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Introduction

Most of the oil and gas produced in the United States comes from conventional reservoirs in which hydrocarbons have accumulated in discrete structural or stratigraphic traps below relatively impermeable rock and above a well-defined hydrocarbon–water interface (USGS, 2002).1 However, a growing fraction comes from unconventional reservoirs—geographically extensive accumulations of hydrocarbons held in low-permeability rock (e.g., shale, siltstone) with diffuse boundaries and no obvious traps or hydrocarbon–water contacts. Unconventional hydrocarbons include shale gas, tight oil, tight gas, coalbed methane, and gas hydrates.

Shale gas is the fastest growing source of U.S. natural gas (Figure 1.1). The Energy Information Administration projects that shale gas will account for nearly half of U.S. natural gas production in 2040, compared with less than 10 percent in 2011 (EIA, 2013a). However, it is difficult to extract economically. The low-permeability rock holding shale gas and other unconventional hydrocarbon resources is generally hydraulically fractured to free the gas.

Hydraulic fracturing uses a high-pressure injection of fluid (generally water), proppant (often sand), and small amounts of chemicals to create fracture networks or enhance existing fractures in the rocks to stimulate production (e.g., NRC, 2013).2 The consequences of this practice and other aspects of unconventional hydrocarbon production have been a matter of intense public debate. Proponents of unconventional hydrocarbon development emphasize issues such as greater energy security, economic development, job creation, reduced greenhouse gas emissions from natural gas relative to other fossil fuels, and well-established engineering techniques. Opponents of unconventional hydrocarbon development identify potential problems such as contamination of surface water and groundwater, depletion of water resources, fragmentation and loss of habitat, public health effects, induced seismicity, air pollution, and increased greenhouse gas emissions due to leakage of natural gas. Each state with potential shale gas resources has largely sought its own balance in developing the resource and safeguarding the environment (e.g., Wiseman, 2012). In the Appala-

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1 See also http://energy.cr.usgs.gov/oilgas/addoilgas/.

2 See also http://energy.usgs.gov/OilGas/UnconventionalOilGas/HydraulicFracturing.aspx.



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1 Introduction M ost of the oil and gas produced in the United States comes from conventional reservoirs in which hydrocarbons have accumulated in discrete structural or stratigraphic traps below relatively impermeable rock and above a well-defined hydrocarbon–water interface (USGS, 2002).1 However, a growing fraction comes from unconventional reservoirs—geographi- cally extensive accumulations of hydrocarbons held in low-permeability rock (e.g., shale, siltstone) with diffuse boundaries and no obvious traps or hydrocarbon–water contacts. Unconventional hydrocarbons include shale gas, tight oil, tight gas, coalbed methane, and gas hydrates. Shale gas is the fastest growing source of U.S. natural gas (Figure 1.1). The Energy Information Administration projects that shale gas will account for nearly half of U.S. natural gas production in 2040, compared with less than 10 percent in 2011 (EIA, 2013a). However, it is difficult to extract economically. The low-permeability rock holding shale gas and other unconventional hydrocarbon resources is generally hydraulically fractured to free the gas. Hydraulic fracturing uses a high-pressure injection of fluid (generally water), proppant (often sand), and small amounts of chemicals to create fracture networks or enhance existing fractures in the rocks to stimulate production (e.g., NRC, 2013).2 The consequences of this practice and other aspects of unconventional hydrocarbon production have been a matter of intense public debate. Proponents of unconventional hydrocarbon development emphasize issues such as greater energy security, economic development, job creation, reduced greenhouse gas emissions from natural gas relative to other fossil fuels, and well-established engineering techniques. Opponents of unconven- tional hydrocarbon development identify potential problems such as contamination of surface water and groundwater, depletion of water resources, fragmentation and loss of habitat, public health effects, induced seismicity, air pollution, and increased greenhouse gas emissions due to leakage of natural gas. Each state with potential shale gas resources has largely sought its own balance in developing the resource and safeguarding the environment (e.g., Wiseman, 2012). In the Appala- 1 See also http://energy.cr.usgs.gov/oilgas/addoilgas/. 2 See also http://energy.usgs.gov/OilGas/UnconventionalOilGas/HydraulicFracturing.aspx. 1

