shale and tight resources
a game changer
In the United States, the industry’s ability to develop natural gas from shale, as well as crude oil from tight rock, has helped trigger an energy renaissance. According to the study America’s New Energy Future, by research company IHS, shale gas and tight oil are contributing to the U.S. economy by creating jobs and driving a rebirth of manufacturing.
Globally, there are more than 7,500 trillion cubic feet of technically recoverable shale gas resources.
There are over 400 billion barrels of shale/tight oil in the world
The amount of recoverable shale gas available is equivalent to about 60 years of the world's current natural gas demand.
where we operate
Chevron holds approximately 472,000 net acres (1,910 sq km) in the Marcellus Shale, one of North America’s largest and richest sources of natural gas from shale. Our interest in the Marcellus run beneath large swaths of Pennsylvania, West Virginia and eastern Ohio.
The company also holds a significant position in the Utica Shale, which lies partially beneath the Marcellus.
In the Permian region (Texas and New Mexico), Chevron holds approximately 1.5 million net acres (6,070 sq km) in the Delaware and Midland basins, where it is developing tight oil and liquids-rich gas shales.
The company also holds shale and tight resource opportunities elsewhere in the midcontinent region, primarily in East Texas and in the Piceance Basin in northwestern Colorado.
In Alberta, Chevron Canada Limited has a 70 percent operated interest in approximately 228,000 net acres (923 sq km) in the liquids-rich Duvernay shale formation, where an extensive appraisal program is under way. At the Horn River and Liard shale basins in British Columbia, the company holds a 50 percent operated interest in 300,000 net acres (1,214 sq km). These significant resources support the proposed Kitimat liquefied natural gas project.
In Argentina, Chevron produces crude oil and natural gas through its wholly owned subsidiary Chevron Argentina S.R.L. The company’s interests include exploration for and development of shale oil and gas resources from the Vaca Muerta formation, located in Neuquén Province. Chevron Argentina S.R.L. holds an 85 percent-owned and operated interest in one concession, covering 94,000 net acres (380 sq km), that has both conventional production and Vaca Muerta Shale potential. Also in the Vaca Muerta Shale formation, another Chevron subsidiary participates in two areas covering 73,000 net acres (294 sq km): the Loma Campana concession and the Narambuena blocks.
According to the U.S. Energy Information Agency, Argentina holds the world’s second-largest shale gas reserves. Vaca Muerta is Argentina’s largest shale gas play, with an estimated 308 trillion cubic feet of dry, wet and associated shale gas resources.
how we operate
Development of natural gas and oil resources from shale and tight rock involves a number of steps. These include obtaining permission to drill from the landowner and government, constructing a temporary drilling site, and using a rig to drill the well. A key aspect of releasing the resources from the rock formations is the use of hydraulic fracturing (commonly known as "fracking"), which involves injecting water, sand and a small amount of chemical additives under pressure to crack the rock and release the trapped oil and gas. By combining this process with horizontal drilling, more of the resource can be reached with fewer wells and less earth disturbance. Once drilling and completions processes are complete, the well is ready to produce oil or natural gas or both for decades. Chevron monitors the well throughout its life to verify integrity and when the well stops producing, the land is restored to its natural state. The development steps described here reflect Chevron’s operations that produce natural gas in the Marcellus Shale. Similar activities occur in producing shale gas and tight oil from other Chevron operations, including the Permian Basin.
signing leases and securing permits
Before exploration begins, Chevron works with governments, local authorities and landowners to obtain leases and permissions. We conduct environmental, social and health studies to identify potential impacts of our operations. This includes assessing and planning the location of well pads, access roads and facilities to reduce potential impacts on the environment. Studies, assessments and the securing of permits may continue throughout the life of the well.
gathering seismic data
Seismic imaging is a tool that helps us understand what lies beneath the earth’s surface by bouncing sound waves off underground rock structures to build a picture of the subsurface rock formations and determine if they contain oil or gas. Seismologists use seismic trucks to generate sound waves and ultrasensitive devices called geophones to record how the sound waves echo within the earth. By studying the echoes, earth scientists try to determine the best location to place the well in the shale rock. Seismic imaging also helps well-site teams optimize drilling before it starts. Seismic data collection requires permits by regulators. It can take between six months and one year to study the data.
constructing the well site
Once we have identified which locations might contain natural gas and permits are secured, we build a well site. These sites, called well pads, vary in size, and we work to build pads as small as possible. By drilling multiple wells from one well pad, we minimize land use and the number of roads needed to the site.
