Comparison of Oil and Gas Violations and the Sale of Wells

November 12, 2014/by FracTracker Alliance

Well pad spill, wetland. Photo courtesy of WV Host Farms Program

By Matt Unger, FracTracker GIS Intern

When the unconventional oil and gas extraction boom hit Pennsylvania in the mid-2000s small, local operators were among the first on the scene. As shale plays continued to develop, many of these smaller companies were bought out by larger, national corporations. Larger oil and gas development companies often maintain that they are better able to handle the expected regulatory requirements, and so FracTracker wanted to determine if there was a change in the compliance record for wells that changed hands. Does having more resources available to them translate into stronger compliance standards for oil and gas drillers, better training for their employees, and a greater burden to get things right? Investigating these questions by looking into compliance data and the sale of wells, however, was no easy task.

Analysis Methods

There are no indications in either the drilled wells or permits datasets available from the DEP that a well has changed hands; in both of these sources, one operator’s name is simply substituted for the other. It is possible to comb through old news stories, and find that East Resources sold its assets to Shell in 2010, for example. However, this approach is piecemeal, and would not lead to satisfactory results on an industry-wide analysis.

Major obstacles to our analysis included:

Lack of information on the transfer of oil and gas wells from one operator to another
There is often a lag time between the time violations occur and when they are reported
Errors in compliance reporting. For example, one API Number was found to have the operator listed as “Not Assigned” (It was later discovered that this well was never sold).

Results

Unlike wells and permits, any items on the compliance dataset are attributed to whichever company was operating the well at the time the violation was issued. So while FracTracker could not do the analysis that we wanted to because of the limitations of available data, we were able to isolate 30 wells that have changed hands between January 1, 2000 and November 4, 2014 (Table 1). One well has been bought and sold twice, with each of the three operators being issued violations.

In some instances the original well owner was reported to be out of compliance more times than the second owner. For example, API Number 013-20012 had 11 violations reported under its first owner and only 1 since it has been sold. The contrary also occurred, however, such as in the case of API Number 065-26481, which had 4 violations reported under its first owner and 14 under its second owner. There are not enough data points to determine which scenario is the trend in the data – if in fact there is one.

Due to limitations in the data, we cannot currently evaluate whether the notion that larger companies can improve the track record of problematic wells. In fact, many of the wells that were issued violations for multiple operators really just changed hands from one big operator who wanted to get out of the Marcellus to another big operator who wanted to get in. Our small sample doesn’t include any of the wells that were issued violations to only one company, of all the wells that changed hands over the years. To accurately assess the scenario, more data would have to be released, specifically the date when wells changed hands from one company to another.

