Environmental Regulation of Hydraulic Fracturing

Abstract

Summary Since the late 1990s, coalbed methane (CBM) has grown to be a significant part of the economy of the State of Queensland, Australia, building alongside world-scale coal-export operations. Environmental regulation in Queensland over the same period has evolved, with petroleum activities following a unified mineral rights/land tenure and environmental permitting process, particularly in respect to the impacts related to the spatial extent of CBM-basin developments. Following the announcements in 2008 of a number of multibillion-dollar liquefied-natural-gas-export projects, with industry estimates approaching 30,000 wells, attention by interest groups and the public at large gave rise to increased scrutiny by regulators of the scope of prevailing rules. In respect to the application of hydraulic fracturing, the CBM sector has indicated a likelihood of fracturing up to 40% of wells. A number of shale resources and tight gas basins are also under exploration in Queensland, with horizontal completions. Thus, the State can expect a significant rise in the application of stimulation technology. The unconventional-resources sector in Australia is somewhat different from that in North America, with the absence of a third-party pipeline sector, the result being few major producers with their own pipeline networks and speculative minors. As a result of this industry structure of relatively few operators, permitting has been project-based rather than sector-based, resulting in older approvals having conditions inconsistent with modern expectations. The State Government has moved to amend this position by developing more-performance-focused codes in respect to new hydraulic-fracturing programs. It has also moved toward greater emphasis on compliance activities. This paper examines a wide range of environmental issues related to hydraulic fracturing, including those potentially affecting groundwaters, surface waters, landforms and geology, biodiversity, the atmosphere, and community, drawing examples from Queensland and elsewhere. In respect to environmental regulation of hydraulic fracturing, a single, risk-based comprehensive code is proposed that encompasses the use of stimulation across all energy sources and fluid systems—conventional oil and gas, CBM, unconventional oil and gas, and geothermal. Fundamental to the approach is a comprehensive risk assessment, considering a wide range of issues at local and regional scales. Permit conditions will target pre-event disclosure requirements, engineering constraints, environmental-protection measures, product accreditation, process monitoring, and post-event reporting. Disclosure of products is required under petroleum and gas legislation, but this new approach will require product accreditation under an international standard that encompasses contaminant-concentration limits, human toxicology, and ecotoxicology. Evidence supporting code development includes consideration of environmental issues in Queensland, detailed review of hydraulic-fracturing studies, and reviews of petroleum-engineering risks. A detailed legislative review was completed that considers rules from 55 jurisdictions (including Australia, the US, Canada, Brazil, the UK and Scotland, France, and South Africa) across 59 identified regulatory matters. The following general principles and practices have been proposed to underpin the revised code to minimize the likelihood of adverse impacts from hydraulic fracturing: Detailed understanding of the local stratigraphy, including aquifers, faults, linear features, hydraulic conductivity, porosity, seismic risk, and groundwater-dependent assets Detailed engineering understanding of the impacts of applied stresses, including aquifer drawdown, on connectivity to aquifers above and below the fractured zone subsequent to the hydraulic-fracturing activity To require the presence of vertically impermeable formations between the fractured zone and other aquifers To require installation of a multibarrier casing string that isolates aquifers from hydrocarbon-bearing formations and, with current certification, demonstrates internal and external mechanical integrity To ensure injected fluids have low toxicity, contain no persistent bioaccumulating constituents, and are accredited for use under an international standard For the operator to apply advanced process control that incorporates real-time analysis, fracture modeling, and formation understanding by use of techniques such as microseismic measurements, as required, to assist in the early development of the resource and to address identified environmental risk over the life of the project To initiate and maintain a high level of meaningful communication with adjacent groundwater users, near neighbors, government, and the public in general This paper presents information supporting the chain of evidence leading to a revision of the Queensland regulations that is expected to be completed and approved in 2015, following industry and public consultation.