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OH and WV Shale Gas Water Usage and Waste Injection

By Ted Auch, OH Program Coordinator, FracTracker Alliance

Both Ohio and West Virginia citizens are concerned about the increasing shale exploration in their area and how it affects water quality. Those concerned about the drilling tend to focus on the large quantities of water required to hydraulically fracture – or “frack” – Utica and Marcellus wells. Meanwhile those concerned with water quality cite increases in truck traffic and related spills. Concerns also exist regarding the large volumes of fracking waste injected into Class II Salt Water Disposal (SWD) wells primarily located in/adjacent to Ohio’s Muskingum River Watershed.

Injection Wells & Water Usage

While Pennsylvania and WV have drilled heavily into their various shale plays, OH has seen a dramatic increase in Class II Injection wells. In 2010 OH hosted 151 injection wells, which received 50.1 Million Gallons (MGs) per quarter in total – or 331,982 gallons per well. Now, this area has 1941 injection wells accepting 937.5 MGs in total and an average of 4.3 MGs per well.

In the second quarter of 2010 the Top 10 Class II wells by volume accounted for 45.87% of total fracking waste injected in the state. Fast forward to today, the Top 10 wells account for 38.87% of the waste injected. This means that the industry and OH Department of Natural Resources Underground Injection Control (ODNR UIC) are relying on 128% more wells to handle the 1,671% increase in the fracking waste stream coming from inside OH, WV, and PA. During the same time period, freshwater usage by the directional drilling industry has increased by 261% in WV and 162% in OH.

Quantity of Disposed Waste

With respect to OH’s injection waste story there appear to be a couple of distinct trends with the following injection wells:

— Long Run Disposal #8 in Washington and Myers in Portage counties. The changes reflect a nearly exponential increase in the amount of oil and gas waste being injected, with projected quarterly increases of 6.78 and 5.64 MGs. This trend is followed by slightly less dramatic increases at several other sites: the Devco Unit #11 is up 4.81 MGs per quarter (MGPQ).

— Groselle #2 is increasing at 4.21 MGPQ, and Ohio Oil Gathering Corp II #6 is the same with an increase of 4.03 MGPQ.

— Another group of wells with similar waste statistics is the trio of the Newell Run Disposal #10 (↑2.81 MGPQ), Pander R & P #15 (↑3.23 MGPQ), and Dietrich PH (↑2.53 MGPQ).

— The final grouping are of wells that came online between the fall of 2012 and the spring of 2013 and have rapidly begun to constitute a sizeable share of the fracking waste stream. The two wells that fall within this category and rank in the Top 10 are the Adams #10 and Warren Drilling Co. #6 wells, which are experiencing quarterly increases of 3.49 and 2.41 MGs (Figure 2).

Disposal of Out-of-State Waste

These Top 10 wells also break down into groups based on the degree to which they have, are, and plan to rely on out-of-state fracking waste (Figure 3). Five wells that have continuously received more than 70% of their wastestream from out-of-state are the Newell Run Disposal (94.4), Long Run Disposal (94.7%), Ohio Oil Gathering Corp (94.2%), Groselle (94.3%), and Myers (77.2%). This group is followed by a set of three wells that reflect those that relied on out-of-state waste for 17-30% of their inputs during the early stages of Utica Shale development in OH but shifted significantly to out-of-state shale waste for ≥40% of their inputs. (More than 80% of Pander R & P’s waste stream was from out-of-state waste streams, up from ≈20% during the Fall/Winter of 2010-11). Finally, there are the Adams and Warren Drilling Co. wells, which – in addition to coming online only recently – initially heavily received out-of-state fracking waste to the tune of ≥75% but this reliance declined significantly by 51% and 26% in the case of the Adams and Warren Drilling Co. wells, respectively. This indicates that demand-side pressures are growing in Ohio and for individual Class II owners – or – the expanding Stallion Oilfield Services (which is rapidly buying up Class II wells) is responding to an exponential increase in fracking brine waste internally.

