Unconventional Resource  Development and the Environment: 

The Curious Situation in New YorkJohn P. Martin, Ph.D.

JPMartin Energy Strategy LLCSaratoga Springs, NY 12866

DirectorShale Resources and Society Institute

University at Buffalo, SUNY

and

Senior AdvisorEcology and Environment, Inc.

2nd United States‐Indonesia Energy Investment RoundtableJakarta, IndonesiaFebruary 6, 2012

Background – Fracture Stimulation and  Unconventional Development

Early Development:

Natural Fracture Systems

•1820s: 1st

well, Fredonia, NY

•1860s: Explosive Fracturing  with 

Nitroglycerin                        (PA, 

NY, KY, WV)

•1880s: 1st

Marcellus 

wells in NY

•1890s: Ohio Shale, Big Sandy, 

West Virginia

•1930s: acidizing

Modern Development: 

Induced Fracture Stimulations

•1950s –

1990s: – Napalm, Nitrogen,  Nuclear – vertical and limited horizontal– Barnett Shale, Texas water fracs

•2000 – Present: – High Volume Hydraulic Fracture 

stimulation using water, propane 

and recently CO2

– Shale plays on 6 of the 7 continents

State of the Art:

Complex engineered 

systems requiring 

significant planning,    

quality control and 

monitoring

Increasing Complexity

Slide courtesy of Ecology and Environment, Inc.

Shale Well Life

cycle Syno

psis

Top: Sierra ClubMiddle: Grant Jacobs, Southwestern Energy, 2010Bottom: USDOE, Shale Gas Primer, 2009

First of Three Critical Innovations: Multiwell Pads

• Key cost‐reduction factor.• Used as early as 1970 in the 

Prudhoe Bay Field, Alaska.

• Flexible drilling site that can  accommodate multiple 

wellheads. 

• Centralized site operations  eliminates duplicative ancillary 

activities such as drilling rig  mobilization/ demobilization.

Alaska Oil and Gas 

Conservation 

Commission

Multiple Well 

Pads: 1970

Potential Environmental Issues• There are few environmental impacts that 

differ from the typical siting operation for the  industry. 

• Seismic operations: disturbance and noise

• Site development:– erosion– habitat fragmentation

– dust – soil compaction

• Ultimately, centralized multiwell pads  REDUCE overall disturbance and impact

Well Pad Under Preparation (PA) – Source: www.naturalgas.psu.edu

Top: NYSDECMiddle: Grant Jacobs, Southwestern Energy, 2010Bottom: Star-Telegram/Joyce Marshall, 2010

• Well is “turned”

to parallel  formation rather.

• First horizontal well: 1929• First horizontal shale well: 1986 

(Devonian, WV, USDOE research  well)

• First commercial horizontal shale  well: 1988 (Michigan Antrim Shale)

• “Today, about 2/3rds of the U.S. rig  count is non‐vertical, and close to 

50% of the rig count is drilling  horizontal wells.”

(Triepke 2010) 

Innovation #2: Horizontal Drilling

Triepke, Joseph, “Land Rig Review: Rebound Predicated on Oil/Horizontal Drilling,” Rigzone, March 8, 2010 (http://www.rigzone.com/news/article.asp?a_id=88967). Image: Blue Flame Energy Corp.

National Energy Board (Canada), A Primer for Understanding Canadian Shale Gas November 2009

Environmental Issues • Underground fluid and gas migration due to 

drilling practices (well design, casing,  cementing)

• Noise and air emissions

• Visual impact

• Onsite spills

Insulation blankets used to deaden noise from

drilling operations

Top: Grant Jacobs, Southwestern Energy, 2010Middle: NTC ConsultantsBottom: USDOE, Shale Gas Primer, 2009

Innovation #3: Hydraulic Fracture Stimulation• First hydraulic fracturing: 1903 (granite mining) • First commercial oil and gas frac:1949• First horizontal shale frac: 1995 (Barnett Shale, Texas, USA)• Estimated 35,000 wells annually in USA. (API HF2 2010)• Over 1 million wells of the 2.5 million drilled in USA  since 1949 

have been hydraulically fractured. (API HF2 2010 and EIA)• Horizontal hydraulic fracturing  can be equated to a series of 

vertical‐well scale frac stages increasing production substantially. 

Image: Blue Flame Energy Corp.

Potential Environmental Issues• Truck traffic ‐

noise, emissions, road damage

• Water quality impacts:– ecosystem and aquifer impacts associated with water withdrawals

for 

hydraulic fracturing

– Water contamination due to wellbore failure, spills, disposal

• Naturally occurring radioactive materials

• Air emissions: – Greenhouse gases– Volatile organic compounds

• Induced Seismicity– Stimulation – no

– Disposal –

maybe

Lifecycle Fluid Management

And One that is Likely not an Issue“One of the commonly perceived risks from hydraulic fracturing is

the 

possibility of leakage of fracturing fluid through fractures into drinking water. 

