The Ohio Department of Natural Resources Division of Mineral Resources Management

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Emergency Management Association Of Ohio- Spring
Directors Seminar
Ohio Department of Natural Resources Division of
Mineral Resources Management (DMRM)
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On Behalf Of
Director David Mustine Assistant Director
Scott Zody DMRM Chief - John Husted
Presentation by Tom Tugend
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Division of Mineral Resources Management
(DMRM) Provides for the Safe and
Environmentally Sound Development and
Restoration of Mineral and Fossil Fuel Extraction
Sites
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What We Oversee

• Oil/Gas Well Permitting, Drilling,
• Production, Plugging
• Industrial Mineral Permitting
• Mining
• Mine Safety

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What We Oversee - Continued

• Coal Mine Permitting, Mining
• and Reclamation
• Abandoned Mined Lands
• Reclamation
• Orphan Well Plugging
• EPA Certified Lab

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• 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

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Permitting Overview

• Leasing Precedes Permitting
• Owner Registration (Bonding/Insurance)
• Permitting Spacing, Casing, Pre-Permit Site
• Review, Permit Conditions, Restoration Plan

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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
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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

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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

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Prevention of Impacts to the Environment
and Protection of Public Safety

• Key Factors
• Permitting
• Well Site Construction
• Well Construction !
• Well Control !
• Fluid Control !
• Oversight

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Our Field Enforcement Focus/Priority

• Complaints Posing Threats to Public
• Safety and the Environment
• Drilling Operations Protection of
• Fresh Water/Public Safety/Environment
• Plugging Operations
• Routine Inspections Public
• Assistance

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Most Common Violations

• Well Site Identification
• Idle Wells
• Pollution/Contamination
• Restoration
• Brine Disposal
• Gas Leaks

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Good or Bad What is the Real Story
Hydraulic Fracturing Fracking Fracing
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Hydraulic Fracturing
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.
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Hydraulic Fracturing Cont.
Is this a New Process NO Almost Every Well
Drilled in Ohio Since the Late 1970s has
Been Hydraulic Fractured (Approximately 80,000
Wells have Been Hydraulic Fractured in Ohio)
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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

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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.
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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.
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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).
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Oil and Gas Activity 1990-2010
Total Permits Issued 44,367 Drilling -
21,507 Plugging - 22,860 Wells Drilled
16,409 Wells Plugged 15,298 Total Ohio Wells
64,427
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Wells Drilled The Early Years

• Year Wells Drilled
• 2593
• 1895 6147
• 1900 6555
• 2134
• 1980 5100
• 6085
• 4830

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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

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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 ?

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So, why is this a big deal?Potential Production

• A typical conventional gas well in the
  Appalachian Basin produces 100500,000 CF of gas
  per day and 200500 MMCF in its life. (500 MMCF
  x 4/MCF 2M gross revenue creating a 250K
  royalty payment _at_12.5 of gross.)
• Horizontal Marcellus (or Utica?) well may produce
  around 210 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 _at_ 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

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Differences Between a Horizontal Well
andTraditional 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

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We are not alone.
Source U.S. EIA, 2010.
Many shale gas plays are now developing across
the United States and Canada.
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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
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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
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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
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Generalized Geology and Profile of a Utica Shale
Well
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Sandstone A Typical Reservoir Rock
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PORE
SAND GRAIN
SAND GRAIN
SAND GRAIN
PORE
Graphic from Kostelnick (2010).
A porous sandstone prepared for viewing under
a microscope reveals pore spaces (blue areas).
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Shale is extremely fine grained with many very
small pore spaces.
UTICA SHALE
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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

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Risks Cont.

• Fires During Drilling/Well Completion
• Injury to Rig Hands While Drilling
• Lightning Strikes
• Tank Fires

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Tank Launching
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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
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ODNR Division of Mineral Resources
(DMRM) Management Contact Information
See DMRM Web Site for Additional County Contact
Information and Information on Shale Drilling and
DMRMs Programs DMRM Web Site Go to ODNRs Web
Site http//ohiodnr.com/, Click on Other
Divisions, Click On Mineral Resources and
Click on Oil and Gas