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HomeMy WebLinkAboutAgenda - 04-17-2012 - 4c 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: April 17, 2012 Action Agenda Item No. 4 -c SUBJECT: Draft Resolution Regarding Hydraulic Fracturing in North Carolina DEPARTMENT: Environment, Agriculture, PUBLIC HEARING: (Y/N) No Parks and Recreation (DEAPR) ATTACHMENTS: IINFORMATION CONTACTS: 1. Map of Triassic Basins in NC David Stancil, 245-2510 2. NC Geological Survey publication Thomas Davis, 245-2513 3. Draft Resolution Regarding Shale Rich Shaw, 245-2514 Gas Development in North Carolina PURPOSE: To consider a draft resolution regarding the potential extraction of shale gas resources in North Carolina. BACKGROUND: Recent developments in technology have greatly increased the interest in the drilling and extraction of formerly unrecoverable deposits of natural gas. Horizontal drilling and hydraulic fracturing ("fracking") are now routinely used to extract natural gas from geologic deposits that have not traditionally been utilized for the recovery of oil and natural gas. In North Carolina, there has been a substantial increase in interest in the organic rich deposits located in the Deep River Basin and the Dan River Basin (known as Triassic Basins) shown on Attachment 1. A small portion of Orange County is located in the Deep River Basin. The Cumnock Formation, an organic rich shale unit located in the Sanford Sub-Basin of the Deep River Basin, is a deposit that is known to contain natural gas, possibly in sufficient quantity to be of interest to companies that could utilize fracking and horizontal drilling to recover this gas. Attachment 2 is a publication of the NC Geological Survey discussing the shale gas potential of the Deep River Basin in Chatham and Lee counties. This publication provides more details concerning the potential gas resources of the Cumnock Formation in the Sanford sub-basin. At this time, little data appears to exist concerning the extent of the Cumnock Formation, or its equivalent, in the Durham sub-basin, which extends into Orange and Durham counties. The NC Department of Environment and Natural Resources (DENR) recently released a draft report concerning possible oil and gas development in North Carolina. This report detailed the near complete lack of petroleum exploration and development activities in North Carolina to date, and as a result, the current lack of state-level regulations that would apply to many of the activities used in the recovery of natural gas by fracking and horizontal drilling, both of which are currently illegal in North Carolina. It is expected that the NC General Assembly will begin to discuss oil shale development during the upcoming 2012 session. The draft DENR report 2 details the many shortcomings in current state level regulations that would apply to fracking, horizontal drilling, and other activities that would occur if shale gas extraction were allowed in North Carolina. Attachment 3 is a draft resolution concerning Shale Gas Development in North Carolina. FINANCIAL IMPACT: None at the current time. If fracking begins in the Deep River Basin, financial and societal impacts could be incurred by Orange County. RECOMMENDATION(S): The Manager recommends that the Board consider and discuss the attached draft resolution. 3 Attachment 1 . Triassic Basins of North Carolina. Triassic Basiris of North Carolina t �,Cbkes t= ockingtwrn Person � 1, r _ , rsy sh Guilford 1 i-ran k- t � lin doll Va kt: Chatham Johnston fFtt,�rtt, Moore� alo'tt Narrnkc-fi St nly" txrroiy IMP lenburr f:r rr t rt, rx Richrrr_ d Hoke taGt:�4 or,0 [fan river Basin Robeson 6,ad n - -- Creep River Basin f1l Shale Gas Potential in Triassic Strata of the Deep River Basin, Lee and Chatham Counties North Carolina with pipeline and infrastructure data I r � Z_ Fig. 1. Map showing the distribution of Mesozoic basins in the eastern United States (from Robinson and Froelich, 1985). Lee and Chatham counties are located inside the red box. Suggested citation: Reid, Jeffrey C., and Taylor, Kenneth, B., 2009, Shale gas potential in Triassic strata of the Deep