Horizontal Wells – Hydraulic Fracturingin Michigan

Michigan Oil & Gas Producers Education Foundation | 124 West Allegan St., Suite 1610, Lansing, MI 48933 | 517.487.1092 | mogpef.orgMichigan Oil & Gas Producers Education Foundation | 124 West Allegan St., Suite 1610, Lansing, MI 48933 | 517.487.1092 | mogpef.org

Introduction Since 1925, Michigan has been one of the nation’s

important sources of natural gas and crude oil.

Michigan’s natural gas producers supply 21.8

percent of the natural gas used by Michigan

residents and businesses for heating and energy

needs (U.S. Energy Information Administration,

2009). Natural gas is clean and abundant, making

it a reliable energy source for Michigan.

In Michigan, where renewable energy sources

like wind power are being developed to diversify

our energy mix, natural gas will continue to be a

major fuel source, as we bridge to a wider range

of energy sources in the future.

Home-state production of oil and gas benefits

our state, its communities, and families in many

ways. It supports energy security and independence,

provides thousands of Michigan jobs, and generates

millions of dollars in tax revenues for state and

public services. It also provides royalties that help

purchase land or support improved recreation and

environmental assets. Thousands of private mineral

owners – Michigan landowners – also receive royalty

income from production activities each year.

Hydraulic fracturing in MichiganHydraulic fracturing is a safe, proven and essential

process for recovering natural gas and oil from

reserves found deep below the earth’s surface

and often in tight rock formations, such as shale,

which are common to Michigan’s geology and

contain reserves of natural gas that are important

to Michigan’s energy supply.

More recently, production of natural gas and oil from

shale rock formations and other “unconventional”

sources has continued to grow as producers seek

opportunities to deliver more energy from onshore

domestic sources for meeting energy needs.

Michigan’s Utica/Collingwood, found at a depth that

ranges between 4,000 feet below the surface

of the earth (at the top of the lower peninsula)

to about 9,000 feet below the surface of the

earth, is an example of an unconventional source

formation that may have the potential to produce

significant energy.

Beginning in the 1950s, Michigan has a successful

track record of using hydraulic fracturing to safely

produce natural gas and oil from rock formations

deep underground. An estimated 12,000 producing

wells have utilized the method, while protecting

water resources and the environment.

Does hydraulic fracturing allow gas toescape into freshwater aquifers?No. With the appropriate well construction as required

by Michigan regulations, freshwater aquifers are

protected. Steel casings, and cement surrounding the

casings, isolate the well from surrounding freshwater

aquifers. There have been no reported occasions of

Michigan drinking water aquifers being affected by

fracturing activity, which has taken place in the

state for more than 60 years and in approximately

12,000 wells.

Why are some Michigan residents concerned about horizontal hydraulic fracturing?Michigan’s vast freshwater resources play a vital

role in our state, and Michigan residents rightly want

them protected. As awareness grows of the poten-

tial for enhanced gas and oil production in Michigan,

residents want assurance that water use by producers

will be reasonable, sustainable, and regulated, and

that water quality will be protected.

Recently, hydraulic fracturing has come under scrutiny

as media reports from other states have raised

concerns about environmental damage from disposal

methods in those states. In contrast, Michigan’s

strict standards for well construction and fracturing

fluid disposal are credited with the state’s strong

environmental safety record around oil and natural

gas production.

Why is horizontal hydraulic fracturing needed? Natural gas is critical to our energy supply, and

Michigan has large reserves of this clean and afford-

able fuel. The use of natural gas in Michigan is also

expected to grow, along side other renewable energy

sources that are being developed and will become

increasingly viable.

Hydraulic fracturing is essential to the successful

development of a large percentage of oil and gas

wells in Michigan. Many underground geologic

formations in Michigan have low permeability and

could not produce economically viable volumes of

natural gas without the use of hydraulic fracturing.

Horizontal drilling with the use of hydraulic fracturing

has important advantages in certain deep formations,

as the horizontal leg of the well exposes more of the

well to the producing formation and the fracturing

creates micro-fissures that allow natural gas or oil to

reach the well. It enables production of more natural

gas and/or oil from a single well. This makes

production from some deep reserves economically

viable, even with the immense development costs

of these wells.

Is more water used in fracturing horizontal wells than vertical wells?Water is necessary to conduct the hydraulic

fracturing process. The amount depends upon the

particular well, and the number of stages in the

fracturing process. Horizontal wells typically have

greater total depth, with fracturing taking place in

multiple stages. This generally requires the use of

more water for horizontal wells.

Can fracturing fluids find their way to groundwater?No, assuming proper construction of wells according

to state regulations. The fluids used in the fracturing

process are confined to the well and to the deep

formation being fractured. In Michigan, when the

fracturing fluids flow back to the surface through the

well, they are captured and stored in tanks before

being disposed of in regulated disposal wells.

