the northeast ong marketplace - july 2015

PRSRT STDU.S. POSTAGE PAIDBECKLEY, WV 25801

PERMIT NO.19

JULY 2015P.O. BOX 1441 • OAK HILL, WV 25901 | WWW.ONGMARKETPLACE.COM

ENVIRONMENTAL MANAGEMENT- 2-13 A New Approach To Geohazard Mitigation

LEGAL & FINANCE - Pages 22-23 EPA Releases Assessment on Hydraulic Fracturing/Water Study

ONG SPOTLIGHT - p 3

WATER MANAGEMENT - p 6-7

HEALTH & SAFETY - p 8-9

INDUSTRY INSIGHT - p 16-17

NEW TECHNOLOGY - p 18-19

The Northeast ONG Marketplace

©2015

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Land Management Programs at CALU, Christina A. Toras, J.D., M.A.

In Fall of 2014, the Department of Professional Studies at California University of Pennsylvania began offering two new exciting programs to train individuals to work in the energy industry. The BA in Jurisprudence / Land Management Concentration and the Land Management Certificate prepare the graduate for a wide variety of positions in the oil and gas arena, including entry-level landman,

in-house energy company support staff, third party contractor support staff, property and leasing manager, and title abstractor. The BA is designed for students who hold an associate degree or who have completed at least 40 hours of college credit and may be completed in four to six semesters, depending on the number of credit hours earned prior to admission. The 30-credit Land Management Certificate is designed for students with at least a high school diploma and may be completed in 12 months.

As Chair of the Department of Professional Studies and a former practicing real estate attorney, I developed these programs in response to a perceived workforce need to support industry. The idea for such programs came to me when I noticed that many of my friends were leaving their jobs as attorneys to work as landmen. In addition, student and

community inquiries, the legal profession, and our own market research revealed that there is a demand for programs in land management, particularly programs which prepare the students with job-specific skill sets.

The unique nature of our programs is reflected in both the curriculum and the delivery method. Research revealed that the duties of a landman or land professional are largely law-based and also stressed the importance of knowledge in the areas of geology and geographical information systems. Based on the research and industry input, I designed a curriculum that provides instruction in subject matter including oil and gas law, land management administration, contract law,

real estate law, surface and sub-surface geology, and GIS. The courses are taught by both full-time faculty and adjunct faculty who are specialists in the field. With respect to the delivery method, feedback was overwhelming that the courses be offered 100% online so as to accommodate working professionals with family obligations. The 100% online feature of the programs has proven quite attractive to students who would not otherwise be able to pursue their academic goals by attending face to face, on-campus courses.

I have attended many industry events over the last year and a half and the response to our programs has been incredibly positive. Many of you have contacted me with inquiries and have referred students to our programs. Our student body has grown from 15 students initially to approximately 50 students to date. Although the industry is experiencing a lull at the current time, student applications continue to be received. As we all know, our industry is cyclical and increased energy production is bound to return soon. In the meanwhile, this is a perfect time for individuals to prepare themselves for the future by earning educational credentials that will help them advance in the future.

To learn more about our programs and how Cal U can help provide a trained workforce for your needs, please visit our website at www.calu.edu/golandmanagement or contact me directly at [email protected]

Christina A. Toras, J.D., M.A.Chair and Associate ProfessorDepartment of Professional StudiesCalifornia University of Pennsylvania

July 2015

THE ONG SPOTLIGHT

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ARTICLESTHE ONG SPOTLIGHT: Land Management Programs at CALU, Christina A. Toras, J.D., M.A. ..... 3

WATER MANAGEMENT: Finding Deep Groundwater by Repurposing Petroleum Seismic Reflection Data ................................................... 6-7

HEALTH & SAFETY: Safety Excellence: Leadership is the Cornerstone ............................................... 8-9

ENVIRONMENTAL MANAGEMENT: A New Approach To Geohazard Mitigation .................. 12-13

INDUSTRY INSIGHT: Making the Most of Declining Assets with Remote Wireless Monitoring ........ 16-17

NEW TECHNOLOGY: Phased Array– The Safe Alternative to Radiography ............................. 18-19

LEGAL & FINANCE: EPA Releases Assessment on Hydraulic Fracturing/Water Study ................... 22-23

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P. O. Box 1441 • Oak Hill, WV 25901855-269-1188

Fax: 304-465-5065E-mail: [email protected]

The Northeast ONG Marketplace will not be liable for any misprint in advertising copy which is not the fault of The Northeast ONG Marketplace. If a misprint should occur, the limits of our liability will be the amount charged for the advertisement.

We do not assume responsibility for the content of advertising or articles herein. Any warranties or representations made in the advertisements are those of the advertisers and not The Northeast ONG Marketplace. Any warranties, representations or opinions made in the advertisements or articles are those of the contributors and not The Northeast ONG Marketplace.

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By: John Jansen, Senior Associate, P.G., R.Gp., Ph.D., Leggette, Brashears & Graham, Inc., West Bend, WICharles D. Harlan, P.G., Senior Associate, Leggette, Brashears & Graham, Inc., Dallas, TX Gregory A. Ayres, PG, Senior Hydrogeologist, Leggette, Brashears & Graham, Inc., Pittsburgh, PA

Oil and gas production requires water, often in areas that have limited resources or where water use by energy companies is contentious. Though oil and gas production provides a higher return than many conventional uses, water has or will become a limiting factor in many oil fields. The scarcity of water in many areas has increased interest in sources of “unconventional” water (fresh to brackish water sources at depths of 2,000 to 5,000 feet). Though usually more expensive, these aquifers are often less controversial to develop. In many cases it is the only water that is readily available because it has not been tapped by other users and is isolated from the shallower water sources which may be fully allocated. These sources are particularly attractive in states that allow land owners to develop deep isolated aquifers separately from the allocation system of shallow aquifers and surface water.

