US Onshore Ambassador Toolkit - American Association of

41 Pages·2014·5.73 MB·English

U.S.
 Onshore
 Ambassador
 Introduction

With
 the
 ever-­‐changing
 environment
 of
 our
 fast
 paced
 industry
 and
 the
 technological
 advancements

taking
 place
 every
 day,
 the
 landman
 has
 had
 many
 challenges
 to
 overcome.

 One
 major
 challenge
 has

been
 the
 social
 acceptance
 of
 the
 Energy
 Industry’s
 operational
 practices.
 With
 the
 renaissance
 of

America’s
 energy
 boom,
 the
 energy
 industry
 has
 advanced
 further
 into
 urban
 regions
 while,

transversely,
 urban
 sprawl
 has
 developed
 into
 historical
 and
 newly
 emerging
 energy
 fields.

 This
 dynamic

has,
 at
 times,
 put
 the
 energy
 industry
 at
 the
 forefront
 of
 the
 public
 view
 and
 is
 taking
 on
 much
 debate.

As
 our
 industry
 exposure
 increases
 in
 public
 awareness,
 so
 does
 the
 scrutiny
 of
 our
 standards
 of

practice.

 Unfortunately,
 because
 of
 our
 technical
 practices,
 much
 of
 the
 general
 public
 does
 not
 have
 a

complete
 understanding
 of
 the
 basic
 concepts
 about
 how
 their
 energy
 is
 provided.

 This
 aspect
 has

allowed
 fear
 to
 be
 spread
 among
 an
 uneducated
 public
 by
 those
 with
 political
 and
 social
 agendas
 that

strive
 to
 stop
 domestic
 energy
 development.

 With
 many
 states
 and
 energy
 commissions
 facing
 a
 large

grass
 roots
 movement
 against
 the
 energy
 industry,
 it
 was
 time
 for
 a
 proactive
 approach.

 The
 message

needed
 was
 a
 simple
 and
 clear
 directive
 -­‐
 get
 the
 facts
 on
 energy
 development
 first
 before
 you
 make
 a

decision.

Industry
 in
 some
 regions
 of
 the
 United
 States
 realized
 this
 challenge
 and
 fully
 devoted
 an
 effort
 to

getting
 the
 facts
 out
 to
 the
 public.

 This
 initiative
 starts
 with
 everyone
 in
 the
 energy
 industry
 helping
 to

promote
 a
 clear
 and
 concise
 message
 as
 ambassadors
 to
 our
 livelihoods.
 With
 this
 idea,
 I
 am
 proud
 to

present
 an
 AAPL
 ambassador
 toolkit.

 This
 toolkit
 includes
 an
 abundance
 of
 key
 information
 for
 the

landman,
 the
 public
 face
 of
 the
 energy
 industry.

 With
 this
 knowledge
 we
 can
 provide
 those
 who
 are

unaware,
 a
 clear,
 concise
 and
 unified
 education
 of
 our
 safe,
 regulated,
 and
 vitally
 important
 industry.

Throughout
 these
 pages
 you
 will
 find
 key
 messages
 about
 energy,
 hydraulic
 fracturing,
 air
 quality,
 water

regulations,
 social
 investment,
 economics,
 taxation
 and
 derived
 products
 in
 our
 everyday
 use.

I
 encourage
 you
 to
 share
 this
 information
 to
 those
 around
 you
 and
 extend
 the
 educational
 message
 we,

as
 landmen
 want
 to
 provide.
 Have
 a
 friendly
 non-­‐confrontational
 conversation
 with
 stakeholders,
 your

family
 and
 friends
 within
 your
 social
 circle
 to
 try
 and
 dissolve
 those
 unknown
 fears
 towards
 one
 of
 the

most
 highly
 regulated
 and
 scrutinized
 industries
 in
 our
 nation.

 This
 toolkit
 will
 be
 a
 valuable
 resource

that
 will
 provide
 landmen
 with
 thorough
 illustrations
 and
 comprehensively
 researched
 information
 to

share
 with
 the
 public.

 Having
 20,000
 plus
 AAPL
 members
 sharing
 this
 unified
 message,
 imagine
 the

great
 educational
 benefit
 we
 can
 provide.

 This
 is
 truly
 an
 incredible
 resource,
 I
 hope
 you
 take
 on
 the

role
 as
 an
 AAPL
 ambassador
 for
 the
 good
 of
 our
 industry
 and
 the
 public
 we
 serve
 with
 our
 products.