What are the chemicals used in hydraulic fracturing? The fracturing fluid consists mainly of water and

sand. A small amount (less than 2 percent) of addi-

tives is used to ensure the water-sand mixture works

effectively in opening up rock fissures and enabling

gas or oil to flow to the well. Most additives are

those we encounter every day, such as disinfectants,

table salt, bleach, mineral oil and sodium carbonate

(used in water softeners).

Are drilling companies required to disclose the chemicals used in horizontal well hydraulic fracturing?Michigan regulations require operators to file Material

Safety Data Sheets (MSDSs) in compliance with OSHA

standards covering chemicals used in hydraulic

fracturing of horizontal wells. The Michigan DEQ posts

the MSDSs to its website for public disclosure. MSDSs

are also posted at each horizontal hydraulic fracturing

job site, and are made available to local first

response authorities.

Is hydraulic fracturing fluid ‘radioactive’?No. Fracturing fluid does not contain radioactive

qualities when it is pumped into the ground via a well,

nor when it comes back to the surface. All fracturing

fluids are disposed of in United States Environmental

Protection Agency (EPA) and Michigan DEQ regulated

disposal wells.

Is it possible that tap water from ahousehold faucet could catch fire, as has been reported?Gas occurs naturally in some fresh water aquifers

or surface waters. In rare situations, where flamma-

ble tap water occurs, the cause is usually naturally

occurring methane gas in the residential water well,

not hydraulic fracturing operations. In a few in-

stances in other states, gas has migrated into

aquifers due to improper well construction unre-

lated to hydraulic fracturing. Michigan’s well con-

struction standards prevent this type of occurrence.

Can hydraulic fracturing be done safely?Yes, with proper well construction as required by

Michigan regulations, and proper disposal of waste

fluids. Michigan has a program for ensuring proper

disposal. In Michigan, fracturing fluids are disposed

of in regulated disposal wells.

Is horizontal hydraulic fracturing occurring in Michigan? Hydraulic fracturing of horizontal wells has been and

is being conducted in Michigan in several geologic

formations. More recently in Michigan, some

producers are assessing the Utica/Collingwood as a

potential significant source of natural gas, as well as

its economic feasibility and the need for this addi-

tional energy source for individuals, businesses, and

manufacturers. Development, if it occurs on a signifi-

cant scale, is expected to involve deep horizontal

wells of greater length, utilizing multi-stage fracturing

to access greater reserves of energy.

What is Michigan’s experience with hydraulic fracturing and horizontal drilling?Hydraulic fracturing has been used in Michigan

since the 1950s, in more than 12,000 wells. More

commonly, a straight vertical well has been used;

horizontal wells — where the vertical well reaches its

depth and then is extended horizontally underground

— is an approach being used by producers where

appropriate to the producing formation. The approach

used depends upon the geologic conditions and the

economic reality of a particular situation.

Increased demand by citizens for clean burning

natural gas and greater energy independence, and

the potential opportunity for greater natural gas

production from Michigan’s abundant resources,

suggest that horizontal drilling could play a beneficial

role in future production, while boosting job creation

and economic growth.

How is horizontal hydraulic fracturing regulated? Michigan oil and gas production, including hydraulic

fracturing, is strictly regulated. Regulations govern

well construction, drilling sites, environmental

monitoring, hydraulic fracturing, and waste

fluid disposal.

How is hydraulic fracturing fluid disposed? In Michigan, used fracturing fluids that flow back to

the surface after the fracturing process are disposed

of in U.S. EPA and Michigan DEQ regulated

disposal wells.

More recently, production of natural gas and oil from shale rock formations and other “unconventional” sources has continued to grow as producers seek opportunities to deliver more energy from onshore domestic sources for meetingenergy needs. Michigan’s Utica/Collingwood is anexample of an unconventional source that may have the potential to produce significant energy.

MOGPEFMOGPEF

Michigan Oil & Gas Producers Education Foundation – Exploring Oil and Natural Gas through Education

Answers to Commonly Asked Questions

Antrim Shale: Counties in which exploration and production have predominantly occurred.

Utica/Collingwood: Counties in which exploration has occurred.

September 2011

Each well drilled in Michigan is constructedwith the protection of the environment andwater resources in mind, and in accordancewith regulatory requirements.

Michigan has taken prudent steps tostrengthen its regulatory framework.Michigan fosters energy production while maintaining a clean environment.

IMPERVIOUS ROCK LAYERS

Surface Casing*

Cement

Production Casing

Cement

HydraulicFracture Area

FRESH WATER AQUIFERS

Intermediate Casing

Required to 100 feetbelow deepest potentialfresh water zone

*

Cement

Michigan regulatory effectivenessWhen it comes to experience and safety in the

natural gas and oil exploration and production

industry, Michigan is a leader. With its own

experience, as well as that of other states,

Michigan has taken prudent steps to

strengthen its regulatory framework. Michigan

fosters energy production while maintaining

a clean environment.

