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Advancing Understanding of Resource Recovery and Environmental Impacts via Field Laboratories

Jared Ciferno – Oil and Gas Manager, NETL

Upstream Workshop Houston, TX February 14, 2018 The National Laboratory System

Idaho National Lab National Energy Technology Laboratory

Pacific Northwest Ames Lab Argonne National Lab National Lab

Fermilab Brookhaven National Lab

Berkeley Lab Princeton Plasma Physics Lab

SLAC National Accelerator Thomas Jefferson National Accelerator

Lawrence Livermore National Lab Oak Ridge National Lab

Sandia National Lab Savannah River National Lab

Office of Science National Nuclear Security Administration Environmental Management Fossil Energy Nuclear Energy National Efficiency & Renewable Energy Los Alamos Energy Lab National Lab

2 Why Field Laboratories?

• Demonstrate and test new in the field in a scientifically objective manner • Gather and publish comprehensive, integrated well site data sets that can be shared by researchers across technology categories (drilling and completion, production, environmental) and stakeholder groups (producers, service companies, academia, regulators) • Catalyze industry/academic research collaboration and facilitate data sharing for mutual benefit

3 Past DOE Field Laboratories

• Multi-well Experiment (MWX) and M-Site project sites in the Piceance Basin where research was done by DOE and GRI in the 1980s • Data and analysis provided an extraordinary view of reservoir complexities and “… played a significant role in altering the conventional procedures, techniques, and methodology in the development of tight reservoirs.” – Paul Branagan, SPE Distinguished MWX site, Piceance Basin in 1980s Lecturer* *Branagan, P., 2009, “An Accurate Physical Model: Essential for the Economic Development of Complex Reservoirs,” SPE Distinguished Lecture Series

4 Past DOE Field Observatories Appalachian Basin

• Multiple well experiments carried out by DOE as part of the Eastern Gas Program (EGSP) in the 1970s and 1980s • EGSP Appalachian Basin “firsts” include: • First foam fracturing • First oriented coring • First high-angle directional wells • First air-drilled horizontal shale well • First large volume

• First CO2/Sand fracturing

5 FY14 DOE-FE Field Laboratory Initiative

• Solicited in FY14 to advance UOG R&D objectives: reduce development intensity and fresh water use, enhance wellbore integrity, assess air and water impacts and investigate • Long-term access to shale development sites is required for long-term, multi-disciplinary, integrated, science-based research • Industry partnerships to obtain site and wellbore access can be a challenge to develop because: • DOE cannot accept liability for risks with field projects • Research can delay production and increase risks • Industry economics can hinder collaborative opportunities

6 Two Current Field Laboratories

• Dedicated science wells; instrumented production wells • Baseline and real-time observation/monitoring • New technology testing and demonstration • Public and international training and outreach Marcellus Shale Energy and • Broad collaborative Environment Laboratory opportunities Hydraulic Test Site Marcellus/Dry Gas Liquid Rich Univ. Gas Tech. Institute

7 Marcellus Shale Energy and Environmental Laboratory (MSEEL)

Key Features of Site: • Partners: DOE-NETL, WVU, Northeast Natural Energy (operator), , Ohio State • Well-documented baseline of production and environmental data from two previous wells drilled at location • A dedicated vertical observation well to collect detailed subsurface data and to monitor hydraulic fracturing of project well 3H • Multiple events over the course of the five-year project, separated by periods sufficient to analyze data

8 Marcellus Shale Energy and Environmental Laboratory (MSEEL) Drilling

Fracturing

Location of horizontal wells and science well

9 MSEEL Project Elements

• NNE drilled two wells (MIP 3H & 5H) in 2015 and obtained 111 feet of 4” whole core through the Marcellus and 50+ sidewall cores in the 3H well. • The 3H well was instrumented with fiber optic cable for distributed acoustic and temperature measurements throughout the full lateral length. • A dedicated vertical science well, situated between the two horizontal production wells, was drilled and logged with ~150 sidewall cores obtained. • The science well was instrumented with microseismic sensors to gather data during the 3H well hydraulic fracture stimulation. • A surface seismic array was also used to monitor the stimulation. • Baseline noise, air and data were collected before, during, and after operations.

10 MSEEL Subsurface Science MSEEL Project Team Additional Science (enabled by NETL/MSEEL) Geochemistry (Sharma, Weislogel, Donovan - WVU; Cole, Darrah - OSU) From NETL-ORD • Rock – Kerogen; TOC; C/N/S; XRD; FIB/SM; cryo-laser ablation; Hg porosimetry • Crandall (NETL): multi-scale CT imaging/micro-scale structure; MSCL • Fluids/Gases – Continuous monitoring S/C/O/H isotopes, organics, DOC, NORM, • Hakala (NETL): Sr/Li isotopes; major cation/anion/trace elements noble gases • Hammack (NETL): surface micro-science array; fracturing and relaxation • Soeder (NETL): SRA/TOC Microbiology (Mouser, Wrighton - OSU; Sharma - WVU) • Biomass; microbial lipids, metagenomics • Boyle (NETL): fracture modeling (FMI)

,# /Geomechanics (Aminian, Wang, Siriwardane – WVU) From Existing National Laboratory Contributors* • Steady-state permeability (in situ P/T); porosity; pore-size; adsorption  dynamic • Xu (LANL): XRD, XRF, DSC/TG, SEM, TEM  characterization and LBM modeling; SANS  petrophysics f(P); vertical/lateral heterogeneity. phase and flow behavior • Mechanical strength measurements (laboratory and well-log) • Carey (LANL): tri-axial core-flood w/tracers & AE  in situ fracture formation and permeability; X-ray • FIB/SEM: pore and mineralogical structure tomography  apertures and conductivity.

