The onventional Operator · QTicketForm2019.pdf "Predictions are fraught with danger especially...
Transcript of The onventional Operator · QTicketForm2019.pdf "Predictions are fraught with danger especially...
Bill Haley and His Comets were geologic prophets with their classic rock
and roll hit. It has been known for several decades now that California is
overdue for a major earthquake along its San Andreas Fault System. Two
recent earthquakes with magnitudes estimated at 6.4 and 7.1 have
occurred and increased the nervousness of California residents and state
officials. These latest quakes occurred along two separate faults in the
Mojave Desert in a geologic area known as the Eastern Shear Zone, not a
part of the San Andreas fault which trends along the western side of
California. According to the California Earthquake Authority (CEA),
California has 15,700 known faults with more than 500 of them active.
California seismologists predict that the chance of the “big one,” with a
magnitude of up to 8.3, along the San Andreas or closely associated fault
systems approaches 100 percent over the next 30 years, making this
prediction a near certainty. When the big quake does happen there, it
will be a catastrophic event with huge human and economic costs. We
need to be ready to help California when, not if, that event occurs. In
contrast to California, most of Pennsylvania sits in an areas of relative
tectonic stability. There are daily seismic events and earthquakes to be
sure, but less than a handful with magnitudes greater than 5.0. Now there
is an increased focus by the PADEP on earthquakes induced by either
“deep” oil and gas operations or waste water injection. More about how
PA shakes, rattles, and rolls in this month’s technical article.
In this issue
Shake, Rattle, and Roll P.1 2019 Conventional Permits P.2
In the Spotlight P.3 PA Seismicity p.4
StratResources p.8
About this Newsletter
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Cary Kuminecz CPG, PG is President/
Owner of StratResources Geologic
Consulting, PLLC which provides
prospect generation, geologic
property evaluation, and well log
scanning & digitization services for
the oil & gas industry and
landowners. For more information
and for past issues of this newsletter
please visit:
www.stratresourcesgc.com
The Conventional Operator
Bi-Monthly Newsletter for Operators Exploring & Developing Conventional Oil & Gas Plays in Pennsylvania
ISSUE 27 July 2019
Shake, Rattle, & Roll
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Conventional Well Permits - Pennsylvania (2018 & 2019)
Conventional well permits to date in 2019 are 13
percent behind the permit total for the same
period (January through June) last year (123 versus
142 cumulative permits). Coincidentally, average
crude oil prices for ARG’s Group 1 tier are also
approximately 13 percent behind last year’s
averages to date ($56.38/BO in 2019 versus
$64.73/BO for the same time period in 2018).
Since January there have been 85 Oil Well permits
30 Combination Oil & Gas Well permits, 5 Storage
Well Permits, 2 Gas Well permits, and 1 Disposal
Well Permit awarded. Permitting activity has
accelerated in Warren and Forest Counties in the
past two months.
116 of the 123 conventional well permits in 2019
are new permits with only seven (5.7% of total)
being permit renewals.
2019 Conventional Permits Falling Behind 2018 Pace
2019 Conventional Permits by County
County No. Permits % of Total
Warren 63 51.2
McKean 38 30.9
Forest 14 11.4
Bedford 5 4.1
Clarion 1 0.8
Clearfield 1 0.8
Fayette 1 0.8
Total 123 100.0
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Success Stories, News, Announcements
Diversified Gas & Oil, PLC, parent company of
Diversified Oil & Gas, the largest operator of
conventional wells in the Appalachian basin with
60,000 gross wells and 54,000 operated wells,
reported in its June investor presentation that its
anticipated plugging costs for Pennsylvania wells
ranges from $20k per well in Non-Coal areas to $25k
in Coal areas. Diversified plans to plug a minimum
of 20 wells per year by agreement with the PADEP.
Diversified reports that It operates 22,289 wells in
Pennsylvania at this time.
IOGANY will hold its 39th
annual BBQ this week on
July 11th at Peek n’Peak
Resort in Clymer, New York.
Information about this great
event can be found at:
https://www.iogany.org/files/
BBQTicketForm2019.pdf
"Predictions are fraught with danger especially when
they pertain to the future" - Unknown. But I think
this quote could easily have come from Yogi Berra.
Upcoming events
sponsored by the Drake
Well Museum and Park
in Titusville, PA include
the MEET-U Rib BBQ,. This is an all you can eat
affair from 5-8 PM. Pricing is just $12/adult, $6/
child 5-12 years, and free if you’re reading this and
under 5 years of age.
