Hydraulic Fracturing Operations
The success of hydraulic fracturing with horizontal drilling techniques in what were once considered unproductive formations has made this a preferred approach to producing natural gas – especially in shale plays. El Paso’s E&P operations span across the major shale gas plays in the United States, as well as in Brazil and Egypt. We also conduct hydraulic fracturing in coalbed methane fields. Consistent with our values, we develop and manage our hydraulic fracturing operations responsibly. Our operations protect groundwater and surface water, the air and land, and the safety of our workforce and the communities in which we operate.
In 2010, we utilized hydraulic fracturing at a total of 120 wells drilled by El Paso, including in the Black Warrior Basin in northwest Alabama; the Haynesville Shale in East Texas and northeast Louisiana; the Wilcox Sand in South Texas, the Altamont Field in the Uintah Basin in northwestern Utah; the Eagle Ford Shale in South Texas; the Wolfcamp Shale in West Texas and New Mexico; and the New Albany Shale in southwestern Indiana.
What is Hydraulic Fracturing?
Hydraulic fracturing is a process of pumping fluid and proppant (sand) into underground geologic formations to create fractures in the formations, which are typically thousands of feet below the surface. During the fracturing process, fluids are injected under high pressure deep into oil and natural gas formations. Injection is conducted in a controlled environment through a well that is isolated from the environment by multiple layers of steel and cement. The hydraulic fracturing process creates small fractures in the hydrocarbon formation. The fractures allow natural gas and oil to move more freely from the formation to the well and finally to the surface production facilities. The fluid used to fracture shale is typically more than 99.5 percent water and sand. Sand particles keep the fractures open after the fluid injection stops. The remaining 0.5 percent of the fluid consists of additives that are necessary to perform the hydraulic fracturing safely and effectively, such as friction reducer, surfactant, gelling agent, scale inhibitor, pH adjusting agent, breaker, crosslinker, iron control, acid, potassium chloride, corrosion inhibitor, antibacterial agent, and clay stabilizer. Many of these additives are the same that are used in household cleaners, foods, and cosmetics. Hydraulic fracturing has been safely used in oil and gas operations since the 1940s in more than a million wells in the United States.
Controls to Protect the Environment
El Paso designs wells and production pipe to isolate producing formations from freshwater zones and the environment. Maintaining well integrity, the containment of hydrocarbons within the well all the way to the surface, is an important feature of all oil and natural gas production wells – it enables well drilling and production and is essential to protecting groundwater and the environment. Our procedures allow us to have consistent controls across our operations and represent industry best practices.
What is Coalbed Methane?
The vast majority of El Paso’s hydraulic fracturing operations occur in deep shale plays, and therefore, this section of our CSR focuses on management of those operations. To a much smaller degree, El Paso has operations in shallower “coalbed methane” plays as well.
Coalbed methane production is a process that releases natural gas that is structurally trapped in beds of coal beneath the earth’s surface. The process requires drilling into the coalbeds, removing the water, and allowing the natural gas stored within the coal to flow to the surface. Natural gas production from coal seams is one of the oldest commercial uses of natural gas in the United States. Water production is an associated byproduct of natural gas production from coalbed methane seams. El Paso properly handles water produced during its operations to protect freshwater aquifers from depletion or contamination.
El Paso’s operations on New Mexico’s Vermejo Park Ranch provide an example of our environmental stewardship of coalbed methane operations. El Paso works closely with Vermejo’s Environmental, Forestry, and Wildlife Departments and Manager Marv Jensen, who has a deep commitment to the environment. As a result of this shared commitment, extensive planning, and attention to detail, the company is able to produce and deliver vital supplies of natural gas, while minimizing impact to the environment. “Through the strong partnership between El Paso and Vermejo Park Ranch, this coalbed methane project is being done in a very environmentally sensitive way,” says Jensen, “and we’re learning and improving as we go.” Additional details about El Paso’s Vermejo Ranch operations are described at www.elpaso.com/greenreport/range.html.