drilling the well
With the well site complete, a drilling rig is erected. A well is drilled, usually vertically, until it reaches the target rock. This can be as deep as 3 miles (4.8 km) below the surface. Depending on the shale play basin and the well objective (e.g., appraisal vs. development), a decision will be made whether to complete the vertical target section (e.g., by fracturing stimulation) or to continue drilling as a horizontal well, in which case the rig then drills horizontally 2,000 to 6,000 feet (610 to 1,829 m) outward into the layer of shale rock. Wells are lined with multiple layers of steel casing and cement to isolate the gas, oil and fluids and protect the environment. If the drilling results are not encouraging, the hole is plugged and the site is restored. If we find clear evidence of substantial natural gas, we may continue drilling and plan for testing.
Hydraulic fracturing (also known as "fracking") is a common practice in oil and natural gas development - 90 percent of oil and gas wells in the United States undergo fracturing to stimulate production. It has been used since the 1940s in more than 1 million wells in the United States and more than 2 million wells globally. In hydraulic fracturing, a fluid generally composed of more than 99 percent water and sand and less than 1 percent chemical additives is pumped down the well at a high pressure for a short period of time. This creates a network of cracks in the rock that allows trapped natural gas to flow to the well. The sand helps keep the fractures open and gas flowing. In Chevron’s Marcellus operations, hydraulic fracturing is performed in sections along the length of the horizontal well. The entire process takes five to seven days per well.
building natural gas pipelines
Once a well has been completed, it is ready to produce natural gas for market. A pipeline is installed from the new well to an existing pipeline system that will take the natural gas to market, where it will be used for electrical generation, heat for homes and chemical feedstock.
remediating the drilling site
It takes approximately a year to build the well site and drill and complete the well. After the process is complete, we restore the land in accordance with an approved plan with minimal impact to its original contours. Throughout the well development process, regulatory agencies ensure compliance through regular inspections.
producing natural gas for decades
After the well site has been restored, the remaining footprint includes a wellhead, a gas processing unit, and one or two water tanks. Natural gas wells that produce from shale rock are expected to have a long production life, spanning several decades. A valuable source of energy for homes and businesses, vehicles, power generation, and other industrial processes, natural gas production brings social as well as economic benefits.
Wells that stop producing and exploration wells that are of no further use are plugged with cement and the equipment is removed. Reclamation takes place during the final months of each well and up to a year beyond. At the end of a well's 40- to 50-year life, the site is fully restored.
certification, which recognizes our environmentally sound practices. The CRSD is an unprecedented collaboration built on constructive engagement among environmental organizations, philanthropic foundations and energy companies from across the Appalachian Basin who share the objective of advancing the industry’s operational performance through technological innovation and the sharing of best practices. Chevron was recertified in October 2016. Read our most recent CRSD report.
Technology is essential to identifying, developing and producing shale reservoirs. We have a technology unit focused exclusively on solving the technical challenges of shale and tight rock formations.
addressing the issues
Keeping people safe and protecting the environment are Chevron core values. We share the public's expectation that the energy we need will be produced safely and reliably. Decisions for all our shale and tight oil and gas operations are guided by Chevron’s Operational Excellence Management System, a systematic and risk-based approach to identifying, assessing and managing personal safety and health, process safety, the environment, reliability and efficiency. We employ a systematic approach to environmental stewardship that includes rigorous standards and processes. We know that public confidence in our operations is essential to our success. We engage communities where we live and operate to learn about local concerns, share information and minimize potential impacts of our activities.
well integrity and protecting groundwater
We take steps to protect groundwater during hydraulic fracturing and over the life of the well. Our wells have multiple layers of steel casing and cement that form a continuous barrier between the well and the surrounding formations. We perform pressure tests to ensure the well’s integrity, and conduct monitoring and various tests over the life of the well, which may include cement evaluation logs, temperature, acoustic or ultrasonic measures, to verify long-term integrity. Because fracturing is done thousands of feet beneath the groundwater aquifer, the potential for cracks to leak gas or fracturing fluids into groundwater is extremely low. For example, micro-seismic surveys of shale gas wells in the eastern United States show that fractures are separated from groundwater by more than a mile of rock - a distance as deep as the Grand Canyon.