For the kids, the Museum and Park are sponsoring
Thursday Discovery Days on July 11, 18, 25, and
August 1 . Also, on August 24th the 160th
anniversary of the Drake Well will be celebrated
with Drake Day-Let’s Rock! The day will focus on the
origins of crude oil and will include fossil hunting
and rock identification with geologists as well as
other hands-on activities. See the link below for
details of these events.
https://www.drakewell.org/about-us
The Appalachian
Gas Measurement
Short Course
conference will be
held from July 29th through August 1, 2019 at Robert
Morris University, Moon Township, PA. The course
includes lectures, hands-on classes and exhibitors.
Registration information may be found at:
https://www.agmsc.org/
PIOGA will hold a Water and
Waste technical training
workshop in Wexford, PA on
August 21st. The following
day PIOGA will hold their 22nd Annual Divot Diggers
Golf Outing at Tam O’Shanter of Pennsylvania Golf
Course in Hermitage, PA from 8 AM to 5 PM. Details
for both of these events will be forthcoming on
PIOGA’s website: https://pioga.org/events/pioga-
events/
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Pennsylvania Seismicity
and
Conventional Oil & Gas Operations
Earthquakes are a type of seismic activity that occurs in Pennsylvania. Most earthquakes in Pennsylvania have usually
been small in magnitude and rarely felt. One recent exception was the June 12th earthquake with a magnitude of 3.4,
which occurred 11 miles southwest of Mifflintown in Juniata County at a depth of approximately 17 miles. No injuries
were reported, but this quake was felt
by many over a
broad area of
central
Pennsylvania.
The Pennsylvania
State Seismic
Network
(PASEIS), which
was completed in 2016, is part of over
100 seismic monitoring stations located
across PA and in nearby states. The
station locations are shown in Figure 1.
The locations of earthquake epicenters
from 1724 to 2003 (and the Mifflintown
Quake) that are shown in Figure 2 are
instructive. The red dots show the
surface locations (epicenter) above
each earthquake’s subsurface focus or
hypocenter. From this map it can be
clearly seen that the majority of
Pennsylvania’s earthquakes and most of
the larger ones occur in the
southeastern portion of the state in
counties surrounding Philadelphia. The
cause of earthquakes in California and
other western states is fairly well
known and related to the styles of
faults and the active tectonic
environments which cause those faults to build up pressure and then suddenly rupture producing the quake. However,
the cause of earthquakes in the eastern United States remains somewhat of a mystery as eastern North America is part of
a tectonically stable continental margin. Movement along unmapped, deep-seated faults or slabs of older continental
crust is likely occurring, but how and why remain unanswered questions. (Continued on Page 5)
Mifflintown Earthquake
Fig. 1
Fig. 2
5
(Continued from Page 4) This brings us to the question of what seismicity (sound-wave induced vibrations in the earth)
has to do with oil and gas operations. In the oil and natural gas patch of western Pennsylvania there is only a very small
chance of natural earthquakes compromising drilling operations, gathering system infrastructure, and public safety. These
earthquakes can be either natural or induced tectonic seismic events resulting from fault or crustal slab movements.
There are also non-tectonic seismic events (i.e., not caused by fault movements in the earth’s crust) originating from mine
and quarry blasting. The vast majority of seismic events recorded in Pennsylvania are of this latter variety, which are easily
distinguishable from tectonic earthquakes in seismograph recordings. A map of total seismic events including natural
earthquakes in a 28-month period is shown in Figure 3 (Homman & Nyblade, n.d.). The comparison of earthquake
locations to location of all seismic events clearly shows the rarity of tectonic earthquakes in Pennsylvania.
Oil and gas operators need to focus on the potential for fault movements created by oil and gas related operations. In
recent years water injection into deep formations with active faults has been documented or at least strongly implicated
in several states, notably Kansas, Oklahoma and Ohio as well in several other countries. The USGS reports that between
1973-2008 an average of 25 earthquakes of magnitude three or larger occurred in the central and eastern US, but this
number, which began increasing in 2009, jumped to over 600 in 2014 and over 1000 in 2015. This number declined in
2017 (to 364), but that is still almost 15 times higher than the previous natural rate (USGS, n.d.). The most common oil and
gas related activity associated with the jump in seismic events has been wastewater injection, and to a lesser extent
hydraulic fracturing. In both cases fluids are injected or introduced into formations that may cause brittle rock failure,
and/or a change in pressure gradients near active faults (McDonnell et al, 2017) leading to sudden fault movement.
Following a 2016 tectonic “micro”-seismic event in Lawrence County, believed to be induced as it correlated with operator
activities (PADEP, 2017), the PADEP has issued guidelines for future wastewater disposal wells and hydraulic fracturing
operations. The change in hydraulic fracturing operations would only apply to drilled wells that have specific geologic
characteristics, particularly if the distance from the frac’d zone to the crystalline Precambrian basement is relatively short.
