|eclion begins al agreed-uon rales, oeralors
vouId have a green Iighl lo conlinue unIess
earlhquakes begin lo occur lhal aear lo be
Operators and regulators should establish
operational protocols like perhaps a traffic
light system for wastewater injection sites
located in areas where there is concern about
the potential for triggered seismicity: Green
means go, all systems working correctly; yel-
low means proceed with caution, seismicity
detected; red means stop, seismicity poten-
tially presents a hazard.
() ":# *+1# ?+6 ":+" 0"@* 01$.3"+)" ". $,+)
<.3 ":# $.**090,0"6 .< "3044#3#; *#0*10/0"6 0)
+;>+)/#A ?# :+># ". 9# $3#$+3#; ". 3#;B/#
0)C#/"0.) 3+"#*A .3 #>#) +9+);.) ?#,,* 0<
"3044#3#; *#0*10/0"6 /+))." 9# *".$$#; 96
,010"0)4 0)C#/"0.) 3+"#*D
stop:
seismicity
potentially
presents a
hazard
proceed with
caution:
seismicity
detected
go:
all systems
working
correctly
42 !"#$% April 2012 www.earthmagazine.org
WaLer & CCS nexus
149
The Water and CCS Nexus
1ravls McLlng, 8eglonal Carbon SequesLrauon arLnershlp WaLer Worklng
Croup, ldaho Lnglneerlng nauonal LaboraLory,
WaLer & CCS lmpacL by power planL
130
Water and Carbon Capture Impact
Source: Gerdes, K.; Nichols, C. Water Requirements for Existing and Emerging Thermoelectric Plant Technologies; DOE/NETL Report
402/080108; U.S. Department of Energy National Energy Technology Laboratory: Morgantown, WV, 2009.
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
Subcritical
pc
Supercritical
pc
IGCC Dry
Feed
IGCC
Slurry Feed
NGCC
No Capture 0.52 0.45 0.30 0.31 0.19
With Capture 0.99 0.84 0.48 0.45 0.34
Estimated Water Consumption Increase with
CO
2
Capture and Compression
gal/
kWh
% Increase 91 87 61 46 76
pc pulverlzed coal, lCCC lnLegraLed gaslcauon comblned cycle coal planL,
nCCC- naLural gas comblned cycle
Cerdes, k., nlchols, C. WaLer 8equlremenLs for Lxlsung and Lmerglng 1hermoelecLrlc lanL 1echnologles, uCL/nL1L
8eporL 402/080108, u.S. ueparLmenL of Lnergy nauonal Lnergy 1echnology LaboraLory: MorganLown, Wv, 2009.

WesLern waLer use for
coal, oll & naLural gas exLracuon
131
Combined Results
WaLer Consumpuon for Lnergy LxLracuon ln
Lhe WesLern uS -Argonne naLl Lab sLudy
132
Cverall energy exLracuon does noL appear Lo be a
ma[or waLer user ln mosL areas ln Lhe WesLern u.S.
Accordlng Lo uSCS, ln 2003 all mlnlng, lncludlng
energy exLracuon, accounLed for only 1 of LoLal uS
waLer wlLhdrawals. Powever waLer use does appear
Lo be concenLraLed ln relauvely few areas
Moreover, even Lhese relauvely small volumes can
sull resulL ln conlcLs beLween Lhe energy lndusLry
and agrlculLural and/or munlclpal waLer users ln
areas wlLh hlgh waLer sLress/low waLer avallablllLy or
ln umes of droughL.

8educed SLreamow ro[ecuons for
MosL 8lver 8aslns ln Lhe WesLern uS
133
C||mate |mpacts of 3-SC
temperature r|se on the
Upper Co|orado k|ver
8as|n pro[ected to reduce
Spr|ng streamow 36
and Summer streamow
dec||nes w|th med|an
decreases of 46.

Add|nona| worsen|ng
from warmer
temperatures, w|th
|ncreased average annua|
evapotransp|ranon by
~23.
uLCLlnL
uLCLlnL
uLCLlnL
uLCLlnL
uLCLlnL
uarren L. llcklln, l1 SLewarL, L Maurer, CllmaLe Change lmpacLs on SLreamow and Subbasln-Scale Pydrology ln Lhe upper
Colorado 8lver 8asln LoS, Aug 19, 2013, uCl: 10.1371/[ournal.pone.0071297
lndusLry lnnovauons
133
1he vocal opposluon Lo fracklng by so many cluzen groups, rlslng number of Lown
bans, and moraLorlums ln sLaLes llke new ?ork and norLh Carollna have caughL Lhe
auenuon of Lhe fracklng lndusLry.
1here ls a plpellne of Lechnology lnnovauons Lo address publlc concerns on waLer
use, fracklng chemlcals, wasLewaLer dlsposal, waLershed conLamlnauon, meLhane
and vCC emlsslons, eLc. Some of Lhese lnnovauons oer wln-wln ouLcomes -
galnlng envlronmenLal beneLs whlle also reduclng producuon cosLs. A few are
hlghllghLed ln Lhe nexL few slldes.
uavld WeLhe, 8euer lracklng 1hrough Sound-Senslng llber Cpucs, 8loomberg 8uslnessWeek, !uly 11, 2013
lndusLry lnnovauons
Mlcro Selsmlc MonlLorlng
136
Mlcroselsmlc fracLure mapplng provldes
an lmage of Lhe fracLures by deLecung
mlcroselsms or mlcro-earLhquakes LhaL
are Lrlggered by shear sllppage on
beddlng planes or naLural fracLures
ad[acenL Lo Lhe hydraullc fracLure.

1he locauon of Lhe mlcroselsmlc evenLs
ls obLalned uslng a downhole recelver
array LhaL ls posluoned aL Lhe depLh of
Lhe fracLure ln an oseL wellbore.
hup://www.halllburLon.com/en-uS/ps/sumulauon/sumulauon/mlcroselsmlc-fracLure-mapplng-fracLure-
modellng.page?node-ldhgoxbxoc
Mlcroselsmlc fracLure mapplng ls employed Lo lmprove producuon economlcs by
lncreaslng reservolr producuvlLy and/or reduclng compleuon cosLs. 1hls capablllLy helps
assure Lhe fracLure sLays ln Lhe lnLended zone and LhaL Lhe compleLe zone ls sumulaLed.
1hls capablllLy can help opumlze producuon and mlnlmlze Lhe number of wells and
fracLures requlred.
lndusLry lnnovauons
llber Cpucs MonlLorlng
137
urllllng companles oen re Lhe mlxLure of
chemlcals, sand, and waLer more or less
bllndly aL rocks LhaL hold oll and naLural gas
Lo creaLe ssures and exLracL Lhe seeplng
fuel.
lracklng each well Lyplcally Lakes 13 sLages"
of mlxLure-rlng aL abouL $100,000 each.
Success ls hard, wlLh 80 of Lhe sLages
dellverlng less Lhan 20 of Lhe producuon.

urlllers spend more Lhan $30 bllllon on sub-
opumal" fracklng sLages across 26,100 u.S.
wells.
lndusLry lnnovauon
llber Cpuc MonlLorlng

138
PalllburLon and oLhers are Lesung ber-opuc cables LhaL are used ln u.S.
submarlnes. 1hese so-called dlsLrlbuLed ber-opuc llnes record sound and
LemperaLure along Lhelr enure lengLh. WlLh sLeel-encased llnes clamped beLween
fracklng wells and rock, drlllers can record sounds LhaL slgnal Lhe perfecL frack. 1he
PalllburLon Leam ls renlng soware Lo converL Lhe sounds Lo a graph, showlng how
Lhoroughly Lhe rock hldlng Lhe fuel has fracLured.

ln addluon Lo dlscernlng beLween good and bad fracklng sLages, Lhe ber plcks up
subLle nolses LhaL can lndlcaLe when Lhe cemenL seallng of a spenL well lsn'L worklng
-a safeLy LhreaL LhaL could allow resldual gas Lo reach Lhe surface and Lrlgger an
exploslon. lewer fracklng sLages mean less Loxlc sludge pumped down Loward a
communlLy's waLer Lable, buL lL doesn'L make Lhe chemlcal cockLall lLself any
cleaner. And whlle ber llnes can save drlllers money on lll-almed or unnecessary
fracklng sLages, emclency-hungry companles may balk aL uslng ber opucs on
smaller operauons. lnsLalllng Lhe ber can cosL as much as several hundred
Lhousand dollars per well.
lndusLry lnnovauon
CravlLy & Solar v SandCasLle"
139
1he vasL ma[orlLy of fracklng slLes ln
Amerlca are powered by emlsslons-
spewlng, nolsy dlesel englnes.

