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NATURAL GAS RESOURCES FROM UNCONVENTIONAL FIELDS

- POTENTIAL AND RECOVERY


- - ABSTRACT-

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CONTENTS



INTRODUCTION........................................................................................................................................3

1. BRIEF HISTORY OF THE OIL AND GAS INDUSTRY IN ROMANIA..5
2. NCONVENTIONAL ENERGY RESOURCES
POTENTIAL AND RECOVERY..............................................................................................................7

3. SPECIFIC EQUIPMENT, TECHNIQUES AND TECHNOLOGIES FOR DRILLING,
COMPLETION AND OPERATION OF THE WELLS FOR UNCONVENTIONAL GAS
FORMATIONS..................................................................................................................................................14

4. OIL OPERATIONS ASSOCIATED TO
UNCONVENTIONAL GASES AND POTENTIAL ENVIRONMENTAL IMPACT................................16

5. ECONOMIC IMPACT OF
NATURAL AND UNCONVENTIONAL GAS RESOURCES IN ROMANIA, AT
NATIONAL AND LOCAL LEVEL........................................................................................................25

6. LEGAL FRAMEWORK APPLICABLE TO THE RECOVERY OF GAS RESOURCES
FROM UNCONVENTIONAL DEPOSITS......28

7. CONCLUSIONS AND RECOMMENDATIONS.30


ANNEX A - LIST OF AUTHORS ..36

























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INTRODUCTION


For the readers of this paper who are less familiar with the role of the Romanian National Committee for the
World Energy Council (RNC - WEC) in the energy sector in Romania, we would like to mention thefollowing:
- RNC-WEC was established in 1924 and is a founding member of the World Energy Council, an
organisation with global reach that is actively involved in developing strategies in the field of energy, and
an important international forum involved in the development of the energy sector and in the creation of a
framework for the active exchange of information and opinions through symposia, conferences,
exhibitions and publications (its own and/or those of partners);
- RNC-WEC, through more than 150 member entities and 40 honorary members, important personalities
from thefield of energy, is actively involved in developing strategies and policies on energy, including on
fuel mineral resources, that are made available to policy makers for professional purposes, for the
development of the legal implementation framework;
- the analysis, during the monthly meetings of the Board of RNC-WEC, of the urgent issues in the field of
energy, the publication, in the "Energy Bulletin", a monthly newsletter, of original scientific articles and
translations, presenting news in the energy and environment field;
- the organisation, every two years, of "FOREN, the Regional Energy Forum", a prestigious regional
manifestation, which includes events dedicated to conventional and unconventional energy resources.

An important element in the development of strategies in the energy sector is the assessment of the current
situation. An important conclusion of the specialists in the field of energy resources (fossil fuels) is that
Romania's current reserves of oil and gas will run out in the next 25-30 years, if the current level of extraction and
consumption is maintained. However, during this period, the production (extraction of fuel mineral resources)
shall decline steadily, which will lead to an increased dependence on imports and, inherently, to higher prices.




One of the findings is that the assessment of the potential of the country for the discovery of new fossil fuel
resources to replace the natural gas reserves, which will soon be depleted, is the necessity and the obligation that
the current generation has, at themoment, to provide energy for future generations.

The emergence of new global, albeit controversial opportunities, represented by therecovery of unconventional
gas, in general, and of shale gas in particular was bound to attract the attention of the RNC-WEC, an organisation
actively involved in the analysis of medium- and long-term development strategies of the energy-environment
sector in Romania, including, implicitly and necessarily, thefuel mineral resources.

RNC-WEC has therefore decided to draft a report on the potential and possibilities of capitalising Romania's
natural gas resources from unconventional deposits, having regard to:
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- Romania has favourable indications of unconventional gas resources, associated with argillaceous
formations known for their potential to generate hydrocarbons (shale gas), from coal beds (CBM) or
sandstones with low yield capacity without stimulation methods, by hydraulic fracturing (tight gas).
- the levels achieved in the recovery of unconventional gases, particularly of shale gas in the U.S., the
pioneer of this activity, which covers over 30% of the domestic consumption, converted the U.S.
(previously an importer) into an exporter of natural gas, leading to aprice decrease by over 50% in 10
years (!);

The opportunity to assess this new resource is given by the favourable geological perspectives of the oil and gas
basins of our country, in conjunction with over 150 years of experience in the Romanian oil sector and with the
worldwide development of technologies that ensure the conduct of the activities related to the extraction of
unconventional gas with acceptable levels of risk.

The need to evaluate the potential of this new source, able to replace the natural gas reserves, which shall be
exhausted by mining in the next 20-25 years, is also related to:
a) theneed to reduce dependency on imported gas;
b) the reduction of the social effects resulting from the increase in gas prices over acceptable levels,
compared with the average income of the population, and the rising unemployment among skilled workers in the
oil sector, by the gradual closing down of existing mining facilities.

We aim, in this introductory chapter, to answer a frequently asked question by people less familiar with the oil
field: "What is unconventional gas?" In short, this new sub-category of the unconventional gases is
included in the broader gas category, has an identical chemical composition, but what sets it apart are details
related to their genesis, type of deposits, trap type, lithology and permeability of collecting channels, and mining
technology.

The need to assess the country's unconventional gas resources, the disputes and controversies arising from the
civil society and from the population have caused RNC-WEC to draw up a report, to be used to present qualified
points of view on unconventional gas recovery, to be made available to the authorities, to the media, to the NGOs
and the stakeholders.

This report is a first step in an ambitious future project: the creati on of a regi onal centre for unconventional
gases called the European Centre for Excellence in the fiel d of Natural Gas from gas-bearing cl ays
CENTGAS through:
establishing international partnerships between CENTGAS and equivalent or relevant entities around the
world
creating and continuously updating, together with international partners, an information resourcecentre,
representative for Europe, in the field of general and specific geological conditions, of the available
technologies and best practices, experiencein managing the social and environmental impact, economic
models that apply to the development of natural gas from gas-bearing clays, general or specific
legislation.

For this report, CENTGAS has assembled a team formed of 43 speci alists, listed in Appendix A, from the
academic field, from research institutes, people with vas experience and long-term activity in the oil and
geosciences fields.
In the kick-off meeting of the report drafting process, held on 12 - 14 October 2012, that was attended by the
majority of themembers of the selected team, it was decided that thereport should have a 5-module structure,
covering key aspects of the shale gas potential and recovery evaluation. The activity of these teams is shown
below:
- the assessment of geol ogical perspecti ves, analysing the generating potential of unconventional gases, in
their various presentations, as shale gas, CBM, tight gas and gas hydrates in the main oil basins of
Romania, in the mainland and maritimeareas;
- the presentati on of the existing technol ogies, with a focus on new technologies whose application
reduces the risk of technical accidents to acceptable levels, lower than those of the classical technologies,
applied in the mining of conventional hydrocarbons;
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- the objecti ve assessment of the possi ble impact on vari ous envi ronmental factors (water, soil, air,
seismicity, noise, etc.) with the presentation of the possibility to reduce impact to acceptable levels via
technical measures and activity monitoring;
- the presentati on of the main economi c, social and politi cal advantages, the latter due to ensuring the
country's energy independence, no longer depending on imported gas;
- the presentati on of the appli cable primary oil and envi ronmental legislation, of the compatibility
with the European legislation and the emphasis on the need to supplement the secondary legislation
(technical instructions, rules, regulations on activity monitoring and control, implementation of good
practice rules established by the international practices in the field of the recovery of unconventional
gases).

