Hydraulic Fracturing Fluid Composition
Hydraulic fracturing fluid is predominantly composed of water with proportionally small volumes of proppant and chemical additives. The water we use for the fluid is primarily from freshwater sources, though as discussed in the Water Use section, nonfreshwater sources may also be used. Proppant is a solid material, such as sand, used to hold the formation open and allow the oil and gas to flow into the well. As of 2016 we have switched to sand as proppant instead of ceramic materials. The chemical additives in fracturing fluids are used for specific purposes such as reducing friction, killing bacteria or inhibiting corrosion or scale deposits.
We know that some stakeholders are concerned about the chemical composition of hydraulic fracturing fluid. Hess does not use diesel or benzene, toluene, ethylbenzene or xylene (BTEX) in our hydraulic fracturing fluids. All of our downhole chemicals are disclosed on the FracFocus reporting website (www.fracfocus.org).
We also evaluate the additives we use and consider new products that become available. In 2014 and 2015 Hess pioneered the use of high-concentration friction reducers (HCFRs). HCFRs have multiple benefits, including a reduction in pumping power requirements (which lowers fuel use and emissions) and a reduction in the overall number and volume of chemicals used per well. Using fewer chemicals per well reduces the number of vehicle deliveries and the occupational and environmental exposure risks associated with handling chemicals, as well as the potential for and consequences of spills. By the end of 2015, approximately 26 percent of our North Dakota wells had been completed with the reduced additive fluid composition containing HCFRs. By year-end 2016, Hess adopted the use of only two additives (a friction reducer and a surfactant), along with utilizing a more environmentally favorable version of the surfactant, for all new North Dakota wells.
Data on the composition of hydraulic fracturing fluid used in each well is publicly available on the FracFocus website. While respecting laws that allow our service providers to preserve the confidentiality of their fracturing fluid formulations, we encourage transparency in chemical use and disclosure.
In our shale energy operations, regulated emissions occur during flowback and production operations. When technically feasible, these emissions are collected and directed to a pipeline for gathering and processing. Where pipeline availability is constrained, flaring may occur. See the Climate Change and Energy section of our sustainability report for more information on greenhouse gas (GHG) emissions, and the Environment section for discussion of non-GHG air emissions.
We seek to minimize land use and reduce the number of well sites needed to develop our acreage. In North Dakota this can be achieved by implementing multi-well pad drilling – that is, multiple wells (up to 18) on a single well pad with shared surface facilities. In both Ohio and North Dakota we use geographic information systems when siting facilities to minimize the impact on the environment and local communities.
We are sensitive to stakeholder concerns about increased trucks on the road in areas of high drilling activity. In North Dakota we have participated in multi-stakeholder initiatives aimed at minimizing impacts on public roads and traffic congestion. We have also collaborated with community partners and state officials in North Dakota to promote adequate infrastructure funding in an effort to improve traffic safety and support road maintenance. In 2016 we were able to remove more than 51,000 trucks from the road through additional infrastructure projects and oil gathering improvements. For example, in 2016 we further increased our use of piping, rather than trucks, to transfer fresh water for completions at our North Dakota asset. During the year we piped water to 100 percent of our well completions in North Dakota – approximately 5.2 million barrels, which offset more than 50,400 truck deliveries. We also use temporary pipelines to supply fresh water for 100 percent of our well completions in Ohio.
In addition, the Hess completions team is using a new “sandbox system” for delivering proppant sand to about half of the wells Hess is fracturing in North Dakota. With the sandbox system, the boxes empty by gravity, and the sand falls out of the boxes onto a conveyor. Importantly for road safety, the sandboxes can be delivered ahead of time and pre-staged for use throughout the fracturing process. This reduces the need for nighttime and bad weather truck deliveries.
Also in 2016, a cross-functional initiative involving EHS, Operations and Global Supply Chain – aimed at reducing, reusing and recycling water at our Utica asset – reviewed the water management value stream to identify inefficiencies through a Lean “Kaizen” problem-solving approach. By addressing those inefficiencies, the team saw significant cost savings while simultaneously reducing two key safety exposures: driving (the typical fluid hauler’s average drive time was cut from six hours to three) and spills. We have significantly reduced water disposal costs and improved communication with fluid haulers, which has led to quicker response time for spills.
Over the past several years, the transport of crude oil by rail has become an issue of concern in the U.S. and Canada. Improving crude-by-rail safety is a shared effort among railroads, regulators and operators. At Hess, we are committed to doing our part to minimize the risks involved. Hess encourages the adoption of a holistic approach to rail safety that is science based and addresses accident prevention, mitigation and emergency response capability.
We have worked with local and national governmental agencies, industry, rail equipment manufacturers and the railroads to facilitate the safe transportation of crude oil and other petroleum products. Also, we have an internal, cross-functional Rail Transport Working Team that shares information regarding issues relating to rail safety. We are also actively engaged with industry efforts to further improve the safety of rail crude oil transport. We are represented on the American Petroleum Institute’s Rail Policy Committee, Government Affairs Committee and Rail Transportation Group. We are also active on several multi-stakeholder task forces addressing these issues.
We recognize that appropriate train and track design standards and maintenance are significant factors in preventing train derailments. We rely on guidance from studies conducted by railroads and regulators and follow mandatory train and rail car design and maintenance standards. To that end, Hess was one of the first companies in 2015 to procure crude oil tank cars equipped with thicker shells and full-height head shields for puncture resistance, enhanced thermal protection and bottom fittings protection as called for in the DOT-117 enhanced tank car design standard issued in May 2015.
Effective July 1, 2015, Hess entered into a midstream energy joint venture in which Global Infrastructure Partners purchased a 50 percent ownership interest in Hess’ Bakken, North Dakota, midstream assets. The Tioga Rail Terminal and associated rail cars are included in the joint venture. However, Hess, through our affiliates and service agreements with the joint venture, continues to operate the assets.
We do not own any “legacy” DOT-111 rail cars. Through the midstream joint venture, we have an ownership interest in 956 crude oil rail cars that were constructed between May 2011 and March 2012 in accordance with AAR Petition 1577 (CPC-1232) safety standards and are equipped with advanced safety features, including a thicker, more puncture-resistant shell, extra-protective head shields at both ends of the rail car, and additional protection for top fittings and a self-closing safety relief valve. Each of these CPC-1232 crude oil rail cars is capable of being upgraded to the most recent DOT-117 safety standards. Although the CPC-1232 cars are not currently in use, they are available for service until the retrofit deadline of April 2020 and can be retrofitted for service after that date.
The midstream joint venture acquired 550 new crude oil rail cars, which it began receiving in 2015. These cars have been constructed to the most recent DOT-117 standards, with the exception of adding electronically controlled pneumatic (ECP) brakes. In accordance with the transportation legislation passed by Congress and signed by President Obama in December 2015, implementation of the ECP brake requirement is on hold while the National Academy of Sciences conducts a hazard study on ECP brakes to determine whether they are warranted.