PalllburLon has begun uslng
SandCasLles, a fracklng machlne LhaL
uses gravlLy and elecLrlclLy
generaLed from solar panels Lo send
sand more quleLly lnLo a labyrlnLh of
Lubes before ulumaLely belng shoL
underground Lo prop open uny
cracks ln gas- or oll-bearlng rock.
8y replaclng dlesel englnes Lo move sand from Lhe Lrallers, PalllburLon esumaLes Lhe
devlces have saved 930,000 gallons of dlesel and reduced CC
2
emlsslons by 20 10,000
Lons ln Lhe rsL nlne monLhs of 2012
lndusLry lnnovauon
Lcologlx - WasLewaLer 8ecycllng
160
Cleanlng up wasLewaLer from
fracked and convenuonal wells
already ls an $18 bllllon annual
buslness. 1he lndusLry sees
lnnovauon as a key way of
soenlng calls for governmenL
regulauons.

Lcologlx ls markeung Lechnology
LhaL can recycle fracklng
wasLewaLer by uslng alr bubbles
Lo separaLe ouL polluung sollds,
formlng Lhem lnLo a sludge
blankeL LhaL can be scooped up.
Lcologlx LnvlronmenLal SysLems, lnLegraLed 1reaLmenL SysLem (l1S) for lrac WaLer ManagemenL,
hup://www.ecologlxsysLems.com/sysLem-lLs.php
lndusLry lnnovauon
verenlum non-Loxlc Lnzymes
161
verenlum ls markeung nonLoxlc
enzymes almed aL reduclng a causuc
chemlcal, ammonlum persulfaLe-a
sLandard lngredlenL ln halr bleach-
used durlng fracklng.
Cuar gum ls a naLural polymer found ln
guar beans, and lndla supplles 80 of
Lhe world guar gum supply. 1he
blggesL use of guar gum ln recenL years
has been as an addluve ln fracklng.
lracklng uses guar gum Lo lncrease vlscoslLy of Lhe lnlual uld pumped down wells,
followed by LreaLmenL wlLh a guar breaker Lo decrease vlscoslLy and allow hydrocarbons
Lo ow Lhrough Lhe newly formed cracks ln Lhe well. 1hough chemlcal guar breakers llke
chlorlne sources, ammonlum persulfaLe, and hydrochlorlc acld are oen used, Lhe push
Loward more envlronmenLally frlendly alLernauves has lnLensled.
lndusLry lnnovauon
CL Moblle LvaporaLor
162
CL has come up wlLh Lhe
Moblle LvaporaLor, a boller-
on-wheels Lhe slze of a seml
LhaL can be Lowed from well Lo
well and cleans abouL 30
gallons of waLer per mlnuLe by
bolllng lL Lo separaLe ouL
conLamlnanLs. 1he cleaned
waLer can be reused or fed
lnLo waLerways.

lndusLry lnnovauon
PalllburLon CleanSum
163
CleanSum ls a fracklng uld wlLh addluves
made, lL says, almosL enurely of enzymes from
frulL and vegeLable compounds.

PalllburLon won'L dlsclose Lhe new
lngredlenLs, so far used ln 23 wells, calllng
Lhem proprleLary. Pow convlnced ls
PalllburLon of Lhe ellxlr's safeLy?

ln fronL of hundreds of oll and gas execuuves
ln San AnLonlo for Lhe SocleLy of eLroleum
Lnglneers annual conference ln CcLober, CLC
uavld Lesar Look a swlg of CleanSum from a
small [ar. 1here's noL one peLroleum producL
ln lL," he sald. 8uL, he added, lL doesn'L LasLe
very good."
uavld WeLhe, lor lracklng, lL's Cemng Lasler 8elng Creen, 8loomberg 8uslnessWeek, nov. 29, 2012
lndusLry lnnovauon
uslng Acld Mlne uralnage
164
Wlnner WaLer Servlces, a 8auelle subsldlary, runs
a LreaLmenL faclllLy ln Sykesvllle, ennsylvanla LhaL
removes lron from Lhe waLer LhaL ows Lhrough an
abandoned coal mlne. 1he company would llke Lo
sell Lhe waLer Lo fracklng companles.

A's uepL. of LnvlronmenLal roLecuon ls
encouraglng Lhe use of conLamlnaLed waLer
owlng from hundreds of abandoned coal mlnes.
Cver 300 mllllon gallons of conLamlnaLed waLer
ow from Lhe sLaLe's abandoned mlnes every day,
polluung roughly 3,300 sLreams.

A uL, uullzauon of Mlne lnuenced WaLer for naLural Cas LxLracuon Acuvlues, WhlLe aper, !anuary 2013, A uepL. of LnvlronmenLal roLecuon.
8reu WalLon, ennsylvanla Lncourages new Source of WaLer for lracklng - ulscharge from Abandoned Mlnes, Clrcle of 8lue, !uly 23, 2013
Acld mlne dralnage (AMu), as Lhe meLal- and salL-laden waLer ls commonly known, can
be LreaLed and Lhen developed as a source of fracklng waLer. 8y dolng so, Lhe sLaLe
hopes for a double beneL: cumng Lhe ow of conLamlnaLed waLer from mlnes lnLo
rlvers whlle decreaslng Lhe amounL of freshwaLer used ln fracklng.
u.S. ConunenLal Shale lays
163
8U1 kesources = keserves = Supp|y
166
Shale 8esource Skepucs
167
ArLhur L. 8erman, peLroleum geologlsL
and Shale 8esource lndusLry AnalysL
uSA does noL have 100 years of naLural gas.
Less Lhan 22 years of posslble reserves.
Shale gas reserves are over-sLaLed by aL leasL
100.
L& buslness succeeds or falls based on earnlngs
and proL, and noL on producuon growLh,
resource or even reserve addluons
1rue break-even cosL of shale gas ls $7/mcf. rlce
musL rlse above Lhls cosL for companles Lo survlve.
roducuon ls lmpresslve buL mosL wells are noL
proLable.
All plays have conLracLed Lo core areas a fracuon
of Lhe slze of Lhe play as orlglnally adverused.
Shl Lo llquld-rlch shale plays wlll deaLe Lhe gas
over-supply and cause prlces Lo rlse.
LnvlronmenLal problems wlll llmlL Lhe conLrlbuuon
of Lhe Marcellus Shale.

ArLhur L. 8erman, Aer 1he Cold 8ush: A erspecuve on luLure u.S. naLural Cas Supply and rlce, ASC
Conference 2012 vlenna, AusLrla, May 30, 2012
A V|ew from the 8ouom of the kesource yram|d
168
Sllde 3 LabyrlnLh ConsulLlng Servlces, lnc. ASC Conference 2012
A vlew from Lhe boLLom of Lhe resource pyramld
unconvenLlonal plays became
lmporLanL as beLLer plays were
exhausLed.
1here ls no Lechnologlcal
revoluLlon, [usL lmprovemenL
Lhrough exLenslve & expenslve
Lrlal-and-error.
Shale reservolrs wlll noL perform
as well as convenLlonal reservolrs.
Lconomlcs depend on hlgh
prlces.
LxcepL LhaL enLry, drllllng &
compleLlon cosLs are enormous.
And Lhe drllllng Lreadmlll never
ends because of hlgh decllne
raLes.
uemand desLrucLlon wlll llmlL
producL prlce and, Lherefore, Lhe
long end of Lhe unconvenLlonal
producLlon curve.
Shale plays are noL a renalssance or a
revoluLlon. 1hls ls a reLlremenL parLy."
ArLhur L. 8erman, Aer 1he Cold 8ush: A erspecuve on luLure u.S. naLural Cas Supply and rlce, ASC Conference
2012 vlenna, AusLrla, May 30, 2012
Arthur L 8erman
A race between |ncreased pr|c|ng & |mproved techno|ogy
LsumaLed ulumaLe 8ecovery (Lu8)
169
Lu8 ls dened as Lhe LoLal amounL of gas expecLed Lo be economlcally recovered from
a reservolr or eld durlng each well's producuon llfeume.