The activity of the teams, assembled for each module, covered about 9 months and resulted in thedevelopment of
a comprehensive report of about 400 pages, with specialised terminology, aimed at oil and geosciences
specialists. The paper is not confidential, it will be made available at the offices of the RNC-WEC and will be
transmitted upon request, in digital format or printed (provided that a reproduction fee is paid) to the legal entities
concerned.

Based on thecomprehensivereport, an abstract of about 100 pages was prepared, with a wider target audience,
which is posted on the RNC-WEC website www.cnr-cme.ro and which will be submitted to thecentral and local
stakeholders.

In order to target a wider audience and to facilitate the easier browsing and understanding of the information, this
summary of 35 pages was also developed and posted on the website of the RNC-WEC; it was al so partially
published in the "Energy Bulletin" and made available in scientific events organised either by RNC-WEC or in
partnership with other entities.

Thank you for your interest in the issue of unconventional gases.

RNC-WEC and the staff of CENTGAS




1. BRIEF HISTORY OF THE OIL AND GAS INDUSTRY IN ROMANIA
Romania has over 150 years of experience in the oil industry and of over 100 years in the natural gas industry, in all
the specific and support sectors of activity thereof.
According to historical and archaeological evidence, be it direct or indirect, oil was used on the territory of the
country from the 1st century A.D. for various purposes (as medicine, lubricant, to seal wooden boats, as fuel, for the
construction of houses and walls etc.). In contrast, since the 15th - 16th century and until the middle of the 19th
century, there is more evidence and information regarding the existence, processing, use and export of crude oil
(called by the locals "heavy fuel oil"), both in Moldova and Munteniaetc.
During the years 1857 - 1918, we witness the formation and affirmation of the oil industry in Romania. The year
1857 is considered the official birth year of the Romanian oil industry, as Romania (the United Principalities)
witnessed, for the first time in the world, three outstanding events, namely: it was the first country in the world to be
officially recorded in the world statistics with a production of 275 tons of crude oil; the first oil refinery in the world
st art s it s act ivity in Rfov, near Ploiet i, and t he city of Bucharest , the capit al cit y, becomes the first city in the world
to have street lighting that used burning oil. During this period, a series of great achievements occurred in all the
sectors of this industry, i.e. geology, drilling wells, crude oil recovery, oil transportation and processing, tools and
equipment, training of specialists, laws etc. As a result, the crude oil production increased continuously, reachinga
record of 1,883,619 tons (in 1913) and a refining capacity of over 1,800,000 t/year (in 1916), Romania being the
sixth oil producer in the world.
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As regards natural gases, 1909 marks the discovery of the first deposit on the current territory of Romania, in
Srmel, Sibi u Count y, and as a result t he year 1909 is considered the official birth year of t he Romanian nat ural
gas industry, even if it was discovered and used earlier (1865 - 1900) in the areas in which crude oil was extracted.
During this period, Romania has important achievements in the field of natural gas, some of them European or world
premieres. During the first World War, the Romanian oil and gas industry faced significant losses due to the
destruction/self-destruction of numerous wells, refineries, tanks, pipelines, oil products, buildings and plants, etc.
The years 1918-1943 are the maturity era of the oil and gas industry in Romania. After the war, the recovery of the
Romanian oil industry took about 6 years (until 1924), and the re-launching started in 1925-1926, as a result of the
Mining Law adopted in 1924. It must be noted that general crude oil production increased from 2,316,304 t in
1925 to 8,704,000 t in 1936, the maximum inter-war production (ranking second in Europe and sixth worldwide),
and the refining capacity has also increased markedly, from approx. 1,650,000 t in 1924 to 10,600,000t in 1939 -
1940. As regards natural gas, after the completion of the Unification of the Romanian State, the companies
operating in the field of methane gas in Transylvania were seized and afterwards they became the property of the
Romanian state. The Romanian gas deposits were estimated to be the most significant in Europe, both in terms of
production volume and in terms of purity (up to 99.5%). In 1938, Romania ranked third worldwide in terms of
natural gas production with a share of 17% of the worldwide output.
World War II occurred in the period 1939-1945, and it involved many countries, including Romania. It must be
mentioned that the Romanian oil, extracted during 1940-1944 represented the main source of fuel for the powers of
t he Axis, as well as t he fact t hat the cit y of Ploieti and the Prahova area suffered many damages in terms of the oil
industry, as a result of thebombings of the allied forces in 1943-1944.
Theyears 1945-1989 marked thegreatest development of theRomanian oil and gas industry, in all the specific or
support sectors of activity. This period included two main stages, namely: 1945-1965 when all the specific and
support activities underwent a restoration, restructuring and diversification process, and 1965-1989, which witnessed
an intensive and extensive development of this industry.
As a result of the significant increase in the number of drilling works, including for geological research, many new
deposits of crude oil and gas deposits were di scovered and mined, both on mainland and on the continental shelf of
the Black Sea. As a result of the intensive mining of old and new deposits, of the improvement of the extraction
technologies and of the stimulation of wells, the crude oil production reached a historical high in 1977, 14.63 million
tons, and the natural gas production reached a similar level in 1986, with 36.3 billion cubic metres of gas.
During this period a vast network of pipelines was built for the transportation of crude oil, oil products and
particularly of natural gas, the refining capacity increased to over 32 million t/year, a strong petrochemical industry
was developed and one of the most powerful oil equipment industries in the world was created, Romania being the
third manufacturing country in the world (after the USA and the Soviet Union) and ranking second in termsof
exports (after the USA).
A key part in the reconstruction, development and modernisation of the oil and gas industry was played by the
qualified staff, trained both in the general national education system and in schools specific for this industry, as well
as the important specific design and research institutes in the field.
After 1989, the economy in general and the oil and gas industry in particular experienced a dramatic fall for various
objective and subjectivereasons (the natural declineof the deposits, thedrastic reduction in exploration works, the
insufficient investments in machinery, tools and advanced technologies, the poor management and legislation, etc.).
As a result, in 2012, thecrude oil production fell to about 4 million t, and the natural gas production to about 10
billion cubic metres. In addition, the operational refining capacity decreased to about 50%, and the petrochemical
capacity to about 20%, compared to the year 1989. As a consequence of this situation, the oil equipment industry has
also registered a substantial decrease, reaching a volumeof 20-30% of that existing in 1989.
As for crude oil, raising the final recovery factor from the mined deposits is paramount, as is starting the exploration
and operation of crude oil reserves located at great depths (over 3,000 - 4,000 m).
For natural gas, Romanias short, medium and long term perspective to increase production is significantly better due
to important conventional deposits located on the continental platform of the Black Sea and to unconventional
deposits such as shale gas, tight gas, coal bed methane and, potentially, methane hydrates.
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In conclusion, we may state that, while theproduction increase forecasts for crude oil are limited, for natural gas they
are optimistic and certain in the short, medium, and long term.