Table 1. Wells with violations by API number that have changed ownership

API Number	First Owner	Last Known Date Of Ownership	Second Owner	First Known Date Of Ownership	Third Owner	First Known Date Of Ownership
013-20012	Chief Oil & Gas LLC	5/24/10	Chevron Appalachia LLC	2/5/13
015-20033	Belden & Blake Corp	4/10/09	Chesapeake Appalachia LLC	12/7/11
015-20051	Consol Gas Co	6/16/04	Range Resources Appalachia LLC	8/9/05	Talisman Energy USA Inc	11/16/11
019-21494	Phillips Exploration Inc	6/10/08	XTO Energy Inc	7/24/13
019-21680	Phillips Exploration Inc	4/6/10	XTO Energy Inc	3/13/13
065-26481	Dannic Energy Corp	5/11/11	Mieka LLC	11/10/11
065-26832	Dannic Energy Corp	3/2/11	Mieka LLC	4/11/12
081-20062	Chief Oil & Gas LLC	1/6/09	Exco Resources Pa LLC	8/16/11
081-20069	Chief Oil & Gas LLC	5/21/08	Exco Resources Pa LLC	3/28/11
081-20128	Chief Oil & Gas LLC	11/15/10	Exco Resources Pa LLC	6/27/11
081-20144	Chief Oil & Gas LLC	7/21/10	Exco Resources Pa LLC	3/15/12
081-20149	Chief Oil & Gas LLC	1/10/11	Exco Resources Pa LLC	2/21/12
081-20244	Chief Oil & Gas LLC	5/20/10	Exco Resources Pa LLC	11/15/12
081-20255	Chief Oil & Gas LLC	11/15/10	Exco Resources Pa LLC	11/29/11
081-20279	Chief Oil & Gas LLC	12/3/10	Exco Resources Pa LLC	4/20/12
081-20298	Chief Oil & Gas LLC	5/26/10	Exco Resources Pa LLC	6/27/11
083-53843	Anschutz Exploration Corp	4/7/09	Chesapeake Appalachia LLC	3/20/13
113-20025	Chief Oil & Gas LLC	2/15/11	Exco Resources Pa LLC	3/16/11
113-20049	Chief Oil & Gas LLC	11/30/10	Exco Resources Pa LLC	4/13/11
115-20052	Turm Oil Inc	9/24/08	Chesapeake Appalachia LLC	8/21/14
115-20169	Alta Opr Co LLC	11/24/09	WPX Energy Appalachia LLC	4/13/11
115-20174	Alta Opr Co LLC	4/16/10	Wpx Energy Appalachia LLC	4/29/11
115-20191	Alta Opr Co LLC	12/1/09	Wpx Energy Appalachia LLC	6/1/11
115-20214	Alta Opr Co LLC	7/19/10	Wpx Energy Appalachia LLC	8/16/10
115-20231	Alta Opr Co LLC	4/8/10	Wpx Energy Appalachia LLC	6/1/11
117-20197	East Resources Inc	4/8/08	Talisman Energy USA Inc	1/26/11
117-20280	East Resources Inc	5/19/10	Swepi LP	8/28/14
117-20330	East Resources Inc	12/18/09	Talisman Energy USA Inc	2/20/13
117-20394	East Resources Inc	12/14/09	Swepi LP	10/25/11
117-20538	East Resources Inc	12/18/10	Swepi LP	5/27/10

Conventional and unconventional wells in PA

Over 1.2 Million Pennsylvanians Within 1/2 Mile of a Well

October 30, 2014/by Matt Kelso, BA

Aging well in McKean County, PA. Source: saveourstreamspa.org

One of the potentially troubling aspects of oil and gas development is that there are usually people who live in the vicinity of the wells. Pennsylvania now has over 8,000 active unconventional wells; there are any number of issues that can occur with these modern, industrial-scale sites, including road degradation, contaminated water, and health impacts, among others. In addition, there are over 93,000 of the smaller, conventional wells in operation throughout the Commonwealth. While these garner far less attention than their unconventional counterparts, they are also prone to producing similar impacts, not to mention that since many of them are older wells, they not only have potentially been subject to deterioration and occasional neglect, but were constructed during a period with less stringent requirements than are currently expected.

Petroleum engineers are now capable of drilling horizontally for tens of thousands of feet. For the most part, however, this technology is employed to maximize production, rather than to ameliorate impacts on people who live near the product. But who are these people? To help to answer this question, the FracTracker Alliance calculated the number of people living in a half-mile radius around active wells in the state.

More than 1.2 million Pennsylvanians live within the impact area.

Of the 93,754 wells that have been drilled in the state since 1950 that have not yet been plugged, the Pennsylvania DEP only has location data for 79,118 of them. All but one of the 14,636 missing locations are for wells that are categorized as Conventional. While one must presume that there is some overlap in coverage within the half-mile zone, the extent of this region – and therefore the population that lives within it – cannot be determined.

Fig. 1. PA Populations Near Oil and Gas Wells. Click here to access written description and additional map tools.

