investor-relations
Investor Relations

Fracturing

HYDRAULIC FRACTURING




(From The Texas Oil & Gas Industry)

Throughout our operations we uphold and preserve the vision and company culture that is Penn Virginia.

As a critical element in our operations and strategy, we engage in hydraulic fracturing in environmentally responsible ways to protect the environment, our landowners, our employees and the communities in which our employees and their families reside and work.

This is the right thing to do and it is the Penn Virginia way.


Overview

With the rise of unconventional natural gas and oil production, one topic garnering significant media attention and increased scrutiny by the environmental community is the industry-wide practice of hydraulic fracturing, or fracking.  Fracking involves the injection of water, sand and chemicals under pressure into prospective rock formations to stimulate oil and natural gas production.

This technique has been safely used in the United States by the oil and gas industry for over sixty years in over a million wells. In fact, according to the Interstate Oil & Gas Compact Commission (IOGCC), fracking has been used to complete over 90% of the oil and gas wells drilled in the United States. We use this completion technique on substantially all of our wells.

We believe the environmental risk associated with fracking is very low, yet it is important for us to effectively manage this risk. To that end, we have implemented a stringent environmental program that helps us achieve our commitment to safe and responsible resource development.

We strive to design, drill, complete, produce and plug our wells in ways that minimize adverse effects on the environment.

Focus on Safety From the Beginning of the Life of the Well

Pre-Drilling

Before we ever begin drilling, our geologists perform a geological assessment of the site to identify faults, abandoned mines and old wells and to assess the overall geological soundness of our drilling location.  Our geologists weigh all available facts and attempt to choose a location, when feasible, where we can drill multiple laterals off of one pad so that we can minimize surface impact to the surrounding environment, including disruption to trees and wildlife. 

Once well locations are identified, we generally meet with the surface owners to discuss the placement of well sites and, where possible, we enter into agreements with the surface owners to compensate them and provide individualized guidelines on our surface use.

In every state where we operate, we use a certified third party environmental laboratory to collect and analyze water samples from a radius of at least 2,500 feet around the well location so that we can determine if contaminants are present prior to our commencing any activities on the land.  We share these water testing results with landowners.

 

Studies conducted by respected environmental authorities, including the Environmental Protection Agency, the Ground Water Protection Counsel and The Interstate Oil and Gas Compact Commission, have concluded that fracking is safe and does not pose a threat to human health and poses little to no risk to contamination of underground sources of drinking water.

Drilling The Well

The oil and gas we explore for is separated from groundwater by thousands of feet of impermeable rock.  Fracking of the well takes place at a considerable distance, many times at a distance as deep as the Grand Canyon, below any drinking water aquifers.  Even so, we take great efforts to protect the environment and our drinking water supplies from all aspects of our operations, including fracking.  Each of our wells is designed to protect groundwater for the life of the well, which typically spans a number of decades.

Once drilling starts, we design and construct our wellbores soundly.  We meet or exceed state law requirements in the design, drilling and completion of our wellbores.  To isolate fresh water from the production stream:

  • we drill our wells with a minimum of two barrier layers of steel casing with cement behind one of those steel barriers; and
  • we routinely run cement to the surface to isolate the wellbore from potable groundwater. 

After drilling is completed and the well is ready to be fracked, we perform the following safety measures:

  • we pressure test the wellbore for integrity to make sure that no fluid can escape through the protective casing and cement system;
  • we install a pressure relief system, which is tested and monitored throughout fracking operations, to monitor the appropriate pressures so that any breach or weakness in the casing would be discovered immediately;
  • in the rare event that we encounter abnormal pressure, the pressure relief valve enables the pressure to be dissipated on the surface;
  • we routinely run cement bond logs, an acoustic testing method, to provide further confidence in the strength and integrity of the cement casing strings;
  • in addition, we recycle oil-based mud and cuttings which reduces landfill volumes and costs, truck hauling, waste disposal and consumption; and
  • where feasible, we extract diesel used during drilling operations and reuse it.

Video

Hydraulic Fracturing: How It works

Fracking Fluids

Mostly Water and Sand

Our fracking fluids usually are comprised of approximately 99.5% water and sand and 0.5% additives.  Most of these additives can be found in everyday household products such as laundry detergents, cleaners, food and beauty products.  We use environmentally friendly chemicals when possible.  Even though additives represent such a small portion of the overall fracking fluid, they serve several important purposes:

  • they help to eliminate bacterial growth in the well (similar to the way that chlorine helps to   eliminate bacterial growth in a pool or our drinking water), since bacteria can cause corrosion, which, unless treated by chemicals in the fracking fluid, could impact the safety and integrity of the well;
  • they prevent scale build-up in the well; and
  • they reduce friction to help manage well pressure.



The Interstate Oil and Gas Compact Commission has stated that oil and natural gas supply more than 60% of the nation's energy. Fracking plays a critical role in the development of virtually all unconventional oil and natural gas resources.