2. CONVENTIONAL ENERGY RESOURCES POTENTIAL AND RECOVERY
The evolution of the concepts and the new European standards for unconventional energy resources, the
launching of economic policies all depend on the knowledge of the potential for such resources, respectively, of gas-
bearing clays, on the assessment of the reserves and of their quality, on their distribution in the territory, and, finally,
on the methods of recovery (in many different economic fields). The study provides a unified and balanced
knowledge of all types of unconventional energy resources, namely, gas-bearing clays, of their regional and local
distribution and of their qualities.
Unconventional energy resources are an alternative form of energy, they are located in sedimentary
formations of different ages and are found, usually, at great depths: shale and tight gas, heavy oil and oil shale, coal
seam gas and in the cold ocean areas - gas hydrates.

Romania has proven reserves of natural gas for another 10-15 years, and according to the latest report US Energy
Information Agency (EIA), released in June 2013, the shale gas reserves increase by 47% the potential recoverable
gas reserves, worldwide. Globally, the shale gas reserves represent 32% of thetotal reserves of natural gas.
Romania, with a recoverable reserve estimated at 1444 billion cubic metres, ranks third in Europe, after Poland (4190
billion cubic metres), France (2879 billion cubic metres), being ahead of Denmark (906 billion cubic metres)
(According to EIA-2013).
Geologi cal formations wi th shale gas (shale gas-SG) potential

In Romania, the potential gas-bearing shale formations, gas shales, are located in Orogen units, in folded
structures (with surface exposure, but which also are extending to the deep areas of the Eastern Carpathians), andin
platform units (in the Carpathian foreland basin), at depths exceeding 2500-3000 m (the Moesian Platform -
Romanian Plains, with its extension in Southern Dobruja, the Scythian Platform (Brlad Depression), the south of the
Moldavian Platform). Also, the potential conditions for the existence are fulfilled in the Getic Depression, the
Pannonian Depression or the Transylvanian Basin.

The age of the formations of interest covers a time interval ranging from Early Paleozoic (Silurian - 425 million
years) to Neozoic (Paleogene - 30 million years). The Paleozoic ones, very old, indicate parameters with optimal
values, close to theinternational standards.
The thermal gas generating potenti al of the argillitic formations was tested in Carpathian, extra-Carpathian
and intra-Carpathian geological units and on the continental platform of the Black Sea.















The study presents the criteri a
and standards for
evaluating the gas-bearing
potenti al of clays with
organic matter content. The Total Organic Carbon content (TOC-wt%) may have values between 0 and 12 as the
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maturity of the organic substance increases; the vitrinite reflectance (Ro%) may establish the maturity degree of
bituminous rocks, whether they have entered the oil window or not (gas window, respectively); At Ro values
lower than 0.6, thereis an immaturity stage. Mature systems have Ro values between 0.6 and 1.35.






Organofacies (rocks with a high organic matter content) - established by the synthesis of data included in the
scientific papers - indicate, for the formations of interest:
o High productivity of organic matter, a diagenesis (thermal) evolution of the primary sediments influenced both
by the burying history and by the tectonic evolution of the basin (history of break-thrusts which happened one
after another); the maturity of the organic substance did not take place uniformly, in terms of time (in the
sediment pile) or space(fromnorth to south, along the basin).
The formations with good potential are those in which the TOC values are higher than 2 - 4%, with avitrinite
reflectance - Ro:1.5%, with a type II-III kerogen and which havehad a maturation temperature higher than 430
o
C.
These formations can be explored.












The thi ckness of the formations is variable (100 - 2000 m), and its values are influenced by the tectonic
framework, by the paleo-relief of the basin during their accumulation and by the frequency of the drillings which











C.Or Pl .Mo. Pl .Mol d. Dep.Bar. Dep.Get. Dep.Pann. B.Tr ans.










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have intercepted such formations, in PMol and PSc it increases from the east (approx. 100 m) to the west (more
than 1000 - 1500 m), and in PMo, it differs from one basin (Calarasi, Alexandria) to another (Bailesti), increasing
from south to north andm to the centre of the platform, the shale formations have bed-like, tabular geometries,
with lateral thinning, frequently interrupted by a systemof major faults.
o For the operation stage, formations with thicknesses of more than 50 m haveto be taken into account,
provided that lithological homogeneity is found.
The lack of lithological homogeneity (granulometric, petrographic and structural) makes the assessment of the
thickness of the argillaceous sequences difficult, stricto sensu, and this lack of homogeneity is specific for a very
large number of the described formations.
The main li thol ogi cal types are represented by clays, argillites, dysodiles, menilites, marls, alternating with thin
strata of sandstones, and the dilution degree of the clays and argillites may reach 50% or may exceed this value.
The lithological columns, based on data from exposures or drillings, have to be completed by sequential analyses.
The results of the analysis indicate ahigh potential for the Silurian formations of theMoesian Platform, of the
Scythian Platformand of the Moldavian Platform.
In the Eastern Carpathians and in theGetic Depression, the Oligocene formations have an average potential.
For the Permian and Jurassic formations in the Southern Carpathians (Resita - Moldova Noua area), for the
Carboniferous and Jurassic formations of theMoesian Platform and for the Cretaceous and Miocene formations
of the Transylvanian Basin the potential is low.

As for the Pannonian Basin and the Black Sea continental platform, the available information does not allow for
such assessment.

In the Orogen uni ts (Fol d Belt Basi n): Eastern Carpathians
The GS formati ons are extensive along the Eastern Carpathians and are delimited by the Crystalline-
Mesozoic zone or, partially, by thesouthern sector of Neogene vulcanites - to thewest, and by the structures of the
Moldavian and Moesian Platforms, to theeast and south-east.
In many cases, there is an overthrust of these formations (overthrust sheet structures).




The facies covered by GSFm are flysch facies with folded formations (folded basin). Their extensions, to the
west-east, are much more diminished (km) compared to the north-south extensions (thousands of km).
In terms of organi c matter content, the maximum values (8-15%) of note are those of the Audia Formation
and of the dysodile formation (including the lower and upper dysodiles). The values of the Total Organi c Carbon
(TOC) obtained by the Rock-Eval analyses go beyond the limit of interest, compared to the classic standards of gas-
bearing argillites (gas shale) only in case of the menilite formations (TOC =6.64), of the brown marl formations
(TOC =12.69) and of the dysodile formations, for which TOC reaches considerable values =17.62%). The marked
differences, for thedysodiles, between a minimumof 0.82 and a maximum of 17.62 suggests the lack of homogeneity
of the sequences and the diversity of the rhythms of the formation in its entirety. These differences will pose
difficulties in terms of the assessment of the gas-bearing potential and, implicitly, of the possible calculation of
reserves. Vitrini te reflectance could not be assessed in all cases. The Ro values are compliant with the requested
standards (Ro>1.3) only in the case of the Audia Formation, which reaches the required maturity for the dry gas
window.




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In the Southern Carpathi ans, Resi ta -Mol dova Noua Basin
The geological formations with gas-bearing potential (gas shales or bituminous argillites, also named black
shales) are found in the Getic Nappe(Resita-Moldova Noua sedimentation area, and in the Danube Units (Svinita-
Svinecea Mare and Presacina sedimentation areas), at the level of the Paleozoic and Mesozoic sedimentation cycles.
Among these, the following are better known:
The Uteris Formation, from the Jurassic period, is the formation with the highest gas-bearing potenti al in
the Southern Carpathians, being represented by argill aceous, bi tumi nous shales, with siderite lenses, with a
thickness of 50-100 m, approximately.
In the underground of the Anina Mine, the bi tuminous shales are present in all mining fields: the Northern Mining
Field, the New Area Field (3Vest, 2Vest sectors) and in the Bradet Field. In these mining fields, the surface
geological structures do not correspond to the structures in the depth of the mining operations, which could reach, in
Anina, a depth of 1300 m). The organi c matter, expressed as organic Carbon, varies from 2 to 20%, with a
maximumanalysed of 5-15%. TypeA bitumen exceeds, in few cases, 1% (with an average of 0.25 - 0.50).