To maximize the reliability of our calculations, this map was created using a custom Albers equal-area projection centered on Pennsylvania. A half-mile buffer around each well type was created, and the resulting layer was clipped to Census tract data. The ratio of the smaller clipped area to the full Census tract area was calculated, and that ratio was then multiplied by the population totals from the 2010 Census to obtain our population estimates of the half-mile zone. The area in the study area is larger than six states, while the calculated population is larger than that of eight states.

Of the 79,118 active oil and gas wells in PA for which location data are available, we determined the area and estimated the population within a half mile radius. Note that some regions are with a half-mile of both conventional and unconventional wells.

Fig. 2. Number of people in PA near oil and gas wells (79,118 active wells for which location data are available). Note that some regions are with a half-mile of both conventional and unconventional wells.

The county most impacted, in terms of area, for unconventional wells is Bradford, with 353 square miles (See Figure 2). Washington County had the most people living in the zone, however, with 20,566. For conventional wells, the drilling landscape is the largest in Indiana County, affecting 761 square miles, while Erie County has the most people in the half-mile zone, with 212,900. When considering all wells together, the numbers are almost identical to conventional wells. Indiana County leads with 762 square miles, while the drill zone in Erie County represents 211,903 people, or 76% of the county’s population in 2010.

Clearing land for shale gas pipeline in PA

International Pipelines and Proposals

October 29, 2014/by FracTracker Alliance

Gas Trucks Blocking Roads

October 28, 2014/by FracTracker Alliance

Companies Lack Truck Traffic Coordination

Recently, I was observing how Statoil was managing their gas well traffic, how well it was moving, and whether local residential traffic was being significantly delayed.

Figure 1. Road map referred to throughout text

In Wetzel County, WV, gas trucks travel 4.5 miles from a Statoil pipe yard (Fig 1. Location A) in Uniontown to the Statoil Kuhn well pad (E). This trip can take at least 15 minutes for each truck. Rockford is also doing pipeline work along this route (B and D).

The roadway Statoil is using, even though it is small gravel lane, is a public route. Routine well pad traffic was moving between the pad and pipe yard. When I attempted to travel out to the well pad, I noticed some issues around the pipeline crossing. A large truck was blocking the road and all traffic was stopped. At 3:59 pm, a large dump truck hauling drill cuttings left the well pad coming towards the pipeline. Statoil personnel radioed the flagger at the pipe yard to stop traffic there.

The dump truck was stopped at the pipeline crossing, point D at 4:09 pm, where the road was blocked. It was not until 4:34 pm that traffic was finally able to proceed. This section of road was closed for 35 minutes, as was the lower road at the pipe yard.

For the past few days, Statoil has been stopping all traffic as soon as any truck leaves the well pad, whether the pipeliners have the road blocked or not.

Associated Issues

There are three serious factors that significantly hamper traffic flow along this route:

Statoil’s Kugh Well Pad

Statoil has flagger-radio personnel stationed at the pipe yard and at the pad, but not at the top of the hill (C) about a mile from the pipe yard. As a result, there was no way to allow any local traffic to come up the hill even when they intend to continue heading west or southeast. With a flagger-radio at the top of the hill, local traffic could be up the hill and long gone before any large trucks got to there. (Note: After a few weeks a traffic person was then stationed at the top of the hill).
Not all Statoil subcontractors trucks are equipped with CB radios, so it is impossible to track their progress or location on this road.
Rockford and Statoil do not use any common radio band. They do not appear to communicate with each other even though they are working along this same truck route.

This traffic block incident luckily did not include emergency vehicle traffic. If there had been any accident on or near the well pad or the pipeline right of way, no one would have been able to get through. It would seem that it is in the best interest of the companies and their employees to make sure the road is clear, all the time. When I discussed this with the tool pusher* on the well pad, he agreed. He was also concerned that there was no helicopter landing area nearby in the event of a serious accident. He runs a safe well drilling operation but wanted to be certain that an emergency vehicle could get through.