Waste Sources

We know anecdotally that much of the waste coming into OH is coming from neighboring WV and PA, which is why we are now looking into directional well water usage in these two states. WV and PA have far fewer Class II wells relative to OH and well permitting has not increased significantly there. Here in Ohio we are experiencing not just an increase in injection waste volumes but also a steady increase in water usage.  The average Utica well currently utilizes 6.5-8.1 million gallons of fresh water, up from 4.6-5.3 MGs during the Fall/Winter of 2010-11 (Figure 4). Put another way, water usage is increasing on a quarterly basis by 221-333K gallons per well2. Unfortunately, this increase coincides with an increase in the reliance on freshwater (+00.42% PQ) and parallel decline in recycled water (-00.54% PQ). In addition to declining in nominal terms, recycling rates are also declining in real terms given that the rate is a percentage of an ever-increasing volume. Currently the use of freshwater and recycled water account for 6.1 MGs and 0.33 MGs per well, respectively. Given the difference in freshwater and recycled water it appears there is an average 8,319 gallon unknown fluid void per well. The quality of the water used to fill the void is important from a watershed (or drinking water) perspective.  The chemicals used in the process tend to be resistant to bio-degradation and can negatively influence the chemistry of freshwater.

WV Data

WV is experiencing similar increases in water usage for their directionally drilled wells; the average well currently utilizes 7.0-9.6 MGs of fresh water – up from 2.9-5.0 MGs during the Fall/Winter of 2010-11 (↑208%). This change translates into a quarterly increase in the range of 189-353K gallons per well3. The increase coincides with an increase in the reliance on freshwater (+00.34% PQ) and related decline in recycled water (-00.67% PQ). Currently, freshwater and recycled water account for 7.7 MGs and 0.61 MGs per well, respectively. Given the difference in freshwater and recycled water, there is an average of 22,750 gallons of unaccounted for fluids being filled by unknown or proprietary fluids (Figure 5).

The Bigger Picture

This analysis coincides with our ongoing Muskingum River Watershed resilience analysis on behalf of Freshwater Accountability Project’s Leatra Harper and Terry Lodge. Their group represents a set of concerned citizens disputing the “short-term water sale” of freshwater by the increasingly abstruse and proprietary Muskingum Watershed Conservancy District (MWCD) to industry players such as Antero, Gulfport, and American Energy Utica. Pending or approved sales total 120 MGs averaging 1.8 MGs per day at around $4.25 per thousand gallons4. The proximity of this watershed – and location of many Utica wells within its boundaries – to most of the current and proposed WV and OH wells makes it susceptible to excess, irresponsible, or dangerous water withdrawals and waste transport (Figure 6). We will continue to update this analysis in an effort to infuse the MWCD conversation about industry water sales with more holistic watershed resilience and susceptibility mapping with an eye toward getting the state of OH to address issues associated with freshwater valuation which is lacking at the present time.

Figures

Ohio Class II Number and Volumes in 2010 and 2014

Figure 1. Ohio Class II Number and Volumes in 2010 and 2014

Ohio's Top 10 Fracking Waste Class II Injection Wells by Volume

Figure 2. Quarterly volumes accepted by Ohio’s Top Ten Class II Injection Wells with respect to hydraulic fracturing brine waste.

Ohio's Top 10 Fracking Waste Class II Injection Wells by % Out-Of-State

Figure 3. Ohio’s Top Ten Class II Injection Wells w/respect to hydraulic fracturing brine waste.

Average Water Usage by Ohio's Utica Wells By Quarter (Fall 2010 to Spring 2014)

Figure 4. Total water usage per Utica well and recycled Vs freshwater percentage change across Ohio’s Utica Shale wells on a quarterly basis. Data are presented quarterly (Ave. Q3-2010 to Q2-2014)

Average Water Usage by West Virginia's Directional Drilling Wells By Quarter (Summer 2010 to Winter 2014)

Figure 5. Changes in WV water usage for horizontally/hydraulically fractured wells w/respect to recycled water (volume & percentages) & freshwater. Data are presented quarterly (Ave. Q3-2010 to Q2-2014)

OH_WV_Water

Figure 6. Unconventional drilling well water usage in OH (n = 516) and WV (n = 581) (Note: blue borders describe primary Hydrological Units w/the green outline depicting the Muskingum River watershed in OH).