The change in permit requirements for wastewater injection wells applies to all such wells.
Where the separation between a deep well in the Utica Shale and the crystalline Precambrian basement rock, which is
brittle and likely highly faulted and fractured, is less than a certain thickness, then certain hydraulic fracturing operations,
such as simultaneous zipper fracing, may be proscribed. (Continued on Page 6)
Pennsylvania Seismicity
and
Conventional Oil & Gas Operations
Fig. 3
6
(Continued from Page 5) Skoumal et al (2018) document close agreement between vertical proximity to basement rock
and hydraulic fracturing zones and suggest that injection by fracturing or wastewater disposal within 1 km (3,280 ft) of the
basement may increase the likelihood of induced tectonic seismic activity. Distance to basement is not the only factor
involved as the lithology of the rocks above the basement, the spatial orientation of the fault planes, and the existing
stress states in the rock are all variables that can affect the onset of induced seismicity. Since we often have limited data
to map these characteristics of the crystalline basement rock, the 1 km vertical setback recommendation is an easily
measured and planned for
operational parameter.
Conventional operators in
Pennsylvania do not generally
drill within 1 km of the basement
(see Figure 4, which shows the
area NW of the black line to be
potentially problematic for
certain types of Utica Shale
hydraulic fracturing). But
conventional operators are more
and more seeking to permit and
drill wastewater disposal wells in
conventional formations (e.g.,
Medina Sandstone, Oriskany
Sandstone, and Upper Devonian
Sandstone). In Pennsylvania and
New York these are EPA Class II-D wells and while EPA has primacy in these states, an operator seeking a wastewater
disposal well permit must also obtain a state permit. In Pennsylvania, out of an abundance of caution, the PADEP has
decided that the operator of any new wastewater injection well must agree to, among other requirements, a seismic
monitoring plan regardless of the depth of the injection zone. These plans include creating a seismic activity monitoring
and mitigation plan that includes the setting up of one or multiple seismometers around the well in contact with bedrock.
The data from the seismometers, in turn, must be linked to the regional seismic network. Any seismic event with a Richter
magnitude of 1-2 recorded within six miles of the disposal well, that is interpreted by the seismic network as an induced
tectonic seismic event, may have its injection rate cut until further monitoring suggests a safe injection level if any.
Termination of all activities may be required if an induced tectonic seismic event with a magnitude of 2 or greater occurs
within three miles of the disposal well. Setting up and maintaining for years the seismic monitoring around the disposal
well is quite expensive and contractors specializing in this work need to be hired. It may turn out that the cost savings in
conventional wastewater injection wells versus paying to transport and treat wastewater at a designated facility exceeds
the setup and ongoing costs of seismic monitoring. If that is the case, shallow conventional play disposal wells may still
make economic sense, but the conventional operator needs to go in with eyes wide open. (Continued on Page 7)
Pennsylvania Seismicity
and
Conventional Oil & Gas Operations
Fig. 4
7
(Continued from Page 6)
References Cited:
Homman, K. & Nyblade, A. n.d. Seismicity in Pennsylvania and the Pennsylvania State Seismic Network. Department of
GeoSciences, Penn State University. 1p.
McDonnell, P., Pelepko, S., & Wise, H. 2017. Review of April 2016 Lawrence County seismic events. PADEP Office of Oil and
Gas Management webinar presentation. 24p.
PADEP. 2017. Review of seismic events in Lawrence County Pennsylvania: January 2017. 8100-RE-DEP4711 1/2017.
Skoumal, R.J., Brudzinski, M.R., & Currie, B.S. 2018. Proximity of Precambrian basement affects the likelihood of induced
seismicity in the Appalachian, Illinois, and Williston Basins, central and eastern United States. Geosphere, Vol. 14.
No. 3. 15p. doi:10.1130/GES01542.1
USGS, n.d., retrieved from https://earthquake.usgs.gov/research/induced/studies.php
Pennsylvania Seismicity
and
Conventional Oil & Gas Operations
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Providing Geologic Consulting Services to the
Oil & Gas Industry and Landowners
Oil & Gas Prospect Generation
Evaluation of Properties for Water Injection or Disposal
Acreage Hydrocarbon Assessments/Property Risk Management Assessment
Quantitative Well Log Analysis
Core Descriptions
Analysis of Drillers’ Cuttings
Well Log Quality Control at the Wellsite
Volumetric Reserve Estimates
Oil & Gas Data Compilations and Reporting
Subsurface Geologic Reports/Interpretation of 3rd Party Reports
Conversion of Paper Well Logs into Raster Format (TIF) or Vector Format (LAS) Files
Training Classes
-Stratigraphy of the Northern Appalachian Basin
-Upper Devonian Sequence Stratigraphy Using Well Logs