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A Perspective On New Well Completion And Stimulation Regulations In California — Implications For Petroleum Geologist Resulting From Senate Bill 4 (SB-4) And Other Local Regulations

Abstract

Introduction

Uncertainty surrounds new environmental regulations in California. Oil and gas producers in California are now tasked with addressing technical requirements that are not clearly defined. In particular, Senate Bill 4 (SB-4) places new reporting, monitoring and review requirements on the well permitting process. New or pending regulatory requirements are also associated with other agencies, including Kern County and South Coast Air Quality Management District. This paper focuses on technical issues associated with SB-4, with implications for petroleum geologists.

Background

Hydraulic fracturing is a common well completion technique successfully utilized by the oil and gas industry for over 50 years. During the past few years, various environmental organizations, along with the general public, raised concerns regarding this common practice. Initially, these concerns were associated with large staged-fracturing in horizontal wells. But now, environmentalist voice concerns regarding the practice in general.

  • Is hydraulic fracturing safe?
  • Will it contaminate groundwater supplies?
  • Are there unrecognized potential risks associated with this completion technique?
  • What geologic factors may represent potential risks (e.g., earthquakes)?
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    The California Department of Conservation, in conjunction with Division of Oil, Gas and Geothermal Resources (DOGGR), proposed new regulations in California address public concerns, improve disclosure, increase safety, and reduce potential risks. Concurrently, members of the State legislature proposed new regulations, resulting in passage of SB-4. DOGGR is tasked with implementing the conditions set forth in SB-4. Oil producers in California must adapt to these new regulations beginning in 2014, and address initial technical requirements with assistance from petroleum geologists.

    Important questions relevant to a petroleum geologist are listed below.

  • What are the public concerns behind these new regulations?
  • Can we learn from flaws in these new regulations to improve the process?
  • How does a petroleum geologist prepare to address requirements in these new regulations?
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    Addressing Technical Issues

    Primary public concerns in California regarding hydraulic fracturing cover a range of geologic issues. The three most often heard issues are listed below.

  • Groundwater supplies and contamination
  • Induced seismicity and increased earthquake risks
  • Public exposure to hazardous chemicals
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    Limited potable water supplies in California exist with or without oil and gas operations. Agriculture consumes the highest percentage of water, following by municipal use. Regardless, water consumption by the oil and gas industry is indentified as a public concern.

    Generally, groundwater contamination with chemicals used during hydraulic fracturing is not common. Induced fractures are typically limited in vertical and horizontal extent. Methane gas is documented in shallow groundwater aquifers, but may be associated with well integrity issues rather than directly related to hydraulic fracturing. Understanding the potential for well releases is an important element for assessing groundwater contamination potential.

    Typically, hydraulic fracturing does not directly cause or increase earthquake risks. Most induced seismicity is associated with deep injection wells used for disposing waste water from hydraulic fracturing operations. But some increased seismic activity is directly attributed to hydraulic fracturing operations in North America.

    Most chemical additives used during hydraulic fracturing process are not hazardous. And chemical additives represent an extremely small percentage of the total fluid volume injected. Industry reluctance to fully disclose the chemicals injected causes public concern. In California, this concern resulted in a new awareness that acid is commonly injected into wells during initial completions, and during typical operations and maintenance activities. New California regulations require disclosing the acid type and volume injected during well completions.

    Proponents of new regulations on hydraulic fracturing in California propose including tracers in the fluid injected. Due to physical constraints, tracers safe for groundwater use would not be detected in shallow aquifers. Long travel distances and dilution factors for tracers limit their application. Therefore, this proposed new requirement would be costly and ineffective.

    Implications for Petroleum Geologists

    In order to comply with technical components of SB-4, additional technical information is required. Some petroleum geologists are being tasked with assembling this information and data. And in some cases, acquiring new additional data (e.g., groundwater monitoring). It is anticipated that the level of detail required will evolve as industry and regulators interact.

    Primary issues associated with geology are potential impacts to groundwater supplies and increased earthquake risks. Addressing these concerns requires technical additional information and data.

    Groundwater conditions

    Defining hydrogeologic conditions presents a new challenge for many petroleum geologists. This includes delineating both aquifers and barriers (vertical and lateral). Typically, petroleum geologists focus on deeper geologic formations and structures. Although some oil and gas fields are relatively shallow, most are substantially deeper and far below useful fresh-water aquifers. Therefore, different data sources and publications may provide useful technical information: Regional Water Quality Control Boards (RWQCB), Department of Water Resources, groundwater industry publications (e.g., National Groundwater Association), and academic publications.

    Establishing baseline groundwater quality and variations is a requirement under SB-4. Defining baseline conditions is critical to protect producers by documenting existing conditions. In many cases, naturally occurring hydrocarbon compounds, typically methane, are present in groundwater. And in other cases, groundwater is brackish or saline, and therefore, does not represent a potable supply. This effort to establish baseline conditions includes monitoring groundwater supply wells, and potentially installing new groundwater monitoring wells.

    In addition to establishing baseline groundwater conditions and defining the hydrogeologic setting, new regulations may prompt computer groundwater modeling. Fate and transport modeling of potential contaminants may be applicable. These studies are conducted by or under supervision of individuals with appropriate California state licenses (i.e., Professional Engineer, or Certified Hydrogeologist) and applicable experience.

    Induced seismicity and increased earthquake risks

    In California, seismicity and earthquake risks are a public concern. And potential induced seismicity associated with oil and gas production is gaining greater public attention. These concerns increase when reports documenting induced seismicity associated with oil and gas operations are published.

    Induced seismicity attributed to oil and gas production is associated with several different production activities. Published reports on induced seismicity either document direct cause and effect or imply a direct connection to oil and gas related activities.

  • Fluid injection in wastewater disposal wells
  • Hydraulic fracturing activities
  • Oil and associated fluid extraction during production
  • Fluid injection for enhanced oil recovery
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    Therefore, addressing specific cause and effect for each scenario, under this broader induced seismicity topic, requires different information and datasets from one issue to another. Petroleum geologists may support studies and provide some of this information. Assistance from specialized technical experts to prepare these evaluations is recommended, and likely required by regulatory agencies. And from the public perspective, this specialized technical expertise will be necessary for “independent review”.

    Summary and Conclusions

    Oil and gas producers may call upon staff petroleum geologist to assist with new regulatory compliance. Addressing new requirements associated with SB-4 and other pending regulations will require additional technical knowledge and experience. Depending upon internal technical expertise, this support could involve different roles for a petroleum geologist, from conducting hydrogeologic evaluations and seismic assessments to overseeing technical consultants who provide specialized expertise. Applicable training and state licenses may be necessary.

    Petroleum geologist will benefit from preparing for the evolving regulatory environment. It is not feasible for a most petroleum geologists to acquire the breath of expertise to support the necessary technical studies. Therefore, a logical alternative is identifying the appropriate resources and expertise capable of conducting these technical studies that address new regulatory requirements.

    It is critical to keep in mind that work conducted to comply with SB-4 or other new regulations will be subject to public review, and potentially legal challenges. Therefore, technical experts providing support must have the appropriate experience and credentials to adequately address issues, and in turn, minimize potential financial risks for producers.