The cost of drilling for groundwater development to depths ranging from 2,000 to 5,000 feet limits the amount of test drilling that can be conducted. The limited availability of data also makes developing these resources risky and expensive. Further, the aquifer properties of many formations vary significantly over short distances based on stratigraphic changes in the aquifer. Often it is difficult to predict the potential yield of an aquifer at a given location without additional information. The target zones for drilling are often deeper than the ones usually developed in aquifers for drinking water or irrigation wells. These zones are also beyond the depth of exploration for many surface groundwater geophysical methods. In addition, aquifers with brackish or saline water portray a similar geophysical response as clay-rich units on most electrical geophysical exploration techniques commonly used in groundwater studies. Fortunately the oil and gas industry has developed a well proven exploration tool, seismic reflection, which can provide high resolution images of the subsurface stratigraphy and structure.

Seismic reflection has been used for oil and gas exploration for almost 100 years. Advances in acquisition and processing technologies have greatly improved the resolution and reliability of this seismic method to higher levels. Seismic reflection surveys are able to map fine scale stratigraphic details at depths of up to several thousand feet. Modern processing and interpretation techniques accurately identify permeable sand zones, faults, and other stratigraphic and structural features that control well yield. The latest evolution is the rise of three-dimensional (3D) data acquisition, dramatically improving the resolution of the seismic method even in structurally complex areas.

Seismic reflection surveys have become a routine first step when exploring new oil and gas plays or for planning ways to increase the recovery in historic producing fields. Historically, the relatively high cost to acquire and process high resolution seismic reflection data has limited the routine use of this method for water supply applications. However, recently the cost of processing and interpreting reflection data has decreased to the point where it is a viable technology for water exploration.

Fortunately, most oil and gas areas have been crisscrossed several times by seismic surveys at differing levels of technology and sophistication. Thus creating a

library of existing reflection surveys which serves as a rich new assessment tool for water exploration. The data collected from these surveys is usually acquired for a fraction of the cost of developing new data. While the surveys are typically designed for deeper targets, they are frequently suitable for use in aquifers below 500 to 1,000 feet. The data can also most often be reprocessed to improve the resolution in the shallow zone. Typically these data sets represent untapped sources of information on the location and distribution of potential sources of water for oil and gas operations.

Reflection data can also be interpreted to map geologic formations at depth and produce maps depicting the top, bottom and thickness of the units that are likely to contain permeable water bearing zones. In addition, the data can be processed to display attributes of the reflected wavelets that contain information on the properties of the rock and fluids within the unit. Attributes such as amplitude, similarity, and coherency can be used to distinguish sand from shale and produce maps of net sand thickness, percent shale content, and other stratigraphic information. Reflection data can also be used to map faults and permeable features such as channels or sand bars. The availability of lower cost reflection interpretation tools allows the full suite of oil and gas exploration technology to be used for water exploration.

On a recent project in Colorado a land owner was able to acquire the portion of a 3D reflection survey for the section of land he owned in exchange for granting access to the land and signing an agreement that the data would not be used for oil and gas exploration. The data was interpreted to map permeable channel deposits in a

FINDING DEEP GROUNDWATER BY REPURPOSING PETROLEUM SEISMIC REFLECTION DATA

WATERMANAGEMENT

Figure 1: Resistivity depth slices and seismic similarity attribute depth slices showing channel sands deposits at various depths on a one square mile site.

July 2015

confined aquifer at depths of 450 to 2,000 feet. A standard groundwater exploration survey was conducted using an electrical resistivity survey to map sand units in the upper 500 feet. The two data sets were combined to produce depth slices showing the location of permeable sand channels at various depths across the site (Figure 1).

The data was used to direct a drilling program that consisted of four wells at depths ranging from 250 and 800 feet below ground surface that exceeded the targeted capacity of 400 acre feet per year (af/yr) from a confined aquifer. Figure 2 presents the correlation of the amplitude anomalies (red and orange horizontal lines) that indicate the presence of sand units with the resistivity log of a 800 foot deep test hole (peaks indicate shale layers). The results demonstrate that the seismic amplitude predicted the presence of sand layers nearly perfectly below a depth of approximately 450 feet. The data indicates that additional aquifer units are present between depths of 1,000 and 1,750 feet (see figure2). The resistivity data predicted the location of permeable sand deposits in the upper 400 feet. Similar results are also possible to obtain for exploration targets to much greater depths.

As oil and gas development continues conflicts over water sources will only increase. Employing existing seismic reflection data to explore for deeper groundwater sources provides a viable tool to find unused sources of water that can be utilized for production needs without competing with adjacent land owners for traditional sources of water. This option will reduce project delays and reduce overall production costs by avoiding conflict. More importantly seismic reflection can provide certainty for one of the key resources necessary for efficient and economical oil field production

Leggette, Brashears & Graham, Inc. - Contact Information:

Pittsburgh Office - Foster Plaza 5651 Holiday Drive, Suite 300Pittsburgh, PA 15220

Gregory Ayres, Sr. Hydrogeologist412-298-2061 - [email protected]

Figure 2: Correlation of seismic amplitude and sand layers on the borehole resistivity log of a well drilled to 800 feet.

