Unconventional Gas Issue Briefing

Unconventional gas and hydraulic fracturing Issue briefing bp.com/sustainability How we operate BP participates in a number of joint venture The energy we produce helps to provide heat, At BP, we recognize operations to extract unconventional gas. light and mobility in a changing world. that we need to produce Some of these are under our direct operational Across BP’s operations, established practices control, while others are not. We seek to work energy responsibly – support the management of potential with companies that share our commitment to minimizing impacts to environmental and social impacts from the ethical, safe and sustainable working practices. pre-appraisal stage through to the operational Our code of conduct states that we will seek to people, communities stage and beyond – reflecting BP’s values, communicate our expectations clearly to our responsibilities and local regulatory business partners, agreeing contractual and the environment. requirements. obligations where applicable. See bp.com/sustainability BP and unconventional gas Natural gas has an What is unconventional gas? What is hydraulic fracturing? Conventional natural gas comes from Hydraulic fracturing (sometimes referred increasingly important role permeable reservoirs, typically composed to as ‘fracking’) is the process of pumping in supplying lower carbon of sandstone or limestone, where extraction water, mixed with a small proportion of sand is relatively straightforward because the and chemicals, underground at a sufficient fuel to meet the world’s gas generally flows freely. In contrast, pressure to cause the rock to break or growing energy needs. unconventional gas is situated in rocks with fracture. This helps to release natural gas extremely low permeability, which makes that would otherwise not be accessible. extracting it much more difficult. New This process has been applied since the Natural gas is a vital lower carbon energy technologies and enhanced applications of late 1940s when Standard Oil of Indiana source. It produces about half as much existing techniques are making it possible for (later Amoco), now part of BP, developed greenhouse gas (GHG) emissions as coal BP to extract these unconventional natural the technique and performed some of the when burned to generate power and it can gas resources safely, responsibly and first fracture treatments in the Hugoton field serve as a back-up for intermittent renewable economically. The combination of horizontal in Kansas. energy sources. In the US, the growing use wells and hydraulic fracturing has been key to of shale gas has had a significant impact on unlocking unconventional gas reserves in the carbon dioxide (CO ) emissions, which have 2 US and elsewhere. fallen back to 1990s levels. We expect that natural gas is likely to meet around 25% of total global energy demand Hydraulic fracturing process by 2035. Shale gas is expected to contribute around a quarter of total gas production by 2035. Water tankers Recovered water is Wastewater is recovered Storage tanks We are working to responsibly develop and stored in lined pits for treatment, reuse and/or tanks or disposal produce natural gas from unconventional resources including shale gas, tight gas and Fracturing ﬂuid is coalbed methane. We have unconventional pumped into the gas operations in five states in the US and well head will be producing gas in Oman from 2017. Water table Fissure Well is isolated with pipe and cement Shale Well 5,000-10,000ft below Gas ﬂows along well the water table from fractures 2 BP Unconventional gas and hydraulic fracturing issue briefing Managing methane and other greenhouse gas emissions Methane emissions can occur along the gas We are working to supply chain – that includes flaring and venting, minimize GHG emissions to leaks from equipment in gas production through to the delivery of gas to customers. and other air pollutants We are working with Imperial College London at our operating sites. through the Oil and Gas Climate Initiative to compare GHG and air emissions across different gas and coal supply chains to identify the most effective ways to reduce GHG emissions. Our What about greenhouse gas own life cycle analysis of the liquefied natural emissions (GHG) and air pollution gas from our Tangguh plant in Indonesia shows associated with unconventional that the GHG emissions from that gas are at least 50% lower than coal. gas development? How does BP aim to minimize We have also incorporated measures to reduce The sources of emissions during emissions at sites? emissions into the design of our Khazzan project, unconventional production are similar to We aim to minimize air and GHG emissions by including using the gas we produce to power the those from conventional production and using responsible practices and controls at our central processing facility, which will also provide include flared and vented hydrocarbon gas, operating sites. US regulations require us to take electricity to power well-site equipment. fugitive hydrocarbon gas (leaks from the following actions in our Lower 48 operations: equipment), and