gasdrillingbriefingpro_080112.pdf

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Presentation to Dallas City

Councilby Ed Ireland, Ph. D.

August 1, 2012


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Todays Presentation

Provide background information on the Barnett Shale

Provide factual information to evaluate therecommendations from the Dallas Gas Drilling Task Force(DGDTF) relative to the existing City of Dallas gas drillingordinances.


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Source: U.S.DOE,April2011


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Facts about the Barnett Shale

Barnett Shale Formation is 7,000- 10,000 feet deep

Underlies 5,000 square miles in 24 counties.Dallas County is the eastern-most county.

As of June 1, 2012, 18,298 Barnett Shale natural gas

wells have been drilled1,681 producing wells are in the City of Fort Worth

Many more wells are within the city limits of other

municipalities in the Barnett Shale. Development is safe and protective of human health and

the environment.


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Facts about the Barnett Shale Tremendous economic impacts from natural gas development

(report by the Perryman Group, Sept. 2011)

110,000 jobs

$11 billion per year in economic stimulus $730 million in additional revenues to local governments and

school districts.

City of Fort Worth has received $182 million as of June 1, 2012

from leasing city-owned lands for natural gas drilling School districts have benefitted:

Fort Worth ISD has received over $861,000 in leasepayments in 2011

Arlington ISD, Burleson ISD and Mansfield ISD have eachreceived over $2.5 million in lease payments in 2011

These numbers do not include additional ad valorem taxbenefits


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Why Dallas should encourage the

development of natural gas

To reap the economic benefits for the citizens of Dallas

revenues to the City in the form of minerals leasesbonuses and ongoing royalties

Property tax benefits

Increased sales taxes

To protect and promote the private property rights of Dallas

citizens so they can reap the economic benefits of theirmineral rights.


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Well Setbacks


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Setback Regulations

Existing: 300 feet from any institutional and communityservice use, recreation use or residential uses, measuredfrom the wellhead.

DGDTF: 1,000 feet to a protected use measured from theproperty line of the pad site.

Fort Worth: 600 feet from a protected use measured fromthe wellhead.


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HealthProtectiveSetbacks

SafetyProtective

Setbacks

Ordinance

Requirement

Cityof

Dallas

Current

Task

Force

Proposal

CityofFort

Worth

MickeyLeland

NUATRC

June

2012

CityofFortWorth

AirQualityStudy

International

FireCode

SetBack 300feet 1000feet 600feet** 100meters 600feet*** 300Feet

328Feet

ClearSpace

* 6.5

Acres 134

Acres 26

acres**

* Assumea4acrepadsite** Measuredfromthewellhead***Affirmativelyansweredquestion"Issetbackprotective?"

Datadoesnotsupportextendingsetbacksgreaterthan600feetfromthewellhead


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Fort Worth Star Telegram

July 15, 2011*

Air quality study finds

no major health threats

*CommentingonresultsofFortWorthAirQualityStudy


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Land use ordinances


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Land use ordinances

Existing: Gas drilling and production is an industrial usepermitted in residential and nonresidential zoning districts.

DGDTF: Same but to drill in floodplains requires approvalof the U.S Army Corps of Engineers and other appropriateagencies. Drilling on park land is permitted on park land

not currently being used as a public park or playgroundand other restrictions.


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Existing oil & gas wells in floodplains

in nearby counties 4,352 oil and gas wells within 100-year floodplain per

Railroad Commission of Texas:

50 in Dallas County

1,070 in Tarrant County.

803 in Denton County.2,429 in Johnson County

No impacts to water or floodways


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A Typical Barnett Shale Pad Site

Rockwood, Fort WorthRockwood, Fort Worth

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Completed well site in Barnett Shale

Hidden Creek, BurlesonHidden Creek, BurlesonHidden Creek, BurlesonHidden Creek, Burleson

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Poly, Fort WorthPoly, Fort Worth

Completed well site in Fort Worth

Poly, Fort WorthPoly, Fort Worth

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Sound Mitigation


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Sound Ordinances

Existing: Drilling may not produce a sound level greaterthan 78 dB and fracturing may not exceed 85 dB or 5 dBabove background noise, whichever is greater.

DGDTF: Drilling equipment may not exceed the ambientnoise level by more than 10 dB during fracturing operations

and by more than 5 dB during daytime hours for activitiesother than fracturing. Continuous noise monitoring isrequired during drilling or operating compressors if the well

is within 1,000 feet of a protected use.