References & Resources

  1. Of a possible 239 Class II Salt Water Disposal (SWD) wells.
  2. The large range depends on whether you start your analysis at Q3-2010 or the aforementioned statistically robust Q3-2011.
  3. The large range depends on whether you start your analysis at Q3-2010 or the more statistically robust Q3-2011.
  4. MWCD water sales approved to date: 1) Seneca Lake for Antero: 15 million gallons at 1.5mm per day, 2) Piedmont Lake for Gulfport: 45 million gallons at 2 million per day, 3) Clendening for American Energy Utica: 60 million gallons at 2 million per day.

Unpaid Interns Sought for Fall 2014

Intern ButtonThere is always more work to do than FracTracker has staff. For the fall, we’re on the search for some unpaid interns to help out in the following offices:

  • Camp Hill, PA
  • Pittsburgh, PA
  • Wheeling, WV
  • Cleveland Heights, OH
  • Oakland, CA

FracTracker interns are current college or graduate students who aid in conducting research, gathering and analyzing data, writing articles, managing the website, and mapping geo-located data. These are unpaid positions, as our paid internships run February – August each year. Because the fall internships are unpaid, however, students can choose to seek receipt of academic credits through their academic institution. These position are not eligible for health benefits.

If interested, apply online today. Deadline: July 15, 2014.

Water Use in WV and PA

Water Resource Reporting and Water Footprint from Marcellus Shale Development in West Virginia and Pennsylvania

Report and summary by Meghan Betcher and Evan Hansen, Downstream Strategies; and Dustin Mulvaney, San Jose State University

GasWellWaterWithdrawals The use of hydraulic fracturing for natural gas extraction has greatly increased in recent years in the Marcellus Shale. Since the beginning of this shale gas boom, water resources have been a key concern; however, many questions have yet to be answered with a comprehensive analysis. Some of these questions include:

  • What are sources of water?
  • How much water is used?
  • What happens to this water following injection into wells?

With so many unanswered questions, we took on the task of using publically available data to perform a life cycle analysis of water used for hydraulic fracturing in West Virginia and Pennsylvania.

Summary of Findings

Some of our interesting findings are summarized below:

  • In West Virginia, approximately 5 million gallons of fluid are injected per fractured well, and in Pennsylvania approximately 4.3 million gallons of fluid are injected per fractured well.
  • Surface water taken directly from rivers and streams makes up over 80% of the water used in hydraulic fracturing in West Virginia, which is by far the largest source of water for operators. Because most water used in Marcellus operations is withdrawn from surface waters, withdrawals can result in dewatering and severe impacts on small streams and aquatic life.
  • Most of the water pumped underground—92% in West Virginia and 94% in Pennsylvania—remains there, lost from the hydrologic cycle.
  • Reused flowback fluid accounts for approximately 8% of water used in West Virginia wells.
  • Approximately one-third of waste generated in Pennsylvania is reused at other wells.
  • As Marcellus development has expanded, waste generation has increased. In Pennsylvania, operators reported a total of 613 million gallons of waste, which is approximately a 70% increase in waste generated between 2010 and 2011.
  • Currently, the three-state region—West Virginia, Pennsylvania, and Ohio—is tightly connected in terms of waste disposal. Almost one-half of flowback fluid recovered in West Virginia is transported out of state. Between 2010 and 2012, 22% of recovered flowback fluid from West Virginia was sent to Pennsylvania, primarily to be reused in other Marcellus operations, and 21% was sent to Ohio, primarily for disposal via underground injection control (UIC) wells. From 2009 through 2011, approximately 5% of total Pennsylvania Marcellus waste was sent to UIC wells in Ohio.
  • The blue water footprint for hydraulic fracturing represents the volume of water required to produce a given unit of energy—in this case one thousand cubic feet of gas. To produce one thousand cubic feet of gas, West Virginia wells require 1-3 million gallons of water and Pennsylvania wells required 3-4 million gallons of water.

