The slides shared at a public meeting held on March 4, 2011 at the West Middle School Auditorium. The meeting was sponsored by the Joint Landowner's Coalition of New York. Note: The cover slide says Feb 25, 2011. The meeting was delayed a week due to inclement weather and was actually held on March 4.
Speakers included: Scott Kurkoski, attorney for the JLCNY; John Holko, president of Lenape Resources; Richard Nyahay, manager of geology for New York State, Gastem; Michael Joy, attorney and oil & gas law professor at SUNY Buffalo; and Bob Williams, landowner and coalition member from the Windsor, NY area.
3. Energy Today: New York State Energy
Consumption Pattern, 2008
37.4%
30.0%
6.0%
24.6%
Σ 98%!
4. Shale has always been the
hydrocarbon source rock
New technologies make shale
a viable drilling target for
natural gas.
Tightening North American
supply is making
“unconventional resources”
more attractive.
The Barnett showed us that
shale can be exploited.
Numerous domestic shale
opportunities exist
5. Where Can We Get the Natural Gas ?
Unconventional Resource Plays
How Much
Lewis & Mancos: 97 Tcf
New Albany: 86-160 Tcf
Barnett: 25-252 Tcf
Antrim: 35-76 Tcf
Upper Devonian: 225-248 Tcf
5
10. Characteristics of unconventional gas
shales
Usually the source rock for other reservoirs
Organic rich
Less permeable
Nuisance gas shows while drilling through the
formation
Unusual pressure regimes
Produced over larger areas
produce natural gas by stimulation -Hydrofracturing
Economically produced by using horizontal drilling
technology
11. TOC (Total Organic Content)
Rock Sample
Dispersed
TOC
Organic
Matter:
the “source”
of
oil + assoc. gas
Total Organic Carbon (T.O.C.)
Live Carbon Dead Carbon
Oil Organic Matter (Kerogen) Dead Carbon
Gas (Jarvie, 1991)
Rock-Eval Terminology
15. The Devonian Marcellus Shale
(Rickard, 1989)
Primarily interested in Union Springs and Lowermost Oakta Creek Members
16. Marcellus Union Springs
Organic rich thinly bedded blackish grey to
black shale with thin silt bands
The member is between the Cherry Valley
and Onondaga limestone
Characterized as a pyritiferous, further east
the Union Springs becomes the Bakoven
member that becomes grayer, less organic
and has few limestone members
Lenses in and out in localities in far Western
New York
17. Marcellus Union Springs
Union Springs with vertical calcite filled fractures in the Onesquethaw
Creek, Albany County, NY
18. Marcellus Cherry Valley
Consists of skeletal limestones and
shaly intervals
Westward thinning of the Marcellus
Formation in western and central New
York leads to the condensation and
union of the Cherry Valley limestones
with limestones in the upper part of the
Union Springs
20. Marcellus Chittenango Member
• Upper member of the Marcellus Formation in
Western and central New York
• Becomes Cardiff and Chittenango members in
Central and Eastern New York
• Is confined in Western New York by Stafford
and Onondaga limestones
• Further east it is between the Stafford and
Cherry Valley limestones when it is present
• Dark grey to black organic rich shale
24. Net Thickness of Organic Rich Section of Marcellus
(Piotrowski & Harper, 1979)
25. Shale is Source, Seal and Lately … Reservoir Rock
Mihai A. Vasilache, 2010
“More mature samples show well-developed
nanopores concentrated in micron-scale
carbonaceous grains. Large numbers of
subelliptical to rectangular nanopores are
present, and porosities within individual grains
of as much as 20% have been observed.
Shallowly buried, lower thermal maturity
samples, in contrast, show few or no pores
within carbonaceous grains.
These observations are consistent with
decomposition of organic matter during
hydrocarbon maturation being responsible for
the intragranular nanopores found in
carbonaceous grains of higher maturity
samples. As organic matter (kerogen) is
converted to hydrocarbons, nanopores are
created to contain the liquids and gases. With
continued thermal maturation, pores grow and
may form into networks. The specific thermal
maturity level at which nanopore development
begins has not been determined. However,
current observations support nanopore
formation being tied to the onset of conversion
of kerogen to hydrocarbons.”