Regulators and geophysical experts agree that the likelihood of properly 

injected fracturing fluid reaching drinking water through fractures is remote 

where there is a large depth separation between drinking water sources and 

the producing zone.”

Secretary of Energy Advisory Board Subcommittee 90‐Day 

Report Shale Gas Production, August 18, 2011

Fish

er, K

evin

, “D

ata

Con

firm

the

Saf

ety

of W

ell

Frac

turin

g,”A

mer

ican

Oil

and

Gas

Rep

orte

r, Ju

ly,

2010

Potential Life Cycle Impacts• Potential Negative 

Impacts:– Surface

• Site disruption, spills, water 

management

– Subsurface• Drinking water table, 

chemicals 

• Community and Cumulative  Impacts:

– Change in community 

character, growth?– Cumulative

• air, water, noise, visual and 

ecological (including climate 

change)

• Potential Positive  Impacts:

– Jobs• Direct and indirect

– income and tax revenue• Company, landowner, 

associated services, local 

and state tax collections

• Community and  Cumulative Impacts:

– Economic development• Infrastructure,  growth

– Energy for society and all  its ramifications

• Domestically‐sourced, 

multi‐purpose fuel

Environmental Issues: New York Style!• Oil, Gas and Solution Mining Law

• NYS Environmental Quality Review Act– “encourage productive and enjoyable 

harmony between man and his  environment”

– Identify potential adverse impacts and  ways to mitigate them (think NEPA).

• Surface waters, ground water,  agriculture, historical & archeological 

sites, significant habitats, floodplains,  wetlands, state lands, coastal zone, 

streams, general habitat loss

New York Policy Actions

• July 21, 2008: Shale well spacing goes in effect.

• July 22, 2008: A media report critical of hydraulic  fracturing and NYS regulation released.

• July 23,

2008: While announcing signing the new  spacing law, the Governor requests new 

environmental review of drilling practices.

• Starts evaluation of high volume hydraulic  fracture stimulation and multi‐well pads.

• BIG ISSUE: New York City watershed

The SGEIS  Review Process: 

A Very Public  Debate

(clever title: are they cutting in on your lawyer’s action?)

Note liberal use of celebrity/ environmental activist.

And tree….

Understanding  Context

• Once again requisite use of 

celebrities • “…water that can be lit on fire 

right out of the sink…”

• But that’s not so unusual.. This photo 

from Saratoga Lake published in the 

Daily Gazette, July 13, 1997

Photo Credit: Geraint Lloyd

SGEIS and Jobs: Ecology and Environment Study Versus JOBS…

“Opponents of natural gas hydrofracking take part in a rally at the Legislative Office Building on Monday, Jan. 23, 2012 in Albany, NY. Opponents held the rally prior to meeting with legislators to press for a ban on hydrofracking in the state.”(Photos: Paul Buckowski / Times Union)

Read more: http://www.timesunion.com/local/articl e/Fracking-foes-push-drilling-ban- 2681557.php#ixzz1kPb5Pf1h

Nearing, Brian, “Fracking foes push drilling ban,” Times Union, January 23, 2012

“New York State is the key  battleground that will determine the 

future of fracking in the U.S., and  January 11, 2012, is a turning point.”

Fracking’s Future in the U.S. Comes Down to Upcoming New York State Decisions

By Mark Fischetti | January 11, 2012| 10

Realizing a Risk: Is this Regulatory Failure?

• Since 2008, > 3,500 Marcellus wells have been drilled in  Pennsylvania – with less than 25 major impact events.*

• Perrow’s Normal Accidents: “There is no such thing as a  system that is totally risk free. No matter how we work  to reduce the likelihood of failure, there is always some  minimal probability that some time, some place, there 

will be failure”**

• Betrayal Aversion: “The mere possibility of betrayal  threatens the social order that enables us to trust the 

safety infrastructure of our society, causing intense  visceral reactions and negative emotions toward the  betrayer (Koehler and Gershoff 2003).”***

* Considine et al. 2012 in review. ** from Mike Uretsky, Ph.D. unpublished manuscript using the framework developed in Perrow, Charles, 

Normal Accidents: Living with High‐Risk Technologies, New York, Basic Books, 1984.  *** Gershoff, A. and J. Koehler,

Safety First? The Role of 

Emotion in Safety Product Betrayal Aversion, JOURNAL OF CONSUMER

RESEARCH, Vol. 38, June 2011

Thank You