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HEALTH& SAFETY

By: Jeff Kady, Cosmos Consulting

Last month we started the article, Safety Excellence: Integrating Safety Throughout Your Business Process, by stating that there was no magic bullet, no specific step by step recipe for achieving success in a safety program. As true as this statement is the following tenet, although not the only factor, may be the most influential element on the success of your safety program, that tenet is Leadership. Leadership is the cornerstone for achieving excellence in any facet of your business whether it is safety, a functional operational area, marketing or any other component of your business. Without leadership how do we know where we want to go or where we are going? Without leadership, would not all of the competing agendas we see every day conflict with each other and impede our overall success? Of course they would, hence the need for strong and engaged leadership.

Let’s take a moment and think about the benefits of integrating safety throughout every aspect of your business. In doing so we are selecting a proactive approach in the design and manufacturing of tools and equipment we may need. Wouldn’t you prefer to have that safe design from the onset rather than trying to figure out how to retrofit your new air handler to accommodate working at heights during maintenance activities? Maybe the next challenge is an ergonomics issue, wouldn’t it be easier to solve your concerns if those issues are addressed before your equipment is purchased? The value of business integration can be seen in many examples but take a moment and think about how difficult it may be to coordinate and achieve this integration without leadership. Once again we may revert back to those competing agendas that prohibit or at least hinder safety excellence. Leadership is the driver that brings us all back together and focuses us on the path forward.

Often when we talk about leadership we immediately think about the C-Level executives and how they may impact our quest for excellence. Sometimes it is the mid-level manager that seems to lead the initiative and prominently appears to be the driver of the safety program. Maybe it’s the front line that drives safety in its entirety. The reality is that more often than not it is a combination of all levels that will be the reason your program succeeds, excels or fails.

Of course the first element that will present itself to the leadership will be to define just exactly what is expected of the safety program and what will constitute failure, acceptance, success or excellence. Developing the vision and the strategy for achieving it is the first step. Again, without leadership how do we know where we are going? So in order to achieve ‘safety excellence’ we must first define what that is. Safety excellence will look different to different people. One individual may believe excellence is achieved through attaining the goal that no one gets hurt. Putting zeros up across the board may be the determining factor. Someone else may subscribe to the theory that a certain level of incidents are unavoidable and therefore excellence is achieve by the proactive steps taken to minimize incidents. Whatever rationale you employ it needs to be aligned with the thought process you use to determine ‘excellence’ in every other element of your business. Just nicknaming your endeavor ‘excellence’ will never get you the benefits that true excellence can provide your business. If you don’t have any idea where to start, benchmark your competitors and start there.

Undoubtedly you need the commitment of the C-Level executives to truly achieve a level of excellence in your program that would be considered ‘best in class’ or ‘world class’. That commitment must be highly visible and unwavering. Safety must be a ‘value’ not just a ‘priority’ as we know that priorities change. Only when the

executive leadership demonstrates that their expectations for safety isn’t subservient to production, quality or any other competing value, will it then be possible to align the entire organization with this goal in mind.

There are many types of leadership. There are those leaders who lead because of some authority granted to them or innate in their position or job title. Some leaders provide leadership to those around them because of their skills and knowledge and some based of past performance. The most effective leaders however are those who instill confidence in those around them, who motivate their team to perform at a higher level because they want to aspire to the same leadership qualities that this leader presents. This type of leadership can move mountains, this leadership is what you need to achieve safety excellence. It is here, with the alignment of the organization and leadership at every level, that safety excellence becomes achievable. So to this point we’ve laid the foundation and developed a roadmap to achieve our goal. Our executives are committed to the vision and we have instilled in every level of the organization the value that safety brings to the business. We know that there will be opportunities to falter and that sometimes those who stray from the path will need to be realigned. We understand that it truly takes a commitment from everyone, top to bottom and back up again. So what do we need to do to keep the vision moving forward? Be vigilant and never stop improving. Make and keep everyone accountable from the CEO to the new hire. Provide continuous reinforcement that safety is systemic, it’s part of the overall business model, that allowing a let down here could have a significant impact on every other aspect of the business. You will have these challenges regardless of the CEO’s passion and commitment, you will encounter the opportunity to help one of your co-workers refocus and draw them back. The good thing is, that strong leadership commitment we spoke of, will give you the leverage you need to make the necessary fixes.

Reach for the SkyExcellence is Achievable

If you would like additional information or assistance on steps that you can take that will help you integrate safety throughout your organization please contact Cosmos Consulting at info.cosmosconsultingllc.com Please look for future articles that will identify cutting edge technological solution which can assist in integration and improve overall safety management efficiency or visit www.complaincefactors.com

SAFETY EXCELLENCE: LEADERSHIP IS THE CORNERSTONE

July 2015

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ENVIRONMENTALMANAGEMENT

By: Frank Amend, PE, Director, Materials & Products, GeoStabilization International

A new approach to Geohazard Mitigation is proving to be both successful and economical in dealing with haul lease road washouts, slips and rockfall; pipeline slips and erosion; landslides on well pads; scour at creek crossings; and, also, substandard bridges and box culverts. These geohazards are common upstream and midstream challenges in the Eastern United States.