Llfe Cycle AssessmenL (LCA) sLudles frequenLly hlghllghL Lu8 as a slgnlcanL area of
uncerLalnLy for shale gas wells. Whlle shale wells are expecLed Lo have up Lo a 30-year
llfespan, Lhey only sLarLed Lo be developed ln slgnlcanL numbers ln Lhe lasL decade, so
Lhelr full llfespan ls noL yeL well-undersLood.

LCA resulLs are hlghly sensluve Lo Lu8 because llfe cycle emlsslons are Lyplcally
calculaLed as emlsslons per unlL of energy ouLpuL. Lnergy ouLpuL ls
a dlrecL funcuon of Lhe LoLal volume of naLural gas produced by each well over lLs
llfeume, Lherefore, lf a shale gas well Lurns ouL Lo be less producuve Lhan expecLed,
Lhe llfe cycle emlsslons esumaLes wlll be hlgher ln nearly equal proporuons.
Meanwhlle, mosL upsLream meLhane emlsslons appear Lo occur dlsproporuonaLely
durlng Lhe early sLages of each well's llfeume
key varlable ln esumaung llfe-cycle emlsslons
Lu8 uncerLalnLy
170
SlgnlcanL uncerLalnLy remalns regardlng Lhe LoLal recoverable
quanuLy of naLural gas ln Lhe u.S., and Lhe average Lu8 aL wells ln
each produclng basln. 1hls uncerLalnLy ows down Lo Lhe level of an
lndlvldual well, for example, Lhe mosL recenL assessmenL by Lhe u.S.
Ceologlcal Survey (uSCS 2012) nds LhaL mosL u.S. shale plays have
Lu8s ln Lhe range of 0.7 Lo 1.3 8cf per well.

1hls ls conslderably less Lhan lndusLry esumaLes and less Lhan half Lhe
esumaLes used by prevlous LCA auLhors (1able A2-1). 1hls would
suggesL LhaL LCAs are generally underesumaung average well llfe cycle
emlsslons.

Cn Lhe oLher hand, Loday's Lu8 esumaLes are based on currenL
lnformauon, whlle unexpecLed fuLure Lechnology lmprovemenLs
(unknown knowns) could resulL ln beuer economlcs and hlgher Lu8s.

Summary of parameters |n d|erent
sha|e ] unconvennona| gas stud|es
171
46 |
During well completions, Howarth et al. (2012) assumes zero aring; NETL
assumes a 15 percent aring rate (citing EPAs 2011 technical support
document for subpart W). A recent study by OSullivan and Paltsev (2012)
assumed 70 percent of potential fugitive emissions were captured, 15 percent
vented, and 15 percent ared. The authors argued that this was a reasonable
representation of current gas handling practices in the major shale plays.
Industry representatives have claimed as high as 97 percent of 2011 well
completions were either ared or captured using green completion technolo-
gies (ANGA 2011).
Production stage workovers and liquids unloading
A recent oil and gas industry report (Shires and Lev-On 2012) concluded
that 16 percent of their surveyed unconventional (including shale gas) wells
vented methane in the process of liquids unloading (versus 11 percent for
surveyed conventional wells).
127
While these are fairly high activity rates, the
report assigns much lower emissions to each liquids unloading event, yield-
ing emissions estimates roughly 80 percent lower than 2012 GHG inventory
estimates (EPA 2012a). EPAs draft 2013 GHG inventory cites this industry
survey as the basis for changing assumptions previously held in the 2011
and 2012 GHG Inventoriesnow assuming that liquids unloading occurs at
both conventional and unconventional wells, but with signicantly reduced
associated emissions (EPA 2013a).
There is also uncertainty regarding the frequency in which workovers with
refracturing will be required to stimulate production at the typical unconven-
tional natural gas well. In the TSD for the proposed NSPS, EPA assumed that
refracturing would occur 3.5 times, on average, over the lifetime of uncon-
ventional natural gas wells.
128
However, in the TSD accompanying the nal
NSPS rule (EPA 2012c), EPA assumed that only 30 percent of all uncon-
ventional wells would be refractured during their lifetimes. Of course, these
projections are fraught with uncertainties and based on only a few years of
limited data and experience.
Nevertheless, based on the TSD for the proposed rule,
129
NETL (2012) and
Burnham et al. (2011) assumed multiple well workovers with refracturing
during the production stage, while others assumed zero workovers (see Table
A1). It is common to assume that refracturing during workovers results in
roughly the same GHG emissions as well completions. For example, NETL
and Burnham et al. calculate emissions associated with well workovers by
multiplying the number of workovers per well life-time by the level of emis-
sions associated with well completion. However, this likely overestimates
emissions associated with workovers, since offtake pipes and gathering lines
are always in place when workovers occur (though they may not be in place
when the well is initially developed) and this increases the chances that
operators will use green completions during refracturing operations.
PARAMETER HOWARTH JIANG NETL BURNHAM
Geographic area Barnett, Haynesville,
Piceance tight sand, Uinta
tight sand, Den-Jules
Marcellus Barnett & Marcellus Barnett, Marcellus, Fay-
etteville, Haynesville
EUR, BCF (with range) 2.7 3.13* 3.5 (1.65.3)
GWP (integrated time frame) 20-year = 105
100-year = 33
100-year = 25 20-year = 72
100-year = 25
20-year = 72
100-year = 25
GWP (source) Shindell et al., 2009 IPCC, 2007 IPCC, 2007 IPCC, 2007
Flaring rate for well completions 0 76% 15% 41%
Number of workovers (or refracture)
per well lifetime
0 0 3.5 2
Methane emissions per well
completion (or workover)
95 to 4,608 tons 26 to 1000 tons 177 tons 177 tons
Primary methane emissions
data sources
EPA, GAO, and others EPA EPA EPA
!"#$% '()* + Summary of parameters in different shale / unconventional gas studies
Sources: Howarth et al. 2011; Jiang et al. 2011; NETL 2012; Burnham et al 2011.
Notes: *NETLs EUR value is a simple average of EURs for Marcellus Shale and Barnett Shale, based on data provided in NETLs Table 4-6.
1ab|e A2-1
uSCS Shale Cas Lu8 AssessmenLs
172
!

