GE Energy
Unconventional Fuels:
Opportunities, Challenges,
Solutions
Timothy J. Richards, GE
APEC Energy Group
November 6, 2012
The world’s largest natural gas fields
Initial recoverable resources.
Source: IEA, World Energy
Outlook 2011: Golden Age of Gas
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Supply Anxieties?
This Time it’s Different
Comparison on selected
US and North American
natural gas supply curves.
Source: MIT, The Future of Natural Gas
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Source: Various
Demand growth
Nature abhors a vacuum. Low prices and extreme oil/NG price disparity set feedbacks in
motion.
Source: EVA to EPRI, Feb. 2012
Industrial, power sector,
LNG exports, GTL, transport?
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Environmental issues in upstream
Degree of public scrutiny*
gas
Western Issue
* Large range of regional variation exists
Wastewater
treatment/disposal
Water availability
Land clearing
Venting or flaring
from
completions/workover
s
Low
Truck traffic
Quantity
Source
Frac flowback water
Produced water
INDUSTRY PRIORITY &
FOCUS
Regional ozone Water rights
attainment
High
Chemical composition
of frac fluid
Uncontrolled
release blowout
Source: GE Energy, Global Strategy &
Planning; based on customer
discussion not a statistical survey
Water issues elevated in national debate
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Environmental focus
stronger in some regions
Large gas plays, in close proximity to urban or pristine areas with little local familiarity to the O&G
industry are likely to draw the most intense scrutiny
Key Unconventional Gas Basins
Forces driving
Environmental sensitivity
Proximity to
(urban or wilderness
areas)
High
Rockies basins
• CBM Wastewater disposal
• Water availability
• Emissions
Anadarko Woodford Shale
• Water availability
• Wastewater disposal
• Emissions
High
Low Moderate
Resource
O&G industry
(Size, concentration)
maturity
Source: GE Energy, Global Strategy &
Planning
Niobrara Shale
• Water availability
• Wastewater disposal
• Emissions
Marcellus Shale
• Wastewater disposal
• Water impoundment
ponds
Barnett Shale
• Water availability
• Emissions
Haynesville Shale
• Wastewater disposal
• Water availability
Fayetteville Shale
• Wastewater disposal
• Source of water supply
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GE Proprietary & Confidential Business Information
©Copyright 2011, GE Water & Process Technologies. All Rights
Shale Gas: Federal Regulatory
……and is using it
EPA has authority to
Overview
regulate…..
Safe Drinking Water Act: Fracking
cannot be regulated except where
diesel fuel used
Proposed SDWA guidance requires permits if diesel use;
produced water can be regulated under existing rules
Clean Air Act: EPA can
regulate emissions from O&G
operations that are “major
sources”
Clean Water Act: EPA can
regulate direct and indirect (thru
POTWs) discharges
New rules require “green completion” or flaring at wells
until 1/1/2015; both after that date; more stringent
emission limits for gathering and processing facilities
Current rules prohibit direct discharges; indirect
discharges currently unregulated, but pre-treatment
standards being developed, likely in 2014
Toxic Substance Control Act:
EPA has broad authority for
chemical testing/disclosure
NGOs petitioned for chemical testing/use disclosure in
all O&G exploration/development; EPA denied testing
but granted disclosure/reporting request
BLM has power over Federal lands
…..
BLM has broad powers over
activities on federal lands—
38% of US gas wells on
federal land
..…and it too is using it
Proposed rule issued in May would require chemical
disclosure, data submission on geology/well integrity,
and BLM operational approvals
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Shale Gas: State Regulatory
• Ohio has comprehensive new law
Developments
 covering chemical disclosure
 waste disposal (including for
underground injection well
owners)
 well construction requirements
 pipeline safety requirements
 local approval of permits but not
a severance tax
• New York moving to allow shale gas
development in some counties
Key criteria
1 Fracking
activity
2 Regulatory regime
3 Potential for
change
Prohibited
Established
Burdensome
Supportiv
e
High prob.
Low prob.
