Environmental risks, opportunities and regulatory challenges in the US and Europe: European perspective

1. Environmental risks, opportunities and
regulatory challenges in the US and
Europe:
European perspective
Mark Broomfield, AEA Technology, UK

3. Overview of presentation
Setting the scene
Environmental and health risks of unconventional gas
extraction
• Literature review; stakeholder consultation
• Preliminary risk assessment
Review of control options
• Environmental risk management
• Carbon footprint: fugitive methane control
European regulatory landscape
• Existing acquis
• Gap analysis
• Options assessment
Next steps
• European Commission research
• Supply chain analysis

4. Setting the scene
Stage 1: Stage 2: Stage 3:
Site Well design, Technical
identification drilling, casing & hydraulic
& preparation cementing fracturing
Stage 4: Stage 5: Stage 6:
Well completion, Well production Well
management of (refracturing may abandon-
wastewater be carried out) ment

5. Setting the scene
Energy resources
• 25% of Europe’s energy needs supplied by natural gas in 2008
• Substantial shale gas resources
High volume hydraulic fracturing
• New activity in Europe
• Defined as >1,000 m3 fluid per stage
HVHF in Europe
• Introduced in Europe in the early 1980s.
• Multi-stage hydraulic fracturing in tight gas reservoirs in horizontal
wells in the Soehlingen field in Germany, and in the South Arne field
in Denmark
• Hydraulic fracturing has been carried out elsewhere in Germany, the
Netherlands and the United Kingdom
• These fracturing operations did not use sufficient fluid to be classified as
HVHF.
• Exploratory drilling for shale gas with hydraulic fracturing in
Germany, Poland and the UK commenced in 2010.

6. Setting the scene
European Commission Context
• February 2011: European Council concluded that Europe should assess its
potential for sustainable extraction and use of conventional and
unconventional fossil fuels.
• 2011 report commissioned by the European Parliament drew attention to the
potential health and environmental risks associated with shale gas.
• Half of EU Member States are interested in developing shale gas resources
• However, several MS have prohibited, or are considering prohibiting, the use
of hydraulic fracturing.
• Several EU Member States are considering the appropriateness of national
legislation, and may introduce national requirements for hydraulic fracturing.
• Commission saw a growing need for a coherent approach to unconventional
fossil fuels and in particular shale gas developments in an area where
economics, finances, environment and in particular public trust are essential.
• The Commission is investigating the impact of unconventional gas, primarily
shale gas, on EU energy markets
• DG ENV commissioned an initial assessment of the environmental and
health risks and impacts associated with the use of hydraulic fracturing.
• Concurrent research into carbon footprint commissioned by DG CLIMA

7. Environmental and health risks
Literature review
• Focus on peer-reviewed research where
available
• Fast-moving area of engineering and science
• Over 200 documents referenced, but many
common data sources
• Some key documents:
• Draft New York State DEC SGEIS (2011)
• Lechtenböhmer et al for European Parliament
(2011)
• Broderick et al (Tyndall Centre) (2011)
• US EPA Drinking water study plan (2011)
• Academic studies of specific issues (e.g. Davies et
al. 2012; Considine et al. 2012)
• API guidelines HF1, HF2, HF3
• Papers published by Society of Petroleum
Engineers
• IEA Golden Rules; Empfehlungen des Neutralen
Expertenkreis

8. Environmental and health risks
Stakeholder consultation
• Engaged with a range of specialists from Europe and North
America
• Regulators
• Geological surveys
• Academic specialists
• Useful feedback in specific areas
• Peer review of final report