In the Geti c Depression,














The Olanesti and Bradulet Formations may have gas-bearing potential:
the Olanesti Formation has a maximum thickness of 40 m and includes shales with pebble and cobbles with
conglomeratic intercalations.
The upper section contains 70% grey shales and silts, 25% sublithic sandstones and 5% microconglomeratic facies.
The Bradulet Formation has significant facies variations, fromwest to east. In the eastern area, Raul Doamnei-Valsan
includes 80% bituminous shales, similar to the Pucioasa facies in the Eastern Carpathians, 15% sublithic sandstones,
and 5% marls, siderites and microconglomerates. Content of organi c matter: The Olanesti Formation has an
average content of organic matter ranging between 2 and 4%, max. 5%. The average calculated value is of 4.53%,
and the related TOC is of 1.18%. The Bradulet Formation has a content ranging between 4 and 8 %, with a maximum
of 27 %. The average calculated values are of 7.37 %, and the resulting TOC is of 1.92 %.

Intra-Carpathian units (Tertiary Backarc Basi n). In the Transyl vani an Basin
The formations which include potential gas-bearing shales are found at different stratigraphic levels (Filipescu, 2001):
At the Eocene level:
- The Clat a and Turea Group (Middle-Late Eocene) with bituminological potential (limestone, sandstones,
marls and evaporites in shallow water marine facies);
At Oligocene level:
- The Ileanda Mare formation (bi tuminous sandstones, micrites, calcilutites, in marine shelf facies);
- The Vima and Chechis Formati ons (Early Oligocene-Miocene) with organic content shales, in marine
facies.
These formations have been also intercepted by drillings. The synthesis of the drilling data indicates the
existence of three oil bearing systems (source and reservoir rocks); a part of the source rocks may be of
interest for shale gas, and apart of thereservoir rocks, for tight gas (Krezsek C. et al., 2010).
1) At the Badenian - Late Miocene level: COrg - 0.5% on average, and TOC >1~2 %, type II and III kerogen,
thermally immature (Tmax =423 - 436C).
2) Late Cretaceous-Oligocene (5,000 km2); in t he Northern BT, along t he Bogdan Vod fault, in the Ileanda
Formation (with TOC =1.07 %, Tmax =420oC);
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3) Mesozoic (2,5000 km2); in the median area of the Dacides, at depths ranging from 4,600 to 4,800 m, in the
Jurassic carbonatic sequences.

Platform uni ts, in the Carpathian Forel and (Forel and Basins):
In the Moesian Platform, the main potentially gas-bearing formations are:
The ndrei Shale Formation (Ordovician-Silurian-Early Devonian), the geochemical indices of the east
and west part of the platform indicate that this formation is included in the category of source rocks outside the oil
window, at the stage in which they still generate condensate and dry gas (metagenesis stage).
The generating potential of the Cl rai Formation is debatable, after analysing the results of theexamined cores
from Arget oaia, Chilii, Drvari, Brdet i, Rmet i, and Licot eanca wells (organic carbon - 0.12-1.7 %; soluble
organic extract - 0.008-0.042; extract of hydrocarbons - 32-75 %; hydrocarbon in rocks - 32-468; traces of pyritic
sulphur - 0.30; traces of FeO - 4.40; pH - 8.6-9.6), the hypothesis of the pronounced nature of source rocks of these
deposits remains open.
The Vlain Format ion (Namurian - Westphalian), a sequence of special interest as regards the hydrocarbon
generating potential is the argillitic series, rich in vegetal detritus and with strata of coal with crossed stratifications,
deposited in tidal deltaic facies.

















In the Scythian Pl atform (the Brl ad Pl atform),
The formations of interest are found at the level of the Cycle I - Silurian - Devonian, with lithological types
represented by shales (20-30 %), limestones (30-50 %) and sandstones (30%). They have been intercepted at depths
ranging between 900 and 3800 m and have athickness of 25-30 m.
The organogeni c parameters have average values ranging between 1-0 and 2.4 for TOC (%) and between 0.60 and
3.5 for Ro (%-vitrinite reflectance).



In the Mol davian Platform,
The black shales formations of the Middle and Late Silurian may have an important potential. They can be
found at variable depths (400 - 2300 m) and reach thicknesses which exceed 30-40 m. Petrographically, they are
shales alternating with siltites and fine sandstones. The TOC values vary between 0.7 and 1.15, and the vitrinite
reflectance (Ro) between 0.35 and 1.6.







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In the conti nental pl atform of the Black Sea, a synthesis of the research and analysis results and of the
analysis of the cores extracted from the drillings performed in the continental platform of the Black Sea indicates the
following formations and ages, which may havea gas-bearing shalepotential:
Formations of graptolitic shales?. Silurian. Graptolitic shales (bituminuous argillites) with a thickness of 400 m;
it is the formation with the highest gas-bearing shales potential. The black argillitic formation (Middle Jurasic -
Dogger) represents a litostratigraphic unit that is well represented in the entire northern area (offshore extension of
the Tulcea Unit) of the continental platform. The characteristic of this formation is the predominant development
of the pelitic-siltic rocks, dark in colour, and intensely tectonised.
The Histria Formation Oligocene - includes in an extremely high percent of shales and argillites (micro-gravelly
sericitic, micro-gravelly marly, micro-gravelly sideritic, micro-gravelly tuffaceous shales and argillites), with
accidental micro-gravelly and micro-crystalline sideritic dolomites. It is theformation with the highest potential
The Histria oil-bearing system is an identified oil-bearing system, including the generation-discharge subsystem
represented by Oligocene shales and the migration-accumulation subsystem composed of hydrocarbon deposits
locat ed in t he Sinoe, West Lebda, East Lebda, Pescru and Delt a st ruct ures. It may have pot ent ial relat ed to the
presence of thermal gas-bearing shales (TOC =0.95 - 3.93).

Geologi cal formations wi th compact deposi ts, with l ow permeabili ty (ti ght gas - TG)
In Romania, in the Transylvanian Basin, the geological formations that meet the required conditions to be
defined as tight gas bearing structures have geological ages corresponding to the Badenian and Sarmatian. The
Buglovian in the Transylvanian Basin includes the bed complex developed bet ween the Ghiri t uff and the Bora -
Turda tuff. The deposits are in sedimentation continuity with the Badenian and include, in general, marls with
sandstone, sand and dacitic tuff interlayers.
The natural gas formation and accumulation conditions in the Transylvanian Basin offer the perspectiveof the
discovery of the extension of low permeability compact formations in older gravelly-calcareous formations, much
more permeable than those from the Middle Miocene - an issue which was totally ignored in the previous exploration
activity.

Coal bed methane (CBM) i n Romania

Coal bed methane (Rom. MASC; eng. Coal Bed methane CBM or Coal Seam Gas - CSG) is a naturally
generated gas as a result of the alteration processes of the coal-generating organic matter, Methane(CH
4
, MASC),
Carbon dioxide (CO
2
, eng. Blackdamp), Carbon Monoxide (CO), Ethane, Hydrogen (H
2
), Nitrogen (N
2
), Radon (Rn).

