horizontal shale drilling: the process of drilling and … we have learned source: horizontal shale...

15
What We Have Learned Horizontal Shale Drilling: the Process of Drilling and the Impacts by: Chris Penrose Associate Professor, OSU Extension & Extension Educator Ag/NR Basic Lease Considerations by: Clif Little Associate Professor, OSU Extension & Extension Educator Ag/NR

Upload: nguyenhanh

Post on 15-Mar-2018

219 views

Category:

Documents


4 download

TRANSCRIPT

Page 1: Horizontal Shale Drilling: the Process of Drilling and … We Have Learned Source: Horizontal Shale Drilling: The Process of Drilling and the Impacts, Chris Penrose, Ohio State University

What We Have Learned

Horizontal Shale Drilling: the

Process of Drilling and the Impacts

by: Chris Penrose

Associate Professor, OSU Extension & Extension Educator Ag/NR

Basic Lease Considerations

by: Clif Little

Associate Professor, OSU Extension & Extension Educator Ag/NR

Page 2: Horizontal Shale Drilling: the Process of Drilling and … We Have Learned Source: Horizontal Shale Drilling: The Process of Drilling and the Impacts, Chris Penrose, Ohio State University

What We Have Learned

Source: Horizontal Shale Drilling: The Process of Drilling and the

Impacts, Chris Penrose, Ohio State University Extension

Site Range: 4 – 8 Acres

Pad Depth: 2 ft of Rock

½ to 1 Acre Site When

Fracking Complete

1,500+ Trailer Loads of

Water Per Frack

Companies are Looking to

Recycle Water to Reduce

Water Usage Associated

with the Process

Page 3: Horizontal Shale Drilling: the Process of Drilling and … We Have Learned Source: Horizontal Shale Drilling: The Process of Drilling and the Impacts, Chris Penrose, Ohio State University

What We Have Learned

Source: Horizontal Shale Drilling: The Process of Drilling and the

Impacts, Chris Penrose, Ohio State University Extension

Carroll County - Utica Shale

Horizontal Drilling

Carroll County - Utica Shale Horizontal Drilling

Page 4: Horizontal Shale Drilling: the Process of Drilling and … We Have Learned Source: Horizontal Shale Drilling: The Process of Drilling and the Impacts, Chris Penrose, Ohio State University

What We Have Learned

Source: Horizontal Shale Drilling: The Process of Drilling and the

Impacts, Chris Penrose, Ohio State University Extension

Carroll County - Utica Shale

Horizontal Drilling

Guernsey County Well Site

Page 5: Horizontal Shale Drilling: the Process of Drilling and … We Have Learned Source: Horizontal Shale Drilling: The Process of Drilling and the Impacts, Chris Penrose, Ohio State University

What We Have Learned

Source: Horizontal Shale Drilling: The Process of Drilling and the

Impacts, Chris Penrose, Ohio State University Extension

Carroll County - Utica Shale

Horizontal Drilling

Harrison County

– First Productive

Utica Shale Well

Harrison County – Utica Shale Well

Page 6: Horizontal Shale Drilling: the Process of Drilling and … We Have Learned Source: Horizontal Shale Drilling: The Process of Drilling and the Impacts, Chris Penrose, Ohio State University

What We Have Learned • Hydraulic Fracturing has the Potential to be Life Changing

• For the Better…

• Potential for Large Bonus Payments

• Potential for Large Royalty Payments

• Potential For a More Secure Financial Future

Source: Horizontal Shale Drilling: The Process of Drilling and the

Impacts, Chris Penrose, Ohio State University Extension

Page 7: Horizontal Shale Drilling: the Process of Drilling and … We Have Learned Source: Horizontal Shale Drilling: The Process of Drilling and the Impacts, Chris Penrose, Ohio State University

What We Have Learned • Hydraulic Fracturing has the Potential to be Life Changing

• For the Worse…

• Royalty Payments May Diminish Rapidly

• Potential Damage or Changes to Property

• Increased Traffic / Congestion

• Strain on Family / Neighbor Relations

• Addition of Gas Lines / Roads / Right of Ways

• Potential Water Issues / Surface Spills

Source: Horizontal Shale Drilling: The Process of Drilling and

the Impacts, Chris Penrose, Ohio State University Extension

Page 8: Horizontal Shale Drilling: the Process of Drilling and … We Have Learned Source: Horizontal Shale Drilling: The Process of Drilling and the Impacts, Chris Penrose, Ohio State University

What We Have Learned • Hydraulic Fracturing has the Potential to be Life Changing

Land owners will need to weigh the

benefits and the costs and answer

this question:

At what cost are you willing to have

potential damages / changes to your

property for a lease with bonus and

royalty potential and a more secure

financial future?

