Engineer questions hydraulic fracturing terms of reference Brian Wickins, 19 Oct 2016

This article outlines Don McMillan's submission to the NT Government's inquiry into hydraulic fracture stimulation.

DON McMillan is a petroleum engineer with more than 30 years of experience, who has designed and implemented fracture stimulation projects. His submission to the NT Government’s inquiry into hydraulic fracture stimulation endeavours to clear up some misconceptions, identify the futility of and the need to change the inquiry’s terms of reference, demonstrate that hydraulic fracture stimulation is safe and suggest a few ideas for the NT Government to consider.

Hydraulic Fracture Stimulation v ‘Fracing’ v ‘ Fracking

The title used on NT.gov.au’s website 'Fracking inquiry' is inappropriate [Ref 1]. The industry often abbreviates Hydraulic Fracture Stimulation [HFS] to 'Fracing' but only in conversation, not in official papers. In recent times activists and the media have added the letter 'k' which has a negative connotation. Naming the inquiry’s website using unscientific language that is both slang and provocative maybe perceived as a reflection of the panel’s viewpoint. The panel’s credibility is further eroded as there is no specific requirement for a Fracture Stimulation Petroleum Engineer. HFS is highly technical and the concepts are often difficult for unqualified persons including oil and gas industry spokespersons to comprehend. Inclusion of a Fracture Stimulation Petroleum Engineer would give the inquiry scientific and technical credibility.

Unconventional Resources Definition The definition of unconventional resources needs to be clarified. The best reference is the Society of Petroleum Engineers: Petroleum Resource Management System [SPE-PROS, Ref 2] which is the predominant guideline used to determine oil and gas recoverable hydrocarbon volumes, often referred to as Reserves and Resources. The SPE-PROS is prepared by the Society of Petroleum Engineers [SPE] and reviewed and jointly sponsored by World Petroleum Council [WPC], American Association of Petroleum Geologists [AAPG] and the Society of Petroleum Evaluation Engineers [SPEE].

SPE-PROS Section 2.4, page 12 defines conventional and unconventional resources as follows:
“Conventional resources exist in discrete petroleum accumulations related to a localised geological feature and/or stratigraphic condition, typically with each accumulation bounded by a downdip contact with an aquifer, and which is affected by hydrodynamic influences such as buoyancy of petroleum in water.”

“Unconventional resources exist in petroleum accumulations that are pervasive throughout a large area and that are not significantly affected by hydrodynamic influences.”

The prime difference between Conventional and Unconventional resources is that the latter is “not significantly affected by hydrodynamic influences”.

If unconventional resources are not significantly affected by aquifers, then extraction of said resources and therefore fracture stimulation is unlikely to affect or damage aquifers. The word “unlikely” is the correct adjective to use when conversing scientific matters. Science is the province of hypothesis and theories, not truth or being right. Hypotheses cannot be proven; they can only be disproved and therefore the use of the word 'unlikely' rather than 'never' is correct.

The irony of this investigation is that conventional resources including tight gas which can be affected by aquifers are outside this inquiry’s terms of reference.

Hydraulic Fracture Stimulation

HFS as a concept is generally understood but there are many misconceptions relating to the geometry of the induced fractures. The geometry is complex as it is influenced by tectonic forces, Young’s modulus of the rocks and pore pressure. The following is a general overview of the geometry of the fracture network around the well-bore.

The target reservoir must be greater than 300 m deep and in the case of unconventional reservoirs they are usually at a depth of 1000 to 4000 m. The target reservoir height varies considerably, from a few metres to, in rare cases, hundreds of metres. In vertical well bores, the HFS of a reservoir endeavours to induce a vertical fracture network height of 10 m extending 30 m in an oval shape from the well-bore. In the case of horizontal wells there are multiple [3 to 25 and sometimes more] HFSs along the horizontal section, each usually smaller in dimension than the vertical well-bore fractured rock discussed previously. The induced fractures have a limited life, in the range of three to seven years. HFS is rarely performed at shallow depths.

Chemicals

The word 'chemicals' seems to scare people. Unfortunately, the majority of the populous has not studied chemistry and therefore easily disturbed by the complexity of the science. Also, no matter how stringent and regardless of the strictest chemical protocols, the public is not appeased due to their distrust of the industry, scientists and government regulators. Therefore, the community requires reassurance from other approaches.

Is Fracture Stimulation safe for the environment and people?

There have been numerous inquiries in Australia, USA and England which conclude that the practice can be regulated for safe operation. The reassurance of the science and regulatory bodies has not alleviated the community concerns and this is demonstrated by this inquiry. As with chemicals, the community requires reassurance from other approaches.

What is the evidence that Fracture Stimulation is safe?