9. Environmental and health risks
Project phase
Environmental Site Well design Well Overall rating
aspect identification drilling, Well abandonment
Fracturing Production across all
and casing, completion and post- phases
preparation cementing abandonment
Individual site
Groundwater Moderate-
Not applicable Low High Moderate-High Not classifiable High
contamination High
Surface water Moderate-
Low Moderate High Low Not applicable High
contamination High
Water Not Not
Not applicable Moderate Moderate Not applicable Moderate
resources applicable applicable
Release to air Low Moderate Moderate Moderate Moderate Low Moderate
Not Not Not
Land take Moderate Moderate Not classifiable Moderate
applicable applicable applicable
Risk to Not classifiable Low Low Low Moderate Not classifiable Moderate
biodiversity
Not Moderate –
Noise impacts Low Moderate Moderate Low Not applicable
classifiable High
Not
Visual impact Low Low Low applicable Low Low-moderate Low - Moderate
Not
Seismicity Not applicable Low Low Not applicable Not applicable Low
applicable
Traffic Low Low Moderate Low Low Not applicable Moderate

10. Environmental and health risks
Project phase
Environmental Site Well design Well Overall rating
aspect identification drilling, Well abandonment
Fracturing Production across all
and casing, completion and post- phases
preparation cementing abandonment
Cumulative
Groundwater Moderate-
Not applicable Low High High Not classifiable High
contamination High
Surface water Moderate- Not
Moderate Moderate High Moderate High
contamination High applicable
Water Not Not Not
Not applicable High High High
resources applicable applicable applicable
Release to air Low High High High High Low High
Not Not Not
Land take Very high High Not classifiable High
applicable applicable applicable
Risk to Not classifiable Low Moderate Moderate High Not classifiable High
biodiversity
Not Not
Noise impacts Low High Moderate Low High
classifiable applicable
Not
Visual impact Moderate Moderate Moderate applicable Low Low-moderate Moderate
Not Not
Seismicity Not applicable Low Low Not applicable Low
applicable applicable
Not
Traffic High High High Moderate Low High
applicable

11. Environmental and health risks
Preliminary environmental and health risk assessment
• Structured risk assessment
• Defined quantitative/qualitative criteria
• Limited by available data
• Focused attention on key risks
• Cumulative impacts, requiring consideration at initial stages of
exploration
• Very high: Land take
• High: Groundwater contamination, accidents/spillages, water
resources, air pollution, noise, traffic
• Enables priority areas for future research to be identified
• High/very high impact areas
• Biodiversity impacts
• Long-term post-abandonment phase

12. Control options
Reviewed regulatory and technical control measures
• Appropriate siting of developments, to reduce above and below-
ground risks
• Measures and approaches to reduce land disturbance and land-
take
• Measures to address releases to air and to reduce noise during
drilling, fracturing and completion
• Measures to address water resource depletion
• Measures to reduce the negative effects caused by traffic
• Measures to improve well integrity and to reduce the risk of
ground and surface water contamination
• Measures to reduce the pressure on biodiversity

13. Control options
Aspect Description of measure
Creation of a national database of public sources of information
Database Develop database of baseline water quality and quantity, and geologic information across a
shale gas formation, prior to the commencement of HVHF
Peer review Funding to enable peer review of regulatory activity
Identifying zones which are off-limits to hydraulic fracturing if required for environmental
protection
Zoning (general)
Prevent HVHF in reforestation areas, wildlife management areas and high quality aquifers
Prevent HVHF in areas specified for protection of groundwater
Minimum distance to private water well: 150 m
Minimum distance to public water well or reservoir: 300 m
Minimum distance from well to surface watercourse: 90 m
Minimum distance from disturbance to surface watercourse: 90 m
Minimum distance to watersheds used for drinking water supply: 1,200 m
Buffer zones Minimum distance to residential areas: 1,600 m (where possible)
Distance within which detailed investigation of noise mitigation is needed: 305 m
Require site-specific separation from abandoned wells and other potential pathways for fluid
migration
Require additional containment to prevent surface water impacts for sites within 800 m of
surface water supply locations
Notification to local communities when drilling is planned
Notification
Notification to water suppliers in the event of spills or leaks
Mitigation credit Voluntary ecological initiatives within critical habitats that would generate mitigation credits
system which can be used to offset future development
Environmental
Encourage or require accreditation for shale gas installation operators to secure ongoing
management
environmental improvements
systems

