Operations and Environmental Protection

During the drilling phase, multiple layers of protective steel casing, surrounded by cement, are installed to protect freshwater aquifers and other natural resources. Although the distance between freshwater aquifers and natural gas and oil formations in our plays averages more than 7,700 feet — nearly 1.5 miles — we engineer our wellbore design out of an abundance of caution to prevent the migration of produced fluids and hydrocarbons. We also work with regulatory agencies to ensure we meet or exceed guidelines for wellbore construction. These guidelines often vary by jurisdiction in response to each state’s unique geology.

Systematic monitoring takes place during drilling to safeguard the well for environmental and economic reasons. Each well is monitored by both the drilling team on site, and our Operations Support Center (OSC) based in Oklahoma City. These teams work in tandem, monitoring data and alerts, to help ensure drilling and wellbore construction accuracy. 

One example of the importance of this monitoring is when drilling occurs near an offset well. It is Chesapeake’s practice to conduct an anti-collision analysis prior to drilling to minimize the risk of interacting with a nearby well. Chesapeake’s operational standards mandate surveys that give locational information of our wells, mapping them to avoid neighboring activity. Should our acreage be adjacent to that of another company, we coordinate with the neighboring company to identify its well locations and align our activity schedules. 

After preparing the well during the drilling stage, we utilize the completion process of hydraulic fracturing to stimulate and recover natural gas and oil resources. We employ the use of hydraulic fracturing technology in all of our wells and are committed to industry best practices in well integrity and chemical use. 

The Hydraulic Fracturing Process

Once drilling is complete, a mixture most commonly consisting of water, sand and a small percentage of additives is pumped at a high pressure to create small fissures, or fractures, within the rock. These newly created fractures are held open by proppants (typically sand), which allow the trapped natural gas and oil to flow through the well and up to the surface.

When producing an oil well, a larger proppant is required as is a more viscous (thick) fluid for transport. To increase the viscosity of the fluid, additives are included in the water mixture. This difference in viscosity needs, as well as the intended production and targeted formation, leads to variance in the makeup of hydraulic fracturing fluids.

FracFocus

In an effort to improve transparency around the use of chemicals in the hydraulic fracturing process, we disclose the additives contained within hydraulic fracturing fluids to state regulatory agencies and to the public on fracfocus.org. FracFocus, a web-based registry with support from the U.S. Department of Energy, provides detail on completion process additives, chemicals and the amount of water used, as reported by oil and gas operators. Chesapeake was an early supporter of FracFocus, championing the site and contributing to its development. 

Since February 2011 we have reported on 100% of our well completions, a total of more than 7,000 disclosures. When reporting to FracFocus, Chesapeake utilizes information supplied to us by our vendors in the form of Safety Data Sheets (SDS). The Occupational Safety and Health Administration (OSHA) governs the information that is supplied on the SDS and, in certain situations, allows a manufacturer or vendor to withhold specific information about a chemical or substance in order to protect what the manufacturer believes to be confidential business information (CBI) or proprietary trade secret information. However, the manufacturer is required to report all pertinent health hazard warnings associated with any ingredient declared as CBI.

We encourage our additive suppliers to be as transparent as possible regarding the composition of their products. To this point, we support the efforts of our service providers who report both the actual additives used in their hydraulic fracturing operations and, separately, the individual chemistries contained in the additives. By not marrying the individual chemicals to their respective additives, companies are able to maintain formulation confidentiality without withholding individual chemical names.  

GreenFrac®

We take a proactive approach to reducing or replacing the chemicals used in our hydraulic fracturing process through our GreenFrac® initiative. GreenFrac® challenges Chesapeake engineers to evaluate the necessity of each chemical additive and determine if a more environmentally friendly option could be used. 

We use a scorecard system to evaluate each compound based on information provided by regulatory bodies and U.S. and international health and hazard information. As part of the program, Chesapeake vendors are required to evaluate each of their completion chemicals against the GreenFrac® scorecard criteria. Those chemicals that are more environmentally friendly yield a better score and are further evaluated as compared to potential additive replacements that do not score as well.

As an example, GreenFrac® encourages the use of dry additives or extremely low aromatic solvents in place of chemicals that incorporate aromatic or BTEX-containing ingredients. Since 2011, Chesapeake has not allowed the use of diesel, a common fuel and carrier solvent known to contain BTEX, in any concentration within our hydraulic fracturing chemistries. 

