SPE 140864

Managing Environmental Risks from Shale Gas Exploration -

Applying Lessons Learned in the US to New Ventures in Poland
F.V. J ones, SPE, M.D. Zimmerman, SPE, W. Heinz, SPE, ERM Southwest Inc.
Copyright 2011, Society of Petroleum Engineers

This paper was prepared for presentation at the SPE European Health, Safety and Environmental Conference in Oil and Gas Exploration and Production held in Vienna, Austria, 2224 February 2011.

This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not been reviewed
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Abstract
Outside of the United States (US), unconventional gas resources like shale gas have not been intensively studied or explored until
recently. This paper describes the specific environmental risks and potential social impacts of shale gas exploration and how
lessons learned from the US shale gas programs can be transferred to new ventures in Poland and other European countries.

Compared to conventional gas resources, the extraction of natural gas from tight shales is more difficult and therefore requires
additional efforts. These are mostly related to the need for long-reach horizontal drilling into shale formations of variable thickness
and the need for fracturing these formations by high pressure water with additives (e.g. sand, friction reduction agents, and other
chemicals).

Environmental risks are associated with greater surface disturbance to perform more extensive seismic studies, more traffic and
well pad activities, the need for large volumes of water, the application of water additives, and specialized wastewater handling.
Aspects that need to be considered in the development of Polish (European) assets are more densely populated areas, land divided
in smaller parcels, a relatively large number of protected areas, as well as the typical issues associated with gas development such
as stormwater management, air emissions, spill management, social aspects, and stakeholder engagement.

This paper discusses these potential issues and provides a review in tabular form along with potential mitigation and management
programs, which have been successfully applied by operators in US shale gas programs.

The ability to identify the potential impacts and then develop focused mitigation programs is a key factor in developing a well
rounded SHE program and facilitate acceptance of shale gas exploration in Poland and Europe.


Introduction
The shale gas programs in the US - although relatively young - are more developed than other programs outside the US. It would
therefore be logical to use the technical and environmental experience gained in the US and apply them to new ventures in other
parts of the world. This paper tries to summarize the specific environmental risks and potential social impacts of shale gas
exploration, and how the related environmental lessons learned from the US can be transferred to other countries. Since Poland is
currently in the focal point of shale gas exploration in Europe, this country has been picked as an example for other European
countries

It makes sense to have a closer look at what went wrong in the US in the early phase of shale gas exploration and how these issues
are avoided and addressed now. The most obvious environmental issues or concerns are published in numerous media and linked
to few groundwater impacts (also highlighted in the famous Gasland video), the ongoing discussions and requests for disclosure of
fracking fluid compositions, the related fracking ban in the State of New York, the perceived enormous surface footprint (as
dramatically highlighted in pictures from the J onah Natural Gas Field in Wyoming; see example below), and the large water needs
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including related wastewater management issues. In addition, last years Gulf of Mexico incident significantly contributed to an
increased environmental awareness of the public with special focus on the oil and gas industry and their activities as a whole. This
is especially the case in Europe, where environmental awareness has a very long tradition.






















Current Situation in Poland
Poland is one of the most promising shale gas plays in Europe, where most of the exploration activities are currently focused. The
first shale gas exploration well in Poland was drilled in September 2010 in the onshore Baltic Basin, and by the end of 2010 only a
few others were started and completed. It is therefore still quite early in the exploration phase and will take some time to evaluate
the reserves and production outlook, and thus the feasibility of full-scale development and production.

The overall regulatory and social climate for exploring and developing Polish shale gas resources is very supportive because of
Polands currently strong dependency on Russian-supplied gas, and the related wish to become self-sufficient.

Whereas the environmental boundary conditions in Poland are often quite similar to the US, there are also some differences, which
need to be taken into account when considering a transfer of lessons learned. Poland is quite densely populated, and in most
regions split in numerous small parcels of land with different owners. Although most of the shale gas concessions are in rural
areas, in most cases small villages or farms are fairly close to the exploration camps. Poland, like most European countries, also
has a relatively large number of protected areas, including cultural heritage sites landscape parks and most importantly so-called
Natura 2000 sites. The shale gas concessions in Poland are in areas, which previously have not been extensively exposed to
upstream activities, although this is also the case in many parts of the US, particularly in the northeastern US Marcellus play.

Finally, the Polish environmental regulations are not yet adapted to the specific shale gas activities, which imply considerable
room for interpretation of existing laws and regulations if applied to shale gas operations. While this provides a weak planning
ground for operators, the inexperience of the regulators in dealing with permitting shale gas operations and the ongoing regulatory
changes (like e.g. the recently implemented requirement to perform Environmental Impact Assessment for exploration wells
deeper than 1000 m) contribute to the uncertainty and to the related planning risks. This situation is analogous to the status of
regulation in New York State, which imposed a moratorium on fracking to more directly address these issues. To avoid a similar
suspension of activity in other geographies, operators will benefit from addressing the environmental and social issues associated
with shale gas development in the absence of regulation.


What are the main environmental Risks of Shale Gas Exploration?
Environmental risks of shale gas exploration, production, and development are associated with drilling, fracking, temporary flaring
of gas, and related activities which involve surface impacts/footprint, the management of large volumes of water, the management
Jonah Natural Gas Field, Upper Green Ri ver Basin, Wyoming;
Photo: SkyTruth / EcoFlight
SPE 140864 3
of waste and wastewater, truck traffic including related impacts and risks, air emissions and noise, visual impacts, the handling of
chemicals (fracking fluid additives) including application of fracking fluids under high pressure, potential risks of impacting soil
and/or groundwater resources, surface impacts and vibration during seismic studies including potential impacts to sensitive
protected areas and receptors. Whereas the overall impacts and risks may be relatively small during the early exploration phase,
they multiply during field development and production, and are also multiplied by different operators working in parallel on
neighboring concessions resulting in cumulative impacts.