Sincerely,

Michael
 T.
 Kuledge,
 RPL

Denver
 Association
 of
 Petroleum
 Landmen
 –
 AAPL
 Director

Bayswater
 Exploration
 and
 Production,
 LLC.
 -­‐
 Operations
 Landman
U.S. Onshore
Ambassador Toolkit
Online Sources
ANGA.us
API.org
COGA.org
Energy.gov
EnergyFromShale.org
EnergyInDepth.org
EnergyTaxFacts.com
EnergyTomorrow.org
FracFocus.org
A values-based guide for sharing and openly communicating
about the oil and natural gas industry.
www.landman.org
Information courtesy of Anadarko Petroleum Corporation
#AAPLlandman
OUR MISSION
AAPL’s mission
1| Key Messages About Energy
is to promote the 2| Hydraulic Fracturing: The Truth
3| Air Quality
highest standards of
4| Water
performance for all
5| Regulations
land professionals, to
6| Investing in Our Communities
advance their stature
7| Oil and Natural Gas by the Numbers
and to encourage sound
8| Truth Versus Fiction: Oil and Natural Gas Profits
AAPL Member’s Mark
and Taxes Versus Other Industries
and ethical stewardship
9| Products Derived from Oil and Natural Gas
of energy and mineral
10| American Energy Transformation
resources.
11| What Can I Do?
1
Key Messages About Energy

Hydraulic Fracturing 2

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Hydraulic Fracturing has had an enormous 9
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reonlaeb elinnegr gtyh ep lnaaytsi oinn otou rp mroodduecren m liovrees .oil and
natural gas than it consumes. 10

6
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Section 1 – Key Messages About Energy
Anadarko Ambassador Toolkit – U.S. Onshore
www.landman.org
1| Key Messages About Energy
Energy is
fundamental
to modern life.
The confluence of horizontal drilling and hydraulic
fracturing technologies has created new
Oil and natural gas are the building blocks for
opportunities to develop unconventional oil and
thousands of products we use, and natural gas is a
natural gas resources around the nation.
cleaner generator of electricity – the power needed
to light, heat and cool American homes. Modern
TAKEAWAyS
economies are dependent on a reliable, affordable
•  Affordable energy is fundamental to modern life –
energy supply, and they are further strengthened
it is as important as air, food and water.
through energy security. •  Oil and natural gas are used to make or power
practically every product we touch every day.
•  Every step in oil and natural gas development is highly regulated
The U.S. has abundant resources of oil and clean-burning natural gas. In the last
by multiple state and federal agencies across the U.S.
several years, the country has experienced an energy revival. The tremendous oil
and natural gas resources found in the U.S. have positioned the nation to benefit •  Oil and natural gas development supports millions of jobs and provides
through economic growth, increased domestic jobs, lower electricity costs while tax revenue that funds public schools, local emergency management
reducing the country’s dependence on foreign sources of energy. and a variety of municipal, state and federal programs and services.
•  The men and women who work in the oil and natural gas industry
provide a valuable and essential resource to America.
7 8
Section 1 – Key Messages About Energy
Anadarko Ambassador Toolkit – U.S. Onshore Section 1 – Key Messages About Energy
www.landman.org
Why is the Oil
and Natural Gas
Industry Important
“Rising U.S. oil and natural gas production is having a
bigger impact on the U.S. economy than estimated a
couple years ago.”
to America?
– John Larson, IHS Energy
“The emergence of shale gas and tight oil in the U.S.
demonstrates, once again, how innovation can change
U.S. Jobs
the balance of global economic and political power.”
•  9.8 million jobs supported by the oil and natural gas industry
– Daniel Yergin, Pulitzer Prize Winning Author
•  $224 billion in wages paid to U.S. industry employees in 2011
•  $598 billion generated in associated labor income
•  2.7 million jobs gained from 2002 thru 2012 “Advanced technologies for crude oil and natural gas
through oil and natural gas activity production are continuing to increase domestic supply
and reshape the U.S. energy economy as well as expand
the potential for U.S. natural gas exports.”
– Adam Sieminski, U.S. EIA Administrator
U.S. Economy
•  $85 million paid daily to the U.S. Treasury in federal
income taxes, royalty payments and other fees in 2012
•  8% of the entire U.S. economy supported by industry
•  $545 billion contributed to the economy through
capital investments, wages and dividends by
the oil and natural gas industry in 2011
•  $1,200 gained by U.S. households from low natural gas prices
Source: API, Moody’s Analytics, PricewaterhouseCoopers, LLP
9 10
1