The Steierdorf formation, Early Jurassic, from the Resita Basin, is a continental, intra-mountain flat formation,
represented by conglomerates, microconglomerates, sandstones, clays, tuffs and coal beds (8 layers, coking pit coal),
with a thickness ranging from 60 to 250 m.
This coal-bearing formation (coking pit coal) meets the following criteria, significant for several CBM extraction
options: the CBM reserves are considerable, taking into account the mining history of this area, that confirms a
massive and permanent generation of CBM in the underground. The infrastructure of thecentral area of the Resita
Basin is industrial in nature (mining operations) and allows for theproper fitting of the CBM mining wells.

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Gas hydrates of the continental shelf of the Black Sea
The gas emissions in the Black Sea (mainly methane) are present in all depth ranges, from coastal area to shelf area,
in the continental flexural area, on the continental slope and even in the maximum depth abyssal areas, associatedto
mud volcanoes, acase in which emissions can be episodic in nature.















The seismic and acoustic investigations carried out in the Romanian shelf area of the Black Sea using a sub-bottom
profiler revealed the existence of fields in which seismo-acoustic facies are indicative of the presence of gas in
shallow sediments. The reflexion seismicity data shows that gas is present in sediments at depths greater than 1,300
m, suggesting a thermogenic origin as well.
The gas accumulations located in the external shelf area and in the upper section of the continental slope also
originate from the decay of sedimentary deposits rich in organic matter, but which have accumulated in this area
when the level of the Black Sea was 100 m below than the current one. The gases were able to migrate to the surface
along thefractures.
The equivalent volume in methane of the hydrates accumulations was estimated very roughly. These are: 12 3 x
10
11
m
3
of methane for the area of the abyssal cone of the Dnieper River;
6,945 x 10
8
m
3
of methane for the area of the abyssal cone of the Danube River; 4.8 km
3
or 0.1 - 1 x 10
12
m
3
of
methane.
* * *
For the formations which were intercepted by the drillings, at depths varying from 2000 to 5000 m, cores which
woul d allow a systematic proving are not kept, and the access to the geophysical core data (PS, GR, permeability,
porosity etc.) is extremely limited (information fromROMGAZ - Medias and Tg. Mures). A separate study of
these datawould be necessary.

In the expl oration stage, each geological unit must be examined and assessed separately because their geological
(stratigraphic, sediment-related, organogenic, tectonic) characteristics are very different, they present different
natural gas preservation and discharge conditions, requiring different exploitation technologies.

The assessment of the reserves of shale gas can be made only after conducting exploration drillings which will
establish, with a 3D approach, the geometry (architecture) of the rock bodies, their thickness, their lateral extent,
the lithological homogeneity, and the formation permeability in its entirety.









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3. SPECIFIC TOOLS, TECHNIQUES AND TECHNOLOGIES FOR DRILLING, COMPLETION AND
OPERATION OF THE WELLS FOR UNCONVENTIONAL GAS FORMATIONS

