Ohio Department of Natural

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Nov 8, 2013 (3 years and 8 months ago)

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Ohio Department of Natural
Resources


Division of Mineral Resources
Management

(DMRM)

Emergency Management Association

Of Ohio
-

Spring Directors Seminar


Director


David Mustine

Assistant Director


Scott Zody

DMRM Chief

-

John Husted


Presentation by


Tom Tugend



On Behalf Of
:

Division of Mineral Resources
Management (DMRM)


Provides for the Safe and

Environmentally Sound Development

and Restoration of Mineral and

Fossil Fuel Extraction

Sites



Oil/Gas Well Permitting, Drilling,


Production, Plugging




Industrial Mineral Permitting &


Mining




Mine Safety

What We Oversee


Coal Mine Permitting, Mining


and Reclamation



Abandoned Mined Lands


Reclamation



Orphan Well Plugging



EPA Certified Lab

What We Oversee
-

Continued



Our Authority For The Regulation of
:



Oil and Natural Gas Wells


Salt Water Injection Wells


Brine Haulers


Administering the Orphan Well


Program


Ohio Revised Code 1509

Ohio Administrative Code 1501

Permitting Overview


Leasing Precedes Permitting


Owner Registration (Bonding/Insurance)


Permitting: Spacing, Casing, Pre
-
Permit Site


Review, Permit Conditions, Restoration Plan


Spacing Categories








Distance


Depth


Acres

Unit Lines

Bet. Wells


0 to 1,000’


1




100




200



1 to 2K



10



230’



460’


2 to 4K



20



300’



600’


4,000 +



40



500’



1,000’


Field Inspection and Enforcement

Inspection



Pre
-
Permit Site Review



Critical Phases of Drilling and


Approval of Preliminary Site Restoration



Routine Inspection of Production Wells



Response to Complaints/Public Assistance



Oversight/Approval of Plugging and


Final Restoration

Field Inspection Cont.

Enforcement


Progressive Enforcement with Resolution at


Lowest Level:


Compliance Notices, Orders, Civil and


Criminal Actions and Consent Agreements,


Loss of Permitting


Permit Block,


Suspension of Producing Operations

Prevention of Impacts to the Environment


and Protection of Public Safety

Key Factors
:



Permitting



Well Site Construction



Well Construction
!



Well Control
!



Fluid Control
!



Oversight



Complaints Posing Threats to Public


Safety and the Environment



Drilling Operations


Protection of


Fresh Water/Public Safety/Environment



Plugging Operations



Routine Inspections


Public


Assistance

Our Field Enforcement Focus/Priority


Well Site Identification


Idle Wells


Pollution/Contamination


Restoration


Brine Disposal


Gas Leaks

Most Common Violations

Hydraulic Fracturing


Fracking


Fracing

Good or Bad

What is the Real Story

A Process Using Pressure and Fluid to

Break Open (Fracture) the Oil and or


Natural Gas Formation to Permit Production


that Otherwise Would be Not be Economic.


Hydraulic Fracturing

Is this a New Process


NO

Almost Every Well Drilled in Ohio Since
the Late 1970’s has Been Hydraulic

Fractured (Approximately 80,000 Wells have

Been Hydraulic Fractured in Ohio)


Hydraulic Fracturing Cont.


Hydraulic Fracturing Cont.

The

Hydraulic Fracturing Fluids Consist of:



Water



Sand (proppant)



Chemicals (to Make the Water Viscous to


Carry the Sand), Scale Inhibitors, HCL.



99+% Sand and Water


Hydraulic Fracturing Cont.

Has Hydraulic Fracturing Contaminated

Groundwater in Ohio


NO

With Proper
Well Construction
,
Well Control

and
Fluid Control
, Impacts to the Environment

are Prevented.


Hydraulic Fracturing Cont.

The Fracturing Fluids are Maintained Inside

The Steel Cased Well Bore and or in Lined

Pits or Steel Tanks then Recycled (Reused)

Or Properly Disposed of Under the Authority

the Division of Mineral Resources or Ohio

EPA.

Frac

Containment

Target shale is thousands
of feet below any drinkable
ground
-
water layers.


Thick layers of shale and
limestone are above and
below shale keep fractures
from penetrating upward
and downward into
adjacent formations.


Companies do not want to
use excess frac materials
and power and do not want
to produce water



Very little additives in frac
fluid (0.05%)


Fluid is injected into
undrinkable brine zones,
very unlikely to migrate

Graphic from Kostelnick (2010).