In May 2011, the Michigan Department of

Environmental Quality (DEQ) announced

additional regulations for the gas and oil

industry to provide disclosure and trans-

parency related to larger-volume hydraulic

fracturing activities in Michigan.

New requirements for larger-volume

hydraulic fracturing include:

• Changes to water usage oversight –Operators must document where they

are getting the fresh water used in the

process, using the DEQ's water withdrawal

assessment tool to ensure that neither

surface water nor any neighboring water

wells are adversely impacted. They must

also report the total volume of fracturing

water recovered during operation.

• Reporting – The DEQ requires operators to

file Material Safety Data Sheets (MSDSs) in

compliance with federal Occupational

Safety and Health Administration (OSHA)

standards, and the DEQ will post that

information on the department's website

for public review. The MSDSs list character-

istics of chemical additives and their

potential health effects.

• Fracturing records – Operators must submit

service company fracturing records and

associated charts showing fracturing

volumes, rates, and pressures.

Deep horizontal wells: access to more energy, more efficiently,less impactFederal and state regulations affecting well

construction, drilling sites, environmental

monitoring, and waste fluid disposal strictly

regulate hydraulic fracturing in Michigan.

Horizontal drilling, coupled with multi-stage

hydraulic fracturing, has many advantages

for accessing gas and oil located in certain

deep formations. The approach:

• Makes production from certain deep

reserves economically viable, even with

the immense development costs, because

the resulting micro-fissures allow signifi-

cant volumes of oil or gas in tight rock

formations to reach the well.

• Enables a single well to produce from an

extended area, with the surface facilities

located in one location.

Vertical and horizontal wellsWhether the well is a vertical well or

horizontal well, the purpose and method of

fracturing is the same. The purpose is to

create fissures — or pathways — that allow

sufficient quantities of oil or gas locked in

the rock to move to the well, thereby making

production economically viable. All wells

require these pathways; hydraulic fracturing

in tight rock formations (where the pathways

do not occur naturally) allows producers to

create the pathways necessary for oil or gas

to move more freely from the tight forma-

tions. Fracturing may be conducted in one

stage, or in multiple stages, depending on

the specific circumstances of the well

and the reservoir formation.

Vertical wellsIn Michigan, vertical wells are most com-

mon, as producers have developed energy

reserves from reservoirs that can be

efficiently produced through vertical wells.

Vertical wells extend straight down from

the earth’s surface to reach formations

containing gas and/or oil reserves.

Horizontal WellsA horizontal well is a vertical well with a

horizontal leg, or a lateral extension, that

stretches out within the deep productive

formation. Horizontal wells have been com-

mercially used in Michigan since the 1980s.

Hydraulic fracturing in horizontal wells uses

the same process of fracturing as used in

vertical wells. Where the horizontal leg is

extended, the hydraulic fracturing process

is typically conducted in several stages along

the length of the leg. This creates micro-

fissures along the horizontal leg of the well,

allowing a single well to produce from a

larger area within the producing formation.

Fracturing — whether in a single stage or

multiple stages — takes place in a regulated,

well engineered and controlled procedure.

The opportunity for increased production to

meet energy needs and reduce dependence

on foreign energy sources, by using clean-

burning natural gas, could spur development

of deep shale and other unconventional

sources in Michigan, such as the Utica/

Collingwood. Such development could utilize

longer horizontal wells and multi-stage

hydraulic fracturing. If efforts to develop the

Utica/Collingwood using longer horizontal

wells are successful, another positive aspect

would be the relatively low surface impact

of a single well producing from a large area

within the underground formation.

Safety and responsibility Well constructionFracturing operations in Michigan take

place in an oil and gas-producing zone

below the freshwater aquifers. Each well

drilled in Michigan is constructed with the

protection of the environment and water

resources in mind, and in accordance with

regulatory requirements.

Typical Utica/CollingwoodHorizontal Well In MichiganHydraulic fracturing is not a drilling method.

After a well has been drilled, hydraulic fracturing

involves pumping water, sand, and a small

amount of additives down the well under

controlled pressure. As the mixture is forced

out through perforations in the well casing and

into the surrounding rock, the pressure causes

the rock to fracture – creating micro-fissures

that enable gas and/or oil to flow from tight

or low permeability rock to the well.

Steel surface casing is set from the earth’s

surface down to a depth 100 feet below

the deepest potential fresh water zone, and

cemented to the surface. Utica/Collingwood

horizontal wells in Michigan also have an

intermediate casing extending up to half the

vertical well depth, providing additional protection

against potential gas migration. Finally, production

steel casing is set deeper into the production

zone and through the horizontal leg and

cemented, ensuring the protection of ground-

water by multiple cemented steel casings.

Sand Keeps Fissures Open

FissuresPerforation

Gas Flows From Fissures Into Well

Well

Graphic is not necessarily to scale.