• Log to core calibration; comparison to industry standard methods; • Wang (SNL): thermodynamics of CH4-CO2-H2O under nano-pore confinement; Hi T/P sorption • Real-time, actionable data for HF operations; comparative geometric (5H) and measurement methods. engineered (3H) completions • Moridis (LBNL): thermodynamic; X-Ray CT  production strategies • natural fracture imaging; fiber-optics monitoring  Multi-scale (nano-scale to SRV) numerical simulation. From Collaborating Federal Agencies • Orem (USGS): contaminants in drill cuttings – wastewater evaluations Geophysics (Wilson – WVU) • Borehole microseismic – SRV characterization in multi-well context From Cooperative Agreement Contributors*,+ • Zhu (TAMU): fracture conductivity • Daigle (UT-A): tri-axial compressive strength; ultrasonic velocity; NMR during fracture; SEM and FIB • Jessen (USC): shale-rock interactions • Puckett (Ok. St.): petrophysical protocols: shale-fluid interaction

11 MSEEL Findings (Water and Waste)

• While recycle rate is high (85%), there is still a need for efficient treatment/management • Secondary containment/ integrity are effective in preventing off site contamination by produced water spills • Radium trends > 20,000 pCi/L several months into the produced water cycle • Ra precipitates as tank/pond precipitates-radioactive but low volume • Drill cuttings should be subject to TCLP testing and if pass, then handle as non- hazardous to save landfill space and cost. • Strong evidence that green drilling fluids can produce non hazardous drill cuttings that may be neither hazardous (per RCRA) nor radioactive (per WV policy)

12 MSEEL Findings (Well Completions)

• Engineered completion design results in ~20% increase in production compared to standard NNE completion techniques based on data obtained at MSEEL. • EUR for future wells could be ~10-20% greater if we can exploit the technologic advantages observed at MSEEL in a cost-effective fashion. • DAS and DTS fiber-optic data can be used to better understand hydraulic fracture propagation. • At the MSEEL site, completion efficiency along the lateral is affected by preexisting oriented at an angle to existing principal stresses and strongly influence hydraulic fracture propagation. • An Unconventional Fracture Model (UFM) approach appears to more accurately simulate hydraulic fractures. This approach combines geomechanics with natural fracture interactions for hydraulic fracture geometry estimation.

13 MSEEL Data Distribution

• Interactive website has been operating since project launch • Physical samples distributed to 12 universities, 5 national labs, and USGS • Well over 100 publications and presentations to date • Hundreds of visitors and students have toured the field lab • Data on restricted portal being moved to publically accessible system on MSEEL.ORG and NETL-EDX • Core archived at NETL Morgantown

14 MSEEL Next Steps • Maintain MSEEL web application and data portal online at mseel.org • Continue air, surface water, and production monitoring activities • Publish results of portfolio of analyses • Plan and execute additional data gathering and experimental activities as appropriate

15 Permian Basin Hydraulic Fracturing Test Site (HFTS) Key Features of Site: • Partners: DOE-NETL, GTI, Laredo (operator), seven other producers, , CoreLabs, University of Texas at Austin, BEG • Location in Permian’s Reagan Co. is well characterized (87 nearby wells) • Observatory Site includes 11 horizontal wells, in Upper and Middle Wolfcamp formations (10,000 ft. horizontal legs) • Two re-fractured horizontal wells adjacent to pad wells • Vertical pilot well drilled for sidewall cores, logs, and injection test data • Slant hole core well located between horizontal wells to intersect hydraulic fractures

16 Permian Basin Hydraulic Fracturing Test Site (HFTS)

PIONEER Natural Resources

17 HFTS Project Elements • Water and air sampling prior, during, after HF • Cross-well seismic surveys prior to and after HF • Diagnostic fracture injection tests • 400+ fracture stages completed in 11 wells; radioactive and chemical tracers employed, as well as colored proppant in wells close to slant core well • Microseismic monitoring conducted during fracturing treatments • Slant core well drilled through stimulated rock volume; 595 feet of core recovered in Wolfcamp zones • sensors installed in slant well to monitor pressure during production

18 HFTS Findings (Air and Water)

• Air quality data and analysis indicated little to no increase in toxic compounds during fracturing and production operations for eleven wells • Elevated levels of BTEX measured during flowback period, short time frame, engineering controls exist to mitigate emissions • No evidence of or produced water migration to aquifer • Drawdown of water required for hydraulic fracturing had a temporary impact on groundwater salinity • High levels of sulfate in groundwater and use of recycled produced water may contribute to microbially-influenced