14. Control options
Aspect Description of measure
Database Creation of a national database of public sources of information
Surface and
water quality Surveys of water quality and levels to be carried out before, during and after HVHF operations
monitoring
Air quality
Surveys of air quality to be carried out before and during HVHF operations
monitoring
Pit liners Require pit liners to be installed
Secondary
Require secondary containment for storage of specified hazardous fluids
containment
Spill control
Require spill control plans to be produced and maintained
plans
Minimum spacing of well pads of one per 2.6 square km, with all the horizontal wells in the unit
Well spacing drilled from a common well pad
Specify minimum well spacing
Minimise habitat
Implement mitigation measures to minimise ecological impacts.
fragmentation
Minimise impacts
on sensitive Develop and implement a specific mitigation plan and monitor in sensitive wildlife areas
habitats
Invasive species
Develop and implement an invasive species mitigation plan
plan
Locate sites away from occupied structures and places of assembly
Implement management measures to minimise noise
Noise mitigation
Implement barrier methods to minimise noise
Carry out noisy operations during the day

15. Control options
Aspect Description of measure
Seismicity
Monitoring of seismic activity with intervention in the event of events occurring
monitoring
Visual impact Standard measures to minimise visual impacts with regard to site location, lighting and
mitigation paintwork
Road use agreement/transportation plan covering vehicle routeing and timing
Use existing roads where possible
Locate access roads away from residential areas
Centralise gathering facilities to reduce truck traffic
Minimise impacts of new road construction via design and use of appropriate standards; build in
Minimise impacts mitigation at design stage
of traffic Limit truck weights
Vehicles to conform with highest emissions standards
Unnecessary idling to be prevented
Carry out effective maintenance
Repair road damage, or make payments to allow damage to be repaired
Use temporary pipeline for water transportation
Site selection Comprehensive assessment to identify optimum site
Management Staff selection, training and supervision in environmental protection
Maintain land used for gas extraction to a suitable standard to enable restoration so far as
possible
Land restoration
Stockpile surface soils for use in restoration
Loose soil should be covered with geotextiles or other materials
Pace of Limiting the pace of development could reduce some acute effects associated with shale gas
development development

16. Control options
Aspect Description of measure
Use cut areas for surface impoundment construction to avoid unnecessary increases in facility
Site layout
footprint
Avoid the use of surface impoundments and reserve pits where possible
Avoid the use of surface impoundments and reserve pits in flood zones or other sensitive areas
Silt fences, sediment traps or basins, hay bales, mulch, earth bunds, filter strips or grassed
Minimise risks
swales can be used to slow runoff and trap sediment from leaving the site.
from liquid
Where possible, activities should be staged to reduce soil exposure and coincide with a season
storage and
of low rainfall
handling
Contingency planning and training to address spillage risks
Visual inspection of primary containment before hydraulic fracturing is carried out
Use conductance monitors for rapid detection and assessment of spillages
Minimise risks
from temporary Pipelines should not be located on steep hillsides or within watercourses
pipelines
Surface casing to extend to at least 30 m below aquifers
Surface casing to extend to at least 15 m below aquifers
Extent of surface Surface casing to extend below aquifers
casing Surface casing to extend to at least 30 m below ground level
Surface casings should be cemented before reaching a depth of 75 metres below underground
sources of drinking water.
Extent of
Production casing should be cemented up to at least 150 metres above the formation where
production
hydraulic fracturing will be carried out
casing