!"#$% '( !"#$% '(%( )*+ ,-%./(%,' $0%./(%, +,1*2,+3 '.-%+.4$%.*"- )*+ 5".%,' 6%(%,- -7(0,89(- (--,--/,"% $".%-: 2(0$,- ." 4.00.*"- *) 1$4.1
),,% *) "(%$+(0 9(-; <=5: (--,--/,"% $".%> ("' ?5@: ,-%./(%,' $0%./(%, +,1*2,+3A
)*
+,-#%.
)* +"-% /.012+3%
4%".
"55%55%6
72+2-,-
8*9
7%62"+
8*9
7":2-,-
8*9
7%"+
8*9
BCDECFGF H(3",-2.00, 6(4.", I0(%)*+/ 67(0, J(- J$0) K*(-% L,-*M*.1 NCFC C;CN N NC N;GFO
BCDECFGP L.'8Q*--.,+ 6(4.", I0(%)*+/ 67(0, J(- J$0) K*(-% L,-*M*.1 NCFC C;CN F FC F;PCR
BCBRCFGF S**')*+' 67(0, J(- ="('(+T* Q(-." NCFC C;CN C;R FB F;NPP
BCGOCDGR !"%,+.*+ L(+1,00$- =##(0(17.(" Q(-." NCFF C;CN C;R FN F;FBR
BCDECFGO ?(90, U*+' 67(0, J(- J$0) K*(-% L,-*M*.1 NCFC C;CN C;R FC F;FCD
BCGNCPGN U(3,%%,2.00, 67(0, J(- 8 H.97 J(//(8@(3 V,#*1,"%,+ =+T*/( Q(-." NCFC C;CN C;R FC F;FCD
BCDBCFGF J+,(%,+ W,X(+T ?(-% U+(18Q(++.,+ K*"%."$*$- Q(+",%% 67(0, J(- Q,"' =+178U*+% S*+%7 Q(-." NCCP C;CN C;O FC F;CCC
BCDDCFGF V,0(X(+,YI,1*- Q(-."- S**')*+' K*"%."$*$- 67(0, J(- I,+/.(" Q(-." NCCO C;CN C;G R C;RDN
BCDDCFGN V,0(X(+,YI,1*- Q(-."- Q(+",%% K*"%."$*$- 67(0, J(- I,+/.(" Q(-." NCCO C;CN C;G R C;RDN
BCBRCNGF Z7.+%,," U."9,+ [./,-%*",8=%*T( 67(0, J(- ="('(+T* Q(-." NCFC C;CN C;B FC C;ORB
BCGNCNGF S**')*+' 67(0, J(- =+T*/( Q(-." NCFC C;CN C;B FC C;ORB
BCNFCPGD J*%7.1: K7./",3 @*1T: H*2,"X,,# 67(0, J(- I(+('*\ Q(-." NCFF C;CN C;D FC C;GON
BCGPCBGF V,2*".(" ="%+./ K*"%."$*$- J(- L.17.9(" Q(-." NCCD C;CN C;D D C;BNP
BCGNCPGP U(3,%%,2.00, 67(0, J(- 8 S,-%,+" =+T("-(- Q(-." L(+9." =+T*/( Q(-." NCFC C;CN C;P G C;DOC
BCNFCPGN K(", K+,,T 67(0, J(- I(+('*\ Q(-." NCFF C;CN C;P B C;DDG
BCDDCFGP L.'0("' Q(-." S**')*+'YQ(+",%% K*"%."$*$- J(- I,+/.(" Q(-." NCCO C;CN C;P B C;DDG
BCDECFGB L(2,+.1T Q(-." I,(+-(00 67(0, J(- J$0) K*(-% L,-*M*.1 NCFC C;CN C;NB B C;PEF
BCDBCFGN ?\%,"',' K*"%."$*$- Q(+",%% 67(0, J(- Q,"' =+178U*+% S*+%7 Q(-." NCCP C;CN C;N B C;PPD
BCPECOGF W.*4+(+( K7(0T V,"2,+ Q(-." NCCF C;CNB C;N N C;NGF
BCGNCNGN K7(%%("**9( 67(0, J(- =+T*/( Q(-." NCFC C;CN C;F G C;NNP
BCGOCDGO U*0'4,0% L(+1,00$- =##(0(17.(" Q(-." NCFF C;CN C;F B C;NCR
BCGNCPGD K(",3 67(0, J(- =+T*/( Q(-." NCFC C;CN C;CR B C;FOE
BCGOCDGE S,-%,+" L(+9." L(+1,00$- =##(0(17.(" Q(-." NCFF C;CN C;CB B C;FNE
BCGDCPGF V,2*".(" %* L.--.--.##.(" W,X =04("3 K*"%."$*$- J(- !00."*.- Q(-." NCCO C;CF C;CR F C;FFC
BCGOCDGN W*+%7X,-%,+" ]7.* 67(0, =##(0(17.(" Q(-." NCCN C;CF C;CD C;B C;CBB
BCGOCDGP V,2*".(" 6.0%-%*", ("' 67(0, =##(0(17.(" Q(-." NCCN C;CF C;CP C;B C;CDD

uSCS, Var|ab|||ty of D|str|bunons of We||-Sca|e Lsnmated U|nmate kecovery for Connnuous (Unconvennona|) C|| and Gas kesources |n the U.S.,
keport 2012-1118, U.S. Geo|og|ca| Survey. 1A8LL 1
1ab|e 1. lnpuL daLa for esumaLed ulumaLe recovery dlsLrlbuuons for u.S. shale-gas assessmenL unlLs,
values ln bllllons of cublc feeL of naLural gas. [Au, assessmenL unlL, and Lu8, esumaLed ulumaLe recovery]
CLCuu LC1
uSCS Shale Cas Lu8 AssessmenL unlLs (Aus)
173
uSCS, Var|ab|||ty of D|str|bunons of We||-Sca|e Lsnmated U|nmate kecovery for Connnuous (Unconvennona|) C|| and Gas
kesources |n the U.S., keport 2012-1118, U.S. Geo|og|ca| Survey
8

!"#$%&#
The results are presented in Iigures 1 through 4. Each line shows the range oI EURs Ior a
single AU. Only those EURs greater than the minimum assessed value (Ior that particular AU
assessment) are included. Individual AU distributions show approximately two orders oI
magnitude diIIerence between the smallest and largest EURs within a single AU. This range
would be even larger iI the distributions were not truncated.

()*$+" ,- !"#$% '"#( )#* +,-(.% /(0(.1 120".3401 011.115.,( $,-(16 7082 8$*9. *.'*.1.,(1 #,.
011.115.,( $,-( 0,% -1 :01.% #, (2. -,'$( %0(0 -, (0:". ;6 <"08= %-05#,%1 -,%-80(. (2. 5.0, 90"$. )#*
.082 8$*9.6 >?+@ 011.115.,( $,-(A 7+B@ .1(-50(.% $"(-50(. *.8#9.*CA 0,% <!D@ :-""-#,1 #) 8$:-8 )..(E

Seml-log Cloud or Spaghem
ploL for u.S. shale-gas Aus.
Lach curve represenLs one
Au and ls based on Lhe lnpuL
daLa ln Lable 1.

lracules lndlcaLe whaL
percenL of wells have an Lu8
of aL leasL Lhe lndlcaLed
amounL. noLe Lhe Lu8s range
more Lhan Lwo orders of
magnlLude.

1he Lu8 dlsLrlbuuons Lend Lo
collapse" around Lhe mean
(!).
LUk, esumaLed ulumaLe recovery,
8CI, bllllons of cublc feeL]
!8lack dlamonds lndlcaLe Lhe mean value for each curve.
Why 8eserves (Lu8s) are Cver-sLaLed:
uecllne 8aLes are Plgher Lhan AnuclpaLed
174
Sllde 9 LabyrlnLh Consulung Servlces, lnc. SouLh 1exas Money ManagemenL
11.3 of LoLal u.S. supply.
Paynesvllle Shale annual base decllne raLe ls ~33, whlch LranslaLes lnLo ~3.8 8cf/d of gas
producuon LhaL needs Lo be replaced annually" (l1C, 2 lebruary 2012).
Cur work corroboraLes l1C (48 annual decllne raLe, 3.4 8cf/d replacemenL raLe).
Data from DI

0
200
400
600
800
1000
1200
1400
1600
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
5.5
6
J
a
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-
0
8

M
a
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-
0
8

M
a
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-
0
8

J
u
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0
8

S
e
p
-
0
8

N
o
v
-
0
8

J
a
n
-
0
9

M
a
r
-
0
9

M
a
y
-
0
9

J
u
l-
0
9

S
e
p
-
0
9

N
o
v
-
0
9

J
a
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-
1
0

M
a
r
-
1
0

M
a
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-
1
0

J
u
l-
1
0

S
e
p
-
1
0

N
o
v
-
1
0

J
a
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-
1
1

M
a
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-
1
1

M
a
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-
1
1

J
u
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1
1

S
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p
-
1
1

N
o
v
-
1
1

J
a
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-
1
2

N
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o
f

P
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W
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B
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s