Typically the answer has been to enlist the support of various technical/construction trades to provide a collaborative solution using traditional tried and true contracting and excavation techniques. These conventional solutions oftentimes cannot address constantly changing ground conditions and many times they create ongoing and costly maintenance problems that significantly impact maintenance budgets in an already constrained operating environment.

A new approach to geohazard mitigation combines design/build/warranty project delivery with a variety of new innovative technologies, not yet in common practice. These include hybrids of soil and rock anchoring and nailing as well as Geosynthetically Confined Soil (GCS®) walls and abutments. These techniques combined with an experienced and dedicated workforce can provide quick, efficient, high quality, guaranteed repairs at costs that were previously unattainable.

INNOVATIVE CONTRACTING METHODSThe common themes for geotechnical issues throughout the oil patch in the Eastern United States involve problems associated with terrain that is remote, steep, and typically somehow involve critical highways to towns and/or communities. Heavy hauling of rock and fill can be problematic. Most likely any solutions involving road/pipeline/facility closures are not an option; time and again traditional methods prove to be too inconsistent; and the job must be completed yesterday.

Innovative solutions are best accomplished when there are synergies between the designers and construction crews, and where the contracting mechanism allows for design and construction changes to be made to “best fit” the application. This flexibility of system and process is critical to allow for field alteration as required. Ground conditions that are believed to exist may be vastly different than what lies underneath the ground’s surface. Oftentimes to obtain a robust design, an iterative process must be incorporated to derive the most robust solution. Figure 1 indicates the initial site characteristics that would be incorporated in the modeling scenario to stabilize a haul road.

Additionally the existing geomorphic conditions coupled with changing atmospheric phenomena can change the projects’ complexity overnight – or even by the hour. Therefore design flexibility along with customer input are necessary to overcome these challenges and provide lasting solutions to the kind of pressing geotechnical problems illustrated above in Figure 2. This collaborative effort between the design team and construction crews even extends to the actual construction process. Many instances can arise in the construction process where the as-found conditions vary greatly and cause the original design to be “unworkable”.

Open communication and trust between the owner, designer, and contractor is the key to ensure that the constructed solution will indeed fully mitigate the geohazard. To facilitate this open communication and trust, a design/build/warranty contracting approach enables the optimal design be implemented and constructed with the oversight of the project owner. The warranty ensures that the designer/contractor works in the best interest of the owner so they won’t have to preform rework at their own cost.

This differs from a fixed-price contract where once a project impediment is realized; the work often stops while a change order is negotiated. This delay often causes worsening of the project conditions and a much greater contract cost to fix the greater challenges. Additionally the contractor can be locked into a work methodology that is immediately outdated once the “real” conditions are determined during the onset of construction – again leading to change orders and delays.

A NEW APPROACH TO GEOHAZARD MITIGATION

Figure 1 - Preliminary modeling to calibrate the soil anchor design work.

Figure 2 – Various Geohazards Encountered by the O&G Plays

July 2015

INNOVATIVE TOOLSLaunched Soil Nails: Soil nailing is a reinforcement technique for inserting tensile members into a soil mass. These members provide tensile strength to unstable or potentially unstable soil. The nails resist slope movement by providing bending and shear resistance, but provide their largest contribution by acting in tension to increase forces normal to the slip plane (See Figure 3).

Conventional (solid-bar) soil nails typically are installed using a drill to produce an open hole in which a nail is inserted and then filled with cemetitious grout. In landslides caving holes can present difficulties and necessitate drilling with a cased hole, which generally increases cost and project time. Because drilling cased holes in

actively moving landslides pose safety and installation difficulties, solid-bar soil nails are rarely used for landslide repair.

In order to install soil nails rapidly, at low cost, and in the caving and actively moving soil conditions found in landslides, European engineers developed launched soil nail technology in the 1980s. Actuated by compressed air at pressures up to 3000 psi, the cannon typically fires a 20 foot long, 1.5-inch diameter bar or tube into the ground in a single shot at velocities exceeding 250 miles per hour. The compressed air technology used to fire launched soil nails was originally developed by the British military to launch chemical weapons, but later repurposed for civilian applications.

Installation rates for launched soil nails vary between 100 to 250 nails per day. Assuming 80% average penetration, this equates to 1,600 to 4,000 feet of nail length per day; compared to conventional drilled soil nail installation rates of 1,000 feet and 300 feet using open hole and cased drilling techniques, respectively.

Like conventional drilled and grouted soil nails, these rods reinforce an unstable or potentially unstable soil mass by transferring the nail’s tensile and shear resistance into the sliding soil. Unlike traditional soil nails, launched soil nails are dynamically inserted into the soil without pre-boring a drill hole. This dynamic installation generates a shock wave that causes the soil particles to elastically deform around the nail tip and the bars enter the earth without significant abrasion or loss of exterior corrosion protection. When perforated, the tubes can also serve as horizontal drains. Pressure grouting of perforated launched soil nails can also

increase bond strength values between 110 to 300 percent, with higher increases seen in granular soils with high porosity. Shallow landslides often exhibit surficial erosion as well. In those cases, erosion control blankets, meshes, or mats can be tied to the protruding nail tips to address surface erosion. In extreme cases, reinforced shotcrete can also be tied to the protruding nail tips, creating a truly structural solution to the landslide and associated surficial erosion.