• Pennsylvania: state law preempting
local ordinances overturned—
groundwater contamination a
continuing issue
• Vermont/New Jersey have ban/
moratorium, but neither has shale
gas resources
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Key environmental considerations
Category
Water lifecycle
Operational issues
Seismic issues
Community
impacts
Issues
GE
mitigant
• Water scarcity
• Potential surface water
contamination
• Potential groundwater
contamination
• Source water filtration
• Water reuse/recycling
• Mobile evaporators
• Fixed treatment solutions
• GHGs
• Air quality
• On-site efficient power generation
• Pipeline & meter technology
• Compressors/pneumatic devices
• Well venting/flaring
• Safety
• Potential property damage
• Potential groundwater
contamination
• Water reuse/recycling
• Mobile evaporators
• Fixed treatment solutions
• Safety
• Potential infrastructure
damage
• Potential property value
impact
• Nuisance
• On-site efficient power generation
• Water reuse/recycling
• Mobile evaporators
• Fixed treatment solutions
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Frac gas and oil development
Minimal increase to mining sector’s water withdrawals
Total US water withdrawals
US Frac fuels injected water projections
Billion barrels per year (BB/yr)
Billion barrels per year (BB/yr)
3,563 BB/yr
Power
Mining*
Other
1%
45
40
35
30
25
20
15
10
5
0
34.9
* Fracking fuels water withdrawals fall into the mining sector
+3.2
Frac gas and oil
development contributions
Mining sector
w/out frac gas
and oil
development
2005
Source: USGS, 2005 data
+1.4
2010
2020
Source: USGS 2005; GE Energy, GSP estimates 2012
Frac fuels–related withdrawals are a drop in the bucket
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GE solutions for water issues
• Source water filtration to reduce chemical pretreatment
• Water reuse/recycling
• On-site mobile evaporators
• Fixed evaporation & crystallizers
Challenge - filter hydraulic fracturing
source water to reduce chemical treatment
and cost and meet environmental
regulations
Solution - mobile ultra-filtration systems
Challenge - cost effectively
treat produced and
flowback water for reuse or
discharge
Solution - mobile and fixed
membrane systems and
thermal evaporators with
service contract
Mobile Evaporator
Challenge - reduce operation
costs through solid and bacteria
removal
and chemical reduction
Solution - one pass filtration
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GE solutions for fugitive methane
emissions
breakdown by source of emissions
Pipeline Leaks & Meters
• USM Go, Rightrax RVI XL/ Rovver, X-ray
ERESCO
% Total Emissions
• Ultrasonic, remote visual inspection, and x-ray
tools for monitoring and preventing leaks
• Reduce leak service calls
3
Dry Gas Seal RulePak
2
3
4
• ICL Compressor Line
•
• PEMS, GF868, GM868,
XGM868i
• Predictive Emissions
Monitoring System software
• Reliable, accurate meters for
new installations or retrofits
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Centrifugal Compressors
• Electric powered not natgas
• No venting when stopped
• Completely closed design means no
seal leaks
Well Venting & Flaring
5%
39%
5%
• Software for non-ICL compressor seals
7%
Gas Engine Exhaust
• Waukesha 275GL+
• 1.2% greater fuel efficiency
• Reduces CO2 by 1,900
tons/yr
• .5 g/bhp-hr w/o emissions
after treatment
Reciprocating Compressors
• Low Emissions Rod Packing
• Reduces packing emissions
70%
• Standard offering on small HP
today…extending to high HP
ecomagination
Product
13%
14%
Pneumatic Devices
• Becker ZERO BLEED™
• Eliminate atmospheric bleed gas
• Masoneilan LE Packing, EF Seal
• Reduces emissions from control
valves <100 ppm
Source: EPA Estimates, NatGas Star
Program
http://www.epa.gov/gasstar/basic-
Natural gas produces far lower operating emissions
20 % of wells drilled in 2010/2011 located in Non–Attainment regions
NOx (grams per bhp-hr)
CO (grams per bhp-hr)
2.7
8% lower
2.5
Diesel
Natural Gas
0.5
95% lower
Natural gas also reduces on site vehicular traffic
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