17. Control options
Aspect Description of measure
Pressure tests of the casing and state-of-the-art cement bond logs should be carried out
Regulation and inspection regime needed to confirm effective repair of defective cementing
Measure compressive strength with benchmarks between 2.1 and 8.3 MPa, based on setting
times between 4 and 72 hours
Well integrity Include well integrity measures in permit specified under Mining Waste Directive
Complete cementing and isolation of underground sources of drinking water must be carried out
prior to further drilling
Casing centralizers should be used to centre the casing in the hole
Testing of well integrity should take place at construction, and throughout the lifetime of the well
Fracturing at depths of less than 600 m requires a specific permit
Fracturing not permitted with a separation of less than 46 m between fracture zone and aquifer
Minimum depth
Fracturing at depths of less than 600 m or with less than 300 m separation between fracture
for hydraulic
zone and aquifer requires a specific analysis and review
fracturing
Fracturing with a separation of less than 600 m between horizontal section of well and aquifer
should not be permitted
Multi-stage
Maintain hydraulic isolation between porous zones
fracturing
Operators should disclose publicly the chemical constituents of hydraulic fracturing fluid,
including product name and purpose/type; proposed composition of fracturing fluid by weight;
Disclosure
and proposed volume of each additive
Operators should disclose publicly the results of well integrity tests
Emissions from diesel engines to conform with highest applicable standards
Use natural gas powered engines and compressors where feasible
Drilling engines
Use electrically driven engines and compressors where feasible
Use selective catalytic reduction to reduce emissions from drilling rig engines

18. Control options
Aspect Description of measure
Drillers should select fluids to minimise the environmental hazard posed by drilling wastes
Drilling fluids Separation of drilling fluids and processing to facilitate re-use
Use closed-loop systems to reduce drilling time, drilling fluid use and surface disturbance
Develop guidance for use of diesel fuel in HVHF fluid
Prohibit use of diesel fuel in HVHF fluid
Prohibit use of specified volatile organic compounds in groundwater zone
Composition of
Use of specified volatile organic compounds in HVHF fluid requires prior authorisation
HVHF fluid
Select appropriate additives to minimise environmental impacts
Minimise biocide use, e.g. via use of UV disinfection techniques in place of chemical biocides
Select proppants which minimise the HVHF treatment required
Develop and use an integrated water management system
Water resource
Require use of alternative sources of water
management
Avoid sensitive areas for water withdrawals
Control of Implement precautions to prevent invasive species from water storage by cleaning vehicles and
invasive species appropriate disposal of surplus water
Predictive modelling to optimise fracturing strategies
Share data from nearby fracturing operations
Ensure equipment compatible with composition of fracturing fluid
Control of HVHF Use all available techniques to minimise risk of fracturing taking place outside the target
process reservoir
Thorough planning and testing of equipment prior to fracturing operations
Development of contingency plan prior to fracturing operations
Detailed monitoring of process during fracturing operations

19. Control options
Aspect Description of measure
Develop pre-treatment standards for discharges of shale gas extraction wastewater to municipal
wastewater treatment plants
Establish treatment requirements/discharge limits for treatment and final discharge of
wastewater
Re-use waste water where possible
Wastewater
Store waste water in storage tanks, or in double lined lagoons constructed with regard to local
management
topography
Ensure receiving treatment works is capable of handling wastewaters
Install on-site wastewater treatment if appropriate
Measure the composition of the stored return water
Use closed-loop systems manage and reprocess waste waters
Develop and adopt air emission standards for methane, air toxics, ozone-forming pollutants,
and other airborne contaminants
Require Reduced Emissions Completions to be carried out
Emissions to air Prohibit venting of gases, and minimise use of flaring
from well Control of VOC emissions by combustion for any tank emitting more than 6 tons VOCs per year
completion Prohibit use of open-top or blow down tanks
Specify required reductions in uncontrolled VOC emissions
Use low-bleed or no-bleed pneumatic controllers
Replace glycol systems with alternatives
Survey well head equipment to identify and address leakage
Leakage to air Use equipment with low potential for leakage
during operation Automatic fail-safe equipment on pipelines
Reduce the number of storage tanks on site
Temporarily Set requirements for plugging and inspection of shut-in wells
abandoned wells Inspect and maintain wellheads every 90 days