Geosynthetically Confined Soil (GCS®) Walls: Thousands of years before the concept of “Reinforced Soil” became widely accepted, ancient people had already used soil with vegetative tensile inclusions to build structures. As early as 1000 B.C., Mesopotamians used layers of reeds and packed clay to build the cores of their ziggurats. Portions of the Great Wall in China were reinforced using the twigs of tamarisks trees between layers of gravel and clay. As shown above in Figure 6, the design attributes of GCS® walls is the closely packed soil that essentially locks the soil particles together and provides its strength. Limiting the distance between each “lift” ensures that the forces will keep the soil interlocked and will not dissipate the locking force; causing the wall’s failure.

The use of these walls in the energy plays enable haul roads to be rebuilt in place and even provide additional shoulder width for guard rails and/or pull off lanes; reduce the footprint of well pads and other facility foundations; provide a fast and efficient vehicle bridge construction; and alleviate the permitting and zoning requirements as all construction can be accomplished on solid ground.

CONCLUSIONTraditional earthwork solutions used to mitigate geohazards that impact upstream and midstream infrastructure often create recurring and costly maintenance problems, negatively impacting maintenance budgets and enticing the wrath of regulators. Innovative, non-traditional solutions utilizing design/build/warranty contracts with experienced geohazard mitigation engineers and constructors can provide a cost effective solution, and assure lasting stabilization.

Figure 3: Force Diagram of a Typical Shallow Rotational Landslide Repaired Using Soil Nails.

Figure 4: Launched Soil Nail Installation

Figure 6: Design and Durability of GCS® Walls

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INDUSTRYINSIGHT

By: Robert Ward, VP, International Business DevelopmentOleumTech Corporation

In a downturn energy market, how can operators make better usage of their declining production assets for optimizing production output to ultimately maximize profits? One of the ideal methods is by collecting more critical data using cost-effective and easy-to-use instruments and I/O networks to improve production.

Capgemini - The Deciding Factor: Big Data & Decision Making • 9 out of 10 say decisions made in the past three years would have been better if they would have had all the relevant information

• 41% is the expected improvement in performance due to big data in 3 years• 85% of respondents felt the issue was not so much the volume of data as the need to analyze and act on big data in real time

• 56% of respondents suggest “organizational silos” is the biggest barrier to data-driven decision making

With the downturn of new drills, producers are getting closer and closer to seeing the ominous decline of their assets. With $100 oil and today’s quick drill technologies capable of bringing on a new well in days or weeks instead of weeks or months, it seems easier and more strategic to use new drills to obscure the decline curves. But when the new drills slow, the declining health of the asset becomes more and more evident.

Without new drills to bulk the bottom line, production teams must rely on enhanced techniques that may or may not yet be in place to optimize production. Regardless of the state of their optimization or lift technique, what becomes of value is determining the baseline of the individual contributors to the overall asset. Those contributors at a high level are the wells and supporting infrastructure such as pumps, compressors, flow line architecture, tank batteries, injection wells, formation pressures, and field-based intermediary processing facilities.

Each of those production contributors have a vast array of components that determine how successful it will be depending on whether the well is a flowing type well, pumped well, injection/gas lifted well, any tertiary components such as CO2, steam or water for floods, etc.

Traditional monitoring and custody transfer of gas wells is accomplished using an Electronic Flow Measurement (EFM) device. This is essentially the cash register for transactions based at the well. Liquids are usually monitored as they are taken away from the site with portable bulk storage (trucks) or measured as they feed into a gathering system.

While these measurements are the key to transactional business they do little to provide visibility to the engineering team about what is happening at the well. Most measurement data is compared to previous day, week and month to see if production is up or down. These measurements were more indications of past data and lacks visibility of what the production could be.

There are generally few points of monitoring with fewer points of granularity and even less context around what those values mean. The context is quite important for each point. A good example is a tank level goes prematurely high. To an operator, the first thought is “How do I avoid a spill?” To a production or reservoir engineer, the first thought is “Why did that tank go high?” Each are important in their own context but each data point has the likelihood of meaning something totally different, or at least causing a different response, depending on the discipline of the one evaluating the point. If this data was contained in an organizational silo as mentioned in Capgemini stat’s above, one of those analysts would not have been able to make the right decision.

When looking at daily production, it is hard to tell if the well is flowing generously all day or if it is loading and unloading violently. Without granular data sets it is difficult to tell how the asset is performing and even more difficult to determine why its performance is what it is.

Now the market has shifted and operations and engineering need more than just a speedometer on their dashboard to navigate where they need to go next. Data is needed for impacting decisions at the well today, next week and next month in addition to feeding the modeling machines that will provide indications of how to operate the field asset in coming months and years. These impacts on modeling are a direct result from only receiving daily flow data and monthly well tests to receiving multiple process monitoring points. These points correlate directly with

MAKING THE MOST OF DECLINING ASSETS WITH REMOTE WIRELESS MONITORING

July 2015

flow and lift strategy, well shut-in profiles, etc. and provide the decision makers access to much more content to apply context and make more tactical and strategic decisions.

The value of such data does not stop at the wellhead. There is also great value in knowing what is going on at the local field gathering level and using that data to impact well site decisions. A producer in North America had a number of new wells using rod pump control, with reasonable sophistication applied with VFD’s. Yet, problems still occurred attaining the daily production targets. After several changes were made to the control strategy, they decided to see what was happening downstream of the well by simply connecting a battery powered wireless pressure transmitter a kilometer or two downstream. After just a short time they noticed significant and repeatable pressure spikes that would prevent the well in question from flowing. By changing the well flow destination to intermediate atmospheric tanks they were able to prove the well was having a problem bucking the periodic excessing line pressure created by higher pressure wells. With minimal infrastructure changes they were able to synchronize the higher pressure and lower pressure wells. Within a couple of days all the adjacent wells were producing optimally. After interpreting the proper context of the data and making a few well informed decisions, they were able to achieve modeled production targets.