Table 1. Reported water withdrawals for Marcellus wells in West Virginia (million gallons, % of total withdrawals, 2010-2012)

WV Water Withdrawals

Source: WVDEP (2013a). Note: Surface water includes lakes, ponds, streams, and rivers. The dataset does not specify whether purchased water originates from surface or groundwater. As of August 14, 2013, the Frac Water Reporting Database did not contain any well sites with a withdrawal “begin date” later than October 17, 2012. Given that operators have one year to report to this database, the 2012 data are likely very incomplete.

As expected, we found that the volumes of water used to fracture Marcellus Shale gas wells are substantial, and the quantities of waste generated are significant. While a considerable amount of flowback fluid is now being reused and recycled, the data suggest that it displaces only a small percentage of freshwater withdrawals. West Virginia and Pennsylvania are generally water-rich states, but these findings indicate that extensive hydraulic fracturing operations could have significant impacts on water resources in more arid areas of the country.

While West Virginia and Pennsylvania have recently taken steps to improve data collection and reporting related to gas development, critical gaps persist that prevent researchers, policymakers, and the public from attaining a detailed picture of trends. Given this, it can be assumed that much more water is being withdrawn and more waste is being generated than is reported to state regulatory agencies.

Data Gaps Identified

We encountered numerous data gaps and challenges during our analysis:

  • All data are self-reported by well operators, and quality assurance and quality control measures by the regulatory agencies are not always thorough.
  • In West Virginia, operators are only required to report flowback fluid waste volumes. In Pennsylvania, operators are required to report all waste fluid that returns to the surface. Therefore in Pennsylvania, flowback fluid comprises only 38% of the total waste which means that in West Virginia, approximately 62% of their waste is not reported, leaving its fate a mystery.
  • The Pennsylvania waste disposal database indicates waste volumes that were reused, but it is not possible to determine exactly the origin of this reused fluid.
  • In West Virginia, withdrawal volumes are reported by well site rather than by the individual well, which makes tracking water from withdrawal location, to well, to waste disposal site very difficult.
  • Much of the data reported is not publically available in a format that allows researchers to search and compare results across the database. Many operators report injection volumes to FracFocus; however, searching in FracFocus is cumbersome – as it only allows a user to view records for one well at a time in PDF format. Completion reports, required by the Pennsylvania Department of Environmental Protection (PADEP), contain information on water withdrawals but are only available in hard copy at PADEP offices.

In short, the true scale of water impacts can still only be estimated. There needs to be considerable improvements in industry reporting, data collection and sharing, and regulatory enforcement to ensure the data are accurate. The challenge of appropriately handling a growing volume of waste to avoid environmental harm will continue to loom large unless such steps are taken.

Report Resources

Complete Report  |  Webinar

This report was written on behalf of Earthworks and was funded by a Network Innovation Grant from the Robert & Patricia Switzer Foundation.

This FracTracker article is part of the Water Use Series

Over 1.1 Million Active Oil and Gas Wells in the US

Many people ask us how many wells have been hydraulically fractured in the United States.  It is an excellent question, but not one that is easily answered; most states don’t release data on well stimulation activities.  Also, since the data are released by state regulatory agencies, it is necessary to obtain data from each state that has oil and gas data to even begin the conversation.  We’ve finally had a chance to complete that task, and have been able to aggregate the following totals:

Oil and gas summary data of drilled wells in the United States.

Oil and gas summary data of drilled wells in the United States.

