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Information you need to know regarding hydraulic fracturing and water management

 Scientists have known for many years that unconventional rock formations, including sands and shales, which underlie a large portion of the continental United States, contain a tremendous supply of natural gas and oil. Over the past two decades, significant advances in technologies, including directional and horizontal drilling, as well as hydraulic fracturing, have made these previously inaccessible reserves available and economically viable. Thanks to the discovery of tight sand and shale gas reserves, our country’s supply of natural gas is growing at a very rapid pace. In fact, according to the Energy Information Agency (“EIA”), natural gas reserves have increased 67 percent over the past three years. At this time, it is estimated that the United States have a 100 year supply of natural gas at the current rate of consumption, and that supply continues to grow with new discoveries and technological advancements. Natural gas is now produced in 32 out of 50 states in the U.S., plus it creates jobs in every state of our union – which is more than 2.8 million jobs in total. Step Change is a part of this dynamic industry and is developing natural gas.


Step Change’s exploration and production efforts depend upon the use of hydraulic fracing to enhance production from natural gas and oil wells. This technology involves the injection of fluids that primarily consist of water and sand with a small amount (about 1 to 2 percent) of other additives into a well in order to create fractures in the rock under high pressure that allow natural gas and oil to flow more freely into the wellbore. Almost all of our wells would not be economically viable without the use of hydraulic fracturing to stimulate the production in the formation. Furthermore, as part of Step Change’s ongoing commitment to best practices, we employ “green completions” on 100 percent of the wells we fracture. This operational practice is designed to eliminate the unnecessary venting of natural gas into the atmosphere.


Increased use of natural gas benefits our nation


At this time, most of the oil consumed in the United States is imported from Canada and overseas. Of particular concern is the fact that more than half of the petroleum used in the United States comes from often unstable and unfriendly nations. In contrast, abundant supplies of affordable, domestic, clean burning, and versatile natural gas are available right here in the United States. Also, North America has an extensive pipeline system to serve as a vehicle for safe delivery to the end user. Natural gas is also environmentally-friendly, and increased use of the fuel can help reduce smog, acid rain and greenhouse gas emissions. Furthermore, it creates domestic jobs for U.S. citizens.


Natural gas can benefit commercial business, industrial facilities, but most of all American homes


American home owners, small businesses, and manufacturers will all continue to benefit from increased use of domestically produced natural gas. The residential and commercial sectors comprise more than 110 million homes and five million places of business. The primary uses of natural gas in American homes are space heating, cooling, water heating, and cooking. In commercial buildings the primary uses are lighting, space heating and cooling, and water heating. Natural gas provides clean, versatile, cost- efficient fuel to serve homes and to support small business owners. Natural gas can also be used as a vehicle fuel. Currently, there are proven natural gas technologies available that could allow the U.S. to reduce reliance on foreign oil imports by several million barrels a day. In the U.S. industrial sector, expanded use of domestically-produced natural gas in such applications as blast furnaces, power generation or process heat can reduce emissions and reduce costs, making our nation’s manufacturing more competitive in a global economy.


Step Change believes in employing best available technology


As a matter of good business sense, Step Change strives to implement best available technology (BAT) in all aspects of our operations, including fracing. We recognize that technological innovations are dynamic; therefore, we are always looking for change as we do not accept the status quo. As part of this process, we work closely with our service providers, many of whom are large, international corporations who continuously invest millions of dollars into research and development.


Frequently asked questions


The following information is intended to provide our investors, landowners and community groups a better understanding of Step Change’s operations and our safe use of the hydraulic fracturing process.


What is hydraulic fracturing or “fracing”?


Hydraulic fracturing was originally developed over 70 years ago as a method of enhancing and increasing production in a target zone by opening new flow channels in the rock surrounding a wellbore. Fracing occurs in a controlled environment in which a mixture of fluids comprised primarily of water, sand and a small amount (about 1 to 2 percent) of other additives is pumped into a well at high rate and pressure. As the mixture is forced through perforations in the wellbore into the surrounding rock, the pressure causes the rock to fracture and the sand props the fissures in the rock open. This allows the natural gas or oil to flow more readily through the rock formation in the newly created fractures to the wellbore and up to the surface.


Today’s hydraulic fracturing operations are engineered with sophisticated computer modeling software. These designs ensure that the fractures caused by our operations are contained within the intended rock formation. The actual dimensions, extent, and geometry of the fractures are carefully controlled and monitored by the pump rate, pressure, volume and thickness of the fracturing fluid. Planning our hydraulic fracturing operations in this way allows us to continually improve our approach for future operations. A recently developed technology, known as micro-seismic monitoring, allows us to monitor micro-seismic events associated with hydraulic fracturing in three dimensions and in real time. When applied, micro- seismic monitoring provides a way to evaluate important elements of each hydraulic fracture treatment, such as vertical extent, lateral extent and fracture complexity. This technology uses real time data to confirm that the fractures we are creating are actually occurring in accordance with the specific fracture design and modeling assumptions.