River Basin, Lee and Chatham counties, N.C. with pipeline and infrastructure data: North Carolina Geological Survey, Open -file report sVU:Nre' W.d-b. s"1ba 2009 -01, 2 p. 50 Miles Fig. 2. Map showing the distribution of Mesozoic basins in North Carolina (from ® Reid and Milici, 2008). Blue Ridge Piedmont Coastal Plain Triassic basins The Deep River Basin is a 150 -mile long northeast - trending half - graben with a steeply- dipping eastern border fault in central North Carolina (Fig. 1 and 2). The basin is divided into three sub - basins, which are named (from north to south) the Durham sub - basin, the Sanford sub -basin and the Wadesboro sub - basin. The three sub - basins are filled with 7,000 feet of Triassic strata, which are divided into the following three formations in descending stratigraphic order (Figs. 3 and 4): (1) Sanford Formation (red and gray siltstone and shale); (2) Cumnock Formation (black shale, with some beds of gray shale, sandstone and coal); and (3) Pekin Formation (gray sandstone and shale). The Cumnock Formation includes a —800 foot thick interval of Upper Triassic (Carnian) organic -rich black shale. This shale extends across 25,000 acres, at depths of less than 3,000 feet in the Sanford sub - basin, Lee and Chatham counties. Organic geochemistry and thermal maturation analyses indicate that the black shale in the Cumnock Formation is gas - prone, and that values of total organic carbon (TOC) exceed 1.4 percent in places. The Cumnock Formation contains systematic fractures that are observable in outcrop, in drill cores and on 1:24,000 -scale geologic maps superimposed on LiDAR data. The primary fractures trend northwest, whereas the conjugate fractures trend northeast. In some places along the west side of the basin, the primary fractures are filled with diabase dikes (that locally heated the Cumnock Formation), although mapping in underground coal mines (now closed) has shown that the diabase dikes do not extend far into the basin. Six of the 28 wells (including old coal holes) that have been drilled in the Cumnock Formation have reported natural gas and oil shows, and two shut -in wells have reported pressures of 900 psi and 300 psi. One of these shut -in wells (Butler #3) is located within 3.5 miles of a six -inch natural gas distribution line to an industrial park with large volume gas users (Fig. 5). Well drilling preceded acquisition of —75 miles of seismic lines that provide 3 -D control in the Sanford sub -basin and parts of the Durham sub - basin. Deeper parts of the Sanford sub -basin are unexplored. Preliminary seismic interpretation suggests multiple stratigraphic and /or structural targets. In the Deep River Basin, many families sold the mineral rights to their property to pay for taxes during the Great Depression, and significant underground coal mining occurred during the 1930s. Information on mineral rights and deed transfers may be found using online county land records. The North Carolina oil and gas law may be viewed online at the following Web site: http: / /www.ncleg.net (see short cut to General Statutes). Additional information on natural gas and oil, and permitting in North Carolina, may be found in N.C. Geological Survey Information Circular 36, available online at: ww_w.geology.enr. state. nc.us (see 'Publications' at that URL). Seismic data, drill cores, cuttings, well logs and other data from the Deep River Basin may be examined at the facilities of the North Carolina Geological Survey in Raleigh, N.C. See contact information on the next page. P Age C t3 L R U Deev River basin Dan River basin . conglomerate, sandstone, and mudslone Sub - basins Conglomerate, fanglomerate, sandstone, and mudslone Fig. 3. Generalized stratigraphy of the Deep River and Wadesboro lSanfofd Durham in the Dan River basin (from Reid and Milici, 2008). � d Z) Industrial Park,' SaWord Sanford Stoneville O • �i Al FoZbon Formation Butler #3 Formation tad r,. • G\jO .. � a tp7 Z?, a Simpson #1 5aa t- ° °9r W � O ' t°uenteitl Cumnock Cumnock Cow Branch Q7 Cumrvrch Formation Formation Formation al G.1fc lbH— - - - Ym .c a' L U Pekin Pekin Pekin ❑ Pine Hall W Formation Formation Formation Formation 2 NW P. a,,,,,,�,. _ SANFORD SUB -BASIN OF THE DEEP RIVER BASIN vertical Scale n horizontal scale Sinn NW Mostly fluvial tell am broom B ciasbc rocks t-�-� Lacusvma gray and black u fine -gralnad cla5llc rocks Rod, hrnwn, and pray conglomerate and sandstone Mapr normal faults . conglomerate, sandstone, and mudslone Sandstone. mudstone, coal, and carbonaceous shale Gray mudslone and sandstone, with thin coal beds Conglomerate, fanglomerate, sandstone, and mudslone Fig. 3. Generalized stratigraphy of the Deep River and Dan River basins showing the stratigraphic position of the Triassic Cumnock Formation in the Deep River basin and the stratigraphically equivalent Cow Branch Formation in the Dan River basin (from Reid and Milici, 2008). � NW P. a,,,,,,�,. _ SANFORD SUB -BASIN OF THE DEEP RIVER BASIN vertical Scale n horizontal scale Sinn NW Mostly fluvial tell am broom B ciasbc rocks t-�-� Lacusvma gray and black u fine -gralnad cla5llc rocks Rod, hrnwn, and pray conglomerate and sandstone Mapr normal faults Fig. 5. Detailed map of part of Lee and Chatham counties, showing the city of Sanford and the locations of several brick kilns within about 4 miles of shut -in and previously drilled wells (map from National Pipeline System). Natural gas distribution line is shown as a green line and the regional transmission line is shown in red. The Butler #3 well is located within 3.5 miles of a six - inch natural gas distribution line (green) with a four -inch feeder line and multiple large gas users. References and additional information SE Olson, P.E., A.J. Froelich, D.L. Daniels, J.P. Smoot and P.J.W. Gore (1991) Rift Basins of Early A' Mesozoic Age in Horton, Jr., J.W. and V.A. Zullo (ed.) (1991). Geology of the Carolinas: Carolina Geological Society Fiftieth Anniversary Volume, Univ. of Tennessee Press, Knoxville. DAN RIVER BASIN zone Cow Branch Formabon e Farmatbn Pin O Hall IFormaton Air SE Fig. 4. Stratigraphic cross sections through the Sanford sub -basin of the Deep River Basin and Dan River Basin (adapted from Olson et a /., 1991). Robinson, G.R. and A.J. Froelich (1985). Proceedings of the Second U.S. Geological Survey workshop on the early Mesozoic basins of the Eastern United States, USGS Circular 946.. Reid, Jeffrey C. and Robert Milici (2008). Hydrocarbon Source Rocks in the Deep River and Dan River Triassic Basins, North Carolina, United States Geological Survey Open File Report 2008- 1108 -- see URL: http : / /pubs.usgs.gov /of/200811108/ Reid, J.C. and K.B. Taylor (2008). Tools to evaluate the hydrocarbon potential of the Mesozoic Basins, North Carolina, USA, American Association of Petroleum Geologists Eastern Section Abstracts with Program — see URL: http: / /www.searchanddiscovery. net /abstracts /html/ 2008 / eastern - pittsburgh /abstracts /reid. htm Reid, Jeffrey C. (2009). Natural Gas and Oil in North Carolina, N.C. Geological Surrey Information Circular 36 - Includes drilling regulations and permitting details — see URL: http : / /www.geology.enr.state.nc. us/ pubs /PDF /NCGS_IC- 36_Oil— and_Gas. pdf Contacts: Jeffrey C. Reid or Kenneth B. Taylor North Carolina Geological Survey (NCGS) ' 1612 Mail Service Center, Raleigh, North Carolina 27699 -1612 N,C. E -mail: jeff.reid(a)ncdenr.pov, kenneth.b.taylor(a)ncdenr.gov Voice: (919) 733 -2423 Internet: http : / /www.cieology.enr.state.nc.us Cr a Deep Rilrer r , lee County � Industrial Park,' F • �i Al Butler #3 rr+j tad r,. • G\jO .. tp7 Z?, Simpson #1 5aa t- ° °9r Carbonton Rd Z ' t°uenteitl Oco2ml Fig. 5. Detailed map of part of Lee and Chatham counties, showing the city of Sanford and the locations of several brick kilns within about 4 miles of shut -in and previously drilled wells (map from National Pipeline System). Natural gas distribution line is shown as a green line and the regional transmission line is shown in red. The Butler #3 well is located within 3.5 miles of a six - inch natural gas distribution line (green) with a four -inch feeder line and multiple large gas users. References and additional information SE Olson, P.E., A.J. Froelich, D.L. Daniels, J.P. Smoot