The vast majority of El Paso’s hydraulic fracturing operations occur in deep shale plays, and therefore, this section of our CSR focuses on management of those operations. To a much smaller degree, El Paso has operations in shallower “coalbed methane” plays as well.
Coalbed methane production is a process that releases natural gas that is structurally trapped in beds of coal beneath the earth’s surface. The process requires drilling into the coalbeds, removing the water, and allowing the natural gas stored within the coal to flow to the surface. Natural gas production from coal seams is one of the oldest commercial uses of natural gas in the United States. Water production is an associated byproduct of natural gas production from coalbed methane seams. El Paso properly handles water produced during its operations to protect freshwater aquifers from depletion or contamination.
El Paso’s operations on New Mexico’s Vermejo Park Ranch provide an example of our environmental stewardship of coalbed methane operations. El Paso works closely with Vermejo’s Environmental, Forestry, and Wildlife Departments and Manager Marv Jensen, who has a deep commitment to the environment. As a result of this shared commitment, extensive planning, and attention to detail, the company is able to produce and deliver vital supplies of natural gas, while minimizing impact to the environment. “Through the strong partnership between El Paso and Vermejo Park Ranch, this coalbed methane project is being done in a very environmentally sensitive way,” says Jensen, “and we’re learning and improving as we go.” Additional details about El Paso’s Vermejo Ranch operations are described at www.elpaso.com/greenreport/range.html.
El Paso’s operations follow local, state, and federal regulations — all of which are in place to protect the environment. Although details vary from state to state, all state drilling regulations specifically address groundwater protection, including requirements for the surface casing to be set below the lowest groundwater aquifer. Regulations require steel casing and cement sheaths that protect the groundwater with multiple layers of protection for the life of the well. This keeps natural gas, oil, and fracturing fluids in the wellbore. During production operations, the pressure in the well is monitored and the well integrity is tested as required by applicable rules to ensure that the steel and cement are protecting the environment as they are designed to do, and any problems are identified and resolved.
Drilling and completion procedures, examples of which are described in more detail below, were designed by engineers and geologists and have been used in tens of thousands of wells over many years to protect groundwater from gas, oil, and fracturing fluids entering the environment. The other important protection to groundwater, however, is naturally occurring. This protection is the great separation between freshwater aquifers and hydrocarbon-bearing shale formations.
Groundwater aquifers typically occur close to the surface — from just below the surface to a depth of approximately 1,000 feet. Because of the distance between the targeted hydrocarbon bearing shale and drinking water, thousands of feet of solid rock prevent hydraulic fracturing fluid from moving upwards toward potential freshwater aquifers.
Although we believe that current regulations provide adequate protection, we continue to identify opportunities to further protect the environment. The following are a few examples.
Groundwater Protection
El Paso provides multiple layers of groundwater protection through the following:
- Maintaining wellbore integrity through industry best practices. Wells are designed to protect underground sources of fresh water. The design prevents contact between the fluids in the well and freshwater aquifers. In a typical well, for example, cement is pumped into the space between the hole and the surface casing. El Paso’s specifications require that the contractor circulates cement back to the surface and tests it at the site to ensure that all of the cement in the annulus is good cement. This method of installing the surface casing and testing the cement achieves a reliable seal between the surface casing and the hole to protect groundwater.
During production operations, the pressure in the well is monitored to verify well integrity as required by applicable rules. This ensures that the steel and cement are protecting the environment as they are designed to do and any problems are identified and resolved.
- Training of all personnel involved in hydraulic fracturing. El Paso ensures that its employees, contractors, and subcontractors are trained on the proper use of all equipment and materials used in hydraulic fracturing at our locations. This includes training on the proper transportation and handling of all fluids and chemicals used, as well as the safety of all aspects of the operation.
- Maintaining, inspecting, and testing equipment. As a highly technical process, El Paso requires all equipment related to hydraulic fracturing to be properly maintained, inspected, and tested. This ensures that equipment will work as designed and minimizes the chance of an incident.
