Chapter Two Operations and Environment Abstract Expanded natural gas and oil resources have resulting variation in environmental impacts and dramatically improved the North American energy issues. The main focus of this chapter is to con- supply outlook. However, prudent production and sider ways in which industry and government can delivery of these resources presents operational improve environmental performance, reduce risk, and environmental challenges. Technological engage with stakeholders, and develop and com- advances have made shale gas, tight oil, deepwater municate important information on environmen- offshore, oil sands, and other resources economi- tal impacts. cally recoverable. If these resources are to be avail- able and economic for development, continuous The outline of the Operations and Environment attention to reducing risks is essential to ensure chapter is as follows: pollution prevention, public safety and health, and y Introduction and Summary environmental protection. These outcomes are important in their own right, but also in order to y Resource Play Variations and Associated Envi- enjoy access to the resources for extraction and ulti- ronmental Challenges mate satisfaction of consumers’ energy demand. y History of Innovation in Environmental Stew- Given the importance of these issues, they have ardship strongly influenced the study process. y History of Natural Gas and Oil Environmental This chapter examines the major environmental Laws and safety issues that must be addressed in order to safely produce and deliver North American natural y Sustainable Strategies and Systems for the Con- gas and oil resources; examines the historical con- tinued Prudent Development of North American text of environmentally responsible development Natural Gas and Oil and improvements in technology, regulation, and y Offshore Safety and Environmental Management environmental management; and describes the variation in natural gas and oil resources and the y Key Findings and Policy Recommendations. INTRODUCTION AND SUMMARY energy use, benefit the economy, and improve energy security. Prudent production and delivery of these Environmental Challenges resources presents operational and environmental challenges. Through technological advances, tre- Expanded potential of natural gas and oil resources mendous new natural gas and oil supply sources have has dramatically improved the North American been identified in the North American resource base. energy supply outlook. The increased use of natural These advances make shale gas, deepwater offshore, gas is likely to reduce the overall carbon intensity of tight oil, oil sands, and other resources economically CHAPTER 2 – OPERATIONS AND ENVIRONMENT 167 recoverable. Continuous attention to reducing risks y Air Emissions – Emissions generated from com- is essential to ensure pollution prevention, public and bustion, leaks, or other fugitive emissions during worker safety and health, and environmental protec- the production and delivery of natural gas and oil tion. These are essential outcomes in order to enjoy present challenges regarding climate change and access to the resources for extraction and ultimate human health impacts. satisfaction of consumers’ energy demand. Due to the importance of these issues, their influence on the Offshore operations environmental challenges are study process has been significant. Risk to the envi- somewhat different than onshore due to the sensitivi- ronment exists with natural gas and oil development, ties of the marine environment, harsh operating con- as with any energy source. Local, state, and federal ditions, remote locations in the case of the Arctic, and governments have developed a mix of prohibitions, advanced technologies employed. These challenges regulations, and scientific study to reduce potential include: environmental impacts of natural gas and oil develop- y Prevention of and Response to a Major Release ment. Parties discussing energy policy can be missing – The pressures and temperatures associated with a common vocabulary and set of references to have remote wellhead locations that are difficult to access a constructive conversation and make educated deci- on the bottom of the ocean floor, and high flow rate sions. No form of energy comes without impacts to of deepwater wells, make the containment of a sub- the environment. An appropriate framework for dis- sea release challenging. cussing energy sources is necessary. y Safety – Offshore natural gas and oil drilling prac- Environmental challenges associated with natu- tices, called into question by the recent Deepwater ral gas and oil development vary by location, such as Horizon incident, have resulted in a weakened pub- onshore versus offshore, and by the methods employed lic perception of offshore process and worker safety. to extract the resource. Although each well involves The limited operating space coupled with significant drilling into the crust of the earth and constructing production volumes can create a higher-risk work well casing using steel pipe and cement, differences environment. arise from the affected environment, resource type, y Marine Impacts – Seismic noise generated by off- regional and operating conditions, and proximity to shore natural gas and oil exploration activities is environmental receptors. The public, policymakers, recognized as a concern for whale populations and and regulators have expressed the following environ- other marine life, including fish. mental concerns about onshore operations: y Arctic Ice Environments – Responding to an oil y Hydraulic Fracturing – Consumption of freshwa- spill in seasonal subzero temperatures with the ter (volumes and sources), treatment and disposal presence of broken sea ice and 24-hour darkness is of produced water returned to the surface, seismic difficult and presents challenges not faced in other impacts, chemical disclosure of fracture fluid addi- marine environments. tives, potential ground and surface water contami- nation, chemical and waste storage, and the volume The development of oil sands poses unique environ- of truck traffic. mental challenges that differ from those associated with other onshore oil resources, including: y Water Management – Produced water handling and disposal has created apprehension about exist- y Water Consumption – Large volumes of water have ing water treatment facilities and the ability to treat generated public and regulatory issues associated naturally occurring radioactive material, adjust with water sourcing, groundwater withdrawals, and salinity, and safely discharge effluent. protecting water quality. y Land Use Encroachment – The encroachment into y Land Disturbances – Removal of overburden for rural and urban areas results in perceived changes surface mining can fragment wildlife habitat and to quality of life, especially in newly developed or increase the risk of soil erosion or surface run- redeveloped natural gas and oil areas. off events to nearby water systems, resulting in impacts to water quality and aquatic species. y Methane Migration – Methane in domestic drink- ing water wells, either naturally occurring or from y Greenhouse Gas (GHG) Emissions – Transporta- natural gas development. tion fuels produced solely from oil sands result in 168 PRUDENT DEVELOPMENT: Realizing the Potential of North America’s Abundant Natural Gas and Oil Resources well-to-wheels life-cycle GHG emissions 5% to 15% well-to-wheel emissions from oil sands processed higher than the average crude oil refined. The car- in the United States were only 6% higher than the bon intensity of oil sands can vary based on extrac- average crude oil consumed in the United States. tion, refining and transport method. And, in 2009, Over time, incremental efficiency improvements, Hydraulic Fracturing Hydraulic fracturing is the treatment applied drilling goes through shallower areas, with the to reservoir rock to improve the flow of trapped drilling equipment and production pipe sealed oil or natural gas from its initial location to the off using casing and cementing techniques. wellbore. This process involves creating fractures y The technology and its application are continu- in the formation and placing sand or proppant ously evolving. For example, testing and devel- in those fractures to hold them open. Fractur- opment are underway of safer fracturing fluid ing is accomplished by injecting water and fluids additives. designed for the specific site under high pressure in a process that is engineered, controlled, and y The Interstate Oil and Gas Compact Commission monitored. (IOGCC), comprised of 30 member states in the United States, reported in 2009 that there have Fracturing Facts been no cases where hydraulic fracturing has been verified to have contaminated water.‡ y Hydraulic fracturing was first used in 1947 in an y oil well in Grant County, Kansas, and by 2002, A new voluntary chemical registry (FracFocus) the practice had already been used approximately for disclosing fracture fluid additives was a million times in the United States.* launched in the spring of 2011 by the Ground Water Protection Council and the IOGCC. Texas y Up to 95% of wells drilled today are hydraulically operators are required by law to use FracFocus. fractured, accounting for more than 43% of total y U.S. oil production and 67% of natural gas pro- The Environmental Protection Agency concluded duction.† in 2004 that the injection of hydraulic fractur- ing fluids into coalbed methane wells poses little y