the normal air emissions How reliable is data on methane from use of natural gas as a fuel. • Apply green completions – this process emissions? captures natural gas that would otherwise Air emissions during drilling and hydraulic We are working to build a more reliable and be flared or vented during the completion fracturing operations can result from engines complete picture of methane – one that provides and commissioning of wells. powering the equipment. These emissions a set of global data categorized by different types occur for the relatively short time required • Control emissions from hydrocarbon liquid of gas fields and operations. to drill and fracture a well. GHG emissions storage vessels. For example, through the Climate and Clean Air during these operations are mostly carbon • Conduct leak detection and repair of Coalition’s Oil and Gas Methane Partnership, we dioxide emissions from fuel combustion. production equipment – we use a range are deepening our industry’s understanding of Once the well has been hydraulically of techniques, including infrared cameras, the core sources that account for the bulk of fractured, the liquids pumped into the well to detect gas leaks. methane emissions in upstream operations. This must flow back out of the well. This process • Implement maintenance programmes to will help to inform actions we can take to reduce is known as the completion stage. During minimize emissions from compressor seals. emissions. this stage, some gas may be flared or vented All this activity builds on the work we have until there is adequate volume and pressure • Use lower-sulphur fuels in the engines of our carried out over the past 15 years to estimate so that the gas can be separated and sold. At drilling rigs and hydraulic stimulation methane emissions from our own operations. our US sites during the completion stage, we equipment – this reduces sulphur dioxide We calculate that our methane intensity – that is, are required through regulation to capture or emissions. methane emissions as a percentage of marketed flare the gas. • Replace pneumatic equipment with lower gas production – is around 0.2%. emissions or no-emissions alternatives. For Do methane emissions from gas example, at our San Juan operations, we use In 2015 and 2016 we conducted detailed production outweigh the climate solar energy to power equipment and that has assessments in many of our upstream benefits of gas over coal and oil? led to a reduction in methane emissions and operations to fine tune our estimates. As this the recovery of gas that would otherwise be work progresses, we will continue to refine our Minimizing methane emissions from gas data on methane emissions and intensity. production is essential to maximize the role vented. of gas in a lower carbon world. We also reduce transportation emissions Methane has a strong warming effect on the by automating some operations – meaning climate – trapping substantially more heat that fewer site visits are required – and by transporting chemicals in dry rather than liquid than CO2. But it has a relatively short lifetime in the atmosphere because it breaks down form, taking up less space on trucks. more rapidly once it’s released. The global And, we reduce methane emissions in other warming potential of methane is at least ways, depending on local circumstances. For 84 times greater than CO2 over a 20-year example, at our Khazzan site in Oman we have period. That potential decreases to around built a central processing facility that reduces 25 times greater when calculated over a the need for processing equipment at each 100-year period – the timeframe most individual well site, which can be additional governments and companies use to assess sources of methane emissions in gas its impact. production. 3 BP Unconventional gas and hydraulic fracturing issue briefing Managing water and other fluids Hydraulic fracturing uses Water and unconventional water and other fluids, gas development which need to be Disposal Sourcing sourced, managed and • Treatment/reuse • Surface water disposed of appropriately. • Evaporation ponds (e.g. municipal, lakes, rivers) • Underground injection • Ground water • Reuse of fracturing water • Produced water Can natural gas and drilling fluids enter underground water sources due to the fracturing process? Water BP wells and facilities are designed, constructed, operated and decommissioned to prevent natural gas and hydraulic fracturing fluids entering underground aquifers, including Storage Transportation drinking water sources. We install multiple • Surface pits • Pipeline layers of steel into the natural gas well and • Water tanks • Trucks cement these above and below any freshwater • Direct use (no storage) aquifers. We test the integrity of our wells before commencing fracturing and again when work at the well reaches completion. Naturally-occurring methane is often found Are the chemicals used in the Where does the water and close to the surface and within drinking water fracturing process hazardous? hydraulic fracturing fluid used in aquifers.

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