Fracking – the Energy Resource, the Region, and Regulations                                                                              the 3-R's of Learning and the Taylorsville Basin

– J. Harrison Daniel, PhD, PE       October 2015

Introductory Comment: The following is an overall discussion of fracking issues touching on both national and state issues, and the author's belief that fracking in the Coastal Plain Tidewater Region of Virginia should not be undertaken at the present time.

o Taylorsville Basin – the Energy Resource:

The decision to develop our natural resources needs to include evaluations of the need, the estimated recoverable reserves, the lifetime of the operations, effective regulations, enforcement and economics of inspections, and environmental concerns – a monumental task.

One cannot discuss fracking and oil and gas production without including the total energy picture of our country. Domestic production of oil and gas have dramatically increased since 2008 as a result of advanced shale fracking techniques. Along with this increase, our dependency on foreign oil has declined every year since its peak in 2005, and the trend is expected to continue. Further, the United States now leads the world in the production of both oil and gas.

All the energy sources – petroleum liquids, natural gas, coal, the many renewables, and nuclear – are dictated by geology, supply and technology. The resources are found worldwide , and their extraction and supply are products of advancing and new technologies that, over the long-term, become available worldwide. We have learned that the fear of “peak oil,” that is when the demand of an energy source exceeds its supply, is over.

Development of low-capacity, non-replaceable energy reserves is unwise. Assessments of the U.S. Geological Survey in 2011 estimated the total undiscovered gas resources of the Taylorsville Basin at 985 billion-cubic-feet with at least a 50% chance of recovery. (source: http://pubs.usgs.gov/fs/2012/3075/fs2012-3075.pdf )

In comparison, natural gas production in the Marcellus Region exceeded 15 billion-cubic-feet per day through July in 2014, the first time ever. The Region, mostly located in West Virginia and Pennsylvania, is the largest shale basin in the United States accounting for almost 40% of U.S. shale gas production. (source: the U.S. Energy Information Administration, Today in Energy -- August 5, 2014). This places the present estimates of natural gas recovery from the Taylorsville Basin equal to 66 days of the proven production from the Marcellus Basin.

o Virginia and the Tidewater Region:

Virginia is a very marginal player in the production of natural gas in the United States. Its contribution in 2013 was 139,382 million-cubic-feet, representing 0.46% of the U.S. total production of 30,005,254. The majority – 71% – of Virginia's annual production of natural gas, or 99,542 million-cubic-feet, came from coalbed methane gas, CBM, produced mainly from a handful of southwestern coal producing counties.

Natural gas, basically methane, is recovered from coal seams. tight shale deposits, and conventional gas deposits. Due to the different and varying geological formations they each require different extraction and production techniques and economics. Coal seams are much shallower and methane flows easily through the soft porous coal seams than in the dense tight-shale basins. These shale formations require much greater pressures to frack the strata allowing for gas migration. Water supply and quantities and pressures required to frack the dense strata and the additives necessary to keep the the fractures open are different for the coalbed and the shale operations – different mechanisms are involved, i.e., the geophysics, hydrogeology, fluid mechanics, and chemistry that govern the technologies.

Virginia is essentially a non-player in the production of crude oil with its 2014 annual production level of nine thousand barrels. The total U.S. annual crude oil production in 2014 was 3,168,233 thousand barrels. (eia data)

The Coastal Plain Tidewater Region of Virginia is an unique area dependent on two very long-term and sustainable industries – agriculture and seafood. These industries exist only with a guaranteed supply of uncontaminated clean water. Any heavy industrialized operation introduced into the region pose uncertainties to water supply and quality and will not provide economic benefits over the long-term as the energy resources are depleted.

o Regulations – Application, Implementation & Costs:

Laws, rules and regulations are enacted to help ensure the safety and health of both workers and the public, and to guarantee the protection of the environment for clean air, water and soil. They are defined in The Virginia Code – its Titles, Chapters and Sections. Over time and practice they are interpreted and modified to keep pace with advancing technology and social issues.