 

While data on hydraulically fractured wells is rarely made available, the slant of the wells are often made accessible.  The well types are as follows:

  • Directional:  Directional wells are those where the top and the bottom of the holes do not line up vertically.  In some cases, the deviation is fairly slight.  These are also known as deviated or slant wells.
  • Horizontal:  Horizontal wells are directional wells, where the well bore makes something of an “L” shape.  States may have their own definition for horizontal wells.  In Alaska, these wells are defined as those deviating at least 80° from vertical.  Currently, operators are able to drill horizontally for several miles.
  • Directional or Horizontal:  These wells are known to be directional, but whether they are classified as horizontal or not could not be determined from the available data.  In many cases, the directionality was determined by the presence of directional sidetrack codes in the well’s API number.
  • Vertical:  Wells in which the top hole and bottom hole locations are in alignment.  States may have differing tolerances for what constitutes a vertical well, as opposed to directional.
  • Hydraulically Fractured:  As each state releases data differently, it wasn’t always possible to get consistent data.  These wells are known to be hydraulically fractured, but the slant of the well is unknown.
  • Not Fractured:  These wells have not been hydraulically fractured, and the slant of the well is unknown.
  • Unknown:  Nothing is known about the slant, stimulation, or target formation of the well in question.
  • Unknown (Shale Formation):  Nothing is known about the slant or stimulation of the wells in question; however, it is known that the target formation is a major shale play.  Therefore, it is probable that the well has been hydraulically fractured, with a strong possibility of being drilled horizontally.

Wells that have been hydraulically fractured might appear in any of the eight categories, with the obvious exception of “Not Fractured.”  Categories that are very likely to be fractured include, “Horizontal”, “Hydraulically Fractured”, and “Unknown (Shale Formation),” the total of which is about 32,000 wells.  However, that number doesn’t include any wells from Texas or Colorado, where we know thousands wells have been drilled into major shale formations, but the data had to be placed into categories that were more vague.

Oil and gas wells in the United States, as of February 2014. Location data were not available for Maryland (n=104), North Carolina (n=2), and Texas (n=303,909).  To access the legend and other map tools, click the expanding arrows icon in the top-right corner.

The standard that we attempted to reach for all of the well totals was for wells that have been drilled but have not yet been plugged, which is a broad spectrum of the well’s life-cycle.  In some cases, decisions had to be made in terms of which wells to include, due to imperfect metadata.

No location data were available for Maryland, North Carolina, or Texas.  The first two have very few wells, and officials in Maryland said that they expect to have the data available within about a month.  Texas location data is available for purchase, however such data cannot be redistributed, so it was not included on the map.

It should not be assumed that all of the wells that are shown in  the map above the shale plays and shale basin layers are actually drilled into shale.  In many cases, however, shale is considered a source rock, where hydrocarbons are developed, before the oil and gas products migrate upward into shallower, more conventional formations.

The raw data oil and gas data is available for download on our site in shapefile format.

 

Almost Heaven

By Brook Lenker, Executive Director, FracTracker Alliance

Touring Doddrige County, West Virginia

On September 26th, FracTracker staff and board member, Brian Segee, traveled to Doddridge County, West Virginia for an eye-popping tour. This endeavor was led by Diane Pitcock of West Virginia Host Farms and local activists who are deeply concerned about the fate of their region – an area overwhelmed by shale gas development.

Approaching West Union on route 50, a giant flare roars above the roadway and about every fourth vehicle, mostly pickups, tankers, and dump trucks, suggest association with the shale gas industry.  At the café in town, vehicles baring EQT logos fill the lot.  Nearby, Middle Island Creek flows thick and brown despite an absence of rain for the past five days. Diane says it’s frequently muddy from the constant pipeline construction upstream.

Mark West site

The first stop is a Mark West complex with a cryogenic plant burning off excess hydrocarbons, a yard for loading CNG on tanker trucks, one well pad, and another in the works (see photo right). To build the latter, a hillside is being disemboweled.  The heavy equipment and a train of idling trucks release diesel emissions. A stream once coursed through the field in the foreground, but the previous landowner had filled and relocated it without a permit. Watching and photographing from the adjoining rail trail, irony rules. The trail sign is topped by a company-placed “No Trespassing” sign. From the discussion and observations, it’s clear that the environment is being devalued and degraded in Doddridge County.

The tour continues on to a water withdrawal site. According to the permit numbers plastered beside the conduit, the site hosts approximately 50 unconventional gas wells – each requiring millions of gallons of water to crack the shale and hasten the flow of gas.

