e&p storm water overview domestic onshore energy e&p storm water overview domestic onshore...
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E&P STORM WATER OVERVIEWDomestic Onshore EnergyE&P STORM WATER OVERVIEWDomestic Onshore Energy
May 10, 2005
Road to Domestic EnergyRoad to Domestic Energy
Road to Domestic Energy: Geological & GeophysicalRoad to Domestic Energy: Geological & Geophysical
11stst look at look at subsurface subsurface
Define geologic Define geologic target using target using surface surface geophysical geophysical equipmentequipment
Subsurface drivenSubsurface driven
The Road to Domestic Energy: Land LeasingThe Road to Domestic Energy: Land Leasing
Leases have terms, Leases have terms, penalties, deadlines penalties, deadlines and a expiration date and a expiration date that drives a project that drives a project timelinetimeline
Leases have multiple Leases have multiple surface and surface and subsurface ownerssubsurface owners
Split Estates; surface Split Estates; surface and mineral and mineral ownership differentownership different
Multiple mineral lease Multiple mineral lease agreements and agreements and requirementsrequirements
Competitive situationCompetitive situation
The lease situation The lease situation drives our clockdrives our clock
The Road to Domestic Energy: PermittingThe Road to Domestic Energy: Permitting
There are numerous There are numerous permit considerationspermit considerations– PrivatePrivate– StateState– FederalFederal
Oil & Gas AgencyOil & Gas Agency– DrillingDrilling– ConstructionConstruction– Pipeline ROWPipeline ROW
Environmental ProtectionEnvironmental Protection– AirAir– WaterWater– WasteWaste– Historical & CulturalHistorical & Cultural– Vegetation & WetlandsVegetation & Wetlands– WildlifeWildlife
The Road to Domestic Energy: ConstructionThe Road to Domestic Energy: Construction
Exploration or Exploration or development welldevelopment well– lease roadlease road– well padwell pad
Access Right of Ways Access Right of Ways have to accommodate have to accommodate environmental and environmental and surface conditionssurface conditions
Allow for:Allow for:– Surface sensitivitiesSurface sensitivities– Landowner requestsLandowner requests– Surface structuresSurface structures– Balance surface Balance surface
conditions to reach conditions to reach subsurface targetsubsurface target
The Road to Domestic Energy: ProductionThe Road to Domestic Energy: Production
If SuccessfulIf Successful
– Well finalizedWell finalized
– Rig moves offRig moves off
– Production Production equipment equipment installedinstalled
– O&G to sales and O&G to sales and water to disposalwater to disposal
– Drill site reduced Drill site reduced and reseededand reseeded
– ““Foot Print” Foot Print” reducedreduced
If UnsuccessfulIf Unsuccessful
– Plug & AbandonPlug & Abandon
– Restore locationRestore location
Storm Water Comparison: Real Estate vs. Oil & GasStorm Water Comparison: Real Estate vs. Oil & Gas
Real Estate DevelopmentReal Estate Development Oil & Gas DevelopmentOil & Gas Development
Static PlanStatic Plan Blueprint Designed Upfront Blueprint Designed Upfront Construction Follows BlueprintConstruction Follows Blueprint Real Estate is All Surface Real Estate is All Surface
Dynamic Plan Dynamic Plan Design As We GoDesign As We Go Each Well Tells a Geologic Story Each Well Tells a Geologic Story Oil & Gas is Sub-Surface DependentOil & Gas is Sub-Surface Dependent
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Storm Water Comparison: Real Estate vs. Oil & GasStorm Water Comparison: Real Estate vs. Oil & Gas
Real Estate
Surface Use Driven
Land Owned
Timeline more Flexible
Planning Certainty
Metropolitan/Centralized
Single Site SW Administration
Real Estate
Surface Use Driven
Land Owned
Timeline more Flexible
Planning Certainty
Metropolitan/Centralized
Single Site SW Administration
Oil & Gas
Subsurface Driven
Land Leased
Timeline Is Critical
Uncertainty
Remote/Decentralized
Scattered Multi Site SW Administration
Oil & Gas
Subsurface Driven
Land Leased
Timeline Is Critical
Uncertainty
Remote/Decentralized
Scattered Multi Site SW Administration
Because of differences E&P needs regulatory flexibilityBecause of differences E&P needs regulatory flexibility
““One Rule Does Not Fit All Industries”One Rule Does Not Fit All Industries”
CostCost
Future StateFuture State
*Refer to Department of Energy 2005 Cost Impact Study *Refer to Department of Energy 2005 Cost Impact Study
US Drilling Wells: US Drilling Wells: 30,000 per year 30,000 per year
SWPPP Implementation:SWPPP Implementation: $5,000 to $15,000 per well $5,000 to $15,000 per well
Well Construction Size:Well Construction Size: 2 to 10 acres 2 to 10 acres
Current StateCurrent State
GovernmentGovernment– Recordkeeping – Inspection – Recordkeeping – Inspection –
MonitoringMonitoring
– Permit approvals timeline increasesPermit approvals timeline increases
– StaffStaff
– Administrative burdenAdministrative burden
IndustryIndustry– Increased “notice of intent” filingIncreased “notice of intent” filing
– Delayed NOI approvalDelayed NOI approval
– Annual cost burden $150-$450 Annual cost burden $150-$450 million*million*
– Limited qualities resourcesLimited qualities resources
– Lease expiration risks are realLease expiration risks are real
Summary – Take AwaySummary – Take Away
Intent of Storm water regulations are to protect Intent of Storm water regulations are to protect surface waters from sediment and erosion surface waters from sediment and erosion runoff created by construction activitiesrunoff created by construction activities
Covered Oil & Gas ProcessCovered Oil & Gas Process
Comparisons/Differences between Oil & Gas Comparisons/Differences between Oil & Gas and Real Estateand Real Estate
Stormwater Regulations Are Not Manageable Stormwater Regulations Are Not Manageable For Oil & GasFor Oil & Gas
Conclusion – Take AwayConclusion – Take Away
There is a better alternative than the There is a better alternative than the proposed stormwater rule change:proposed stormwater rule change:
No Storm water permitNo Storm water permit
Implementation of RAPPS for all Oil & Implementation of RAPPS for all Oil & Gas construction will control sediment Gas construction will control sediment and erosion runoffand erosion runoff
Implementation of RAPPS for all Oil & Implementation of RAPPS for all Oil & Gas constructionGas construction
E&P STORM WATER OVERVIEWE&P STORM WATER OVERVIEW
May 10, 2005