Hydraulic Fracturing Study PXP Inglewood Oil Field October 10, 2012 Prepared For Plains Exploration & Production Company Hydraulic Fracturing Study PXP Inglewood Oil Field October 10, 2012 Prepared for Plains Exploration & Production Company 5640 South Fairfax Avenue, Los Angeles, CA 90056 and Los Angeles County, Department of Regional Planning 320 West Temple Street, Los Angeles, CA 90012 Prepared by Cardno ENTRIX 10940 Wilshire Blvd, Suite 1525, Los Angeles, CA 90024 Tel 424 832 1303 Fax 424 248 2101 Toll-free 800 368 7511 www.cardnoentrix.com Hydraulic Fracturing Study PXP Inglewood Oil Field Table of Contents Executive Summary ..................................................................................................................................................... 1 ES.1 Hydraulic Fracturing Study Objectives ................................................................. 1 ES.2 Summary of Findings............................................................................................. 2 ES.3 Oil Production in the Los Angeles Basin and the Inglewood Oil Field ................. 4 ES.4 Well Drilling and Completion ............................................................................... 6 ES.5 Summary of Past and Future Hydraulic Fracturing and High-Rate Gravel Packing at the Inglewood Oil Field ....................................................................... 9 ES.6 Monitoring Conducted During Hydraulic Fracturing and High-Rate Gravel Packing at Inglewood Oil Field ............................................................... 13 ES.7 Regulatory Perspective on the Inglewood Oil Field ............................................ 22 Chapter 1 Introduction................................................................................................................................... 1-1 Chapter 2 Oil Production in the Los Angeles Basin and at the Inglewood Oil Field ............................... 2-1 2.1 Introduction ......................................................................................................... 2-1 2.2 Petroleum Geology of the Los Angeles Basin .................................................... 2-5 2.3 Petroleum Production in the Los Angeles Basin ................................................ 2-6 2.4 Petroleum Geology and Production at the Inglewood Oil Field ......................... 2-7 2.4.1 Inglewood Oil Field Geology ................................................................ 2-8 2.4.2 Petroleum Producing Zones ................................................................. 2-21 2.5 Future of Oil and Gas Development in the Los Angeles Basin ........................ 2-23 Chapter 3 Hydraulic Fracturing at Inglewood Oil Field: Past, Present, and Future ................................. 3-1 3.1 Oil and Gas Well Drilling, Including Hydraulic Fracturing Completions .......... 3-1 3.1.1 Drilling, Casing, and Cementing ........................................................... 3-2 3.1.2 Hydraulic Fracturing as a Completion Technique ................................. 3-4 3.2 Hydraulic Fracturing at the Inglewood Oil Field ................................................ 3-9 3.2.1 Conventional Hydraulic Fracturing ....................................................... 3-9 3.2.2 High-Volume Hydraulic Fracturing ..................................................... 3-12 3.2.3 Images from January 2012 Completion Operations ............................ 3-20 3.3 Gravel Packs at the Inglewood Oil Field .......................................................... 3-24 3.3.1 Past Gravel Packs ................................................................................ 3-25 3.3.2 Recent High-Rate Gravel Pack Completions ....................................... 3-29 3.4 Anticipated Future Use of Hydraulic Fracturing and Gravel Packing at the Inglewood Oil Field .......................................................................................... 3-31 October 2012 Cardno ENTRIX Table of Contents i Hydraulic Fracturing Study_Inglewood Field_10102012.docx Hydraulic Fracturing Study PXP Inglewood Oil Field Chapter 4 Environmental Effects Monitored in Conjunction with Hydraulic Fracturing Tests ............... 4-1 4.1 Introduction ......................................................................................................... 4-1 4.2 Hydrogeology, Water Quantity and Quality ....................................................... 4-1 4.2.1 Geologic Control on the Distribution of Groundwater-Bearing Zones...................................................................................................... 4-1 4.2.2 Hydrogeology ........................................................................................ 4-8 4.2.3 Water Quality ....................................................................................... 4-10 4.2.4 Groundwater Monitoring Associated with High-Volume Hydraulic Fracturing ............................................................................ 4-13 4.2.5 Surface Water ...................................................................................... 4-17 4.2.6 Sources of Drinking Water to the Local Community .......................... 4-17 4.2.7 Water Supply Concerns Related to Shale Gas Development Elsewhere in the United States ............................................................ 4-19 4.3 Containment of Hydraulic Fractures to the Desired Zone ................................ 4-24 4.4 Well Integrity .................................................................................................... 4-26 4.5 Slope Stability, Subsidence, Ground Movement, Seismicity ........................... 4-28 4.5.1 Slope Stability ...................................................................................... 4-28 4.5.2 Subsidence ........................................................................................... 4-29 4.5.3 Monitoring of Ground Movement ....................................................... 4-29 4.5.4 Vibration and Seismicity During Hydraulic Fracturing ....................... 4-30 4.5.5 Induced Seismicity and Additional Seismic Monitoring During Hydraulic Fracturing ............................................................................ 4-30 4.5.6 Potential for Induced Seismicity at Other Areas in the United States .................................................................................................... 4-32 4.6 Methane ............................................................................................................ 4-36 4.6.1 Subsurface Occurrence of Methane ..................................................... 4-36 4.6.2 Regulatory Framework for Methane .................................................... 4-37 4.6.3 Gas Monitoring Prior to Hydraulic Fracturing at the Inglewood Oil Field ............................................................................................... 4-40 4.6.4 Gas Monitoring After High-Volume Hydraulic Fracturing ................. 4-40 4.6.5 Groundwater Monitoring for Methane after Hydraulic Fracturing ...... 4-42 4.6.6 Methane Emissions and Climate Change ............................................ 4-43 4.7 Other Emissions to Air ..................................................................................... 4-44 4.8 Noise and Vibration .......................................................................................... 4-50 4.9 Los Angeles County Department of Public Health Study ................................ 4-54 4.9.1 Mortality .............................................................................................. 4-55 4.9.2 Low Birth Weight ................................................................................ 4-55 ii Table of Contents Cardno ENTRIX October 2012 Hydraulic Fracturing Study_Inglewood Field_10102012.docx Hydraulic Fracturing Study PXP Inglewood Oil Field 4.9.3 Birth Defects ........................................................................................ 4-56 4.9.4 Cancer .................................................................................................. 4-56 4.9.5 Community Survey .............................................................................. 4-56 4.9.6 Health Assessment Limitations and Recommendations ...................... 4-57 Chapter 5 Regulatory Framework ................................................................................................................. 5-1 5.1 Introduction: Local Source of Energy in the Context of Community Concerns ............................................................................................................. 5-1 5.2 Regulatory Framework and Government-Sponsored Reviews of Hydraulic Fracturing ........................................................................................... 5-2 5.3 California Regulations ........................................................................................ 5-3 5.3.1 DOGGR Regulations ............................................................................. 5-3 5.3.2 Baldwin Hills Community Standards District ....................................... 5-4 5.3.3 Proposed California Regulations ........................................................... 5-4 5.4 Federal Regulations and Studies ......................................................................... 5-5 5.4.1 Federal Regulations ............................................................................... 5-5 5.4.2 Federal Studies ......................................................................................