That example is just one of many stories that illustrate how a quick and simple remote monitoring solution was able to create tremendous value with little effort and little cost. Incremental process monitoring combined with data-intensive and domain expertise “context” can make all the difference.

The speed and simplicity was afforded by the architecture of the wireless instrument network. Using a network that provides a star topology, remote instruments and I/O can be added without any front end engineering or site studies. The sensors need only a few network parameters entered and they become visible by the gateway affording quick and simple installations and endless scalability.

The gateway being serial Modbus and Ethernet Modbus TCP, there is little expertise required for integration with a favorite RTU or SCADA host. Once captured, any

level of analytics can be applied to the data further enhancing field automation and production optimization decisions.

Once the gateway is installed in the RTU panel, many sensors can be added for monitoring local and remote points for extended value creation. Several common applications are:

- Pressure build-up and draw-down analysis- Adjacent well continuity during fracking operations (critical in SIMOP’s)- Flow back monitoring without the cables and wires- Quick regulatory compliance to constantly changing requirements (mitigate fines)

Summary:Improving access to process information allows for decisions impacting production performance of existing assets to achieve quick compliance instead of costly regulatory changes.

Increasing accessibility with low cost, quickly deployable local and remote process monitoring with off-the-shelf battery-powered wireless instrument and I/O network that requires little to no front end engineering, allowing response to changing needs today as well as those which will arise tomorrow and the next day at incredibly small incremental costs.

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NEWTECHNOLOGY

By: Melanie Boop, Communication Specialist, Aerial Energy Resources, LLC

Industrial Radiography OverviewIndustrial Radiography is the process of ionizing radiation to view objects that cannot otherwise be seen. It is a method of inspecting materials for hidden flaws through the use of X-rays and gamma rays. Industrial Radiography

has been used since the early 1900’s for the examination of piping, pressure vessels and plant components. Industrial Radiography has been a valuable asset to the industry as a whole, enabling the evaluation of components previously not subject to analysis.

Industrial Radiography—Safety and Health RisksSeveral significant events throughout the history of Industrial Radiography have shown us the inherent safety risks associated with radioactive isotopes and this method of inspection (Johnston). The dose rates that prevail close to an industrial radiography source, such as iR-192, or Cobalt-60, are high enough to cause overexposure of extremities within a matter of seconds. Overexposure can result in the loss of limbs, eyesight, reproductive ability,

teeth and hair or death. Fatal exposure cases are rare, but they have occurred when sources were mishandled or inadvertently came into the public’s possession. The industry has strict measures, guidelines, and equipment to mitigate the risks associated with industrial radiography; however, accidents can and do happen.

Industrial Radiography Impacts on ProductionIndustrial Radiography regulations require all manufacturing activities in the area are interrupted and workers stay distanced

from the testing area because of the safety risks associated with Industrial Radiography. This causes significant negative impacts on production because work and testing can’t happen simultaneously. The opportunity cost of lost production can be great.

Industrial Radiography Impacts on the EnvironmentThe standard field processing of radiological film uses environmentally harmful chemicals including Hydroxylamine Sulfate and heavy metals such as Lead and Silver Bromide. Lack of proper disposal allows these chemicals to penetrate the ground and our waterways. The environmental impact of these chemicals entering waterways is dangerous to all living organisms. Industry standards require procedures and regulations to be followed when disposing of these harmful chemicals, but human error and negligence allows for improper disposal and negative environmental impacts.

Phased Array Ultrasonics- The Safe Alternative to Industrial RadiographyPhased Array Ultrasonics has been made readily available in the field due to advances in technology over the past 20 years. Phased Array is a form of ultrasonics capable of beam focusing, steering, and 3D image capturing. It is nearly identical to medical ultrasonics. Phased Array has been incorporated into industry standards and codes, such as ASME B31.8 and ASME B31.3, as an acceptable alternative to Industrial Radiography.

Safety and Health Risks of Phased ArrayPhased Array Ultrasonics may be carried out contemporaneously to the various production activities with no production shut down time because the method does not emit radiation. It is completely safe for workers to be within close proximity to phased array testing.

For a client, Aerial Energy Resources, LLC conducts Phased Array in lieu of Industrial Radiography in their shop. In the past, this client would assemble the welds and relocate them to a side building for night time radiographic testing in an attempt to minimize worker exposure to radiation. The welds would be examined at night with results given the next morning; and if repairs were necessary, then it would be another 48 hour turn-around. This procedure was costly as it required personnel involvement with supervising

PHASED ARRAY– THE SAFE ALTERNATIVE TO RADIOGRAPHY

Table 1: Radiological Accidents and Injuries

Table 3: Toxicity of Chemicals Used During Industrial Radiography to Fish and Aquatic Invertebrates. Table 3 shows various chemicals used to develop film from radiography testing and their toxicity to water dwelling organisms (Johnston). The chemicals used in the processing of radiological film have a negative impact on the environment.

July 2015

nightshift vendors on the premises and relocating parts. Workers supervising nightshift vendors were still exposed to radiation.

