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Monterey Shale & Hydraulic Fracturing Myths and Facts

WE STERN STATES PETROLEUM ASSOCIATION. Monterey Shale & Hydraulic Fracturing Myths and Facts. Catherine Reheis-Boyd Western States Petroleum Association August 16, 2013. WE STERN STATES PETROLEUM ASSOCIATION. Hydraulic Fracturing Safety: Myths and Facts.

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Monterey Shale & Hydraulic Fracturing Myths and Facts

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  1. WESTERN STATES PETROLEUM ASSOCIATION Monterey Shale & Hydraulic Fracturing Myths and Facts Catherine Reheis-Boyd Western States Petroleum Association August 16, 2013

  2. WESTERN STATES PETROLEUM ASSOCIATION Hydraulic Fracturing Safety: Myths and Facts Myth: Hydraulic fracturing is unsafe and has been linked to groundwater contamination Fact: “In no case have we made a definitive determination that the fracking process has caused chemicals to enter groundwater.” U.S. Environmental Protection Agency Administrator Lisa Jackson, April 30, 2012 “My point of view, based on my own study of hydraulic fracking, is that it can be done safely and has been done safely hundreds of thousands of times.” Former Secretary of the Interior Ken Salazar, February 15, 2012 “The Water Boards generally consider hydraulic fracturing a low threat to groundwater . . .” State Water Resources Control Board, Executive Director, Thomas Howard, February 8, 2013. 2

  3. WESTERN STATES PETROLEUM ASSOCIATION Hydraulic Fracturing Safety: Myths and Facts Myth: Hydraulic fracturing is or has been unregulated in California Fact: Hydraulic fracturing in CA has been used for more than 60 years, has never been linked to any environmental harm in CA Oil and gas drilling and production activities are closely regulated in CA. The primary regulations that protect groundwater are the state's well construction and testing standards, which are among the strictest in the U.S. 3 Source: FracFocus, Courtesy of Texas Oil and Gas Association

  4. WESTERN STATES PETROLEUM ASSOCIATION Hydraulic Fracturing Safety: Myths and Facts • Myth: There is a lack of science-based information about hydraulic fracturing in California • Fact: In October, 2012, an exhaustive year-long study at Inglewood Oil Field in Los Angeles looked at 14 environmental issues, including public health, groundwater, air quality, seismic, noise, vibration • All fractures separated from fresh water by at least 7,700 feet (1.5 miles) or more • No impacts to any of the 14 areas studies October 10, 2012 4

  5. WESTERN STATES PETROLEUM ASSOCIATION Hydraulic Fracturing Safety: Myths and Facts Myth: Hydraulic fracturing uses millions of gallons of water Fact: In 2012, the average volume of water used during hydraulicfracturing operations of a productionwell in CA was 116,000 gallons The total volume of water used in the528 wells hydraulically fractured in2012 in CA was 202 acre feet The average golf course uses 312,000 gallons every day, corresponding to 350 acre feet per year. Farming in CA in 2012 used approximately 34 million acre feet of water annually Source: FracFocus; California Department of Water Resources 5

  6. WESTERN STATES PETROLEUM ASSOCIATION Hydraulic Fracturing: How Much, Where • Myth: We don’t know how much or where hydraulic fracturing is occurring • Fact: California closely regulates oil and gas drilling and production activities, and maintains a database with the locations of all oil and gas wells. • 2,705 well permits issued in 2012 • 48,970 wells currently producing oil and/or gas in CA • A total of 568 wells were fractured in 2012 (FracFocus), and 97 percent of fracturing operations were in Kern County Source: WSPA survey of FracFocus website 2012 data 6

  7. WESTERN STATES PETROLEUM ASSOCIATION Shale Oil Resources in the United States Bakken 4 Billion Barrels 17% of US Shale Oil Monterey 15.4 Billion Barrels 63% of US Shale Oil Avalon/Bone Springs 2 Billion Barrels 8% of US Shale Oil Eagle Ford 3 Billion Barrels 12% of US Shale Oil 7

  8. An Extraordinary Opportunity WESTERN STATES PETROLEUM ASSOCIATION • “The fossil fuel deposits in California are incredible.” • “The potential is extraordinary, but between now and their development lies a lot of questions that need to be answered.” • “I support our Division of Oil and Gas. They are excellent people and I look for them to navigate the issues as we go forward.” 8

  9. A San Joaquin Valley California Opportunity WESTERN STATES PETROLEUM ASSOCIATION • According to the EIA, 15.4 billion barrels of oil trapped in the pores of shale rocks in the San Joaquin Valley • Advanced-extraction oil technology: potential in CA • 1,750 square mile area represents 2/3rds of U.S. shale resources • Hydraulic fracturing used extensively in other states and in California for 60 years without harm to the environment 9

  10. The Monterey Shale & California’s Economic Future WESTERN STATES PETROLEUM ASSOCIATION • 512,000 Jobs by 2015 and 2.8 million by 2020 • 2.6% to 14.3% State GDP Increase • $40.6 billion to $222.3 billion personal income increase • $4.5 - $24.6 billion state and local tax revenues increase 10

  11. WESTERN STATES PETROLEUM ASSOCIATION Ongoing Developments – Regulations • California Division of Oil, Gas & Geothermal Resources (DOGGR) proposed regulations • Draft regulations require: • Advance notice to DOGGR before a well is fractured • Enhanced testing and monitoring of fractured wells • Safe storage and handling requirements of fracturing fluids • Disclosure of chemicals used on FracFocus website • Provides protection of trade secrets 11

  12. Ongoing Developments - Legislation SB 4 (Pavley) requires the state’s Natural Resources Agency to conduct a study of hydraulic fracturing and mandates regulation of that practice. Sen. Pavley removed moratorium language and indicated she would work with the oil industry to develop comprehensive bill to regulate hydraulic fracturing activities. Sen. Fran Pavley 12

  13. WESTERN STATES PETROLEUM ASSOCIATION WSPA Supports Comprehensive, Balanced Regulation • Legislature needs to take a measured and responsible approach to hydraulic fracturing • All parties have a responsibility to acknowledge that: • There are legitimate issues related to hydraulic fracturing that must be addressed by regulators and the Legislature • Production of petroleum energy is a vital and necessary part of the California economy • A comprehensive regulatory package will sufficiently ensure that our state’s environmental health and natural resources are protected while safely using hydraulic fracturing technologies for energy production in California 13

  14. WESTERN STATES PETROLEUM ASSOCIATION Follow Us on Twitter @WSPAPrez 14

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