DNV GL Calls for Industry Collaboration to Quantify Fracking Risk

BURLINGTON, Mass., Oct. 16 -- DNV GL issued the following news release:

To address widespread concerns about fracking risks, particularly related to contamination of groundwater, DNV GL invites industry and other stakeholders to a joint industry project (JIP). The aim is to collect data, develop and validate quantitative risk assessment methodologies and outline risk management strategies that can be widely accepted by all relevant parties.

The shale industry encompasses a great number of companies, so aggregated, quantifiable fracking related data is hard to come by. This makes it more difficult for various stakeholders to assess fracking risk at various well depths, geological formations, and mixes of fracking solution components. Risks are mitigated by utilizing various well design barriers that are intended to protect groundwater resources.

DNV GL is proposing to bring together key stakeholders from all over the world: operators, service companies, academics, financiers, regulators and other interested parties. The objective is to collect and analyze shale gas fracking related data, apply statistical methodologies and then define quantitative measures of fracking risk to both horizontal and vertical portions of a well.

"By drawing on a wide range of stakeholders we get the best possible foundation to apply widely accepted methods of risk assessment and risk management," says Rich Green, DNV GL's Director for Unconventional Oil & Gas in North America.

Managing and communicating risk

Controversy and conflict are repeating themes as proponents and opponents debate the extraction of natural gas. Both the facts and interpretations of facts are often in dispute. Quantification of groundwater contamination risk is a natural first step to improve how industry manages and communicates fracking risk. Whether the potential concern is loss of fluids in the fracking zone or through cement failures of wells much closer to the surface, more data are needed to determine the level of risk that may be realized.

"In shale operations, operators have the option of making an informal analysis of fracking risk, or they can analyze the element of risk and uncertainty in a quantitative manner," states Dr. Hamed Hamedifar, who will lead the JIP.

Quantifying fracking risk is also important in countries that are considering entering the shale industry providing stakeholders with an understanding of risks in a more measurable way.

While all exploration and production activities are technically complex, the decentralized nature of shale developments, repeatable nature of operations and large set of stakeholders bring a high visibility to the industry. Land owners, nearby population centers and regulators all have concerns regarding the risks of shale developments. "This means that there has to be a wider inclusion process when determining how fracking risk is measured and quantified," states Rich Green. DNV GL has received positive responses from a wide range of parties including academia, law firms, regulators and others interested in defining fracking risk to all stakeholders.

Initial JIP Meeting

On 11 November 2014, DNV GL will arrange a meeting in its Houston office to formally establish this Joint Industry Project, begin defining a scope of work, determine funding requirements, develop a timeline and define other contributions from the various participants. DNV GL intends phase 1 of the JIP to be finalized by the end of the second quarter of 2015, with a fracking risk quantification methodology and related recommendations for its use and interpretation as deliverables.

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