The Ground Water Protection Council (GWPC) and IOGCC have implemented a voluntary chemical disclosure website, www.FracFocus.org, where oil and gas exploration and production companies can disclose the additives used in the fracking process on a well-by-well basis starting with wells drilled in 2011.  

We fully support the public disclosure of fracking fluid additives, and we have provided a description of the fracking additives we use on www.FracFocus.org.  In addition, we submit information on these additives to the necessary regulatory agencies.  We obtain Material Safety Data Sheets for every chemical we use in the fracking fluid. 

Type of Water Used in Fracking

We recognize that fresh water is a valuable resource, so we use non-potable water sources in our fracking operations wherever feasible.  We also build frack ponds where we dig and collect rainwater to use in our fracking operations.

Disposal of Fracking Fluids

Once the well has been fracked, most of the sand introduced while fracking remains underground and holds open the fissures in the rock formation so that the oil and gas can be retrieved.  Some of the water and additives that comprise the fracking fluid eventually flow back up through the well.  

In 2011, we began to use predominately a closed loop drilling system where the flowback fluids are temporarily stored in steel tanks, rather than lined pits.  In Texas, the steel tanks we use are open top for the first two to three days and then we use steel tanks that are covered and have pressure relief vents.  In all other areas, we use only covered tanks with pressure relief vents.

We are currently evaluating various recycling options that would reduce the environmental impact.  We intend to begin to recycle the flowback fluids, since they are unfit for human consumption, and use them again in other fracking operations.  This reduces our fresh water consumption.

Well Operations

Air Emissions

We have installed emission reduction devices on our compressors, and, where practical, our loading and storage tanks and other equipment, and we use BTEX controllers on our dehydration units to reduce air pollutants.  We make every effort to put the well in line and close pits promptly after completion so that we can further reduce emissions from the well site.

Regulations in the states in which we operate establish emissions limits, emissions control requirements, monitoring and test requirements and report requirements to protect and maintain air quality.  We operate in compliance with applicable regulations and, in many cases, we exceed them. 

Where infrastructure is in place, we use pipelines for the transportation of production to reduce transportation emissions.  Currently, we sell or transport almost all of our production in Mississippi, Pennsylvania and East Texas via pipeline. Infrastructure is currently being constructed and expanded in the Eagle Ford Shale.  Once that is completed, we expect to use pipelines for the transportation of our Eagle Ford Shale production.

Solid Waste and Sludge Residuals

It is our policy to dispose of drill cuttings and other solid waste and sludge only in licensed disposal facilities.

We also monitor and track NORM (naturally occurring radioactive materials) in our waste streams and, if necessary, we treat it and dispose of it properly at licensed facilities.

After completing the well, we retain a certified third party laboratory to collect and analyze water samples from the same water sources we collected from prior to drilling.  We have not had any negative outcomes when comparing pre-drilling and post-completion water samples.  We share the post-completion water testing results with the landowner once we receive them.

We install liners under, and metal firewalls around, oil tank batteries to insure the containment of any spills.

End of the Life of the Well

Approximately one year after the well starts producing, the well site is reclaimed and the size of the disturbed land necessary to produce the well is significantly reduced.

After the well has ceased producing, we plug the well in accordance with local regulations and take care to restore the land to leave it as close to the way we found it as is reasonably possible.

In the event we drilled a water well for use in our operations, we offer the well to landowners for their personal use.

Contractor Safety

Our operations are handled by trained personnel, and we routinely conduct on-site safety reviews to ensure compliance with best practices.  We have also adopted, in accordance with local regulation, emergency response plans so that we are prepared to respond quickly and effectively in the unlikely event of an unplanned incident.  Each year in Texas, Pennsylvania and Mississippi, we have a picnic dinner with first responders to educate them on our activities and to discuss how best to respond to any potential issues that may arise. 

Our contractors are routinely audited:

  • before they can commence our work, our Environmental, Health and Safety group audits our contractors to ensure the adequacy of their environmental, health and safety training;
  • if we find their training is deficient, we require them to attend our training sessions;
  • we require our contractors to register on ISN (www.isnetworld.com) which collects safety, sustainability, quality and regulatory information and verifies its accuracy; and
  • in addition, in 2012, our outside independent internal auditing firm completed a specific environmental, health and safety audit.

Our Priority

We use responsible and prudent operational practices during every phase of the well – design, drill, maintenance and plugging – to ensure that the fluids and commodities recovered are properly handled both in the well and on the surface.  We collaborate on and stay apprised of best practices that reduce any potential environmental risks, including any that could arise from fracking.

We are very much aware of the recent focus on fracking, and we support the development of fracking fluid additives that represent the least risk to the environment.  We intend on using these greener additives once they are developed, their effectiveness in the fracking process is proven and they become commercially available at a reasonable cost.

In addition, we are committed to working with local, state and federal regulators to continue ensuring a safe environment for our landowners as well as the communities in which our employees and their families reside and work.

For additional information, please see the following [1]