richard dunn
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Hydraulic Fracturing in CanadaTRANSCRIPT
Hydraulic Fracturing in Canada
Richard Dunn Vice President, Regulatory and Government Relations, Encana Canadian Division
Brussels| January 22| 2013
Overview
Encana Profile Industry Response to Stakeholder
Shale Gas Concerns Encana’s Experience
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Shale pics
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Encana CorporationAggressively pursuing liquids growth
Greater Sierra (inc. Horn River)
Duvernay
Cutbank Ridge (inc. Montney)
Bighorn
Coalbed Methane
Jonah
DJ NiobraraNiobrara/Mancos
Piceance
TexasHaynesville
Tuscaloosa
Collingwood/Utica
Deep Panuke
Existing Key Resource Play
New Liquids Play
Mississippian LimeSan Juan
Eaglebine
Production Volumes
• 2011 Actual:
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Natural Gas (MMcf/d)Liquids (Mbbls/d)
2012 Forecast:Natural Gas (MMcf/d)Liquids (Mbbls/d)
3,333 24
3,000 30
Clearwater Oil
Peace River Arch
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Horn River Shale
Montney Silt
Deep Basin Tight Gas
Coal Bed Methane
DuvernayShale
Western CanadaSignificant Unconventional Plays
4 Encana Land
Western CanadaEstimated Gas In Place
(GIP):Alberta: 3400 TcfBC:
1200 TcfTotal: 4600 Tcf
Total Canadian Production: ~6Tcf/year
North American Gas Production by TypeConventional, Tight Gas/CBM, and Shale
Long term growth in shale production offsets conventional declines. Bcf/d
Source: Encana Fundamentals, IHS
Forecast
48 bcf/d~50%
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Benefits of Shale Gas Development
Security of supply– New unconventional natural gas reservoirs have uncovered hundreds
of years of North American supply
Improved competitiveness– LNG exports have the potential to add $ 1 trillion to Canada’s GDP– Sustained low NG prices saving North American manufacturing
operations upwards of $11B annually GHG emission reductions
– Conversions to natural gas fired power generation have caused U.S. energy-related emissions dropped to a 20 year low in 2012 (1992 levels)
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Working with Canadian Governments
Canadian operators work under rigorous regulatory regimes that have been set out by our provincial and federal regulators – Provide effective and efficient operating frameworks that enable both
environmental protection and resource development.
Important for industry (Canadian Association of Petroleum Producers – CAPP) to work with governments to develop mutual understanding of technical, business and social considerations – Leads to improved policy and regulations, delivering “win – win” results
Operating practices developed by CAPP complement robust regulations
Public Concerns About Shale Gas
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Transparency“Frac fluids contain
dangerous chemicals that aren’t disclosed to public”
Water Quality“Fracturing can have
adverse effects on drinking water”
Water Quantity
“Fracturing uses enormous amounts of water”
Seismicity“Fracturing & associated
waste-water disposal cause earthquakes”
Industry Response to Public ConcernsCAPP Guiding Principles for Hydraulic Fracturing
Guiding Principles:
– Protection of quality and quantity of fresh water
Hydraulic Fracturing :– Fracturing fluid additive disclosure– Baseline groundwater testing– Wellbore integrity– Water sourcing and reuse
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CAPP Hydraulic Fracturing Operating PracticesRecognized in the IEA Golden Rules for Hydraulic Fracturing
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http://www.capp.ca/canadaIndustry/naturalGas/ShaleGas/Pages/default.aspx#operating
Fracturing Fluid Additive Disclosure Fracturing Fluid Additive Risk Assessment Baseline Groundwater Testing Wellbore Construction and Quality Assurance Water Sourcing, Measurement and Reuse Fluid Transport, Handling, Storage and Disposal Anomalous Induced Seismicity
Industry Response:• Publicly disclose, on a
well-by-well basis, the chemical ingredients in additives used Additive name, supplier,
purpose, chemical name & maximum concentrations
• BC and Alberta have moved to make disclosure mandatory
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Fracturing Fluid Additive Disclosure
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Public Concern: “Frac fluids contain undisclosed dangerous chemicals”
Fracturing Fluid Additive Risk Assessment
Industry Response:• Identify and manage
potential health and environmental risks associated with these additives Builds awareness Selection of greener fracturing
fluids with lower risk profiles, where possible
• Develop risk management plans for each well fractured
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Public Concern: “Fracturing can have adverse effects on drinking water”
Wellbore Construction and Quality Assurance
Industry Response:• Comply with rigorous
provincial regulatory requirements and good engineering practices
• Confirm wellbore integrity prior to fracturing
• Undertake remedial actions, when required
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Public Concern: “Fracturing can have adverse effects on drinking water”
Water Sourcing, Measurement and Reuse
Industry Response:• Evaluate available
water supply sources Recycled water Saline groundwater Wastewater sources Fresh groundwater Surface water
• Measure and report government regulated water withdrawals
• Reuse water as much as practical
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Public Concern: “Fracturing uses enormous amounts of water”
Anomalous Induced Seismicity5
Industry Response:• Assess the potential for
anomalous induced seismicity
• Monitor during operations
• Implement procedures to mitigate anomalous induced seismicity as required
• Consistent with the recommendations from the regulator’s (OGC) investigation
www.bcogc.ca/node/8046/download?documentID=1270
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Public Concern: “Fracturing & associated waste-water disposal cause earthquakes”
Encana Experience Fracturing Fluid Additive Disclosure
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Developed a Responsible Products Program
– Assessed ingredients being used in hydraulic fracturing fluids against government health and environmental criteria
Program has influenced product selection and procurement
– Eliminated use of diesel, benzene, arsenic, cadmium, chromium, lead & mercury in completions products
Encana Experience Fracturing Fluid Additive Risk Assessment
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Encana Experience Water Sourcing, Measurement and Reuse
A result of aquifer mapping of the region
− Industry/government effort to understand groundwater capacity
Uses water from deep, sub-surface, saline aquifer for hydraulic fracturing operations
Benefits include:
– Eliminating use of surface water
– Less traffic, dust
Debolt Source Water Plant
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Encana Experience Anomalous induced seismicity
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− No event posed risk to public safety, worker safety or the environment
− Seismic events were contained within the production zone (~2.6 km below surface)
− Localized and specific to this particular shale gas formation
− Can be safely managed using prescribed operating practices
• Installed microseismic arrays to monitor the events• Results of both Encana and the OGC’s investigations were consistent:
~2.6 km
Microseismic activity
Conclusion
• Industry develops natural gas resources responsibly and efficiently– Provides security of energy supply while providing benefits to
the economy and environment– Governed by rigorous regulatory regimes, both at the federal
and provincial levels– Addressing operational concerns about hydraulic fracturing
through CAPP practices, which is driving the right behaviors• Development of greener chemicals• Finding alternative water sources• Managing anomalous seismic events
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