Marcellus Formation


Total Permits Issued:
44,367


Drilling
-

21,507


Plugging
-

22,860



Wells Drilled:
16,409


Wells Plugged:
15,298


Total Ohio Wells:

64,427


Oil and Gas Activity 1990
-
2010

Wells Drilled


The Early
Years

Year



Wells Drilled

1890

2593

1895




6147

1900 6555

1930

2134

1980 5100

1981

6085

1982

4830

2010 Ohio Oil/Gas Information



431 Wells Were Drilled in 44 Counties



429 Wells Were Plugged



4.78 Million Barrels of Oil Produced



77 Billion Cubic Feet of Gas Produced


Horizontal Shale Drilling


Marcellus Shale


Utica Shale


Why all the Interest/Press ?


What is the Difference Between a

Traditional Well and a Horizontally Drilled

Shale Well ?

So, why is this a big deal?

Potential Production





A “typical” conventional gas well in the Appalachian Basin
produces
100

500,000 CF

of gas per day and
200

500
MMCF

in its life. (500 MMCF x $4/MCF* =
$2M gross
revenue; creating a $250K royalty payment

@12.5%
of gross.)



Horizontal Marcellus (or Utica?) well may produce around
2

10 MMCF

of gas per day and are projected to average
around
4 BCF

of gas over their life, per well. (4 BCF x
$4/MCF* =
$16M gross revenue, creating a $2M
royalty payment
@ 12.5
% of gross
.)


KEY


M = thousand MMCF = million cubic feet (or 1,000 MCF)


MCF = thousand cubic feet BCF = billion cubic feet [Division of Geological Survey 2011]


Differences Between a Horizontal Well and

Traditional Vertical Well


Everything is Bigger


It Takes Longer


Well Site 3
-
5 acres vs. 1
-
2 acres


Shale Rig is Much Larger


Associated Equipment


More of it


One Month/Well to Drill vs. One Week


Up to 6 Wells Can be Drilled From One


Well Site


Source: U.S. EIA, 2010.

Many shale gas plays are now developing across the United States and Canada.

We are not alone….

Marcellus Shale Activity

Pennsylvania

2004: Range Resources Drilled the First


Horizontal Marcellus Shale Well


2008: 195 Marcellus Wells Drilled

2009: 763 Marcellus Wells drilled

2010: 1,454 Marcellus Wells Drilled

Marcellus Shale


Ohio Activity

To Date:

Vertical Permits Issued: 67

Vertical Wells Drilled: 44

Horizontal Permits Issued: 10

Horizontal Wells Drilled : 2




As of 03
-
08
-
11


Utica Shale


Ohio Activity*

To Date:

Vertical Permits Issued: 19

Vertical Wells Drilled: 9

Horizontal Permits Issued: 4

Horizontal Wells Drilled : 1




As of 03
-
08
-
11


*Permits issued since December 2009


Generalized Geology and Profile of a Utica
Shale Well

Sandstone:

A Typical Reservoir Rock

A porous sandstone prepared for viewing under a

microscope reveals pore spaces (blue areas).

SAND

GRAIN

PORE

PORE

SAND

GRAIN

SAND

GRAIN

Graphic from Kostelnick (2010).

Shale is extremely fine grained with many very small pore spaces.

UTICA SHALE


Risks


Poor Well Site Construction



Erosion
and Sedimentation, Impact to Wetlands


Road Impact/Damage


Spills (Oil/Brine/Drilling Fluids)


On
-
Site/Off
-
Site


Uncontrolled Releases of Natural Gas,
Oil, Completion Fluids

Risks Cont.


Fires During Drilling/Well Completion


Injury to Rig Hands While Drilling


Lightning Strikes


Tank Fires

Tank Launching

ODNR Division of Mineral Resources (DMRM)

Management Contact Information

Columbus Office
: 614
-
265
-
6633

Uniontown Office
: 330
-
896
-
0616

New Philadelphia Office
: 330
-
339
-
2207

Cambridge Office
: 740
-
439
-
9079

Jackson Office
: 740
-
286
-
6411

Salem Office:

330
-
222
-
1527

Mount Vernon Office:

740
-
392
-
4499

Findley Office:

419
-
429
-
8304

Lebanon Office:

937
-
933
-
6717


ODNR Division of Mineral Resources (DMRM)

Management Contact Information

See DMRM Web Site for Additional County Contact
Information and Information on Shale Drilling and DMRM’s
Programs

DMRM Web Site: Go to ODNR’s Web Site:

http://ohiodnr.com/
, Click on “Other Divisions”,

Click On “Mineral Resources” and Click on “Oil and Gas”