The formulation and the codification of the rules and regulations governing oil and gas operations are a challenging process as they need to keep pace with the rapidly advancing technology. Also challenging are the complex procedures and actions necessary to not only implement the mandated actions, but also to inspect and ensure compliance. Inspections and enforcement are costly and require trained personnel that posses technical knowledge and understanding of the operations and processes. Compliance with health, safety and environmental regulations demand on-site inspections of site characterization, construction quality control and continuous monitoring of water quality and supply – all specialized fields.

States, such as Pennsylvania, have had a long history of oil and gas production. Oil was first discovered in Oil Creek near Titusville, PA, in 1849, and today the state is a significant producer of natural gas. In 2013, its annual production of natural gas supplied 10.86% (3,259,042 million barrels) of the U.S. total output of 30,005,254 million barrels. 93.5% of Pennsylvania's production was from deep shale formations, which realized large increases starting in 2005. (eia data).

Pennsylvania is still undergoing regulatory reform. In July 2015, the Pennsylvania Department of the Auditor General issued a 146 page performance audit of the Department of Environmental Protection's Office to “[access] its ability to protect water quality in the wake of Pennsylvania’s shale gas boom.” The audit covered a four-year period from January 1, 2009 through December 31, 2012. It contains eight findings that detail shortcomings of the regulatory functions and makes 29 recommendations of the findings. Interestingly, the Department of Environmental Protection disagreed with the eight findings, but it agreed with the majority of the recommendations presented to improve the situations, agreeing with 22 of the 29 presented. The document, “A Special Performance Audit – Department of Environmental Protection” is found at: http://www.paauditor.gov/Media/Default/Reports/speDEP072114.pdf .

Such evaluations and the experience and long-term knowledge of the oil and gas producing states show the evolution and requirements necessary to keep abreast of the technology and the effective implementation and economics of regulations and inspections. The audit illustrates the continuing efforts involved in regulating the industry even in states with a history of experience.

Virginia has had a history in the underground mining of coal, as well as in the rock quarrying and sand-and-gravel aggregate industries. The far southwestern coal producing counties have been involved with coalbed methane gas recovery since it's beginnings during the 1960's. However, Virginia does not have such a time-line and experience with the production, rule making, regulations and inspections of deep shale deposits of gas and oil .

Summary:

The past has has shown time and again the importance of science-based policy and sound regulations and enforcement. Their evolution is based on experience, enforcement by qualified professionals, and effective quality control to prevent the “cutting of corners” throughout the entire process of exploration, extraction, storage and transport.

The discussion highlights the following questions and issues:

• Is the estimated capacity of the gas reserve large enough to merit development, and what would be its expected lifetime?

• With the existing water supply and contamination problems of the Coastal Tidewater Area and its dependence on agriculture and seafood, is developing a “short-term” industry that requires significant water use and community and logistic changes a wise choice?

• What are the costs, up-front and continuing, required of the local region, as well as the state, in assuring, with a high degree of confidence, that water supplies and quality and communities are not adversely affected? Sound regulations, professional inspections and enforcement and possible remediation are $$$.

• Issues including the new and changing demands on the integrity, quality control and inspections of the much greater depths and lengths of well casings are required; the disclosure of all chemicals and compounds used in the fracking process have to be made available in order to asses health, safety and environmental issues; and the age-old problem of even if it can be done properly, will it be done properly? – regulations / inspections / remediation.

About the Author: J. Harrison Daniel holds a B.S. in mechanical engineering from Duke University, and a Ph.D. in mining engineering from the University of Idaho. A registered professional engineer, he has spent his career developing energy concepts, conducting research, and managing mining and minerals programs As a project engineer with the Department of Defense, he investigated advanced electric-power concepts, and with the U.S. Bureau of mines, he was a researcher and program manager.