The current global volume of unconventional gas resources exceeds 32,560 tcf (trillion cubic feet) and there is no
doubt that, as specific technologies progress, these estimates will be revised (positively). Of these, 16,112 tcf are shale
gases. The specificity of these deposits is that the gas is absorbed into the clay matrix, stationed in the vacuolar
system or in the schist rock fractures and spans relatively large areas, in approximately horizontal planes. This
specificity requires, for their mining, avery large contact interface between the well and the deposit.
Currently, for the recovery of shale gas, horizontal drilling combined with hydraulic fracturing are frequently used. It
mainly involves Extended Reach Drilling (ERD) with horizontal boreholes in therange of the thousands of metres.
There are currently several modern orientation technologies that can address these issues: geosteering, Automation
Technology for Directional Drilling, Rotary Steerable System, Reel Well Drilling - which use bottom engines and
Measurement While Drilling (MWD) devices. In our country horizontal wells havebeen drilled since 1995, starting
with Clejani well 1. Direct ional and horizont al wells were made by S. C. Foraj Sonde Tg. Mure. . Thus, in the
period 2008 - 2012, the company made a number of 34 such wells.
For thewells with high gradients and for horizontal wells, the load on the auger is reduced due to the friction between
the rig and the bottom wall of the borehole (in this case, a part of the drill collars is supported on the bottom wall of
the borehole, so that only part of their weight is conveyed to the auger). With such wells, thedrilling strings are under
extremely high tensile and compression, torsion, bending, cyclical (fatigue) stresses. For their construction, special
drillpipes are used (with thick walls, highly resistant alloys, with double-shoulder joints etc.), pipes designed for
Compressive Service operations, dual drill string (if the Reelwell method is used) etc.
The drilling fluids used for these wells must meet specific requirements such as: The focus is mainly on very
lightweight and lightweight fluids, such as: prevent the strata blocking phenomena, debris removal from very long
horizontal areas, for low fracture gradients, probe wall stability over very long periods, avoiding that thedrilling bit or
casings remain trapped, etc. The focus is on very light solutions such as gases, foams, inhibitive solutions (clear
solutions), very small filtrate fluids, fragile gel fluids, synthetic-oil based fluids, etc. At thesame time, these wells
require great safety in the vertical portion development in order to avoid the contamination of drinking water strata
and to prevent any environmental problems while continuing to develop and operate the wells.
Special measures should be taken for the completion of the curved, inclined and horizontal well development and
equipment programme. These steps are mainly aimed at the prevention of the stability loss of the wall in the intervals
to be reinforced, the prevention of the problems of the insertion of casings in curved portions, due to their rigidity and
length; the prevention of the casing strings from becoming stuck in very inclined and horizontal intervals; ensuring a
successful cementing by centering the columns, using buffer fluids, and volumes and rates of grout that are
appropriate, respectively; using grout recipes that ensure the production of cement stones resistant to production
operations and subsequent operation of the wells. The first string, the anchoring string (that is always vertical) shall be
cased and cemented throughout. It must insulatetheunconsolidated geological formationsand isolate, in particular,
groundwaters. Thenext step is the execution of the casing and cementing of theintermediate string. Depending on the
deposit conditions, on the technical equipment and on the stimulation, this string can be excluded, proceeding to the
casing and cementing of the production casing. If possible, depending on the degree of compaction and on the
composition of the rocks included in the productive layer, we can have, on the horizontal portion, an open borehole.
Of course, in this case, thereis no contamination of the productivelayer with slurry, and the shalegas exploitation
operations shall be optimised.
The monitoring of the well path is based, on the one hand, on the use of high-performance electronic detection
modules in the MWD and LWD systems, and on the other, on a high capacity of processing data collected from the
well at the surface (facies, temperatures, pressures, fluid nature, etc.) in order to determine the position of the bit, to
keep or change the path, etc. It is based primarily on the completion of the prevention installation with rotating seals,
and of the branch with control systems of the output pressure of the gases and of the circulation of the fluid i n a
closed-loop, pressurised system. This system allows for balance drilling technology with the purpose to mainly avoid
blocking the carrier beds, or carrying out controlled pressure drilling (dual gradient with continuous movement with
microflow) with the purpose of providing development programmes with a lower number of casing strings, as well as
for the completely safe well development. To safely achieve these complex wells requires the use of powerful ri gs,
intensely monitored. Moreover, they must be equipped with high performance manoeuvring devices to reduce the
time needed for various operations, such as marches or inserting strings. In this regard we can mention the top driver
systems, the automatic casing tongs, the drilling monitoring booths etc.
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In order to achieve the well which will then be completed for the mining of the shale gas deposits, a drilling machine
which does not differ, in principle, from the equipment used for oil drilling in conventional formations shall be used.
However, taking into account the increased costs necessary to carry out all the operations which are necessary for the
mining of the shale gas deposits, compared with conventional oil deposits, and the fact that the operations take longer
to perform, we need high-performance, reliable drilling rigs, with a high level of automation of the running
operations, which can achieve a high drilling speed, without high technological and technical risks, so as to avoid
technical, technological, and of course environmental accidents.
The drilling activities require a permanent consumption of large quantities of industrial water, required to carry out
the drilling activities. Among those we would like to mention: the preparation and conditioning of the drilling fluid;
the preparation of grouts; maintaining and cooling the drilling equipment, washing the derrick floor, etc.; the
intangible fire fighting reserve; the hydraulic fracturing of the wells. In the case of wells whose start-up uses the
hydraulic fracturing method (for example, the unconventional gas resources recovery) the quantities of water are
notably higher than those used in the traditional drilling. The water resources that can be used in the drilling activities
can come from surfaceand/or ground waters. In thecase of drillings conducted for the recovery of unconventional
gas, in addition to the water requirement calculated in a similar way with that of wells drilled for the natural gas
recovery, the water required for hydraulic fracturing must also be taken into account. While in the first case the
quantity of water used is relatively low (on the basis of the development schedule of the well provided in the
drilling project - the quantities of water may be in the range of hundreds or thousands of m3), in the case of hydraulic
fracturing wells thewater consumption may be of 15 000 30 000 m3.
The whole stimulation process implies a design that should provide the completion of the operations in real time, the
selection of the most appropriate fluids and fracture proppants, the use of such additive chemical substances
compatible with the productive formations. Obtaining commercial productions from shale depends on the detailed
structure of the matrix and of the fracture systems. The fracture network is characterised by a number of indicators
such as the angle, the azimuth, the length, width and maximum opening. Based on them, the statistical network
distribution is made after which the productive characteristic of the deposit can be modelled. One of the main
difficulties is the separation of the effect of pre-existent fractures from those induced artificially. However, the
optimal orientation of the fractures is mainly in the direction of the minimum effort and/or in the transverse direction,
in relation to the system of primary fractures. The issue can sometimes be more complicated because of the possible
complex fracture geometries. The fracture development can be monitored and then guided by microseismic
monitoring. The 2D or 3D representations of the induced microseismic events can be used to locate and size the
fracture network in space.
The methods used in situ for the determination of the fracturing degree into the rock massifs can be direct (RQD,
integral logging, well TV) or indirect (Lugeon test, instantaneous drilling logging, sei smic logging, acoustic
attenuation logging, acoustic well television and the spontaneous potential logging). The concerns of specialistsin
recent years aimed at finding technological solutions to stimulate compact formations bearing shale gas to reduce the
"classical" drawbacks: diminishing the size of the hydraulic fracturing operations, implementation of fracturing
fluids other than water, investigating and monitoring the integrity of casings and of their cementing; real-time
monitoring of the initiation and propagation of artificial fracture systems; replacement of hydraulic fracturing with
other well completion and stimulation methods. As alternative stimulation methods, we can mention: controlled pulse
fracturing; the Super Fracking system - Schlumberger; the Rapid Frack system Halliburton; the slot drilling system;
LPG gel fracturing.
The monitoring methods can be implemented in real time and are used to monitor and optimize stimulation
operations. The collected data analysis methods must ensure the understanding of the sizes of the rock volume
subjected to stimulation and the fluid flowing properties. An important preparation consists of using this data to
calibrate stress-strain type models. The main techniques for real time monitoring and adjustment of the initiation and
propagation of the artificial fracturing systems arerelated to the selective dynamic jet orientation fracturing process
(hydrofrack, Surgy Frack) and to the real time monitoring of the hydraulic fracturing by recording seismic
microwaves. The main conclusions fromthe microseismic monitoring operations by microseismic recording areas
follows: overall, vertical fractures are created within the area defined for the clay shales of the Marcellus shale
structure, but there are some cases where they slightly exceed the upper limit of the formation; in general, the
fractures extend up to 150 laterally and cross theneighbouring horizontal wells; the fracture is uneven in the first part
of the operation as reflected by thechanges in the number of microseismic events; the anomalies observed in pumping
pressure values indicatetheexistence of "swarms", natural fracturesaround artificially induced fractures, confirmed
by the production data of these areas; the analysis of the pressure data and of the tracer investigations indicate some
communication between fractures and between neighbouring wells; the stimulated deposit volume provides good
coverage, although it cannot distinguish between the acoustic signals of the fractures filled with supporting agent and
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the surrounding areas. The problem should be elucidated during the deposit simulation phase and based on the
production data.
The fracking operation requires several types of units/equipment that performs different functions. We would like to
mention the most important ones: fluid transport units) (water, chemical additives) to the hydraulic fracturing
location; fluid storage tanks; transport units for the fracturing support material (quartz sand)/ bulk transport units
from the silos to the hydraulic fracturing location; transfer units; transfer lines, low-pressure pipes for transferring the
fluid from the storage tank to the working tank, with the transfer units; work tanks; pressurizing units, with mixer and
high flow rate and low pressure pumps (centrifugal pumps), for the transportation of the fracking fluid from the work
tanks to themanifold; low pressure lines, for pumping the hydraulic fracturing fluid to the manifold (low pressure)
through the pressurising units; themanifold unit, low pressure, which feeds the hydraulic fracturing aggregate (with
low pressure pumps) and which pump (high pressure) the fracking fluid (high pressure pumps); hydraulic fracturing
equipment; high pressure lines for the transport of fluid from the manifold unit to the drilling bit; high pressure
discharge line; back-side pump and holding it in the annular space during the fracturing operation, prevention of
casing breakage; control center; vacuum trucks. Hydraulic cementing and fracturing unitslikeACF 700, 2 AC 800,
ACFA 1000 and ACFA 1422, with a maximum pressure of 700 bar, 800 bar, 1000 bar and 1422 bar, respectively,
have been built so far in Romania. The hydraulic fracturing operations for shale gas deposits need a pressure with
values above 1 000 bar.
Hydraulic fracturing in Romania, in order to increase the productivity of the wells recovering deposits present in low-
permeability geologic formations (sandstones, marl/sandy clay, etc.), has been used for 40 years, and hundreds of such
operations have been performed successfully. A suggestive hydraulic fracturing example is the one performed at well X,
with neutral proppant type WGA-20 and a Carbo-lite20/40 Mesh. Optiprop G2 16/30 Mesh supporting material. .
We believe, however, that the decision to transition to the commercial exploitation of the shale gas
deposits i s to reach its climax onl y after several years of research, experimentati on, data collecti on etc. In this
regard we propose, below, a five-phase scheme for shale gas mining (the first two are almost completed).
The first phase, which lasts for 1-3 years, is the identification of shale gas resources;
The second phase, which lasts for 1-3 years, is the phase of the preliminary evaluation, that includes the
assessment of the extent of the area of shale gas accumulation;
The third phase is that of thepilot project drilling;
The fourth phase is theproduction pilot-testing;
The fifth phase, and last, is the commercial operation. It consists of making a decision to go from deposit
mining and obtaining the governmental approvals for the building of gas stations, of the pipes and of the well
completion. After the entry into service of the first well, with high economic performance, the shale gas discovery
report can be prepared, in order to clearly delineate the scope and to preparethe development plan.