Picture and text from Robert M. Reed, Bureau of Economic Geology | John A. and Katherine G. Jackson School of Geosciences, The University of Texas at Austin, Austin, TX | Robert G. Loucks , Bureau of
Economic Geology, The University of Texas at Austin, Austin, TX | Daniel Jarvie , Worldwide Geochemistry, Humble, TX | Stephen C. Ruppel , Bureau of Economic Geology, University of Texas at Austin, Austin, TX
Picture and text from Robert M. Reed, Bureau of Economic Geology | John A. and Katherine G. Jackson School of Geosciences, The University of Texas at Austin, Austin, TX | Robert G. Loucks , Bureau of
Economic Geology, The University of Texas at Austin, Austin, TX | Daniel Jarvie , Worldwide Geochemistry, Humble, TX | Stephen C. Ruppel , Bureau of Economic Geology, University of Texas at Austin, Austin, TX
28. Innovation: Horizontal Drilling
First horizontal well: 1929
First horizontal shale well: 1988
(Antrim Shale in Michigan)
First NYS horizontal: 1989 (and
hundreds drilled since)
“Today, about 2/3rds of the U.S.
rig count is non-vertical, and
close to 50% of the rig count is
drilling horizontal wells.” (Triepke
2010)
Makes multiwell pads possible
National Energy Board (Canada), A Primer for
Understanding Canadian Shale Gas November 2009
29.
30. 200 - 500’ Fresh water aquifers are
generally less than 500 feet
deep
Every casing string is
400 - 1,200’
cemented to surface by
pumping cement down pipe
and circulating back up
between the outside of pipe
and the wellbore
More than a million pounds of
steel casing in each well
2,000 - 2,500’
To total depth Source: Range Resources
30 30
31.
32. Drilling Rig
Fresh Water Aquifers
Vertical depth 5,000 – 9,000 feet
Deep Below the Freshwater
Aquifers, protected by multiple
layers of steel casing cemented
into the ground, water, sand and
chemicals are pumped to create
fractures allowing the natural
gas within the shales to flow
into the wellbore and up to the
surface through the steel casing.
Multiple zones are stimulated
to maximize reservoir
stimulation
During the Treatment, Micro-
seismic is assisting in evaluating
the results
Hydraulically created fractures
Marcellus Shale
(100 – 300 feet thick)
Horizontal lateral length
32 3,000 – 5,000 feet
33. HYDRAULIC FRACTURING
Large Volume Hydraulic Fracturing Treatments
50,000 to 500,000 gallons per stage
Multiple Stages
4 to 14 Stages per well
37. Water Useage For Shale Development
vs
Total Water Withdrawal
Appalachian Basin
Courtesy John A. Veil Argonne National Laboratory 2010 DUG East Presentation
39. Additive Main Purpose Common Use
Type Ingredients
Polyacrylamide Reduces friction Cosmetics; soil
Friction (non-hazardous) between fluid and pipe conditioner; some
reducer children’s toys
Anti- Eliminates bacteria in Disinfectant; sterilize
Microbial Glutaraldehyde the water that produce medical and dental
Agent corrosive byproducts equipment and
surfaces
Automotive anti-
Scale Ethylene glycol Prevents scale freeze, household
inhibitor deposit in the pipe cleaners, de-icing
agent
7.5% Help dissolve cement Swimming pool
Diluted Hydrochloric and minerals and help chemical and cleaner
Acid Acid
initiate fractures 39
44. It’s Happening in Pennsylvania Marcellus
Economic Impact ‐ 2010
$3.9 billion in total
value added 2009,
$8 billion 2010
$389 million in state
and local taxes in
2009, $785 million
2010
New jobs
45. What About Broome County, NY?
Let’s Project:
Let’s use the 3 counties Use NY’s current ad‐
closest to NY in PA: Tioga, valorem tax structure
Bradford & Susquehanna
Use NYSORPS 2010 UOP
117 wells with over 100 value ($10.14/mcf)
days production reported
Value actual sales at
to PADEP
current gas prices
Weighted average daily ($4.77/mcf)
production rate of 3,543
For Detail Utilize Tax
mcfd
allocation from Property
Assume 1 well is drilled Tax Bill Town of Maine
46.
47. NY Real Property Taxes Gas Production
Projection for Marcellus Drilling (1 Well, Town of Maine, Broome Co.)
Avg Well Prod. 3,543 Mcfd
Annual Prod Total 1,293,195 Mcf
NYS UOP Value $10.14 Per Mcf
Uniform % 70%
Taxable Value Tax Rate/m$ Tax
NYS & Fed Mandate $9,179,098 11.410278 $104,736
Other County Taxes $9,179,098 0.000001 $0
Town General $9,179,098 0.749814 $6,883
Town Highway $9,179,098 2.762604 $25,358
Maine Fire $9,179,098 1.932882 $17,742
School Tax $9,179,098 37.398362 $343,283
Totals 54.253941 $498,002
48. Key Points
1 Well on Town Property In
Binghamton
$498,002 1st yr Local Property Taxes
$771,613 1st yr Royalty Payments
$1,269,619 Annual Payments to Town
49. New York’s Regulatory Environment
Oil and Gas Drilling and Development has
been Regulated by the NYS Department of
Environmental Conservation Division of
Mineral Resources since its Inception
around 1969
50. Welcome to New York Regulation
State Environmental Quality Review Act
Government agency must review the
environmental impact of its actions.