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a
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Haynesville Shale Static Decline Profile
Gas Production Number of Producing Wells
48% Annual Decline Rate
Why Reserves are Over-statedDecline Rates are Higher than Anticipated
11.3 of LoLal u.S. gas supply. Paynesvllle Shale annual base decllne raLe ls 48-33,
whlch means 3.8 8cf per day of gas producuon needs Lo be replaced annually.
ArLhur 8erman, LabyrlnLh Consulung Servlces, Aer Lhe Cold 8ush: A erspecuve on luLure u.S. naLural Cas Supply and rlce, presenLed aL SouLh 1exas
Money ManagemenL LLd 7
Lh
Annual Lnergy Symposlum, May 16, 2012
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number of Wells & CosL Lo 8eplace
3.3 8cf/day ln Paynesvllle Shale
173
The Number of Wells & Cost to Replace 3.5 Bcf/day in the Haynesville Shale
3.3
7
0
0.3
1
1.3
2
2.3
3
3.3
4
4.3
3
3.3
6
6.3
7
7.3
800 1230
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Number of New roduc|ng We||s
New We||s & Cost 1o Add 3.S 8cf]day naynesv|||e roducnon
$2.3 Billion
per Bcf/d

Total Cost:
$8 Billion
$3.6 Billion
per Bcf/d

Total Cost:
$13 Billion
Jan 2008 - Jun 2010
Jul 2010 - Sep 2011
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800 1230
number of new produclng wells
Lh
8ed Cueen Syndrome
.lt tokes oll tbe toooloq yoo coo
Jo, to keep lo tbe some ploce.
3.3
7
8arneu Shale Cas roducuon decllne
176
8arneu Shale roducuon
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
0
1
2
3
4
5
6
7
J
a
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-
0
3

A
p
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-
0
3

J
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-
0
3

O
c
t
-
0
3

J
a
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-
0
4

A
p
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-
0
4

J
u
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-
0
4

O
c
t
-
0
4

J
a
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-
0
5

A
p
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-
0
5

J
u
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-
0
5

O
c
t
-
0
5

J
a
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-
0
6

A
p
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-
0
6

J
u
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-
0
6

O
c
t
-
0
6

J
a
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-
0
7

A
p
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-
0
7

J
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-
0
7

O
c
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-
0
7

J
a
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-
0
8

A
p
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-
0
8

J
u
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-
0
8

O
c
t
-
0
8

J
a
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-
0
9

A
p
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-
0
9

J
u
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-
0
9

O
c
t
-
0
9

J
a
n
-
1
0

A
p
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-
1
0

J
u
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-
1
0

O
c
t
-
1
0

J
a
n
-
1
1

A
p
r
-
1
1

J
u
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-
1
1

O
c
t
-
1
1

J
a
n
-
1
2

N
u
m
b
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o
f

W
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l
s

B
i
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l
i
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s

o
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C
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Barnett Shale Natural Gas Production
Gas Number of Wells
CurrenL producuon appears Lo be ln decllne desplLe addlng new wells.
9 of u.S. supply.
30 rlgs drllllng, down from 183.
1230 new produclng wells were added ln lasL 12 monLhs.

Data from DI

9 of u.S. gas supply. CurrenL producuon appears Lo be ln decllne
desplLe addlng new wells. 1230 new produclng wells added ln 2011.
30 rlgs drllllng, down from 183.
8
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Lh
8arneu Shale - Why 8eserves over-sLaLed
& decllne raLes hlgher Lhan anuclpaLed
177
30 annual decllne raLe. MusL replace 1.6 8cf per day Lo
malnLaln supply. uevon Lnergy- Lhe largesL operaLor ln Lhe
8arneu - announced LhaL lL wlll drlll no dry gas wells.
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Lh
5.33
3.68
0
2000
4000
6000
8000
10000
12000
14000
0
1
2
3
4
5
6
J
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3

A
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0
3

J
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3

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3

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4

A
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4

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4

O
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4

J
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5

A
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5

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5

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5

J
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6

A
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6

J
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6

O
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-
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6

J
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-
0
7

A
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-
0
7

J
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-
0
7

O
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-
0
7

J
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-
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8

A
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-
0
8

J
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-
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8

O
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-
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8

J
a
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-
0
9

A
p
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-
0
9

J
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-
0
9

O
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-
0
9

J
a
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-
1
0

A
p
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-
1
0

J
u
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-
1
0

O
c
t
-
1
0

J
a
n
-
1
1

A
p
r
-
1
1

J
u
l
-
1
1

O
c
t
-
1
1

N
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b
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o
f

P
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g

W
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s

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a
y

Barnett Shale Static Decline Profile
Gas Production Number of Producing Wells
30 annual decllne raLe.
MusL replace 1.7 bcf/d per year Lo malnLaln supply.
uevon Lnergy-Lhe largesL operaLor ln Lhe 8arneu-announced LhaL lL wlll drlll no dry gas wells
ln 2012.
Data from DI
Why Reserves are Over-statedDecline Rates are Higher than Anticipated
number of Wells & CosL Lo 8eplace
1.7 8cf/day ln 8arneu Shale
178
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2380 2336
number of new produclng wells
Lh
8ed Cueen Syndrome
.lt tokes oll tbe toooloq yoo coo
Jo, to keep lo tbe some ploce.
The Number of Wells & Cost to Replace 1.7 Bcf/day in the Barnett Shale
1.7
3.3
3.1
0
0.3
1
1.3
2
2.3
3
3.3
4
4.3
3
3.3
2380 2336 4900
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Number of New roduc|ng We||s
New We||s & Cost to Add 1.7 8cf]d 8arneu roducnon
$4.2 Billion
per Bcf/d

Total Cost:
$7.1 Billion
$4.5 Billion
per Bcf/d

Total Cost:
$7.7 Billion
$9 Billion
per Bcf/d

Total Cost:
$15.3 Billion
Jan 2003 - Jan 2007
Feb 2007 - Feb 2008
Mar 2008- Dec 2010
4900
1.7
3.3
3.1
1oLal u.S. uecllne 8aLes Pave lncreased
Slnce Lhe AdvenL of Shale Cas lays
179 ArLhur 8erman, LabyrlnLh Consulung Servlces, Aer Lhe Cold 8ush: A erspecuve on luLure u.S. naLural Cas Supply and rlce, presenLed aL SouLh 1exas
Lh
!"#$% '( )*+,-#./0 12.34"5.6 !%-7#8%39 :.8; !24/0 <%=*3 >2.%, >*.*6%?%./
0
10
20
30
40
50
60
70
2000 2002 2004 2006 2008 2010
B
c
f
p
e
r
d
a
y
Steepening DecIine Curves
ncreasing Drilling Productivity is Required to Grow Top Line Production
23% annuaI
decIine rate
32% annuaI
decIine rate
Total U.S. Decline Rates Have Increased Since the Advent of Shale
Gas Plays
:. @AA'9 *..4*" $%8"#.% -*/% B2- C;!; .*/4-*" 6*3 D-2$4852. E*3 @FG;
H2E9 *..4*" $%8"#.% -*/% #3 F@G;
Source: ARC Financial Research
8
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MalnLenance CaplLal &
Cash llow Cenerauon
Lh
MalnLenance CaplLal and Cash llow Cenerauon
Analysls of Lop 34 publlcly Lraded gas producers lndlcaLes LhaL Lhe cosL of
replacemenL ls $22 bllllon per quarLer.
2010 cash ow for Lhose companles was $12 bllllon per quarLer so Lhere ls a $10
bllllon quarLerly cash ow declL.
Analysls of Lop 34 publlcly Lraded gas producers lndlcaLes LhaL Lhe cosL of
replacemenL ls $22 bllllon per quarLer. 2010 cash ow for Lhose companles
was $12 bllllon per quarLer so Lhere ls a $10 bllllon quarLerly cash ow declL.
Capex Lo Cash llow 8auos
Lh
unsusLalnable caplLal
expendlLures wlll llmlL capablllLy
Lo dellver on supply. Servlce
cosL wlll compound Lhls
llmlLauon. lurLher consLralns
on cosL-of-caplLal wlll llmlL
opuons."