4. OIL OPERATIONS ASSOCIATED TO UNCONVENTIONAL GASES AND POTENTIAL
ENVIRONMENTAL IMPACT

The discovery and capitalisation of oil resources (crude oil and gas) involves specific activities, known as oil
operations, grouped into four phases: exploration, development, production and abandonment.
All these complex phases include oil operations which can be pollution sources, with specific pollutants, of
the various environmental factors.
The greatest potential effect on the environment of all petroleum operations carried out throughout the whole
concession period is found in the development phase for the following reasons:
includes the performance of the largest number of oil operations: dozens of wells are drills and
hundreds of hydraulic fracturing operations are carried out over 4-5 years;
the area occupied by a location from which 6-10 boreholes are executed (multi pad) is of approx. 3.6
ha and the exploitation of 250 ha is ensured (A.E.A., 2012). From these figures it is found that by
multi pad drilling the total area occupied at the level of a recovery perimeter is only 1.4%, or 2% at
the most, when taking into account the areas occupied by roads, pipelines, etc.
a cumulative environmental effect may appear, both in terms of water consumption, traffic, noise,
waste management (including recirculated water, resulting from hydraulic fracturing), and in terms of
the chemicals used in thefracturing fluid.
The assessment of the impact of shalegas related oil operations on the environment is a complex process that requires
detailed information about the locations of the wells, the geological, hydrogeological, and tectonic structure, the
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seismicity of these well location areas, etc., information that is not available until after the completion of the recovery
stage.
WATER
Water requi rements for drilling and hydraulic fracturing
In order for the drilling activities to be carried out in good conditions, a permanent consumption of industrial water is
required. We would like to mention, among these activities, the ones that areof special significance:
the preparation and conditioning of the drilling fluid;
the preparation of grouts.
In the case of drillings conducted for the recovery of unconventional gas, in addition to the water requirement
calculated in a similar way with that of wells drilled for the natural gas recovery (module 3.10.2.), the water required
for hydraulic fracturing must also be taken into account.
While in the case of the wells dug for the mining of conventional gases the quantity of water used is relatively low (on
the basis of the development schedule of the well provided in the drilling project - the quantities of water may bein
the range of hundreds or thousands of m3), in the caseof hydraulic fracturing wells the water consumption is of 15
000 30 000 m3.
According to a statistical analysis performed on about 400 wells, the typical water consumption is of 25 - 30 m/m for
water fracturing (Grieser, 2006) and of about 12 m/m for more recent fracturing, which uses a low viscosity mixture,
the distance being thehorizontal path of thedrill bit (Schein, 2004).
Obviously, the water consumption per well is proportional to the length of the well, to the number and length of the
fractured intervals, etc., and the American literature indicates that a mixture of a well chosen fracturing fluid may
reduce water consumption by up to 50%.
The water sources used in oil operations are located on the development sites or in their immediate vicinity. Water
supply is made either fromsurface water sources or from groundwater sources, or, depending on the technological
water needs, from both sources, after obtaining the water management approval from the competent authorities.

Wastewater management
The sources of wastewater arising as aresult of the application of the shalegas extraction technology aredifferent,
depending on the development phase.
Thus, in the exploration phase, when the working platforms and the access roads are executed, wastewater may result
from washing operations, by the personnel, from storm water contaminated with building materials (dust, oil residues
etc.) and, if concrete is prepared on site, from this activity.
In order to avoid any negative impact on the environment factors, the water resulting from washing, as used by the
personnel, shall be collected in tanks and disposed of off-site, to a wastewater treatment plant for municipal
wastewater.
The other types of wastewater shall be discharged on site.
For the development phase of the extraction process, thetechnology includes two stages:
the drilling stage;
the hydraulic fracturing stage.
Both stages generate wastewater, with different features and flow rates.
Drilling fluids are different in terms of composition, depending on the drilling phase, and on the drilling depth
respectively, and also on the geological structureof the site where thewell is located (module 3.4).
These additives, used in this particular drilling phase, result in the water exceeding the pH and concentration limits for
certain substances provided for in NTPA 002/2002 (Law 188/2002), such as sulphates, chlorides, phosphorus, etc.
The wastewater flow rate generated by the drilling fluid depends on many parameters. The existing data included in the
literature (Revised Draft Supplemental Generic Environmental Impact Statement 2011 Chapter 5 Natural Gas
Development Activities & HighVolume Hydraulic Fracturing /pag.53) indicates that, in order to drill a well at a depth
over 3,000 m, with a recovery factor of 40%, a quantity of 6000 7000m
3
of wastewater is generated.
Another wastewater sourceis theeffluent resulting fromthewashing and maintenanceof thedrilling rig and of the
well's working platform and from the well opening (recirculated water tank, blowout prevention plant). The water
resulting fromwashing may contain traces of grease, oil and drilling fluid components.
The management system for process water used in the drilling process must be equipped with collecting, storage, and
treatment systems for this water. After these procedures, thewastewater is reused in the drilling process.
The fluids used in hydraulic fracturing (module 3.10.1) are similar to the drilling fluids, but the additives used and the
concentrations thereof are different. All current technologies use hydraulic fracturing fluids consisting of more than
98% water and less than 2% sand and additives (where the additives make up less than 0.5%). There are about 235
known substances used as additives in the fracturing fluid, some of which are harmful, but commonly approx. 30
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substances are used in this process. These additives, as components of the fracturing fluid, have multiple roles, some of
the most important being the reduction of viscosity, ensuring the surfactant character, maintaining the cracks in the
deposit rocks, etc.
As a consequence of the errors in the implementation of the hydraulic fracturing technologies or of accidents, there may
occur uncontrolled wastewater spills, which can pollute:
the underground water-bearing strata, through the fluid that remains in the underground and migrates
in different directions.
the soil, through the fluid that returns to the surface, in a controlled or uncontrolled manner. The
fracturing fluid that returns to the surface represents 10% - 70% of the initial amount used. The fluid
resurfacing occurs over time(up to eight weeks), but 60% of thefluid resurfaces in four days, and this
amount can be managed;
the surface waters, either during the fracturing phase or during the wastewater resurfacing and
storage phase. The surfacewater contamination may be due to the following factors:
- discharge of the drilling sludge, of the discharge fluid and of the salt fluid from tanks or from the
residue tanks;
- leaks caused by improper cementing of the wells;
- leaks through geological structures, through the cracks or natural or artificial openings.
Current practice shows that 20% - 60% of the fracturing fluid is recovered for reuse, although in certain
development phases of the shale gas extraction technology, for economic reasons, it is no longer recovered.
Another specific issue that can occur only during the operating phase is related to water treatment capacity,
given the high wastewater flow rate resulting from an operation that includes several wells. A prescheduled stage-
based development of the extraction process is recommended, in order to ensure, through water treatment, areduction
of the environmental impact.