We need to appreciate the history of this technology to understand where we are today. Fracturing rock technology is over 150 years old [1865 Colonel Roberts, Exploding Torpedo Patent] and has been using high pressure water for over 60 years. The first HFS performed in Australia was in 1958 [Ref 4]. During this time, thousands of scientists and engineers have developed a process which is both safe and environmentally sound. Millions of wells have been stimulated safely which is borne out by the fact there have been no environmental litigation cases — especially in the highly litigious USA. The public should rest assured that lawyers are eager to litigate oil and gas companies (e.g. the BP Gulf of Mexico oil spill).

Litigation has stopped asbestos, some types of silicone breast implants, drugs such as thalidomide etc. After 150 years with no litigation, the community should have confidence the process is safe. Where litigation has occurred regarding aquifer contamination, it has been due to chemical contamination originating from surface industries or well-bore construction issues.

An inquiry into well-bore construction of petroleum, mining and agricultural wells would be more beneficial in protecting aquifers.

Why take the risk?

Baseless banning of any product or process will have unintended consequences such as encouraging radicalism and discouraging investment in the Territory. Fear campaigns have proved more effective than positive messages as demonstrated in political elections. Baseless banning will affect our way of life and freedom so I hope the people of NT keep their unique independence and determine what is best for themselves. Again, the best protection the community has against dangerous products is litigation.

What are the benefits of HFS?

HFS has enabled the world access to abundant petroleum products at affordable prices. The recent crash in oil prices, due predominantly by HFS increasing USA oil production, have improved the living standards of the poorest nations. Poor people living in poverty have little concern for the environment. For example, with the rise in Chinese living standards in the last three decades, for the first time environmental issues are now being discussed at community levels in the country. HFS has the potential for nations to be energy self-sufficient, thus reducing conflict. In Australia we have been reducing our refinery capacity, relying on imports from Asian refineries. Australia will become increasingly vulnerable if our economy and military becomes reliant on foreign refined product. Australia geologically is a natural gas continent. Natural gas is a low emission, reliable energy source and capable of supplying energy 24 hours a day, 365 days per year. Natural gas generators can operate continuously or intermittently with renewables and as peaking plants. The cost effectiveness, reliability and widespread usage of electrical storage technologies for renewable resources is still many years away so natural gas is essential for reliable electricity supply. Products developed from natural gas such as fertiliser and plastics are essential. Of concern to the farmers is the demise of the Australian fertiliser manufacturers. Incited Pivot Ltd [Ref 3] has warned that they may have to close their Queensland fertiliser plant due to the natural gas shortage. Importing fertiliser will mean that Australia will lose the quality control of the process and this could damage agricultural land.

For the people of NT, investment from petroleum companies will improve their living conditions. Conversely, random banning of a product or process creates economic uncertainty and could discourage long-term investors in many industries. Additionally, petroleum royalties take pressure off the Northern Territory Government tax revenue.

What about the farmers?

In today’s environment, the concept of property ownership is complex. The farmer owns the land, the petroleum company owns the petroleum, the mining companies own the coal and minerals etc. Also there are stakeholders that cannot be ignored such as native title, heritage, and environmental groups. With multiple owners of the property and numerous external stakeholders, the role of government is paramount. The Northern Territory Government has a great opportunity to take the lead and formulate a setting that is both fair and transparent.

To alleviate individual farmers’ anxiety in negotiating with oil and gas or mining companies, the government should consider setting up aquifer protection and compensation agreements before issuing the petroleum or mining exploration permits. The government may consider giving the farmer the opportunity to buy the petroleum, coal and mineral rights. This way the farmers can be assured they are all treated equally and they understand their rights before the exploration license has been sold or issued.

Summary

This inquiry’s website, terms of reference and panel composition needs to be rewritten. The word 'Fracking' needs to be removed from the website to prevent the perception of bias. Based on the oil and gas industry’s definition of 'Unconventional resources' this inquiry is pointless. A HFS inquiry should include conventional [tight] reservoirs if the goal is to understand the HFS impact on aquifers. If the concern is the protection of shallow [groundwater] aquifers then the terms of reference should also include well-bore construction of petroleum, mining, agricultural and government boreholes. Finally, the panel must comprise at least one Hydraulic Fracture Stimulation Petroleum engineer to have scientific credibility.

REFERENCES
Don McMillan FIEAust CPEng; NPER; RPEQ; APEC; IntPE (Aus) Registered Engineer #13987
Reference 1: https://nt.gov.au/news-and-media/public-consultations/frackinginquiry
Reference 2: Society of Petroleum Engineers Petroleum Resource Management System: http://www.spe.org/industry/reserves.php?redirected_from=/industry/reserves/
Reference 3: IPL ASX announcement 16 May 2016. http://www.asx.com.au/asxpdf/20160510/pdf/43743xztgyvm2q.pdf 
Reference 4: Western Australian Department of Mines and Petroleum “Petroleum information sheet Hydraulic fracture stimulation” http://www.dmp.wa.gov.au/Documents/Petroleum/PD-SBD-NST-106D.pdf

comments powered by Disqus