The chemical additives used in hydraulic fracturing generally will be less than 1 percent of the total volume pumped, and many of these additives are chemicals found in common household cleaning products, food, and cosmetics with more than 40 years of safe use. Nonetheless, El Paso continually evaluates chemical use and looks for opportunities to reduce the number and volume of chemicals used across its operations, including hydraulic fracturing. This is good for the environment, employee safety, and communities where we live and work. The company uses specialized employees in this review process.
In May 2011, El Paso and Halliburton completed the first gas well with ecologically benign fracture fluid. El Paso’s use of the CleanSuiteTM system not only represents our commitment to responsible energy development, but it is also consistent with our long-standing approach to conduct our hydraulic fracturing operations in an environmentally sensitive manner. A completion using the CleanSuite system results in:
- Using CleanStimTM hydraulic fracturing fluid comprised of ingredients from the food industry. More than 4 million gallons of the CleanStim fluid were used to enhance the well, and resulted in faster production of natural gas.
- Preventing the addition of 2,400 gallons of biocide. The CleanStreamTM process uses ultraviolet light instead of additives to control bacteria in water, reducing the amount of biocide needed to complete a well.
For El Paso, transparency about environmental issues is an important component of our vision to be the Neighbor to Have. We share this information with the public on a Web-based registry created and managed by the Ground Water Protection Council, a multi-stakeholder nongovernmental organization, and the Interstate Oil and Gas Compact Commission, representing state regulatory agencies. The online registry provides a central location for the public and industry to communicate and relay information on the type, volumes, and suppliers of constituents (including water) used during the process of hydraulic fracturing of oil or natural gas wells. The registry is available at www.fracfocus.org.
Our service companies also share information about hydraulic fracturing constituents, either directly or by allowing El Paso to make disclosures through the registry. Service companies we use who make or allow these disclosures include Schlumberger, Halliburton, Maverick, Weatherford, BJ Services, Superior, and Fractech.
Water Supply
Water supply is an essential issue in the responsible management of hydraulic fracturing. To El Paso, responsible management includes preferentially selecting sources of water that are not used for drinking. It also means trying new technologies that can reduce the amount of fresh water required in the hydraulic fracturing process:
- El Paso uses recycled paper mill wastewater in some of its hydraulic fracturing operations.
- As part of the May 2011 CleanSuite technologies well completion, 1 million gallons of produced water were prepared for recycling in the well through the CleanWave™ system, significantly reducing the need for fresh water.
- El Paso is pilot testing treatment technologies that allow the treatment and reuse of produced water (natural salt water released from the shale) as a means to reduce our overall fresh water demand.
Water returning to surface facilities following hydraulic fracturing operations is termed “flowback” and is a mixture of dilute fracturing fluids and natural waters from the producing geologic formation. Flowback is collected at the surface for disposal and evaluated for recycling in other hydraulic fracturing operations.
El Paso injects flowback water from its fracturing operations into wells specifically designed and permitted for the safe disposal of flowback water when they are available. These wells are regulated under the EPA’s Safe Drinking Water Act. The wells allow the flowback water to be disposed of in geologic layers isolated by depth, distance, and impermeable rock from usable drinking water. If injection wells are not available, the flowback water is discharged in accordance with applicable federal and state laws.
Surface Water Protection
El Paso has in place SPCC (Spill Prevention, Control and Countermeasures) plans as outlined by EPA regulations to prevent incidents that could affect surface water. For example, formal spill prevention, response, and cleanup procedures are in place before initiating any activity that has a potential for a spill. Any surface impoundments used to store fracturing liquids are designed and maintained to prevent spills or releases.
What is Shale Gas?
The term shale gas is used to describe the natural gas that is trapped within shale formations. In addition to gas, oil and other hydrocarbons are also trapped within these formations. Shales are a type of fine-grained rock that can contain large amounts of natural gas and other hydrocarbons.
The natural gas and hydrocarbons found in shale plays occur many thousands of feet below the earth’s surface. Nearly all of El Paso’s hydraulic fracturing operations occur in deep shale plays, and our CSR focuses on management of those operations.