We use pre-drilling and planning activities to identify areas of potential environmental, geologic or archaeological sensitivity. Such activities may include assessing the subsurface geology to identify and mitigate risks associated with groundwater aquifers, faults and geological pathways, historical wells in the area and shallow gas reservoirs.
Fresh water is a precious resource. Chevron is committed to responsible water use and strives to reduce the amount of fresh water used in our hydraulic fracturing operations. In the Permian Basin, we are endeavoring to use deeper aquifers that contain brackish water not suitable for human consumption or agricultural usage. During hydraulic fracturing in our Marcellus Shale operations, we have the capability to recycle nearly 100 percent of our flowback and produced water. We also build pipelines that deliver water to our well pads, reducing the number of water trucks on nearby roadways.
We are committed to protecting air quality by reducing emissions from our shale and tight oil and gas operations. We design and construct our wells to operate reliably and minimize emissions. We verify and maintain asset integrity through regular inspection and maintenance programs.
Chevron and the industry have worked for years with governments and other stakeholders to develop programs that encourage the industry to reduce natural gas leaks and improve operational efficiencies. Learn more about what Chevron is doing to manage emissions.
hydraulic fracturing and disclosure
Hydraulic fracturing has been in use since the 1940s. Today, nearly half the oil produced in the U.S. and two-thirds of U.S. natural gas production comes from wells that have undergone hydraulic fracturing. Water and sand constitute more than 99 percent of fracturing fluid. The remaining 1 percent consists of a small number of chemicals added to improve the efficiency and effectiveness of fracturing. Some of these same substances can also be found in food and beverages.
We support giving the public access to information related to chemicals used in hydraulic fracturing. Chevron discloses vendor-provided information concerning the chemicals used in its hydraulically fractured wells in the United States at FracFocus.org and in Canada at www.FracFocus.ca. Safety Data Sheet level-only information is provided to Frac Focus. Some Frac Focus reports may exclude chemical ingredients that are considered proprietary by the vendors supplying them. In addition, Chevron complies with all laws that require disclosure and reporting to specific governmental agency databases.
We are committed to safely and responsibly managing fracturing fluids, flowback and produced water. After the hydraulic fracturing process is complete and the well begins to produce natural gas or oil, a portion of the water used during the fracturing process flows back to the surface. This water is stored temporarily in lined pits or steel tanks until it is either recycled, reused in future fracturing jobs or injected into disposal wells permitted and regulated for that purpose.
Naturally occurring radioactive material (NORM) is found in some subsurface formations, and may be brought to the surface during drilling and production operations. When Chevron encounters NORM, we take steps to measure, track and dispose of it responsibly, in compliance with applicable regulations.
Induced seismicity has long been a low, but recognized risk of underground fluid disposal wells, one of the ways that the oil and gas industry disposes of produced water, which is the water that is brought to the surface when extracting oil and natural gas. When properly planned, operated, and monitored, fluid disposal wells are safe. In the U.S., these wells have been used since the 1930s and are regulated by the U.S. EPA and states.
The possibility of hydraulic fracturing causing induced seismic events felt at the earth’s surface is rare. Energy from the process is usually not sufficiently large enough to cause such an occurrence, according to reports by the U.S. Geological Survey, National Academy of Sciences and the American Association of Petroleum Geologists. Experts at these organizations concluded that any micro-seismic events from hydraulic fracturing are generally too small to present safety concerns.
Where appropriate, we closely monitor our operations using technologies such as acoustic sensors, tracers, and seismic monitoring networks to validate our well design parameters. Additionally, Chevron is working with academic institutions, including the Stanford Center for Induced and Triggered Seismicity, the Texas Bureau of Economic Geology Center for Integrated Seismicity Research and the University of Calgary, to improve our understanding of induced seismicity and to identify ways to reduce potential risks.
chevron in the marcellus
Chevron is one of the largest leaseholders in the Marcellus Shale, with approximately 472,000 net acres of leases. One of North America’s largest and richest sources of natural gas from shale, the Marcellus runs beneath large swaths of New York, Pennsylvania, West Virginia and eastern Ohio and dips into neighboring states.
Developing Marcellus energy has substantial economic benefits throughout the region. According to the Pennsylvania Public Utility Commission, impact fees generated a record $224.5 million for the state in 2013. From 2011 through 2013, these impact fees - paid to local governments for public projects, such as bridges, roads and firefighting equipment -generated more than $630 million. These fees are in addition to billions of dollars from taxes and royalty payments and local jobs created directly or indirectly by natural gas development.