20. Control options
Aspect Description of measure
Plug with 30 m of cement every 760 m and at least 30 m cement at the surface, with 30 m of
cement in horizontal section
Plug with 15 m of cement above every zone to be protected
Plug at least 15 m below the deepest perforation and 15 m above the shallowest perforation
Plug at least 15 m above and below the base of the deepest usable aquifer
Plug at least 30 m above and 15 m below each fluid-bearing stratum
Permanent well
Plug from 15 m below to 15 m above the base of the treatable water zone
abandonment
Set requirements for inspection of abandoned wells
Ensure a micro-annulus is not formed at temporary plugs
Carry out ongoing monitoring programme
Maintain records of well location and depth indefinitely
Transfer ownership and liability to competent authority on surrender of permit to ensure long-
term management
Remove surface impoundments as soon as possible when no longer needed
Well pad
Remediate well pads on an ongoing basis to facilitate return to original conditions
restoration
Well sites must be restored as soon as possible after the end of extraction operations
All operators are required to have financial security for the wells through performance bonds on
Bonding
an individual well or a field of wells
Operators should work cooperatively with regulatory agencies and other stakeholders to
Wider area promote best practices, and improve communication with local communities.
development Neighbouring operators work together to ensure efficient provision of gas collection and water
treatment infrastructure
Transboundary
Competent authorities should co-operate in jointly meeting regulatory requirements
co-operation

21. Legislative review
Aim of legislative review
• To identify potential uncertainties regarding the extent to which
shale gas exploration and production risks are covered under
current EU legislation
• To identify those risks not covered by EU legislation
• To draw conclusions relating to the risk to the environment and
human health of such operations in the EU
Gap analysis
• Inadequacies in legislation
• Potential inadequacies – uncertainty in applicability
• Potential inadequacies – uncertainty in MS implementation

22. Legislative review
Gaps identified in legislative review
• EIA Directive Annex I threshold for gas production
• EIA Directive Annex II definition of “deep drilling”
• EIA Directive scope: no requirement to address geological features
• Water Framework Directive: definition of “pollutants”
• Mining Waste Directive/IPPC: no relevant
BREF document
• Air and noise emission limits for larger
off-road machinery
• Coverage of Environmental liability directive
• Applicability of IPPC Directive/Industrial
Emissions Directive
• Classification under MWD
• Applicability of Seveso II Directive
• Member State implementation of a number of directives

23. Next steps
Next phase of European Commission studies
• Development of risk framework
• Member state implementation
• Mitigation of climate impacts of possible future shale gas extraction
Our work
• Regulatory guidance
• Supply chain market analysis
• Ongoing regulatory support
in US

24. Supply chain
KEY
Common to DEVELOPMENT
conventional and
Chemical
unconventional Ecology
EXPLORATION manufacturing
Greater or different Survey design Liaison with
Monitoring and planning pipeline operator
requirement with
Chemical supplier unconventional
Engineering EIA
Specialist New requirement Environmental Environmental
expertise drilling/casing for unconventional management management
suppliers Generator plant
SEA
Road, site and Engineering
Compression plant pad preparation
Horizontal drilling Planning
Frack project Financial Audit/ due Public relations
manager advice diligence Road and site
Risk
construction
assessment
Water supply Planning
Public Water pond
relations construction
Waste and water Financing AS FOR
treatment/disposal EXPLORATION
Drill rig
Regulatory PHASE
liaison
DATA SELECT TRIAL DRILL/ TRIAL DATA SELECT WELLPAD SITE PIPELINE DRILLING/
REVIEW TEST SITE FRACK ANALYSIS PRODUCTION ZONE IDENTIFICATION CONSTRUCTION CONSTRUCTION FRACKING
Public Pipeline connectivity
relations Logistics
Planning Site Production gathering
preparation
EIA
Analysts
Personnel messing, catering, ABANDONMENT WORKOVERS PRODUCTION COMPLETION
sanitation, accommodation etc
Monitoring
Trial data acquisition Technical/
Ecology
engineering
expertise
Geology and Reprocessing Site restoration Well maintenance Green Water Sludge
Geophysics of historical data completion treatment/ disposal
Gravimetry Gravimetry expertise recycling
Analysis and Environmental disposal
Well plugging
interpretation monitoring
Geochemical Geochemical
Legal survey survey
Road repair Services
Environmental
Technical/ 2D Survey management
2D Survey
construction Expertise
Infrastructure Landscape Repair
analysis 3D Survey 3D Survey
Political/ EM Survey EM Survey
Geopolitical
DECOMMISSIONING PRODUCTION
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