Issuance of a permit to drill (and frac)
a natural gas well is an action which Generic Environmental
requires review.
Impact Statement:
Disclose and address the impacts that can
be reasonably anticipated. Evaluates separate
Avoid or minimize adverse environmental actions having common
impacts to the maximum extent impacts
practicable.
The purpose of a SEQRA review is not to
ban an activity, but to identify potential
adverse impacts and ways to mitigate
them.
52. Potential Impacts not Addressed by
GEIS
High-volume fluid management
Water withdrawals and consumption
Transportation of water to the site
Additives
On-site facilities and handling
Flowback and ultimate disposition
Multiple wells at single site, longer
duration of impacts
53. Status of Hydraulic Fracturing in New York
Water use Permitting status
Horizontal drilling, GEIS-consistent Permitted under existing GEIS
no HVHF First horizontal well drilled in 1989
Horizontal/directional wells
average 10% of permits per year
No “moratorium”
Conventional frac Up to 80,000 gallons/well Permitted under existing GEIS
(90% of wells in NY; finding of no significant impact
552 total permits Disclosure to DEC of water
issued in 2009) source/disposal and frac chemicals
required with application to drill
High-volume frac Currently defined as 58 applications pending
(HVHF) > 80,000 gallons/well completion of SGEIS
Activity described in
dSGEIS: 2 – 8 million
gallons
54. 2009 dSGEIS – Disclosures and Mitigation (1)
Concern or 2009 dSGEIS
potential
impact
Water Impacts of low-flow described; pass-by flow methodology proposed
withdrawals
Spills Recognizes enhanced risks relative to high-volume hydraulic fracturing
(i.e., larger volume of chemical additives, larger volume of flowback
water. Describes NYS spill reporting requirements.
Enhanced mitigation: Setbacks, secondary containment,
stormwater permit coverage (SWPPP, BMP’s), review of site-
layout and fluid disposal plan prior to permit issuance
Wastewater Reiterates existing procedures and requirements for permitted
disposal discharges
Enhanced mitigation: Review and verification of fluid disposal
plan prior to permit issuance; wastewater tracking to be
implemented
55. 2009 dSGEIS – Disclosures and Mitigation (2)
Concern or 2009 dSGEIS
potential
impact
Ground water From surface activities: See spills.
contamination, From reserve pits & centralized flowback impoundments
including Enhanced mitigation: Construction and liner specifications/fluid removal
natural gas in requirements for reserve pits; double liners/leak detection/site-specific
engineering review for centralized flowback impoundments
water wells
From wellbore: Reiterates existing casing and cementing practices, including annular
venting
Enhanced mitigation: Cement to surface required on production or intermediate
casing; cement bond log; pre-frac certification of wellbore construction
From hydraulic fracturing in target zone: Not a reasonably anticipated impact below 2,000
feet or with 1,000 feet of vertical separation between target zone and deepest fresh water
Enhanced mitigation: Site-specific review at shallower depths or with less vertical
separation
Baseline testing and ongoing monitoring of nearby water wells
56. 2009 dSGEIS – Disclosures and Mitigation (3)
Concern or 2009 dSGEIS
potential impact
Chemical dSGEIS lists 197 proposed additives for HVHF
disclosure 6 service companies, 12 chemical suppliers
152 with complete compositional information
260 unique chemicals with CAS #’s disclosed in dSGEIS: includes amides, amines,
petroleum distillates, aromatic hydrocarbons, alcohols, glycol ethers, ethoxylated alcohols,
microbiocides, organic acids and related chemicals, polymers, minerals, metals and other
inorganics and miscellaneous other chemicals
DEC is monitoring developments in other states and at the federal level.
Air quality Potential well pad impacts: PM, NO2, H2S, benzene
Potential off-site compressor impacts: Benzene, NO2, formaldehyde
Mitigation: control technologies (fuel, equipment), stack heights, public access
restrictions
Centralized flowback impoundments: Potential HAP emissions
Mitigation options: Eliminate specific compounds (methanol, heavy naptha,
benzene), limit duration and use, cover or use tanks instead, physical barriers to
public access
Will be subject to site-specific review including frac & flowback composition
“Industrialization Includes descriptions of well pad & equipment size, longer duration of impacts at multi-well
” (noise, visual, pads; truck traffic associated with HVHF
traffic, Mitigation: Visual impacts mitigation plan, noise impacts mitigation plan, road
use agreement or trucking plan, review of local planning documents, careful
community access road siting
impacts) DEC is reviewing many comments on this topic.