Hydraulic Fracturing: The Truth 2

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Hydraulic fracturing has had an enormous
positive impact on U.S. energy security, greatly

reducing the need for energy imports.
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Section 2 – Hydraulic Fracturing: The Truth
Anadarko Ambassador Toolkit – U.S. Onshore
www.landman.org
2| Hydraulic Fracturing: The Truth HOW DOES HyDRAULIC FRACTURING WORK?
In hydraulic fracturing, a mixture of water, sand and additives is pumped under high pressure down
the wellbore to create hairline fractures that form a pathway for oil and natural gas to be produced.
Hydraulic fracturing
The Depth is Equal to 5.5
Empire State Buildings
is not new.
Hydraulic fracturing is a highly engineered technology first developed in the
450-700 Ft. Multiple Layers of Steel Ground Water
1940s to enhance production of oil and natural gas from tight rock formations Encased in Cement
Protect Ground Water
miles beneath the earth’s surface. “Fracking” technology has improved and
evolved over 60 years and has been applied to more than 1.2 million wells
drilled in the U.S.
•  A temporary process, typically lasting 3 to 5 days per well
•  Separated from ground water by more than a mile of rock Protective Steel Casing
•  Regulated by multiple state and federal agencies
•  Supervised by highly trained engineers and technicians
•  More than 90% of oil and natural gas currently produced
in the U.S. onshore is done using hydraulic fracturing.
•  60% to 80% of all wells drilled in the U.S. in the next 10
years are expected to require hydraulic fracturing.
Hydraulic fracturing occurs at a depth Shale Fractures; 1 mm wide
of approximately 7,000-8,000 Ft.
•  Without hydraulic fracturing, as much as 80% of oil and
natural gas from tight rock formations would be inaccessible.
Source: CRS Report for Congress, January 2013, FracFocus.org, API Source: Adapted with Permission from Texas Oil & Natural Gas Association, © 2010
13 14
Section 2 – Hydraulic Fracturing: The Truth
Anadarko Ambassador Toolkit – U.S. Onshore
www.landman.org
Proper Well Construction Protects Groundwater Understanding Hydraulic Fracturing Fluid
Wells are constructed with multiple layers of steel pipe, also called casing, and cement to In hydraulic fracturing, operators use a mixture of water, sand and additives
protect groundwater. During wellbore construction, the casing and cement are routinely
pumped under high pressure to create fissures within targeted formations. The
tested onsite to ensure integrity, and then the well is equipped with sensitive monitoring
sand props open those fissures to allow oil and natural gas to flow, while the
equipment for 24-hour observation throughout each well’s production life.
additives reduce friction, prevent bacteria formation and inhibit scale.
An Example of a Typical Well Design
Additives used in hydraulic fracturing vary according to geology and are
commonly found in household items. Each of the ingredients used in the
hydraulic fracturing process is shared on the website FracFocus.org.
0.5% Chemical Additives } Such items include:
9.5% Sand • Sodium Chloride (table salt)

90% Water
•  Guar Gum (ice cream)

• Borate Salts (cosmetics)

• Ethylene Glycol (household
cleaners)

• Sodium Potassium Carbonate
(detergent)

• Isopropanol (deodorant)
Source: Adapted with Permission from Texas Oil & Natural Gas Association, © 2010 Source: Groundwater Protection Council, API
15 16
Section 2 – Hydraulic Fracturing: The Truth
Anadarko Ambassador Toolkit – U.S. Onshore Section 2 – Hydraulic Fracturing: The Truth
www.landman.org
“[F]racking has been done safely for decades.”
– Sally Jewell, U.S. Interior Secretary,
Obama Administration, 2013
“In no case have we made a definitive determination that
Simply put, you cannot have the
the fracking process has caused chemicals to enter
groundwater.”
oil and natural gas production
– Lisa Jackson, former U.S. EPA Administrator, 2012
levels now being realized in the
“U.S. mastery of hydraulic fracturing and horizontal drilling
U.S. without hydraulic fracturing.
techniques has led to a slump in energy imports from
some OPEC nations.”
– Bloomberg, May 2013
TAKEAWAyS
•  The combination of horizontal drilling and hydraulic fracturing
has revolutionized oil and natural gas production in the U.S.
•  Hydraulic fracturing enhances production of oil and
natural gas from older wells and increases new production
from formations once thought impermeable.
•  Without hydraulic fracturing, Americans would likely pay
significantly higher utility bills each month, pay more
for raw materials and other consumer goods.
•  Hydraulic fracturing is making energy security a reality for the U.S.
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