ArLhur L. 8erman, peLroleum
geologlsL and Cll&Cas lndusLry
analysL
Capex-Lo-Cash llow 8auos
Unsustainable capital expenditures will limit capability to deliver on supply.
Service cost acceleration will compound this limitation.
Further constraints on cost-of-capital will limit options.
1lcker
Share rlce
as of
04/10/12 MkL Cap ($8) Lv ($8)
1-?ear
Change ln
rlce roducLlon 4C11 (kboepd)
Cas as of
roducLlon
Cash
Margln
($/boe)
uebL Lo
1oLal Cap Capex-Lo-Cash llow
(?ahoo llnance)
C8k $13.43 $0.70 $1.90 -48 46 92 $17.32 34 769
C8ZC $26.09 $1.00 $1.70 -28 22 86 $21.32 39 342
A1C $6.63 $0.30 $2.70 -60 23 34 $28.70 96 417
xCC $6.02 $1.30 $3.10 -71 92 98 $13.19 33 336
uL $19.31 $3.00 $4.90 -60 121 97 $22.10 34 318
kWk $4.41 $0.70 $2.60 -67 69 82 $7.82 63 304
vA $3.93 $0.20 $0.90 -73 19 63 $32.73 43 302
Mu8 $31.98 $10.10 $9.60 -31 192 42 $46.30 6 286
x $40.30 $3.20 $8.40 16 103 30 $26.70 34 282
lS1 $11.33 $1.30 $3.00 -68 37 70 $18.99 39 282
MM8 $8.83 $1.40 $2.10 -30 28 66 $24.17 22 214
SM $64.38 $4.10 $3.00 -10 93 36 $29.21 40 203
C $3.66 $0.40 $0.30 -33 13 83 $14.31 40 196
88C $36.79 $9.00 $10.90 1 104 79 $23.80 46 193
n8L $93.16 $16.30 $19.30 -2 233 60 $34.47 36 189
CxC $96.29 $9.90 $12.00 -7 71 38 $48.33 41 186
88C $22.74 $1.10 $1.90 -43 33 90 $24.62 42 186
Cu $13.33 $0.60 $1.10 -29 18 86 $11.01 80 181
CPk $20.69 $13.20 $28.20 -38 399 82 $21.63 37 180
CCC $30.63 $6.40 $7.30 17 99 94 $18.91 31 176
un8 $17.80 $6.90 $9.40 -24 67 6 $62.47 36 173
8CSL $47.03 $2.30 $2.70 3 32 31 $28.00 27 164
Sl? $27.12 $1.20 $1.60 -34 29 49 $34.33 42 161
SWn $29.30 $10.20 $11.30 -26 242 100 $16.39 23 146
LCC $104.00 $28.00 $32.40 -8 442 38 $33.96 28 144
nlx $33.09 $4.40 $7.30 -34 144 36 $32.26 43 144
xLC $69.19 $3.90 $6.30 -39 100 36 $30.94 11 136
CWLl $72.99 $0.90 $1.40 -26 13 24 $73.10 61 132
88? $44.20 $2.40 $3.80 -13 36 28 $37.92 62 126
CL $3.32 $0.20 $0.30 -20 3 42 $46.36 37 124
xu $103.12 $12.90 $13.10 3 137 44 $31.02 31 122
uvn $68.94 $27.90 $30.60 -23 680 63 $23.07 31 100
Cx? $89.61 $72.70 $74.80 -11 749 28 $30.89 13 96
W1l $18.34 $1.40 $2.10 -16 30 32 $33.73 37 80
AA $93.30 $33.90 $44.10 -26 739 30 $43.21 20 66
AC $74.63 $37.70 $32.30 -8 683 37 $31.18 46 32
WLL $31.17 $6.00 $7.40 -28 71 16 $31.16 31 3
CnC $31.29 $34.20 $42.70 -31 380 33 $43.16 27 n/A
CvL $33.38 $23.10 $30.40 -11 231 47 $28.06 27 n/A
LCA $18.19 $13.30 $19.00 -43 600 96 $17.29 33 n/A
1LM $12.18 $12.30 $17.30 -47 362 39 $31.72 33 n/A
Source: Bernstein Research
& Yahoo Finance
Source: 8ernsLeln 8esearch &
?ahoo llnance
Abundance or mlrage? Why Lhe Marcellus
Shale wlll dlsappolnL expecLauons
182
Industry ana|yst Arthur 8erman argues, "Sha|e gas p|ays |n the U.S. are
commerc|a| fa||ures and shareho|ders |n pub||c exp|oranon and producnon (L&)
compan|es are the |osers.

1h|s conc|us|on fa||s out of a deta||ed eva|uanon of sha|e-dom|nated company
hnanc|a| statements and |nd|v|dua| we|| dec||ne curve ana|yses.

Cperators have ma|nta|ned the |||us|on of success through producnon and
reserve growth subs|d|zed by debt w|th a correspond|ng destrucnon of
shareho|der equ|ty. Many be||eve that the h|gh |n|na| rates and cumu|anve
producnon of sha|e p|ays prove the|r success.

What they m|ss |s that producnon dec||ne rates are so h|gh that, w|thout
connnuous dr||||ng, overa|| producnon wou|d p|ummet. 1here |s no doubt that
the sha|e gas resource |s very |arge. 1he concern |s that much of |t |s non-
commerc|a| even at pr|ce |eve|s that are cons|derab|y h|gher than they are
today."
ArLhur L. 8erman, Abundance or mlrage? Why Lhe Marcellus Shale wlll dlsappolnL expecLauons, ASC uSA, CcLober 08, 2010
Abundance or mlrage?
183
8erman exp|a|ns, "8ecenL revlslons Lo SLC rules have allowed producers Lo book
undeveloped reserves LhaL quesuonably [usufy developmenL cosLs based on Lhelr
own pro[ecuons ln publlc llngs.
new reserves are belng booked aL Lhe same ume LhaL bllllons of dollars ln exlsung
shale gas developmenL cosLs are belng wrluen down because Lhe pro[ecLs are noL
commerclal. Concerns abouL Lhe loglc of ongolng gas-dlrecLed drllllng whlle prlces
collapse have been parLly dlused by a shl Lo llqulds-rlch plays llke Lhe Lagle lord
Shale ln 1exas. Shale gas operaLors have conslsLenLly Lold lnvesLors LhaL Lhelr
pro[ecLs are proLable aL sub-$3/Mcf naLural gas prlces.
?eL company 10-k SLC llngs show LhaL Lhls ls unLrue. 1hey have lnvenLed a new
calculus of parual-cycle economlcs LhaL excludes ma[or caplLal draws for land cosLs,
lnLeresL expense and overhead. 1hey [usufy Lhese dlsclosure pracuces because
excluded cosLs are elLher sunk or xed and, Lherefore, supposedly should noL aecL
Lhelr declslons Lo drlll. 1helr polnL-forward plans are made aL shareholder expense
slnce Lhe dollars spenL were very real aL Lhe ume, and Lhelr cosLs cannoL be charged
Lo a proL cenLer oLher Lhan Lhe wells LhaL Lhey drlll and produce."
ArLhur L. 8erman, Abundance or mlrage? Why Lhe Marcellus Shale wlll dlsappolnL expecLauons, ASC uSA, CcLober 08, 2010
Abundance or Mlrage?
184
A mulu-year evaluauon of
producuon cosLs for Len shale
operaLors lndlcaLes a $7 per Mcf
(Lhousand cublc feeL) average break-
even cosL for shale gas plays ln Lhe
u.S. Laklng hedglng lnLo accounL.

rlce musL rlse Lo meeL Lhe Lrue
break-even cosL, yeL $4/Mcf ls
forecasL unul 2020.
!"#$% ' ()*+,#-./ 01-23"4-5 !%,6#7%28 9-7: ;3<% =-#6%,2#.+ >#7/1")2 !7/11" 1? ./% @-6#,1-A%-.
Cost is Understated: The True Break-Even Price is $7.00/mcf
BC:CC
BD:CC
BE:CC
BF:CC
BG:CC
BHC:CC
BHD:CC
BHE:CC
BHF:CC
Selected Company 5 Year Imputed Production Costs/
Mcfe
Weighted Realized Price/Mcfe with Hedges 5 Year Calculated "Break-Even" Price
Claims of profitability at less than $5.00 /mcfg are based largely on point-forward
economics at odds with costs reported to the Securities and Exchange
Commission in 10-K filingsall sunk costs written off.
Price must rise to meet the true break-even cost.
Several executives have recently said that $6/mcf is a minimum threshold to
justify more drilling.

