Organizational Structure and Interactions

Once the system boundaries, safety goals, accidents and hazards were defined, the next step was to develop a model of the Safety Control Structure (SCS). The safety control constraints are the rules that must be imposed on the system to insure safe operation under all conditions. The implementation of the safety constraints was by the safety control structure, which is displayed in Figure 11. Using research on natural gas extraction and interviews with industry representatives, a Safety Control Structure for natural gas extraction was developed. The SCS developed for natural gas extraction in the Marcellus Shale is shown in Figure 11.

Figure 11: Safety Control Structure

The same methodology used to develop the SCS was used in the development of the requirements and constraints on each entity identified in the SCS. The constraints that each entity identified in the Safety Control Structure must exert on the system to insure safe operation are discussed below.

The role of the Federal Government is to insure that natural gas extraction is completed in a safe and environmentally friendly manner on a nationwide scale through the establishment of regulatory bodies and through federal laws. The two main federal laws are the Safe Drinking Water Act (SDWA) and Clean Water Act (CWA), which regulate the disposal of wastewater by means of underground injection or surface water discharge. Under the SDWA, the Underground Injection Control (UIC) Program was initiated to prevent contamination of drinking water sources through the regulation of underground injection. However, the Energy Policy Act excludes hydraulic fracturing- related activities from the SDWA except when diesel fuels are used. In 2009, the Fracturing Responsibility and Awareness of Chemicals (FRAC) Act was presented to Congress. Through the FRAC Act, the U.S. Environmental Protection Agency (EPA) would have authority over hydraulic fracturing activities under the SDWA, and the

companies would be required to disclose hydraulic fracturing chemical constituents. It has been reintroduced to Congress, with the vote to be decided (as of April 2013).

There have been other actions to obtain more information on hydraulic fracturing, for example, President Barrack Obama initiated the “Blueprint for a Secure Energy Future” in 2011. Through this “Blueprint,” the U.S. Department of Energy (DOE) Secretary identified recommendations on safety practices for public health and the environment through improved practices in shale gas production. Currently, EPA is conducting a study regarding the impacts of hydraulic fracturing on drinking water, with the release of the final report expected in 2014. Furthermore, the EPA regulates some aspects of hydraulic fracturing under the CWA. The effluent guidelines under the CWA prohibit on-site direct discharge of the hydraulic fracturing wastewater in U.S. navigable waterways (U.S. EPA, 2013d). If there is a direct discharge from unconventional drilling practices, then the discharge is subject to the EPA National Pollutant Discharge

Elimination System (NPDES) permitting process as recorded in 40 Code of Federal Regulations (CFR) parts 122 through 125 and Part 435 (U.S. EPA, 2013f). If the

hydraulic fracturing fluid waste is indirectly discharged via a Publicly Owned Treatment Works (POTWs), then the waste is regulated under the EPA General Pretreatment Regulations as recorded in 40 CFR Part 403 (U.S. EPA, 2013f). On the state level, some states have started requiring the disclosure of hydraulic fracturing fluid chemicals in order to more accurately monitor potential water contamination. There are ongoing changes to regulations on shale gas extraction, and there will be continued improvement as more analysis is conducted on potential effects.

The role of the State Government is to establish regulations that govern the natural gas extraction process, and enforce these regulations through state-level regulatory bodies. Currently, the standards for cementing and casing of wells in

Pennsylvania are being revised by the Bureau of Oil and Gas Management (BOGM). The standards currently in place include language that “1) Allow affective control of the well at all times; 2) Prevent the migration of gas or other fluids into source groundwater; 3) Prevent pollution or diminution of fresh groundwater; and 4) Prevent the migration of gas or other fluids into coal seams” (Stronger, 2010). The purpose of revising these standards is to make them more specific to insure the structural well integrity through proper

casing/cementing. Current Pennsylvania standards that protect the environment from oil and gas wells can be found in The Pennsylvania Code: Chapter 78. Oil and Gas Wells: Subchapter C. Environmental Protection Performance Standards. The state is also responsible for issuing well permits.

Standards Organizations are non-government, private entities that establish standards and recommendations for best practice within the industry. The American Petroleum Institute (API) and the Society of Petroleum Engineers (SPE) are specific to the petroleum industry, but other standards organizations, such as American Society for Testing and Materials (ASTM), International Organization for Standardization (ISO), and National Association of Corrosion Engineers (NACE) publish recommendations and standards for the petroleum industry. It is important to note that because of the variability in downhole conditions, establishment of drilling procedures and design of wells to meet standards alone does not necessarily produce a safe design.

The well owner or well operator is the entity that serves as the overall manager and decision-maker of a drilling project. The operator commonly has the largest financial stake in the project (Schlumberger, 2013). The well operator is responsible for the well throughout its entire life cycle, beginning with obtaining well permits, and continuing through design, contracting and supervision of service contractors, and well

abandonment. Oversight of the service contractors is typically accomplished by on-site representatives, often referred to as the “company man”.

Service Contractors execute the plan for well construction developed by the well owner. Examples of service contractors include the drilling contractor, who owns and operates the drilling rig, and the cementing contractor, who executes implementation of the cement job. Service contractors may offer their services at a fixed daily rate, or as a turnkey operation, which may involve the assumption of significant risk (Schlumberger, 2013). The testing laboratory, which conducts specified testing services of cement slurries, may be considered to be a sub-entity of the cementing contractor. In the SCS, it is presented separately for clarity.

The well construction process consists of all steps of the well development life cycle, including processes for site selection, drilling, casing, cementing, hydraulic

fracturing, and production. The responsibilities of each entity within the SCS for natural gas development in the Marcellus Shale are summarized below:

Federal Government

 Insure that natural gas extraction is completed in a safe and environmentally friendly manner on a nationwide scale through the establishment of regulatory bodies

State Government

 Provide adequate resources to state-level regulatory bodies

 Establish regulations that govern the natural gas extraction process

 Issue well permits

 Enforce regulations Standards Organizations

 Determine best practices and report findings

 Establish testing practices Well Owner

 Responsible for obtaining appropriate well permits from regulatory bodies

 Operate in accordance to governing regulations

 Maintain control of well

 Design of well

 Contract and supervise implementation of service contractors

 Maintain well integrity over lifetime of the well Service Contractor

 Complete drilling plan as specified by well owner

 Complete casing plan as specified by well owner

 Complete cement job as specified by well owner

 Provide testing services specified by well owner Testing Laboratory

 Conduct specified testing services of cement slurries