and P.J.W. Gore (1991) Rift Basins of Early A' Mesozoic Age in Horton, Jr., J.W. and V.A. Zullo (ed.) (1991). Geology of the Carolinas: Carolina Geological Society Fiftieth Anniversary Volume, Univ. of Tennessee Press, Knoxville. DAN RIVER BASIN zone Cow Branch Formabon e Farmatbn Pin O Hall IFormaton Air SE Fig. 4. Stratigraphic cross sections through the Sanford sub -basin of the Deep River Basin and Dan River Basin (adapted from Olson et a /., 1991). Robinson, G.R. and A.J. Froelich (1985). Proceedings of the Second U.S. Geological Survey workshop on the early Mesozoic basins of the Eastern United States, USGS Circular 946.. Reid, Jeffrey C. and Robert Milici (2008). Hydrocarbon Source Rocks in the Deep River and Dan River Triassic Basins, North Carolina, United States Geological Survey Open File Report 2008- 1108 -- see URL: http : / /pubs.usgs.gov /of/200811108/ Reid, J.C. and K.B. Taylor (2008). Tools to evaluate the hydrocarbon potential of the Mesozoic Basins, North Carolina, USA, American Association of Petroleum Geologists Eastern Section Abstracts with Program — see URL: http: / /www.searchanddiscovery. net /abstracts /html/ 2008 / eastern - pittsburgh /abstracts /reid. htm Reid, Jeffrey C. (2009). Natural Gas and Oil in North Carolina, N.C. Geological Surrey Information Circular 36 - Includes drilling regulations and permitting details — see URL: http : / /www.geology.enr.state.nc. us/ pubs /PDF /NCGS_IC- 36_Oil— and_Gas. pdf Contacts: Jeffrey C. Reid or Kenneth B. Taylor North Carolina Geological Survey (NCGS) ' 1612 Mail Service Center, Raleigh, North Carolina 27699 -1612 N,C. E -mail: jeff.reid(a)ncdenr.pov, kenneth.b.taylor(a)ncdenr.gov Voice: (919) 733 -2423 Internet: http : / /www.cieology.enr.state.nc.us Cr DRAFT R01a- 039 s ORANGE COUNTY BOARD OF COMMISSIONERS RESOLUTION Shale Gas Development in North Carolina WHEREAS, the organic-rich shale deposits located in the Triassic Basins of North Carolina appear to contain potentially significant quantities of natural gas; and WHEREAS, a portion of Orange County is located in the Durham sub-basin of the Deep River Basin of Triassic age; and WHEREAS, North Carolina has historically had essentially no history of oil or gas exploration and development, and neither horizontal drilling or well fracturing are currently allowed in North Carolina; and WHEREAS, potential exists for the contamination of scarce surface water and groundwater resources, given some of the materials and procedures that are utilized to recover natural gas from deposits that were formerly unrecoverable; and WHEREAS, millions of gallons of water are routinely used for the hydraulic fracturing of each natural gas well, and the resulting wastewater, which typically contains elevated concentrations of salts, metals and other compounds, possibly including naturally occurring radioactive materials, must be disposed of properly; and WHEREAS, Orange County continues to participate in regional efforts to protect surface water resources, as well as plan for the utilization of these resources, throughout the Triangle region in a cooperative, safe, and sustainable manner; and WHEREAS, the lack of experience and regulatory protections in North Carolina means that several aspects of these practices must be thoroughly studied in order to develop the adequate and appropriate regulations that must be in effect to safely permit the exploitation of shale gas resources in North Carolina; NOW, THEREFORE, BE IT RESOLVED, that the Orange County Board of Commissioners does hereby urge the North Carolina General Assembly to maintain existing laws and regulations that prevent the use of horizontal drilling and hydraulic fracturing in the State and to take no action that would weaken these laws and regulations before it is fully demonstrated that North Carolina public health, waters, land, air, economy, and quality of life can be protected from impacts that may occur by allowing the development of shale gas resources in the state. This the 17th day of April, 2012. Bernadette Pelissier, Chair Orange County Board of Commissioners Donna Baker, Clerk to the Board