Well SIte Integrity

Throughout a well’s lifecycle, protecting both the wellbore and the pad site is paramount. Chesapeake utilizes a supervisory control and data acquisition (SCADA) system for monitoring different aspects of a well’s performance during its life stages. Through a series of sensors on or near the well and its accompanying facilities, SCADA collects data which is monitored at all times by our OSC employees. 

Although data collection can vary by well, SCADA has the ability to gather information such as:

• Pressure in wells and surface vessels
• Liquid levels in tanks
• Runtime status for all electrical motors
• Open/closed valve positions
• Well downtime

Should data indicate a potential concern, OSC team members alert field employees to investigate. 

Also using site-sensor data is our proprietary Welltender mobile application. Welltender acts as a dispatch system, partnering with our OSC team to help prioritize lease operator site visits. After measuring and evaluating a series of well performance inputs, including production variations, OSC team members work through Welltender to deliver the data directly to the end user. Lease operators, as the end users, receive a list of prioritized wells, allowing them to investigate and address issues more efficiently.

Not only does Welltender prioritize well visits, but it makes data available to most any team member. In the past, lease operators could only review their personal routes via mobile technology. With Welltender, if a lease operator is out of the office, another team member can assume his or her priority wells.

Launched in 2018 and utilized in our Eagle Ford operating area, there is significant growth ahead for Welltender as the company plans to adopt the application across all business units in 2019. As the application collects more data, there is an opportunity to analyze inputs to determine if predictive patterns exist, thereby proactively identifying potential risk factors. 

Inactive or Abandoned Wells

During a well’s lifecycle, it may become necessary to temporarily abandon or to plug and abandon (permanently close) a well due to its economic viability. An industry term, “abandon” is a comprehensive process that could include either temporarily shutting in a well or plugging the well with approved materials, cutting off any casing and sealing the well. 

Each state regulates this process uniquely and Chesapeake follows applicable rules when managing inactive wells. Although specific to each state, many regulations require a series of cement plugs placed inside the wellbore, across any hydrocarbon-bearing formations and freshwater aquifers. Testing is also often required to confirm there is no escape of hydrocarbon-containing materials. 

Waste Management

The tracking and accounting of our waste is an area of continuous improvement for the company. We use a custom web application called Point to Point to track our hauled water and waste streams used throughout a well’s lifecycle. Currently the majority of our business units have adopted the system and fully integrated their data within the application’s platform.  

Through this application’s database, a monthly report is prepared and distributed to each business unit noting the volume and cost of the waste generated. By building awareness, we challenge each business unit to reduce its waste production and the costs associated.

Post-drilling residuals make up the majority of our hauled solid waste as measured in Point to Point. For this reason, and in compliance with state regulations, we develop a solid waste management plan specific to drill cuttings for each of our business units. 

Each plan begins with a robust analysis of state regulatory requirements based on the waste stream. From this study, Health, Safety, Environment and Regulatory (HSER) team members present different disposal options to operations managers who then make the best decision for their respective areas. These managers also consider individual lease restrictions when determining disposal plans.

HSER employees continue to partner with each business unit to confirm compliance once disposal has begun. This often includes communicating with state regulatory agencies for permitting or for alternative disposal methods. For example in Oklahoma, Chesapeake works with the Oklahoma Corporation Commission to turn drill cuttings into county road material. Drill cuttings are properly transported to appropriately permitted recycling facilities where they are processed to meet road base specifications and used for pavement. 

NORM Waste

Certain waste disposal is highly specialized. This includes the disposal of naturally occurring radioactive material (NORM). During production, NORM, which is primarily associated with produced water, can be brought to the surface where it may accumulate in surface equipment over time.

Although NORM is not regulated in every state, Chesapeake is committed to a high standard of safety and environmental protection. We have a companywide NORM program that incorporates both applicable state and federal regulations, as well as industry best practices. HSER and Operations teams partner to measure the level of NORM on our locations using specialized radiation survey equipment, and use that data to implement appropriate safe work practices and manage associated waste. 

This approach includes regular procedures for the safe handling and disposal of this material.

More than 200 employees are currently trained to be able to survey for NORM and all Chesapeake locations that generate, process or dispose of produced water are surveyed regularly in order to properly manage accumulations of NORM.

Our electronic waste recycling vendor repurposes reusable information technology (IT) equipment and parts, recycling any non-usable assets. This process also includes comprehensive data destruction, protecting company assets while preparing the equipment for additional use. In 2018, due to our e-waste recycling program, we were able to divert 50 tons of solid waste from ending up in a landfill.