In addition to the environmental risks and impacts, some of the activities could also have a relevant social impact on the
neighboring communities, which include land use, noise impacts, water impacts, lighting impacts, potential spills, flaring,
increased traffic and potential accidents, wear and tear on roads and community utilities, increased local costs due to increased
demand for housing, food supplies, and the social impact of the added worker population. To some extent this is balanced by
increased revenues, reduced dependency on outside energy supplies, and local job growth.

Although some of these risks and impacts are not specific for shale gas, they are being introduced in areas unaccustom to the oil
and gas industry and need to be addressed and properly managed to secure the operators regulatory and social license to operate.

Mitigation and Management Programs successfully applied in the US Shale Gas Programs
Potential environmental impacts can be avoided, mitigated or pro-actively managed by first understanding what the potential risks
and potential impacts are and by collecting information on best practices and lessons learned from case studies on how to deal with
these risks. Based on this understanding, a focused Environmental Management and Monitoring Plan can be developed and
implemented in cooperation with local stakeholders. In the following table, the main issues and related mitigation and management
programs, respectively lessons learned in the US, have been collected and summarized. Although this list may not be complete, it
should provide a good starting point for developing an Environmental Management and Monitoring Plan for new shale gas
ventures in Poland and other European countries.

Environmental Issues Mitigation or Management Programs / Lessons Learned in the US
Controversial Discussion of Risks
for Shallow Groundwater
Ongoing or recently completed detailed studies, including a study by the US EPA on the effect of
hydrofracturing on shallow drinking water
Disclosure of fracking fluid compositions
Detailed geotechnical and hydrogeological studies of subsurface structures
Integrity testing of wells
Monitoring of groundwater quality in the vicinity of fracking operations
Potential Soil and/or Groundwater
Impacts
Detailed monitoring (baseline investigations prior to starting the operations, monitoring during and
after operations); monitoring parameters could include soil, groundwater, methane emissions from
the ground (that may be naturally occurring in a region), air, noise, wastewater, waste;
Application of prudent containments and spill prevention procedures;
Environmental management plan including detailed documentation and sharing data with
stakeholders;.
Surface Impacts / Footprint
Reduction of the number of well pads by installing multiple wells on single well pads;
Further reduction of visual impacts by strategically placing operations with respect to natural
barriers (forests, hills, etc)
Flaring operations only during day light hours to minimize visual impacts; application of seismic
techniques with minimum surface impacts
Land use and reduction efforts
Land reclamation programs such as reseeding and erosion control of the well pad following
fracking operations
Water Management
Carefully manage existing resources and try to avoid water resource competition with the local
community; develop a water management plan
Detailed quality monitoring and full documentation prior to starting the operations (baseline
investigation), during operations and upon completion
Public Acceptance of Operations
(Risk of Loosing Social License to
Operate)
Proactively provide detailed information to the public and stakeholders who are directly involved
Proactive engagement of NGOs
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Information sharing between operators
J oint public activities of neighboring operators, who may collectively impact a community;
Develop a community engagement plan, a community investment plan and a community health,
safety and security management plan
Traffic Risks / Health & Safety
Be extremely prudent regarding traffic safety and avoidance of accidents;
Implement and monitor a detailed health & safety program for all operations.
Work with local communities regarding traffic activities to reduce impacts
Emissions
Implement detailed monitoring program for emissions (air, wastewater, waste, noise, greenhouse
gas)
Share monitoring data with agencies and stakeholders involved
Waste Management
Develop detailed Waste Management Plans (WMP) for all wastes streams and all field activities;
Carefully select and audit contractors to avoid waste issues;
Monitoring compliance with the WMP
Work with local communities regarding storage and transport of waste to offsite facilities.
Environmental Permitting
Try to exceed the minimum requirements of existing environmental regulations and be prepared
for regulatory changes; as an example perform Environmental Impact Assessments even if they are
not (yet) legally required;
Actively help the regulators get access to background information and thus education (this may not
be applicable in the US, but should work in Europe), which may include a joint visit of an
operational site.
Overall Environmental
Management
Implementation of a detailed Environmental Management Plan based on environmental regulatory
reviews, constraints screening analyses, baseline data, and environmental impact assessments;
Compliance Monitoring including documentation.


Conclusions
The mitigation and management programs outlined in the previous section are important elements of a well rounded
Environmental Management Plan, which helps facilitate acceptance of shale gas exploration in Poland and Europe. By adopting
lessons learned from the US, a painful and in most cases expensive repetition of errors can be avoided.

The Simultaneous Operations (SIMOPS) of operators on neighboring concessions and related incremental environmental risks and
to some extend combined regulatory and social license to operate, requires an exchange of information and collaboration,
which goes beyond the presentation of papers at conferences. Although we sense that this information exchange is not yet
happening during the day-to-day business, we would highly recommend that the operators start to combine their efforts in
facilitating and maintaining public acceptance of their activities, and thus jointly secure their licenses to operate.

Although in Poland shale gas exploration is currently strongly supported by the public acceptance in conjunction with the wish to
become self-sufficient and eliminate the dependency on the Russian gas supply, this will likely change when the downsides in
form of actual or potential environmental impacts become more visual. This change should be proactively managed by
implementing the referred management plans including action plans for failures, spills and accidents, and by pro-actively involving
and informing the public, community representatives and other stakeholders about the current situation, about planned activities
and related impacts and risks. It is also recommended that operators proactively address critical questions, that are not yet raised in
Poland, but which will certainly be raised in the near future.