The use of Phased Array has been able to provide a safe, code compliant, and cost effective solution to this client’s problem. They now do not worry about their workers being exposed to radiation and the risks associated with it. They also benefit from limited production stoppages and increased quality standards. The lost opportunity cost of work incurred during the use of Industrial Radiography is not a concern when using Phased Array. The use of Phased Array does not require production shut down or a section of the work area to be off limits during testing because the method does not utilize a radioactive source. Non-destructive testing technicians can perform Phased Array inspection in the same area as other workers without disrupting their work.

Phased Array is fully volumetric, allowing for height and depth measurements of the flaw. Results are shown digitally in real time and stored on DVD’s. The discs are easy to label, store, and refer back to as needed, unlike the testing results of Industrial Radiography which is recorded on film.

Environmental Impacts of Phased ArrayPhased Array is safe for workers and the environment as it does not emit radiation. The use of Phased Array also eliminates the risks associated with developing film from Industrial Radiography, such as the use of heavy metals and chemicals. Results of Phased Array testing are shown digitally with no negative environmental impacts.

From Problem to SolutionIndustrial Radiography threatens the health of workers and the environment because the method emits harmful radiation; it also has a negative impact on

production. To eliminate health and environmental risks while maximizing production, companies are turning to a safer testing method. Phased Array does not pose any threats to workers or the environment, allowing for limited production stoppages during testing. By requesting phased array services instead of Industrial Radiography, a company can save time and minimize costs while ensuring safety for their workers and the environment.

Aerial Energy Resources, LLC is a veteran owned non-destructive testing consultancy providing International NDT services.To learn more about our company and phased array, visit www.aertesting.com. To request our phased array services, call us at (724) 872-0298.

References 1. Johnston, Robert. “Statistical Summary of Radiological Accidents and Other Incidents Causing Radiation Casualties.” Johnston’s Archive. N.p., 20 Nov. 2011. Web. 16 June 2015.

Results of Phased Array testing are shown digitally in real time with no negative impacts on the environment. (Left) Workers are able to perform inspection services using Phased Array without safety and environmental concerns. (Right)

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URTeC 2015 San Antonio, TX | www.seg.org

28-29PIOGA Pig Roast and Equipment Show Champion, PA | www.pioga.org

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19-20NAPE South Houston, TX | www.napeexpo.com

25-26IADC Well Control Conference Galveston, TX | www.iadc.org

16-17Shale Insight Philadelphia, PA | www.shaleinsight.com

16-17IADC Asset Integrity & Reliability Conference Houston, TX | www.iadc.org

16-19ADDC Annual Convention Lubbock, TX | www.addc.org

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21-23AESC Annual Tradeshow and Conference Ft. Worth, TX | www.aesc.net

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AUGUST

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July 2015

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LEGAL &FINANCE

By: Kristie Kubovic, Director of Communications, Shale Media GroupEdited By: Mindy Gattner, Editor, Shale Media Group

Unbeknownst at the time, Range Resources changed southwestern Pennsylvania in 2004 by drilling the first vertical Marcellus Shale well. When Range went public in 2008 with the drillable discovery of the Marcellus Shale, it started a snowball effect, changing the surrounding region and eventually the United States’ energy position in the world. As it turns out,

the Marcellus Shale play is now the largest source of natural gas in the United States and the world’s second largest gas supply.

A combination of the technological advancements of horizontal drilling and hydraulic fracturing at the time helped propel this process. Horizontal drilling is actually a combination of vertical and horizontal drilling, where producers drill vertically, then turn the well bore and drill horizontally in different directions, similar to the spokes on a wagon wheel.

After the well is completed, the process of hydraulic fracturing is employed. Hydraulic fracturing is a technique used to release natural gas and oil from subterranean rock deep under the earth’s surface. In the process, water, which is mixed with other compounds like sand, is pressurized and pumped into the ground to fabricate cracks (also known as fractures or fissures) in the rock. These cracks act like veins and allow the release of oil and natural gas to the well. The utilization of horizontal drilling in conjuncture with hydraulic fracturing bolsters producers’ ability to draw oil and gas from the nation’s various shale formations and allows even higher volumes of gas to be extracted.

The growth of the shale oil and gas industry has elevated environmental and health concerns, including the potential effects on drinking water. Even though hydraulic fracturing occurs thousands of feet below water tables, there have been claims that hydraulic fracturing changes the quality of the local water supply. The Environmental Protection Agency (EPA) has scrutinized the validity of these claims and studied the impact of hydraulic fracturing. Consequently, different studies have drawn the same conclusion: “hydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources.”

In 2004, the Evaluation of Impacts to Underground Sources of Drinking Water by Hydraulic Fracturing of Coalbed Methane (CBM) Reservoirs national study final report stated, “EPA has published a final report summarizing a study to evaluate the potential threat to underground sources of drinking water (USDWs) from the injection of hydraulic fracturing fluids into coalbed methane (CBM) production wells. … The Agency has concluded that the injection of hydraulic fracturing fluids into CBM wells poses minimal threat to USDWs. In its review of incidents of drinking water well contamination believed to be associated with

hydraulic fracturing, EPA found no confirmed cases that are linked to fracturing fluid injection into CBM wells or subsequent underground movement of fracturing fluids. Further, although thousands of CBM wells are fractured annually, EPA did not find confirmed evidence that drinking water wells have been contaminated by hydraulic fracturing fluid injection into CBM wells.”