Right-of-Way?

Next, we traverse gravelly back roads widened by the industry.  The roadway expansion often requires the purchase of right-of-way from landowners.  Our guides tell us that if a landowner says no, sometimes they are told “if you don’t sell, we’ll take it by eminent domain.”  The threat is hollow if not deceitful, since in such circumstances the industry has no right to exercise eminent domain. The industry does have the right to access mineral rights they may own, however, even if they don’t own the property on the surface. In West Virginia, these “split estate” situations are as common as country music, only they project a much more somber note to the landowner, especially when the gas company comes knocking.

A Neighbor’s Perspective

Well pad visit

A freshly cut and clearcut road travels onward and upward across a half mile or more of former forest where a nice lady owns the land but not the natural gas being accessed more than a mile below.  Piles of logs line the roadside, a reminder of what was. The road ends at a fenced impoundment holding thousands of gallons of impaired water.  An odor, akin to antifreeze, hangs in the dry, dusty air. The lady tells the group about the wildlife she has seen, including the songbirds that rest on the high fence and likely drink from the poisonous reservoir.

Downhill lies an expansive well pad, big enough for a football game if there wasn’t the metallurgical din and sprawl of a towering drill rig and the pipes and machinery that accompany it. The landowner’s presence enables our group to enter the working well pad where workers, sleeping off a long shift, emerge from a trailer. While over 30 of her roughly 80 acres are affected by drilling-related activities, only a payment for timber is in negotiation. Meanwhile, she pays the taxes on the land – a parcel that will never quite be the same. Tom Bond, a local and well-informed activist, wistfully comments, “This is just the beginning.  Eventually there will be well pads everywhere.” He may be right.

Pipeline Construction

A golden afternoon closes crossing steel plates over an open trench and green pipeline.  The corridor is an undulating, exposed ribbon of ground spanning ridge to ridge in each direction. There are many more just like it snaking across the hills and hamlets of West Virginia from one compressor station to another.

From witnessing the industry’s heavy footprint to the stories we hear of problems emerging in home water wells, somehow a happy John Denver tune now seems melancholy.

Additional Resources

West Virginia Map Updated

At FracTracker, we are constantly adding new content to our maps page. In recent weeks, we have added new content for Michigan, Pennsylvania, and Arkansas. Now, we have updated our West Virginia Shale Viewer as well.


West Virginia Shale Viewer. Please click the expanding arrows in the top right corner to access the legend and other map tools.

The map above shows some detail about Marcellus Shale operations in the Mountain State, including:

  • Permits issued (purple).  To date, there have been 3,079 permits issued statewide since 2000 where the Marcellus Shale is the target formation.
  • Completed wells (orange).  Of the permits that have been issued, the West Virginia Department of Environmental Protection (WVDEP) has received a completion form for 1,840 wells, or just under 60 percent.
  • Wells in noncompliance (yellow).  196 Marcellus wells were given the noncompliance flag in the dataset.  There are no details on what might have led to this status, however.
  • Public comment wells (blue).  35 Marcellus Shale wells in West Virginia are flagged as having received a public comment of one sort or another.  As with the wells in noncompliance, this dataset offers no details on these wells.

Here’s a look at the number of completion reports received by WVDEP by month:

Marcellus Shale completions by month in West Virginia

Marcellus Shale completions by month in West Virginia

The largest number of completions per month for Marcellus Shale wells is 97 in April 2009.  The next highest total was the following month, with 81 completions.  From January through August of this year, there are an average of 40.5 completions per month in West Virginia.

The information that is distributed in this West Virginia data is typical, however, a good deal of data are being collected by WVDEP.  To see the kinds of things that the state knows about completed wells, take a look at what is required for submission on form WR-35.

Updated West Virginia Permits Data

UPDATE: The DataTool is no longer active. Explore WV maps here instead.