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Sound Ordinances

Fort Worth ordinances permit intermittent exceedances:

10 dB for 5 minutes

1 dB for 15 minutes

20 dB for less than 1 minute


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Air Quality


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Air emissions ordinances

Existing:

Electric motors or internal combustion engines may beused during drilling but only electric motors may beused during production.

Except as permitted by the Railroad Commission,operator shall not vent gases into the atmosphere orburn gases by open flame.

If venting or burning is permitted, it must be at least 300feet from any structure.


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Air Emissions Ordinances

DGDTF:

Well may not flow or vent directly into the atmospherewithout first directing the flow through separationequipment or into a portable tank (Fort Worth).

Vapor recovery equipment is required for tanks thathave an estimated rolling annual aggregate emissionsrate of 25 tons of VOC.

Vapor recovery equipment must be operated to ensure95% recovery efficiency.


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Areas of Dry Gas in the Barnett

Most natural gas in this area isconsidered dry gas / lean gas

Approximately 95%+ methane

Trace amounts of VOCs, CO2 andnitrogen

Virtually no treatment necessary

Nearly same quality as delivered tohomes

No Barnett Shale wells in urban Tarrant

County produce condensate

Gas gets dryer/leaner as you move east

Source:BarnettShaleEnergyEducationCouncil,October2009


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Air Quality in the Barnett Shale

One of the most monitored areas in the nation Texas Commission on Environmental Quality operates a permanent

ambient air monitoring network

7 existing sites

8 additional proposed

5 managed by UTA

1 managed by North Texas Commission

SB 527 82nd Session of the Texas Legislature

Reassigns some Texas Emissions Reductions Program funding toinstall approximately 15+/- additional monitors as part of a regionalnetwork within TCEQ regions 3 and 4

Project Managed by the North Texas Commission


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ProposedNewAutoGC

Locations


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ProposedNewAutoGCLocations

ProposedSB527MonitorLocationsSeveralSitesMayHaveMultipleMonitors

WichitaFalls

Bowie

JackCounty(2)

Weatherford

ParkerCountyPaloPintoEastland

Abilene


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What the air monitors have found in

the Barnett Shale Over 100,000 air samples have been collected over the

past 10 years.

Results :

air emission attributable to gas drilling and productiondo not approach health effects levels.

air measured by these monitors in Barnett Shale is notsignificantly different than in areas that have no naturalgas production

Air samples at the Hinton Street monitor in Dallas looklike those in Fort Worth, Dish, Eagle Mountain Lake andother monitors in the Barnett Shale


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Implications for air emissions ordinances

Dallas should continue to recognize and support the jurisdiction and authority of theEnvironmental Protection Agency and the Texas Commission on EnvironmentalQuality Oil and Natural Gas Sector New Source Performance Standard/40 CFR 60

OOOO Reduced Emissions completions Low Bleed Pneumatics Enhanced storage tank requirements

No vapor recovery required on dry gas wells

VOC


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Water Use and Quality


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Water Ordinances-Existing

Operator must ensure that ground water is notcontaminated by gas drilling and production and related

activities.

Operator shall not deposit any substance (i.e. brine, refuse,wastewater, etc.) into or upon a right-of-way, storm drain,

ditch, sewer, body of water, sanitary drain, private propertyor public property.

Operator must comply with all federal, state and local

storm water quality regulations.


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Water Ordinances-DGDTF

Operator must offer baseline testing of wells within 2,000feet of a well bore and surface water within 750 feet of the

well bore, including immediately upstream anddownstream.


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Water used for Drilling and Hydraulic

Fracturing Tarrant Regional Water District - 0.5% total water sales

volume

Area municipalities report 1% of their water total salesvolume

In Dallas, water would be purchased through the City(surface water)


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Water Quality Issues in the Barnett Shale

No incident of groundwater contamination due to gas drilling ordisposal operations has been confirmed within the Barnett Shale

area (Texas Joint Groundwater Monitoring and Contamination Report)

Biggest impacts to groundwater quality in Texas

Overuse (due to population growth in rural areas)

Drought

Improperly installed and cased water wells

Unlicensed water well drillers


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Wellbore Integrity 7 layers of protection isolate our well

bore from its surroundings, preventingany exposure of chemicals, gas, or

produced water with the environment1. Conductor casing

2. Cement, sealing conductor casing in place

3. Surface casing is drilled to a minimum depth

of between 50 to 100 feet below the deepestfreshwater aquifer as specified by the RRC

4. Cement, sealing surface casing in place

5. Production casing

6. Cement, sealing production casing in place7. Tubing

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