In 2009, Congress requested the EPA revisit hydraulic fracturing to study the relationship between hydraulic fracturing and drinking water. In 2011, the EPA released a detailed plan of the extensive, multi-year study. On Thursday, June 4, the EPA finally released the draft form of the Potential Impacts to Drinking Water Resources from Hydraulic Fracturing Activities assessment.The assessment followed the water used for hydraulic fracturing from water acquisition, chemical mixing at the well pad site, well injection of fracking

fluids, the collection of hydraulic fracturing wastewater (including flowback and produced water), and wastewater treatment and disposal. According to the EPA’s news release, the assessment revealed “hydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources.”

As with any industry, there is the potential for and consequences from human mistakes and equipment failures. The assessment also identified important vulnerabilities to drinking water resources from activities associated with hydraulic fracturing. “These vulnerabilities to drinking water resources include: water withdrawals in areas with low water availability; hydraulic fracturing conducted directly into formations containing drinking water resources; cased or cemented wells resulting in below ground migration of gases and liquids; inadequately treated wastewater discharged into drinking water resources; and spills of hydraulic fluids and hydraulic fracturing wastewater, including flowback and produced water.”

“EPA’s review of data sources available to the agency found specific instances where well integrity and waste water management related to hydraulic fracturing activities impacted drinking water resources, but they were small compared to the large number of hydraulically fractured wells across the country. The report provides valuable information about potential vulnerabilities, some of which are not unique to hydraulic fracturing, to drinking water resources, but was not designed to be a list of documented impacts.” These points are reasonable and valid points; consequently, when the industry focuses on these and properly follows the rules and regulations governing it, these instances can be avoided to avert drinking water contamination.

Mike Krancer, former Secretary of the Pennsylvania Department of Environmental Protection (DEP) and now Partner and head of the energy industry team at Blank Rome LLP in the firm’s Philadelphia office, relayed, “The long awaited EPA Assessment of the Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources has been released in draft form. There will undoubtedly be a river of ink spilled on analysis of the Assessment in the coming days, weeks, and years.”

Krancer explained, “From my chair, the bottom lines are these:• The tremendous surge in production made possible by horizontal drilling

and hydraulic fracturing has brought economic benefits to many areas of the United States and, through, increased domestic energy supplies has made the United States more secure;

EPA RELEASES ASSESSMENT ON HYDRAULIC FRACTURING/WATER STUDY

July 2015

• There are above and below ground mechanisms that need to be managed responsibly because, like with any other activity, there is a potential, if mismanaged, to adversely impact environmental resources;

• There have been certain isolated incidences where mistakes in practice or accidents (such as spills or faulty well construction) have caused temporary very limited adverse impacts to certain drinking water supplies;

• There is no evidence that these mechanisms have led to widespread, systematic impacts on drinking water resources in the United States; and

• There is no evidence that hydraulic fracturing itself has caused adverse impacts to drinking water resources.

Translation: hydraulic fracturing can be done responsibly and safely.”

Additionally, Krancer expressed, “One part of the Assessment that is particularly happy for me to read is in the section regarding treatment and disposal methods for hydraulic fracturing wastewater. The EPA reports that “treatment of hydraulic fracturing wastewater by POTWs [publicly owned treatment works] was used in the past in Pennsylvania. This decreased sharply following new state-level requirements and a request by the Pennsylvania Department of Environmental Protection (PA DEP) for well operators to stop sending Marcellus Shale wastewaters to POTWs (and 15 CWTs [centralized waste treatments]) discharging to surface water.””

“This was an example of cooperation from one Gubernatorial administration

to the next—one Democrat and mine Republican–in doing the right things to assure responsible energy development and to protect drinking water supplies. It

was Secretary John Hanger’s DEP under Governor Rendell who put into place the new regulations regarding Total Dissolved Solids discharges. Then it was me when I was Secretary, under Governor Corbett, who discovered that the few grandfathered facilities (which had been excluded from the new regulations) were posing a back-door threat and we acted to shut that down with our ‘call’ to drillers which worked to dry up any further supply to those facilities. In what should be a model for the nation, both sides of the aisle can and do cooperate in Pennsylvania in providing for responsible energy development,” added Krancer.

The EPA news release said the “EPA’s draft assessment benefited from extensive stakeholder engagement conducted across the country with states, tribes, industry, non-governmental organizations, the scientific community, and the public to ensure that the draft assessment reflects current practices in hydraulic fracturing and utilizes all data and information available to the agency.” Additionally, Dr. Thomas Burke, Deputy Assistant Administrator of the Office of Research and Development and Science Advisor, EPA, relayed, “It is the most complete compilation of scientific data to date, including over 950 sources of information, published papers, numerous technical reports, information from stakeholders, and peer-reviewed EPA scientific reports.”

In summary, the EPA assessment concluded that hydraulic fracturing is safe, but mistakes associated with hydraulic fracturing closer to the surface could affect drinking water. However, by following proper protocol, these mistakes could be avoided. The study will be finalized after review by the Science Advisory Board and after a period of public review and comment. For a copy of the study, visit www.epa.gov/hfstudy.

Shale Media Group (SMG) is the news, information, and education resource dedicated to the shale oil and gas industries by messaging across video, Internet, publications, events, and radio. For more, check out ShaleMediaGroup.com to access all platforms. In addition, join us on July 30th for our next Elite Energy Event in front of the Holiday Inn Express in Bentleyville, PA from 5-8pm. Kristie Kubovic is the Director of Communications at Shale Media Group. Contact her at [email protected].

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