* A tool pusher is the boss man who runs the whole drilling operation as a subcontractor to the gas operator.

By Bill Hughes, WV Community Liaison, FracTracker Alliance
Read more Field Diary articles.

The Water-Energy Nexus in Ohio, Part I

October 24, 2014/by Ted Auch, PhD

OH Utica Production, Water Usage, and Changes in Lateral Length
Part I of a Multi-part Series
By Ted Auch, OH Program Coordinator, FracTracker Alliance

As shale gas expands in Ohio, how too does water use? We conducted an analysis of 500+ Utica wells in an effort to better understand the water-energy nexus in Ohio between production, water usage, and lateral length across 500+ Utica wells. The following is a list of the primary findings from this analysis:

Lateral Length

Modified EIA.gov Schematic Highlighting the Lateral Portion of the Well

Figure 1. Modified EIA schematic highlighting the lateral portion of the unconventional well

In unconventional oil and gas drilling, often operators need to drill both vertically and then laterally to follow the formation underground. This process increases the amount of shale that the well contacts (see the modified EIA schematic in Figure 1). As a general rule Ohio’s Utica wells transition to the horizontal or lateral phase at around 6,800 feet below the earth’s surface.

1. The average Utica lateral is increasing in length by 51-55 feet per quarter, up from an average of 6,369 feet between Q3-2010 and Q2-2011 to 6,872 feet in the last four quarters. Companies’ lateral length growth varies, for example:

Gulfport is increasing by 46 feet (+67,206 gallons of water),
R.E. Gas Development and Antero 92 feet (+134,412 gallons of water), and
Chesapeake 28 feet (+40,908 gallons of water).

2. An increase in lateral length accounts for 40% of the increase in the water usage, as we have discussed in the past.

3. As a general rule, every foot increase in lateral length equates to an increase of 1,461 gallons of freshwater.

Regional and County-Level Trends

This section looks into big picture of shale gas drilling in OH. Herein we summarize the current state of water usage by the Utica shale industry relative to hydrocarbon production, as a percentage of residential water usage, as well as long-term water usage and waste production forecasts.

1. Freshwater Use

Across 516 wells, we found that the average OH Utica well utilizes 5.04-5.69 million gallons of freshwater per well.
This figure includes a ratio of 12:1 freshwater to recycled water used on site.
Water usage is increasing by 221-330,000 gallons per well per quarter.
- Note: In neighboring – and highly OH freshwater reliant-West Virginia, the average Marcellus well uses 6.1-6.6 million gallons per well, with a trend increase of 189-353,000 gallons per quarter per well.
- Water usage is up from 4.88 million gallons per well between 2010 and the summer of 2011 to 7.27 million gallons today.

Over the next five years, we will likely see 18.5 billion gallons of freshwater used for shale gas drilling in OH.
On average, drilling companies use 588 gallons of water to get a gallon of oil.
- Average: 338 gallons of water required to get 1 MCF of gas
- Average: 0.078 gallons of brine produced per gallon of water

2. Residential Water Allocation

A portion of residential water (3.8-6.1% of usage) is being allocated to the Utica drilling boom.
- This figure is as high as 81% of residential water requirements in Carroll County.

And amounts to 2.2-3.5% of the available water in the Muskingum River Watershed.

The allocation will increase over time to amount to 8.2-10.5% of residential usage or 4.4-5.6% of Muskingum River available water.

3. Permitted Wells Potential

If all permitted Utica wells were to come online (active), we could expect 299.7 million gallons of additional brine to be produced and an additional 220 million gallons of freshwater a year to be used.
This trend amounts to 1.1 billion gallons of fracking brine waste looking for a home within 5 years.

4. Waste Disposal

Stallion Oilfield Services has recently purchased several Class II Injection wells in Portage County.
These waste disposal sites are increasing their intake at a rate of 2.13 million gallons per quarter, 4.76 times that of the rest of OH Class II wells.