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2 DEVELOPMENT OF UNCONVENTIONAL HYDROCARBON RESOURCES IN THE APPALACHIAN BASIN FIGURE 1.1  Trends in U.S. production of dry natural gas by source, in trillion cubic feet, 1990–2011 and projections to 2040. Projections are based on energy factors (production, imports, consumption) and economic factors (prices, economic indicators such as gross domestic product, energy intensity) and assume that current laws and regulations affecting the energy sector remain unchanged through the projection period. SOURCE: EIA (2013a). chian Basin, for example, shale gas development is proceeding in Ohio, Pennsylvania, and West Virginia, while New York and Maryland have commissioned studies to assess potential impacts. 3 At the request of West Virginia University, the National Research Council organized a work- shop to examine the geology and unconventional hydrocarbon resources of the Appalachian Basin; technical methods for producing unconventional hydrocarbons and disposing of wastewater; the potential effects of production on the environment; relevant policies and regulations; and priorities for future scientific and engineering research (see Box 1.1). A comprehensive treatment of these topics is not possible in a 2-day workshop, so the planning committee chose to focus on shale gas and tight gas, which are economically important to the region and also of intense public interest. West Virginia University expects to use the results of the workshop to support its land-grant univer- sity mission of providing new knowledge, reaching out to the community, and creating economic development opportunities.4 The Appalachian Basin includes several major shale gas and tight gas formations at different depths and spatial extents (e.g., Coleman et al., 2011; Kirschbaum et al., 2012). The boundaries of the most productive formations are shown in Figure 1.2. Some of the shale gas and tight gas formations produce methane (dry gas), and others produce methane mixed with natural gas liquids such as ethane, propane, and butane (wet gas). These natural gas liquids can be separated from the methane and sold as separate products for a variety of industrial applications. 3 See http://www.dec.ny.gov/regulations/77353.html; http://www.mde.state.md.us/programs/Land/mining/marcellus/ Pages/index.aspx. 4 Presentation by James P. Clements, president of West Virginia University, on September 9, 2013.

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INTRODUCTION 3 BOX 1.1 Statement of Task An ad hoc NRC committee will organize a 2-day public workshop on development of unconven- tional hydrocarbon resources in the Appalachian Basin. The workshop will include presentations that examine the numerous geoscientific aspects of hydrocarbon development from unconven- tional resources, including natural gas, oil, and natural gas liquids. The workshop will provide an independent forum for dialogue, including contributions from experts representing a full range of geoscience and engineering fields. The committee will develop the agenda, select and invite speakers and discussants, and moderate the discussions. Topics of emphasis in the workshop will include: 1. Geology and hydrocarbon resources—Main hydrocarbon-bearing geologic formations in and around the Appalachian Basin, including the Marcellus, Utica, and Devonian shales, and their estimated resources of natural gas, oil, and/or natural gas liquids and current and projected produc- tion levels. 2. Potential effects on surface water and groundwater quality and quantity—Connections be- tween hydraulic fracturing and other production technologies and processes, and water systems, including scientific data and methods in assessing impacts. 3. Potential effects on landscapes, including soil and living organisms, and other environmental systems—Connections between hydraulic fracturing and other production technologies and pro- cesses on environmental systems, including scientific data and methods in assessing impacts. 4. Technical and engineering processes—Current and prospective technical and engineering processes for exploration and production of hydrocarbons from unconventional resources, and management methods for wastewater, including disposal. As appropriate, the workshop will also include presentations on relevant state and federal water quality laws, regulations, and permitting processes, as well as relevant land-use and land manage- ment policies. Following the workshop, the National Research Council will issue an individually- authored summary of the workshop, prepared by a designated rapporteur. This report will sum- marize the discussions at the workshop, including priorities for future scientific and engineering research as identified by workshop participants. OVERVIEW OF THE WORKSHOP The workshop was organized and convened by a planning committee and held on September 9-10, 2013, at West Virginia University. Participants were drawn from universities, private com- panies, federal and state government bodies, and nongovernmental organizations to bring a wide range of expertise and perspectives to the workshop. Sixty-six people attended the workshop, and an additional 54 people participated remotely via webcast (Appendix C). 5 The workshop was organized roughly around the statement of task (Box 1.1), with sessions on the geology, resources, and production in the Appalachian Basin (Task 1); water and regulations (Task 2); and ecosystems, air, and climate (environmental systems, Task 3). Technical and engineer- ing processes (Task 4) were discussed in all three sessions. Each session began with a few plenary talks to provide a broad overview of the topics (see the agenda in Appendix B). Next, participants broke into four multidisciplinary working groups to discuss the issues in more depth. Each set of working groups discussed the same topics. To begin discussion, two working group members gave 5 The webcast is available at http://www.tvworldwide.com/events/nas/130909/.

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4 DEVELOPMENT OF UNCONVENTIONAL HYDROCARBON RESOURCES IN THE APPALACHIAN BASIN FIGURE 1.2  Extent of three major shale gas formations in the Appalachian Basin: the Marcellus, Utica, and Ohio shales. SOURCE: Energy Information Administration. brief talks, one from an industry perspective and one from a nonindustry perspective, comment- ing on the plenary presentations and raising other important issues. The key points of discussion, technical and engineering issues, and future research priorities were captured by a rapporteur and presented back in plenary session (see Appendix D). The workshop concluded with some brief thoughts by planning committee members and other workshop participants.