Air-Related IssuesThe term shale gas is used to describe the natural gas that is trapped within shale formations. In addition to gas, oil and other hydrocarbons are also trapped within these formations. Shales are a type of fine-grained rock that can contain large amounts of natural gas and other hydrocarbons.
The natural gas and hydrocarbons found in shale plays occur many thousands of feet below the earth’s surface. Nearly all of El Paso’s hydraulic fracturing operations occur in deep shale plays, and our CSR focuses on management of those operations.
After a new well has been drilled, El Paso removes fluids and debris from the wellbore. In some locations, the standard industry practice is to flare or vent any natural gas produced during this process, resulting in a short-term release of some GHGs, such as carbon dioxide and methane, into the atmosphere. Green completions are a method of completing a well that captures this early natural gas, instead of flaring or venting. El Paso performs green completions where infrastructure allows them to be done economically.
Community Issues and Engagement
As the use of hydraulic fracturing increases in higher-population areas, community issues have become more visible. El Paso is committed to working directly with local communities and governments to ensure that noise, truck traffic, and potential effects on ecologically sensitive areas are properly assessed and managed. El Paso complies with all state and local rules that require minimum setbacks from homes, schools, or other buildings. Local economic benefits from hydraulic fracturing include increased employment; purchases of goods and services by employees, contractors, and subcontractors; and increased tax revenues.
El Paso is an active participant in industry groups, such as ANGA and the American Exploration Production Council, and works with these groups to inform local communities and to address their concerns. As an example, El Paso worked with ANGA to host a town hall-style meeting in Carrizo, Texas, that was attended by approximately 300 stakeholders.
Future Regulations
It is El Paso’s policy to manage hydraulic fracturing operations in compliance with applicable federal, state, and local laws and regulations.
El Paso believes that current regulations such as the Clean Water Act, the Clean Air Act, and state and local regulations provide reasonable and prudent oversight to oil and gas operations, including hydraulic fracturing, as well as the Safe Drinking Water Act, which regulates disposal of flowback from hydraulic fracturing. El Paso does not oppose enhancements that are based on sound science to address real environmental risks, and do not prohibit El Paso from responsibly managing its business.
Federal regulations and guidance are being considered; however, they would impose more stringent regulation of hydraulic fracturing under the Safe Drinking Water Act, and some state authorities are considering similar proposals. Such laws and regulations, if adopted, could impose additional costs in our operations, as well as cause significant delays in obtaining regulatory approvals to drill and complete wells. In addition, there have been proposals to restrict certain buyers from purchasing natural gas and oil produced from wells that have utilized hydraulic fracturing in their completion process, which could negatively impact our ability to sell our production from wells that utilize these fracturing processes.
Conclusion
Across all aspects of our operations, we uphold the vision and values of El Paso. As a core element of our business strategy, we manage hydraulic fracturing to protect the environment, our workforce, and the communities where we operate. This is not only the right thing to do, but it is the only way we can sustainably meet the needs of our customers, shareholders, employees, business partners, and neighbors.
Spill Prevention Programs
We have programs in place to mitigate the risk of accidental spills or releases associated with our operations that allow for effective response to environmental incidents. For example, we have procedures in place for the installation and inspection of storage tanks, containment structures, product storage, stormwater basins, and leak detection equipment.
For our onshore operations that produce and store oil, SPCC plans define facility inspection and documentation requirements for oil storage tanks and associated equipment. For areas with SPCC plans, annual training is conducted to ensure field personnel understand these plans and response procedures.
Our offshore production operations are held to standards requiring the capture and treatment of liquids, including stormwater that contacts the production area decks. In addition, offshore production safety systems are employed on platforms to automatically shut down operations or equipment in the event of a leak or detected failure. El Paso has procedures in place to manage the risk of accidental releases of oil and natural gas from our facilities, including the use of containment systems and other countermeasures specifically designed to address such risks.
Internationally, our E&P operations meet all applicable national and local regulations and standards associated with specific environmental licenses. We demonstrate our commitment to responsible operations by ensuring appropriate resources and equipment are available to prevent, respond to, and mitigate environmental incidents.