Water Usage By Company

The data trends we have reviewed vary significantly depending on the company that is assessed. Below we summarize the current state of water usage by the major players in Ohio’s Utica shale industry relative to hydrocarbon production.

1. Overall Statistics

The 15 biggest Water-To-Oil offenders are currently averaging 16,844 Gallons of Water per gallon of oil (PGO) (i.e., Shugert 2-12H, Salem-Grubbs 1H, Stutzman 1 and 3-14H, etc).
Removing the above 15 brings the Water-To-Oil ratio down from 588 to 52 gallons of water PGO.
The 9 biggest Water-To-Gas offenders are currently averaging 16,699 gallons of water per MCF of gas.
Removing the above 9 brings the Water-To-Gas ratio down from 338 to 27 gallons of water per MCF of gas.

Company differences are noticeable (Figure 2):

Water Usage by Hydraulic Fracturing Industry in Ohio

Figure 2. Average Freshwater Use Among OH Utica Operators

Antero and Anadarko used an average of 9.5 and 8.8 MGs of water per well during the course of the 45-60 drilling process, respectively (Note: HG Energy has the wells with the highest water usage but a limited sample size, with 9.8 MGs per well).
Six companies average in the middle with 6.7-8.1 MGs of water per well.
Four companies average 5 MGs per well, including Chesapeake the biggest player here in OH.
Devon Energy is the one firm using less than 3 MGs of freshwater for each well it drills.

2. Water-to-Oil Ratios

Water-Energy Nexus in Ohio: Water-to-Oil Ratios Among OH Utica Operators

Figure 3. Water-to-Oil Ratios Among OH Utica Operators

Freshwater usage is increasing by 3.6 gallons per gallon of oil. Companies vary less in this metric, except for Gulfport (Figure 3):

Gulfport is by far the least efficient user of freshwater with respect to oil production, averaging 3,339 gallons of water to extract one gallon of oil.
Intermediate firms include American Energy and Hess, which required 661 and 842 gallons of freshwater to produce a gallon of oil.
The remaining eleven firms used anywhere from 6 (Atlas Noble) to 130 (Chesapeake) gallons of freshwater to get a unit of oil.

3. Water-to-Gas Ratios (Figure 4)

Water-Energy Nexus in Ohio: Water-to-Gas Ratio Among OH Utica Operators

Figure 4. Water-to-Gas Ratio Among OH Utica Operators

American Energy is also quite inefficient when it comes to natural gas production utilizing >2,200 gallons of freshwater per MCF of natural gas produced
Chesapeake and CNX rank a distant second, requiring 437 and 582 gallons of freshwater per MCF of natural gas, respectively.
The remaining firms for which we have data are using anywhere from 13 (RE Gas) to 81 (Gulfport) gallons of freshwater per MCF of natural gas.

4. Brine Production (Figure 5)

Water-Energy Nexus in Ohio: Brine-to-Oil Ratios among Ohio Utica Operators

Figure 5. Brine-to-Oil Ratios among Ohio Utica Operators

With respect to the relationship between hydrocarbon and waste generation, we see that no firm can match Oklahoma City-based Gulfport’s inefficiencies with an average of 2,400+ gallons of brine produced per gallon of oil.
American Energy and Hess are not as wasteful, but they are the only other firms generating more than 750 gallons brine waste per unit of oil.
Houston-based Halcon and OH’s primary Utica player Chesapeake Energy are generating slightly more than 400 gallons of brine per gallon of oil.
The remaining firms are generating between 17 (Atlas Noble and RE Gas) and 160 (Anadarko) gallons of brine per unit of oil.

Part II of the Series

In the next part of this series we will look into inter-county differences as they relate to water use, production, and lateral length. Additionally, we will also examine how the OH DNR’s initial Utica projections differ dramatically from the current state of affairs.

Water and Production in Ohio’s Utica Shale – Water Per Well

West Virginia

July 22, 2014/by Guest Author