Permits data for Marcellus Shale wells in West Virginia has recently been updated on FracTracker’s DataTool

[map archived]

Astute viewers will note that there is a well drawn in the Athens, OH area, a good 20 miles from the West Virginia border as the crow flies. As it turns out, this is not the most egregious error; if you zoom out, you will see purple dots in Indiana and North Carolina as well, neither of which are are even contiguous with West Virginia. There were also about five wells that I deleted the location data for, because I could tell at a glance that they would have drawn well south of the Tropic of Cancer.

These data errors are a shame, because they compromise the experience of an otherwise slick data delivery system, where viewers can pick permits from a given formation, see them draw on a map, and then download the data. The data are fairly bare-bones in nature, consisting of just six columns, but this is not something that I have a quarrel with, as it includes the information that most people want to know, including where the well is, who is responsible for it, when the permit was issued, and the unique well number. And we already know, based on download parameters, what the target formation of the well is.

While only a handful of wells are affected by faulty location data, 330 out of 2,688 wells in the dataset lack permit issue dates, or just over 12 percent of the wells. This is significant enough to make the result of any trend analysis questionable. Nonetheless, let’s proceed to have a look, keeping relevant caveats in mind:


Marcellus Shale permits issued per month in West Virginia

While the number of permits per month is fairly erratic in West Virginia, it is clear that the last full month–July 2012–saw the largest number of permit issued in the Marcellus ever, and that June 2012 is tied for second. West Virginia clearly is not seeing the same contraction of unconventional gas activity that Pennsylvania is.

Like its neighbors, Pennsylvania and Ohio, Chesapeake has the largest number of permits for unconventional gas permits. Unlike Ohio, where the operator’s share was over 70 percent of the total of the Utica, here the plurality is just 17 percent of Marcellus Wells.

Jobs Impact of Cracker Facility Likely Exaggerated

This past January, when Ohio was still in the midst of the bidding war for the proposed cracker facility, Toledoans saw the following blurb in their paper, the Toledo Blade:

Gov. John Kasich is pursuing the multibillion-dollar ethane-cracker facility that Shell Chemicals LP plans to build in Ohio, West Virginia, or Pennsylvania to capitalize on the increasing harvest of natural gas from Marcellus shale. The American Chemistry Council estimates that the plant would generate 17,000 jobs in chemistry and other industries as well as $1 billion in wages and $169 million in tax revenue.

That’s some financial impact, right?  And now we are hearing the same figure coming out of Harrisburg via the Post-Gazette:

Estimates from the American Chemical Council have projected that a $3.2 billion ethane-processing facility, similar to the one that Shell is considering for Beaver County, would create more than 17,000 new jobs at the plant itself and among spinoff businesses along the supply chain.

Too bad it is isn’t very realistic.

Although the planned Monaca plant is one of several new cracker facilities planned in North America, currently, there are just a handful on the continent. In January, I posted about one of them, a Shell facility in Norco, Louisiana.  On their website, the multinational giant proudly proclaims the following, in bold type:

Shell Chemicals’ Norco facility is located in St. Charles Parish. The facility has over 600 full-time employees, more than 160 contractors, and generates an annual payroll of $50 million. The company pays more than $16 million in state and local taxes and $6M is property taxes that help fund public education as well as police and fire departments.

As I mentioned five months ago, those are significant contributions, to be sure. But it is a far cry from the projections of the American Chemistry Counsel (ACC) state above.  Shell also operates another cracker in Deer Park, Texas, which claims:

Shell Deer Park is a 1,500-acre complex located in Deer Park, Texas, approximately 20 miles east of downtown Houston along the Houston Ship Channel. Founded in 1929, Shell Deer Park is now home to 1,700 employees who operate a fully integrated refinery and petrochemical facility 24 hours a day.

That’s a lot of jobs, but as an integrated facility, it already accounts for some of the “spinoff businesses along the supply chain”.

Nova Chemicals operates another cracker in Sarnia, Onterio, which according to their website employs about 900 people who earn an estimated $86 million in wages and benefits each year.