Source: Company Reports
$7/mcf avg.
fi gure data
fi gure data
U.S. natural gas prices have remained relatively low over
the past several years as a result of abundant domestic
supply and ef f icient methods of production. However, the
cost of developing new incremental production needed to
support continued growth in natural gas consumption and
exports rises gradually in the Ref erence case,
leading to an increase in the Henry Hub spot price. Henry
Hub spot prices f or natural gas increase by an average of
about 2.4 percent per year, to $7.83 per million Btu (2011
dollars) in 2040 (Figure 86).
As of January 1, 2011, total proved and unproved U.S.
natural gas resources (total recoverable resources) were
estimated to total 2,327 trillion cubic f eet. Over time,
however, the depletion of resources in inexpensive areas
leads producers to basins where recovery of the gas is
more dif f icult and more expensive, causing the cost of production to rise gradually.
n the Ref erence case, natural gas prices remain low at the beginning of the projection period,
as producers continue to extract natural gas resources f rom the most productive and inexpensive areas.
Drilling activity remains robust despite the relatively low prices (below $4 per million Btu), particularly as
producers extract natural gas f rom areas with high contents of NGL or oil. Prices begin to rise af ter 2015, and
they continue rising in the projection through 2040.
Energy f rom nat uraI gas remains f ar Iess expensive t han energy f rom oiI t hrough 2040
The ratio of oil prices to natural gas prices is def ined in
terms of the Brent crude oil price and the Henry Hub spot
natural gas price on an energy-equivalent basis. U.S.
natural gas prices are determined largely on a regional
basis, in response to supply and demand conditions in
North America. Oil prices are more responsive to global
supply and demand. A 1:1 ratio indicates that crude oil and
natural gas cost the same in terms of energy content. On
that basis, crude oil remains f ar more expensive than
natural gas through 2040 (Figure 87), but the dif f erence in
the costs of the two f uels narrows over time.
With rising demand and production costs, both crude oil
and natural gas prices increase through 2040; however,
the oil price rises more slowly than the natural gas price,
bringing the oil-to-gas price ratio down f rom its 2012 level.
Low natural gas prices, the result of abundant domestic supply and weak winter demand,
combined with high oil prices, caused a sharp rise in the oil-to-gas price ratio in 2012.
ArLhur L. 8erman, Abundance or mlrage?
Why Lhe Marcellus Shale wlll dlsappolnL
expecLauons, ASC uSA, CcLober 08, 2010
LlA, MarkeL 1rends-naLural Cas 2013
Well Llfe, nv and Lu8 - overhyped?
183
1he hlgh shale gas reserve
forecasLs by operaung
companles are based on long
lndlvldual well llves of as
much as 63 years.

ln Lhe 8arneu Shale, wells
were grouped by Lhe year of
compleuon and evaluaLed
based on currenL monLhly
gas producuon.
yellow, or cooler, colors show areas of poorer production. The map shows extreme heterogeneity
within the core area where high Barnett production volumes are unevenly distributed and many
non-commercial wells have been drilled adjacent to excellent wells. The claim of repeatable and
uniform results by the shale play promoters cannot be supported by case histories to date. We
contend that the factory model is not appropriate because the geology of these plays is more
complex than operators claim.
Well Life, NPV and EUR
The high shale gas reserve forecasts by operating companies are based on long individual well
lives of as much as 65 years. In the Barnett Shale, wells were grouped by the year of completion
and evaluated based on current monthly gas production. The percentage of wells from each
group that are currently producing less than 1 million cubic feet of gas per month is shown in
Figure 9. This gas volume only covers the cost of well compression assuming $5/Mcf without
royalty payments or other costs. In other words, 25-35% of wells drilled over the past six or
seven years are not paying for the cost of compression so what is the justification for 40-65 years
of advertised commercial production?

When we examined Chesapeake Energys type curve for the Barnett Shale and assumed that all
parameters were correct--initial production rate, decline rate, well life, etc.--we found that most
of the discounted net present value (NPV10) occured in the first five years and that there is
negligible value after Year 20 (Figure 10). The type curve, however, forecasts about half of the
reserves in years 20 through 65. Since these volumes have no discounted value, reserves are
1hls gas volume only covers Lhe cosL of well compresslon assumlng $3/Mcf
wlLhouL royalLy paymenLs or oLher cosLs. ln oLher words, 20-33 of wells drllled
over Lhe pasL slx or seven years are noL paylng for Lhe cosL of compresslon so
whaL ls Lhe [usucauon for 40-63 years of adverused commerclal producuon?
ArLhur 8erman, u.S. Shale Cas: Maglcal 1hlnklng & 1he uenlal of uncerLalnLy, !an. 12, 2012, presenLauon aL uuke unlv. nlcholas School of Lhe LnvlronmenL.
ercenLage of wells from each group LhaL are currenLly
produclng less Lhan 1 mllllon cublc feeL of gas per monLh.
8arneu morLallLy raLe casLs doubL on
40-63 year well llfe
186
!"#$% '( )*+,-#./0 12.34"/#.5 !%-6#7%38 9.7: ;;<= 9./%-.*/#2.*" 12.>%-%.7% ? @A0#+#/#2. B('(
ProbabiIistic methods for EUR and economics
C(D
CCD
CED
CFD
CGD
BFD
'GD
'CD 'CD
ED
(D
HD
'(D
'HD
B(D
BHD
C(D
CHD
F(D
FHD
B((( B((' B((B B((C B((F B((H B((I B((G B((E B((J
!
"
#
$
"
%
&
(
)
*
"
++,

-
&
.
$
(
%
(
/
0$

1
0/
0&
2 -
3
4
%
5
(
%
"
5

(
#
6
#
7
8(/9+"&0(% :"4#
;4#%"&& *"++, -& .$(%(/0$ 10/0&
Reserves based on very long well lives that assume flat decline rates.
Barnett examples based on cumulative production show that EUR
estimates are improbable in a time frame where NPV is meaningful.
Barnett mortality rate casts doubt on 40-65 year well life.
8eserves based on very long well llves LhaL assume aL decllne raLes. 8arneu examples
based on cumulauve producuon show LhaL Lu8 esumaLes are lmprobable ln a ume
frame where nv ls meanlngful.
ArLhur L. 8erman, Aer 1he Cold 8ush: A erspecuve on luLure u.S. naLural Cas Supply and rlce, ASC Conference 2012 vlenna, AusLrla, May 30, 2012
Average 8arneu Sha|e hor|zonta| we|| cumu|anve producnon by operator
uaLe ls normallzed Lo Lhe rsL monLh of producuon
Cumulauve roducuon (8cf)
8ange of Lu8 Clalmed by Ma[or CperaLors
8arneu Wells aL Lconomlc LlmlL
Compleuon year

o
f

w
e
l
l
s

a
L

e
c
o
n
o
m
l
c

l
l
m
l
L
,

a
b
a
n
d
o
n
e
d

o
r

d
r
y

lnaccuracy of 1ype Curve: Paynesvllle
Shale and normallzed producuon daLa
187
Months from start of producnon
M
o
n
t
h
|
y

g
a
s

r
a
t
e

M
s
c
f

Chesapeake Lnergy's Lype curve for
Lhe Paynesvllle Shale, predlcung
average well producuon (Lu8) of
6.3 8cf gas reserves.

1he dlerence lles ln forecasung
fuLure decllne Lrends, parucularly
Lhe hyperbollc b exponenL.