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INTRODUCTION 5 SHALE GAS PRODUCTION PROCESS The following overview of the shale gas production process was based on sources cited at the workshop6 or provided as background by the planning committee (e.g., NETL, 2009). The shale gas production process has several stages, most of which are governed by regulations and sub- jected to various tests by the operator. First, the site is prepared by clearing and leveling the land surface and constructing the production infrastructure, including a well pad for the drilling rig and other equipment, an access road to the well pad, reserve pits to manage drilling fluid and cuttings, and compression stations to facilitate the transport of gas. In Pennsylvania, the average size of a Marcellus Shale well pad is about 3 acres, and an additional 6 acres are occupied by roads, pipe- lines, and water impoundments (Johnson, 2010). Most pads installed in the past few years have two or three wells, although pads can accommodate up to 12 wells, depending on issues such as lease size and restrictions, available capital, economics, terrain, and logistical challenges (Kuntz et al., 2011; Ladlee and Jacquet, 2011). Each well is drilled in intervals. The first section of the well is drilled with a large-diameter drill bit, and a section of pipe is inserted into the hole. Cement is pumped into the space between the hole and the pipe to secure the pipe in place. A smaller-diameter hole is then drilled to a depth below the water table. A length of pipe, called the surface casing, is set into the borehole and cemented in place. A deeper interval is then drilled and another casing string is cemented. This step may be repeated several times with additional concentric strings of casing (Figure 1.3). Below the aquifers, the casing is set to ensure that gas from the producing zone flows into the well and not into other low-pressure zones outside of the casing. At depths slightly above the shale layer, the wellbore is generally turned, and drilling contin- ues horizontally through the shale layer for several thousand feet. Horizontal drilling significantly increases the well’s exposure to the gas-producing formation, thereby increasing production. Next, perforating guns are lowered into the producing section of the well. Explosive charges are detonated to puncture holes through the cement, casing, and edge of the rock formation. This is followed by hydraulic fracturing. Rather than perforating and fracturing the entire gas-producing interval at one time, the process is generally performed on smaller, isolated sections (stages) of the well. Fracturing discrete intervals also allows operators to make adjustments for variations in the formation, such as shale thickness, the presence of natural fractures, and proximity to fractures from a nearby well. Approximately 5 million gallons of water are required for each hydraulic fracturing job. 7 After a hydraulic fracturing job is completed, the formation pressure causes some of the water in the fracture fluid to come back out of the well (flowback water), initially at a high rate. Some of the sand grains remain in the rock fractures, propping them open and allowing the gas to move. Next, production tubing is lowered to the depth at which fluids have accumulated and the space between the tubing and the casing is sealed with an inflatable packer to ensure that fluids enter the tubing. With this step, the well has been completed and is ready for production. In the production stage, natural gas, water, and any natural gas liquids flow from the for- mation into the well. The fluids are separated, and the gas is transported through pipelines to a gas-processing facility. The water, which is a blend of flowback water and produced water (water naturally occurring in the shale), is collected and then managed by underground injection, treatment and reuse, treatment and discharge, or evaporation. 6 See http://lingo.cast.uark.edu/LINGOPUBLIC/natgas/index.htm, cited in John Veil’s presentation. 7 Presentation at the workshop by John Veil, Veil Environmental, LLC, on September 9, 2013.

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6 DEVELOPMENT OF UNCONVENTIONAL HYDROCARBON RESOURCES IN THE APPALACHIAN BASIN FIGURE 1.3  Schematic of the casing and cement installed in shale gas wells. This illustration shows four concen- tric strings of casing (conductor, surface, intermediate, and production) and a small-diameter production tubing string. The conductor casing prevents surface soil from caving into the well; the surface casing seals off freshwater aquifers; and intermediate casing seals off any saltwater zones. The depths (in feet) are illustrative. SOURCE: ALL Consulting, http://energyindepth.org/ohio/the-myths-and-realities-of-horizontal-drilling-and-fracing/. ORGANIZATION OF THE REPORT This report focuses on the geologic, environmental, and engineering aspects of unconven- tional hydrocarbon production in the Appalachian Basin. As such, it complements other recent NRC workshops that focus on health effects (IOM, 2013) and risk management and governance (NRC, in preparation). The organization of this report mirrors the structure of the workshop, which roughly followed the Statement of Task. Chapters 2, 3, and 4 summarize the plenary and work- ing group presentations for the three sessions of the workshop. Chapter 2 covers the geology of the Appalachian Basin, unconventional resources and how they are produced, and the potential of these production activities to induce earthquakes (Tasks 1 and 4). Chapter 3 covers the impact of unconventional hydrocarbon production on water quality and water quantity (Tasks 2 and 4) and also summarizes federal and state regulations aimed at protecting water and other elements of the

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INTRODUCTION 7 environment. Chapter 4 covers the potential impacts of production on ecosystems, air quality, and climate (Tasks 3 and 4). Finally, Chapter 5 summarizes closing remarks made by the planning com- mittee and other workshop participants. Supporting material for the report appears in the bibliography, which include papers cited in the presentations or discussed in the working groups, and the appendixes. A letter from John D. Rockefeller, U.S. Senator for West Virginia, is given in Appendix A. The workshop agenda and list of participants appear in Appendixes B and C, respectively. The reports made by the working groups are given in Appendix D. Biographical sketches of planning committee members appear in Appendix E. Finally, acronyms and abbreviations appear in Appendix F. This report has been prepared by the workshop rapporteur as a factual summary of what occurred at the workshop. The planning committee’s role was limited to planning and convening the workshop. The views contained in the report are those of individual workshop participants and do not necessarily represent the views of all workshop participants, the planning committee, or the National Research Council.

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