So how silly is the claim of 17,000 jobs and $1 billion in wages? Consider that with all of its existing crackers and other facilities,

Shell chemicals companies staff total 8,500 worldwide. The majority of these support our manufacturing operations.  This does not include joint venture employees.”

Even with the JV employees not being counted, we are talking about major petrochemical plants in nine locations around the world, plus three technology centers.  So just who are these experts at the ACC who keep getting quoted for the 17,000 job figure? According to website:

The American Chemistry Council’s (ACC’s) mission is to deliver business value through exceptional advocacy using best-in-class member performance, political engagement, communications and scientific research.

Well played, ACC.  You have put on a best-in-class performance with your exceptional advocacy.  But for the rest of us, it is time to start considering more realistic jobs numbers when talking about the proposed ethylene producing facility.

Paid Marcellus Programming to Play in West Virginia

Who doesn’t love a good half hour commercial? But it’s not just for OxiClean and musical compilations of 70’s disco tunes anymore–the West Virginia Oil and Natural Gas Association is getting in on the act too.

In addition to the half hour weekly episode of “Inside Shale”, in which callers ask questions of industry insiders, there will be a “Marcellus Minute” that airs 10 to 20 times per day. Both programs are scheduled to launch on 49 radio stations throughout West Virginia.

Talking about the Marcellus Shale on the radio is certainly not off limits, but the industry sponsored call in show does sound questionable, in that the format mimics a news format, and it could be confused as such.  It’s a shame that the industry didn’t push for actual moderated discussions, with guests arguing from a variety of perspectives.  That is something that there’s a real need for, not just in West Virginia, but wherever shale gas extraction is occurring.

There are real impacts of drilling.  Some people are giddy with prospective royalty checks.  Others are bitter with the presence of compressors, condensers, and fouled water wells on property that they own, but not the mineral rights for.  There’s a lot to talk about, and communities that might be affected by the industry deserve to hear both sides.

A Look at Horizontal Well Production in Virginia

Horizontal gas wells in Virginia in 2008 to 2009. Note that they are all clustered in the extreme western portion of the Commonwealth.

According to the Virginia Department of Mines, Minerals, and Energy’s (DMME) Division of Gas and Oil, there are 30 horizontal gas wells that produced gas between January 2008 and December 2009 (1). While this is not a large number of horizontal wells, the dataset is interesting, since Virginia publishes monthly production data online.

Of the 30 wells, only nine were in production for at least 12 of the 24 months that I looked at. This is, admittedly, a small sample size, but is as good an entry point as any into the discussion of how gas production changes over time.


Chart 1: Production in Thousands of Cubic Feet (Mcf) of Horizontal Gas Wells in Virginia, with at least 12 months of production between 2008 to 2009.

Many of the wells in this analysis have a spike in production within the first few months of production, followed by a gradual decline.


Chart 2: Maximum, Minimum, and Mean Production of Horizontal Gas Wells in Virginia, with at least 12 months of production between 2008 to 2009.

For wells with at least 12 months of production, the mean production value tends to be closer to the minimum value than the maximum. This is particularly true for those wells which show a significant spike in production, such as VH-520008.


Chart 3: Ratio of Most Recent Monthly Production to Peak Monthly Production of Horizontal Gas Wells in Virginia, with at least 12 months of production between 2008 to 2009.


Ratio of December 2009 production to each well’s maximum monthly production for all horizontal gas wells. Please click the gray compass rose and double carat (^) to hide those menus. Click the “i” tool then any map feature for more information.

For these nine horizontal gas wells in Virginia, the average production of the most recent month (December 2009) is slightly less than 30 percent of the peak monthly production. This figure is skewed on the one side by a well with a tremendous production spike (VH-530008, 6.93%) and on the other by a well with low but relatively steady production (VH-536927, 42.75%). When all wells are considered (as with the map) the range of values is much greater.

Each of these wells had been in production between 12 and 24 months as of December 2009, and none of them produced even half as much gas in that month as the month for their respective maximum production values. The complete production data is available on FracTracker’s DataTool.

  1. The most recent production data currently available is for January 2010, one month after the end of this analysis.