|
A responsible route to shale development Experts argue for comprehensive risk management, open communications when addressing concerns around the use of fracking techniques Alan Bailey Petroleum News
With concerns about possible impacts including groundwater contamination, excessive water consumption and gas leakages, the shale oil and gas revolution that is upending the North American oil and gas industry has been facing many questions regarding safety and environmental protection.
But ensuring safe shale developments and dealing with the uncertainties inherent in development projects requires a comprehensive risk management approach, two experts told the K&L Gates Alaska Oil and Gas Conference on July 10.
Five issues David Wochner, a partner with K&L Gates, said that there are typically five major issues facing a shale development, with each issue having the potential to derail a development project: the siting of wells; water supplies for fracking operations; the flow-back and disposal of fracking fluids; air quality; and the disclosure of information about chemicals used in fracking fluids.
In the United States the issues surrounding well siting are being worked out on a state-by-state basis, with an emerging consistency regarding requirements such as minimum distances from occupied structures, Wochner said.
But the issue of water withdrawals for fracking operations is huge, despite the water usage actually being lower than that of some other applications such as the irrigation of golf courses, he said. States such as Illinois are implementing regulations requiring companies to submit water withdrawal and management plans, while there is also a question of the extent to which states have policies for the use of non-freshwater.
Operators are increasingly trying to save water consumption through re-use, Wochner said. Richard Green, director of innovation in North America for Det Norske Veritas (USA) Inc., said that the oil industry is also investigating the potential to substantially reduce the use of chemical additives in areas where water can be recycled. And some companies are interested in the possibility of using materials such as propane, nitrogen or carbon dioxide as alternatives to water in fracking operations, he said.
Fluid disposal Then there is the question of how to dispose of the fluids that flow back out of a well after fracking, if the fluids are not being recycled. Usually 25 to 30 percent of the injected water re-emerges as flow-back — apparently about 80 percent of these fluids are recycled in operations in the northeastern U.S., Wochner said. Storage and management of the waste fluids are huge issues, with the possibility of having to truck the fluids to storage tanks or pits. In addition to the underground injection of the fluids, other disposal possibilities include evaporation of the fluids in dry regions such as Texas, or the use of brine for salting roads in winter, as in West Virginia, Wochner said.
Issues surrounding air quality include new Environmental Protection Agency rules for green well completions, to minimize the unintended release of natural gas into the atmosphere. Following comments from the industry, the agency is using a phased approach to introducing these regulations, Wochner said.
Chemical additives The disclosure of information about chemicals added to fracking fluids has been a major issue but was probably overemphasized by companies concerned about divulging trade secrets, Wochner said. States have been implementing regulations for the disclosure of fluid additives. In addition, it is essential that emergency responders have full information about any material they have to deal with. Regulations have provisions for trade secrets, which are also strongly protected under U.S. common law, Wochner said.
Both Wochner and Green emphasized the importance of considering the likelihood as well as the potential impact of issues that might impact a shale project. For example, a federal moratorium on shale development would have a massive impact on the industry but is extremely unlikely to happen, Wochner said. On the other hand, local moratoria, such as the moratorium in the state of New York, do happen but have just a moderate impact on the industry as a whole.
Limitations on water consumption, water treatment and water disposal score relatively high both in terms of likelihood and impact.
Fear of the unknown Wochner said that, while shale development creates jobs, brings new state and local revenues, and can spawn new sectors in the economy, new shale technologies bring a fear of the unknown.
“Getting citizens comfortable with this ‘in your backyard’ … is an important step,” Wochner said.
And, while North America is in the midst of a shale revolution, this revolution has yet to catch on in other parts of the world, Green said.
“In many parts of the world the reason that things are lagging is because they’re still fighting to get a social license to operate,” Green said. Det Norske Veritas has developed a code of best practice for shale gas development, driven initially by consultations in Europe over concerns about safety and environmental issues associated with shale development techniques.
Green said that, while companies need to worry about the subsurface impacts of fracking, surface-related issues such as water rights and waste disposal can present some of the biggest challenges.
“It’s the surface issues that can really get the juices flowing in opposition,” he said.
And, in addition to identifying and managing potential project pitfalls and uncertainties, consistent and truthful communications with the public are a key to success, Green said.
“It’s all about transparency,” he said.
|