Source: Horizontal Shale Drilling: The Process of Drilling and

the Impacts, Chris Penrose, Ohio State University Extension

Page 9: Horizontal Shale Drilling: the Process of Drilling and … We Have Learned Source: Horizontal Shale Drilling: The Process of Drilling and the Impacts, Chris Penrose, Ohio State University

What We Have Learned • Sample Lease Considerations

• What is the subject of the lease (oil, gas, other minerals)?

• What is the primary term of the lease?

• May the lease be assigned?

• What constitutes “commencement” of drilling?

Source: Basic Lease Considerations, Clif Little , Ohio State University Extension

Page 10: Horizontal Shale Drilling: the Process of Drilling and … We Have Learned Source: Horizontal Shale Drilling: The Process of Drilling and the Impacts, Chris Penrose, Ohio State University

What We Have Learned • Sample Lease Considerations

• Does the lease include underground storage rights?

• Does the lease allow for roads, pipelines, storage tanks, right of ways?

• Is the Lessee responsible for surface damages (extent)?

• Are there provisions for the use of resources? (land, water, timber, etc)

• What types of buildings, fixtures, etc are allowed on the property?

(distance from home, existing buildings, etc)

Note: Leasing companies may have

multiple leases and/or multiple

addendums which contain different

terms.

Source: Basic Lease Considerations, Clif Little , Ohio State University Extension

Page 11: Horizontal Shale Drilling: the Process of Drilling and … We Have Learned Source: Horizontal Shale Drilling: The Process of Drilling and the Impacts, Chris Penrose, Ohio State University

Community Economic Development • Potential Community Impacts

• Increased Water Usage

• Increased Traffic and Congestion

• Wear and Tear on Existing Roads / Infrastructure

• Road Maintenance Concerns Due to Increased Traffic

• Strain on Existing Housing Stock (lack of housing for rental / purchase)

• Possible Displacement of Current Renters / Commercial Tenants

• Strain on Community Infrastructure

• Strain on Local Financial Institutions Due to Loan Payoffs

• Need for Additional Training for Emergency Responders

• Need for Cell Coverage at Remote Well Site Locations

• Possible Displacement of Workers from Existing Jobs

Page 12: Horizontal Shale Drilling: the Process of Drilling and … We Have Learned Source: Horizontal Shale Drilling: The Process of Drilling and the Impacts, Chris Penrose, Ohio State University

Community Economic Development • Potential Community Impacts

• New Pipeline Development

• New Roads and Infrastructure Improvements

• Increased Sales Taxes and Other Revenues

• Increased Revenues / Opportunities for Existing Businesses

• Tractor Dealers, Auto Dealers, Restaurants, Lodging Owners, Caterers,

Cleaning Services, Trucking Companies, Grocery, Waste Disposal, etc

• Increased Occupancy Rates for Housing / Commercial Rentals

• Need for New Housing Units, RV Parks & Commercial Developments

• New Business Opportunities

• Job Opportunities

• Welders, Truck Drivers, Mechanics, etc

Page 13: Horizontal Shale Drilling: the Process of Drilling and … We Have Learned Source: Horizontal Shale Drilling: The Process of Drilling and the Impacts, Chris Penrose, Ohio State University

Community Economic Development • Potential Community Impacts

• Short- and Long-Term Population Changes / Labor Migration

• Temporary Workers - Transient Crews Skilled in Specific Stages

• Development of Temporary Housing Facilities

• Hotels, Motels, Trailer Parks, Campgrounds, RV Parks, Rental Units, etc

• How Will Community Absorb Unoccupied Units When Temporary

Workers Leave?

• Increased Demands on Water, Sewer, Roads, Telecommunications, etc

• Increased Demands for Emergency Services

• Police, Fire, Medical, Hazardous Materials Teams, etc

• Increased Enrollment at Local Schools

• Increased Real Disposable Income

• Potential Impact on Tourist’s Perception of the Region

Page 14: Horizontal Shale Drilling: the Process of Drilling and … We Have Learned Source: Horizontal Shale Drilling: The Process of Drilling and the Impacts, Chris Penrose, Ohio State University

What We Have Learned

• The information provided by the University of

Illinois Extension and/or Ohio State University

Extension is not meant to serve as legal advice

and should only be used as an educational

resource.

• Potential leaseholders should consult with an

attorney before signing a lease agreement.

Page 15: Horizontal Shale Drilling: the Process of Drilling and … We Have Learned Source: Horizontal Shale Drilling: The Process of Drilling and the Impacts, Chris Penrose, Ohio State University

Contact Information

[email protected]

(618)842-3702

[email protected]

(618)252-8391