19 HFTS Findings (Well Completions)

• Fracture quantity and complexity far beyond what current models predict • Five times as many fractures observed in the Upper Wolfcamp as in the Middle Wolfcamp • More perforations clusters and tighter stage spacing is needed in the Middle Wolfcamp to create additional SRV • Variable rate fracturing significantly increases production • Microseismic and tiltmeter data show fractures do not grow into fresh water zones • Novel proppant quantification techniques provide useful insights • Proppant distribution is limited to <10% of vertical microseismic height • Bed boundaries have significant impact on limiting vertical proppant transport • Significant proppant trapped where fractures intersect, limiting lateral transport

20 HFTS Current Status

• Website for partner data sharing being maintained and updated www.thepermianproject.com • Reservoir pressure monitoring underway during production • Core characterization underway • Water and air sampling continues during production operations • Hydraulic fracture modeling is in progress • PVT testing is ongoing • Plans are being developed to slab the core and collect samples that will be distributed to the National Labs • Microbial and water analyses to be completed in the next six months

21 HFTS Data Distribution

• Interactive website has been operating since project launch • 23 workshops, reports, and presentations delivered to date • Over 60 weekly/bi-weekly WebEx meetings highlighting current results and activities • Special technology session (1-day) being planned for URTeC 2018. • Multiple papers, posters, and presentations in US and abroad, including: SPE, URTeC (SPE, SEG, AAPG), IGRC, and others

22 HFTS Next Steps

• Continue field data collection: interference testing, pressure and production monitoring, environmental sampling • Plan and execute additional data gathering and experimental activities for remainder of project period • Publish results of analyses on: • Inter-well interference • Stimulated rock volume (SRV) & reservoir depletion over time • Effectiveness of geological fracture barriers Slant well core in core barrel. This is the • Effectiveness of alternative HF designs first time a public research well has been • Variations in performance by stage/perf cluster post- cored through the stimulated rock stimulation volume of a horizontal well

23 NEW (2018) Field Laboratory Sites Field Laboratory for Emerging Stacked Unconventional Plays in Central Appalachia Rogersville Shale/Nora Field Virginia Tech

Tuscaloosa Marine Shale Laboratory Tuscaloosa Marine Shale/TX, LA, MS Salt Basin Univ. of Louisiana

Hydraulic Fracture Test Site II The Eagle Ford Shale Laboratory Wolfcamp Shale/Delaware Basin Gas Tech. Institute Eagle Ford Shale/TX, LA, MS Salt Basin Texas A&M

24 Hydraulic Fracture Test Site II (HFTS2) – Delaware Basin Performer: Gas Technology Institute • Evaluate well completion optimization and environmental impact • Determine optimum well spacing and fracture propagation and design • Stage-based production performance testing • Evaluate microbial impacts on reservoir quality • Complete 3D earth models of and fracture evaluation, including micro-seismicity

PROJECT TEAM

Permian basin map illustrating the two major basins (Midland and Delaware) which combine to form the Permian basin

25 The Eagle Ford Shale Laboratory: A Field Study of Stimulated Reservoir Volume, Detailed Fracture Characteristics, and EOR Potential Performer: Texas A&M University • Employ advanced hydraulic fracturing and technology in two new wells • Employ newly developed technologies to monitor the refracturing of a previously fractured legacy well that has been characterized in detail • Test the efficiency of huff-and-puff gas injection as an EOR method

PROJECT TEAM

Eagle Ford Shale Laboratory site

26 Tuscaloosa Marine Shale Laboratory (TMSL) • Improve drilling and completion efficiency by better Performer: University of Louisiana at Lafayette understanding the source of wellbore instability issues • Improve the estimation of reservoir quality using advanced TOC calculations, water analysis, and geophysical analysis • Determine the role of discontinuities on fracture growth and shale creep behavior using digital image correlation

• Improve hydraulic fracturing through the use of stable CO2 foam and super-hydrophobic proppants • Improve understanding of the nature of flow and fluid interaction in the high clay/organic content TMS PROJECT TEAM

Mineral Composition of TMS (Besov et al. 2017; Lu et al. 2015; Lu et al. 2011) compared to Eagle Ford Marl and Buda (Jiang, Mokhtari and Borrok 2017) 27 Emerging Stacked Unconventional Plays (ESUP) in Central Appalachia

Performer: Virginia Tech • Characterize the resource potential for multi-play production of emerging unconventional reservoirs in the Nora Gas Field • Characterize the geology and potential deep pay zones of Cambrian-age formations (including the Rogersville shale) in Central Appalachia by drilling, logging, and coring a deep vertical test well up to 15,000 feet • Evaluate the potential benefits of novel well completion strategies by monitoring the drilling and completion of at least one multi-stage lateral well in the Lower Huron Shale using

CO2-based fracturing fluid and advanced proppants

PROJECT TEAM

Map of the Conasauga-Rome Petroleum System (Ryder, Harris et al. 2014)

28 THANK YOU!