1ype curves don'L work because of
survlvorshlp blas. Lmphasls on
mean ln a hlghly varlable and small
populauon commonly over-predlcL
by 30.
Pyperbollc exponenLs
188
Pyperbollc exponenLs cannoL be whaLever
we llke. 1he maLch wlLh wells LhaL have 12
monLhs or more of producuon ls good.
1he problem lles ln how fuLure decllne
Lrends are pro[ecLed and whaL hyperbollc
exponenLs (curvaLure or b-facLor) are
assumed.
Pow Lhese wells wlll decllne only ume wlll
Lell. 8euer Lo presenL a probablllsuc range of
posslble reserves raLher Lhan a xed value.
1hls lmplles greaLer uncerLalnLy and greaLer rlsk Lhan operaLors represenL. Companles
should use an lnLermedlaLe hyperbollc exponenL (as recommended by SocleLy of eLroleum
Lnglneers peer-revlewed papers) Lo pro[ecL reserves and revlse Lhem upward or downward
laLer when producuon has sLablllzed.

uslng a hyperbollc exponenL of 0.3, Chesapeake's average well wlll produce 3.0 8cf based
on Lhelr Lype curve, whlch ls noL commerclal aL $7.00/Mcf. lor repuLable companles Lo say
LhaL Lhe leasL llkely case (b 1.1) ls Lhe mosL llkely case does noL prudenLly represenL
uncerLalnLy.
Lu8 ls noL nv
189
Shale play promoLers consLanLly Lry Lo dlverL auenuon and analysls from currenL plays
Lo newer plays. newer plays have less daLa Lo analyze and, Lherefore, reserve clalms
are more dlmculL Lo quesuon.

8ecause Lhe 8arneu and layeuevllle shale plays have under-performed expecLauons,
a few years laLer Lhe emphasls shled Lo conslder Lhe fuLure poLenual of Lhe
Paynesvllle Shale play.

now LhaL Lhe Paynesvllle looks dlsappolnung, Lhe emphasls ls shllng Lo conslder Lhe
Marcellus Shale play. And wlLh Lhe shl Lo llqulds-rlch plays llke Lhe Lagle lord Shale,
promoLers LhaL sold Lhe under-performlng plays ln Lhe pasL emphaslze Lhls ume lL wlll
be dlerenL.

1here appear Lo be a hosL of forelgn lnvesLmenL companles LhaL may provlde caplLal
for Lhe shale plays now LhaL operaLor debL has reached exLreme levels, and mosL
avallable asseLs have been sold aL conslderable damage Lo shareholders.

Maglcal Lhlnklng
190
A Lremendous amounL of caplLal has been beL
on shale and much of Lhls ls ln Lhe form of debL.
1here ls very llule shale producuon hlsLory so
Lhe ouLcome ls uncerLaln.
lL ls unclear LhaL shale gas producuon wlll
supporL even shorL-Lerm expecLauons of
abundance.
CaplLal expendlLures exceed cash ow for mosL
companles.
lull-cosL and o-book accounung mask Lhe weak
performance of mosL shale-domlnaLed
companles.
1here ls greaL uncerLalnLy abouL reserves, and
mosL are undeveloped.
?eL, Lhe prevalllng vlew ls LhaL success ls cerLaln.
1here are conslderable rlsks ln maglcal Lhlnklng.
"1hls ls an lndusLry LhaL ls
caughL ln Lhe grlp of maglcal
Lhlnklng," ArLhur 8erman says.

"ln facL, when you look aL Lhe
level of debL some of Lhese
companles are carrylng, and
Lhe quesuonable value of Lhelr
gas reserves, Lhere ls a loL ln
common wlLh Lhe subprlme
morLgage markeL [usL before lL
melLed down."
191
kk's goa| |s to
reduce
CC
2
em|ss|ons
|ntens|ty to
0.4S tons (990
|bs) per MWh
by 202S
Current and Future Technologies Ior NGCC Power Plants
11
Exhibit ES-8 CO2 emission rates

Source: NETL
780.2
89.3 88.1
732.8
83.7 84.3
714.7
80.8 79.7
686.3
77.0 76.3
760.3
81.6 80.7
734.3
78.6 77.8
698.8
74.6
73.9
672.4
71.3 71.1
0
100
200
300
400
300
600
700
800
900
1000
1100
7lA.03 7lA.03 CCS 7lA.03 CCS
LC8
P-frame P-frame
CCS
P-frame
CCS LC8
!-frame !-frame CCS !-frame CCS
LC8
AdvluLure AdvluLure
CCS
AdvluLure
CCS LC8
!
"
#
$
%
&
'
'
&
(
)
'

+
,
-
.
/
0
1
2
CC2 Lmlsslons (lb/MWhneL)
CC2 Lmlsslons (lb/MWhgross)
nL1L, CurrenL and luLure 1echnologles for naLural Cas Comblned Cycle (nCCC) ower lanLs, !une 10, 2013, nauonal
Lnergy 1echnology Lab, uS uL, uCL/nL1L-341/061013

GL 7IA.0S
I frame
S|emens 8000 n
n frame
MnI
I frame
Iuture advanced
k frame*
luLure advanced x frame assumes Lhe 7lA.03 model wlLh ouLpuL 90 more & heaL raLe ls 13 beuer.
1hls Lurblne would requlre lmprovemenLs ln maLerlals & coollng Lechnologles Lo become feaslble.

ower generanon eet goa| |n 202S
3 NGCC p|ants operanng today, & 4
th
one |n deve|opment
(w|thout CCS and w|th further CC
2
reducnons w] CCS)
192
kk's goa| |s to
reduce
CC
2
em|ss|ons
|ntens|ty to
0.4S tons (990
|bs.) per
MWh by
202S.
Current and Future Technologies Ior NGCC Power Plants
11
Exhibit ES-8 CO2 emission rates

Source: NETL
780.2
89.3 88.1
732.8
83.7 84.3
714.7
80.8 79.7
686.3
77.0 76.3
760.3
81.6 80.7
734.3
78.6 77.8
698.8
74.6
73.9
672.4
71.3 71.1
0
100
200
300
400
300
600
700
800
900
1000
1100
7lA.03 7lA.03 CCS 7lA.03 CCS
LC8
P-frame P-frame
CCS
P-frame
CCS LC8
!-frame !-frame CCS !-frame CCS
LC8
AdvluLure AdvluLure
CCS
AdvluLure
CCS LC8
!
"
#
$
%
&
'
'
&
(
)
'

+
,
-
.
/
0
1
2
CC2 Lmlsslons (lb/MWhneL)
CC2 Lmlsslons (lb/MWhgross)
nL1L, CurrenL and luLure 1echnologles for naLural Cas Comblned Cycle (nCCC) ower lanLs, !une 10, 2013, nauonal
Lnergy 1echnology Lab, uS uL, uCL/nL1L-341/061013.

GL 7IA.0S
I frame
So|ar V
Large w|nd
turb|ne
ower generanon eet goa| |n 202S
Lnd-use
emc|ency
Least-r|sk opnons - two a|ready
compennve w|th natura| gas
No fue|s, near-zero em|ss|ons, near-
zero water use
lCC, 2011: lCC Speclal 8eporL on 8enewable Lnergy Sources and CllmaLe Change Mlugauon. repared by Worklng Croup lll of Lhe lnLergovernmenLal
anel on CllmaLe Change [C. Ldenhofer, 8. lchs-Madruga, ?. Sokona, k. SeyboLh, . MaLschoss, S. kadner, 1. wlckel, . Llckemeler, C. Pansen, S.
Schlmer, C. von SLechow (eds)]. Cambrldge unlverslLy ress, Cambrldge, unlLed klngdom and new ?ork, n?, uSA, 1073 pp. (ChapLer 7 & 9).
VS
Lower 8lsk
roLs &
Larnlngs lays?
193
locus on reurlng & replaclng
Lhe energy servlces from Lhe
230 CW of operaung coal
power planLs.

8ld Lo dellver power servlces aL
lower cosL and lower rlsk
Lhrough long-Lerm As.

Lmclency power planLs for
replaclng coal planLs wlLh
lowesL C&M cosLs, and wlnd
and solar v for coal planLs wlLh
hlghesL C&M cosLs.
LmclenL ower lanLs - core Lo smarL
neLworks for real-ume dynamlcally
ucLuaung load managemenL
194
De||ver|ng power serv|ces w|th 8|tW|ts (d|g|ta| know|edge),
|nstead of atoms & mo|ecu|es (natura| resources)
193

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RESULTS AND DISCUSSION OF WATER

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