Impact forecast
Ever since the design phase, the prevention of the pollution risk is taken into account, by applying correct
technologies, selected depending on the geological conditions specific to the location chosen for the drilling and
hydraulic fracturing works. Special emphasis shall be placed on preventing the pollution risk during the execution
phase, taking into account each operation which includes drilling and hydraulic fracturing technology, as well as the
support activities (water capture, water transportation and storage, preparation of the drilling and fracturing fluids, the
storage thereof before and after use, treatment of the drilling flui d, storage of the cuttings resulting from the drilling
activity, treatment and transportation thereof to storage site or to emissaries, etc.). Detailed work procedures shall be
developed for all these activities.
The protection of groundwater against contamination with drilling fluid components shall be achieved by casing and
cementing the borehole crossing the underground aquifers.
The protection of surface waters shall be achieved through the appropriate management of the water used in the
drilling technology and of the wastewater resulting from this technology. This implies the existence of hydraulic
engineering plants with adequate equipment to ensure both its safe circulation, as well as thetreatment of these waters
for reuse.
The probability of a negative impact caused by wastewater on the environment, including on the surface waters or on
the groundwaters, is linked, to a great extent, to the size and scope of the project. Thus, as the number of wells
increases, the likelihood of a negative impact on the environment increases as well.
In the exploration phase, when the activity is not that extensive, compared to the development of a shale gas
extraction project, the likelihood of a negative impact on theenvironment is very small.
Subject to the application of the best technologies for the construction of wells, little impact can be expected.
If the technologies are not observed, or if less safe technologies are implemented, the impact can be significant, and it
can be short-, medium- and long-term.
In the case of hydraulic fracturing, a high risk is due to the water flowing back from the well, following the hydraulic
fracturing process. The flow back can contain up to 70% of the injected water. The presence of this water in the
extraction of unconventional gas requires a management plan for "waste water.
Given the current development stage of these technologies, we can expect a mid-level impact. On a scalefrom1 to
10, the impact level would be between 5 and 6 (where level 1 impact =insignificant).

Impact Mitigati on Measures
The measures required to mitigate the impact on environmental factors, for each step separately, are:
theproper arrangement of well pads;
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the collection, storage and treatment of rainfall water of water from sanitation facilities, for later use as
process water;
the use of best practices in the field of drilling and hydraulic fracturing, in order to avoid
contamination upon underground crossing of sensitive areas;
the use, for drilling and hydraulic fracturing purposes, of fluids containing additives with low toxicity
indexes;
the proper management, accompanied by strict controls, of the toxic and hazardous substances;
the use of a pre-prepared emergency plan, for emergencies that may occur in case of contamination of
the surface water and groundwater;
the use of a centralised location for the storage of water and fracturing fluids, in the development
phase, can thus significantly reduce the risk of pollution of water sources;
buil ding dams and ditches to limit the spills of pollutants into surfacewaters.
the reuse of water in the hydraulic fracturing process can be one of the solutions to reduce water
consumption from natural sources. Also, the use of water from other technological processes (mining,
water treatment plants, etc.) can lead to significant savings in what concerns water use;
in the prevention and control of water source pollution, special emphasis should be placed on installing
surface water and groundwater quality monitoring systems. Water management monitoring involves
preparing detailed projects, based on hydrological, hydrogeological and hydrochemical studies, for the
area in which the drilling and extraction activities are to be carried out. The projects on which the
monitoring system is based should be carried out before starting the exploration works, and monitoring
shall continue throughout the four main stages of the capitalisation of unconventional gas deposits, as
well as for acertain time period after abandonment. The post-abandonment monitoring time shall be
determined during the design activity;
the implementation of an integrated management programme for water, drilling fluids and hydraulic
fracturing fluid that provides for themitigation of thewater sources pollution risk.

AIR
Impact forecast
Expl oration
At this stage, the impact can be characterised as similar to that of any construction - assembly activity. The main
source of pollution at this stage is a mobile one, i.e. thecombustion engines of machinery and transport vehicles.
In the exploration phase, when the activity is not that extensive, compared to the development of a shale gas
extraction project, the likelihood of a negative impact on theenvironment, including on the air, is very small.
In the current development stage of these technologies, we can forecast amedium level impact of 3 - 4, on a scale
from 1 to 10, in the short term.
Devel opment and producti on
In the well drilling phase, the impact is similar to that recorded for conventional drilling.
The shale gas operations include hydraulic fracturing, as well as the collection, purification and storage of gas
deposits. The development of several projects in the field led, over time, in the hydraulic fracturing technology, and in
the technologies used for the collection, purification and storage of gases, to great improvements. These
improvements occurred as a result of the intervention by the environmental authorities, that conditioned the
development of projects upon the risk level associated with the environmental impact.
In the current development stage of these technologies, we can forecast a medium level impact of 5 - 6 on a scale from
1 to 10 (level 1 impact =insignificant).
Impact Mitigati on Measures
The measures required to mitigate the impact on the environmental factors - air, for each step separately, are:
the drilling of each well is executed according to the "Technical Drilling Project", also aimed at
eliminating the risk of air pollution;
the use of best practices in the field of drilling and hydraulic fracturing, in order to avoid
contamination with methane gas when crossing sensitive underground areas;
the use, for internal combustion engines, of quality fuel, and the operation of the engines in conditions
ensuring high energy efficiency;
the use, for internal combustion engines, of catalytic filters in order to reduce air pollution;
the development of air quality plans in linewith the national and European plans, plans that must be
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included in the investment project;
the recovery of gases from wastewater and from the well head and the neutralisation thereof using
different technical methods;
the use of pre-prepared intervention plans, for emergencies that may occur in case of air
contamination, at any stage of the investment project;
the effective management of the drilling waste and slurries resulting from wastewater treatment, so
that they do not constitute stationary sources of air pollution;
the continuous monitoring of both the technical operation parameters, in each stage of development,
and of the air, as environmental factor.

SOIL AND SUBSOIL
Expl oration
The risk of pollution is similar to the risks of any mining or oil operation. However, the risk of soil and subsoil
pollution in the case of shale gas extraction may be considered somewhat higher, up to moderate, due to the volume
and complexity of theplant required for extractions, and due to the relatively large areas that the facilities required for
multipleextraction drilling may require (about 3 ha).
Impact Mitigation Measures:
theidentification of sensitive areas which may be affected by the entire shale gas extraction project;
the acquisition of seismic data with minimal impact on thesoil and subsoil.
In the site preparation phase, the foundation soil must have the geotechnical stability needed to safely
support the plant and the related facilities (the need for ageotechnical study).
The following shall be avoided, for the site:
positioning in seismic zones or in areas with tectonic activity;
areas where landslides may occur;
karst areas or areas with cracked rocks;
floodplains or areas subject to flooding.
Devel opment
The potential soil and subsoil pollution impact is given, in the development stage, by:
drilling wells: materials used for execution, consolidation, sealing works; drilling fluids; cuttings
resulting from the drilling operations; land subsidence, road subsi dence, use and propagation of
chemicals, oil products used as lubricants and/or fuel, free blowout etc.;
drills included in the production process: drill fluid leaks into the environment, drill gas emissions,
light products, CO
2
, H
2
S, aromatic hydrocarbons, which are released into the atmosphere; spreading
on the soil of slurries and / or of substances and materials used for stimulation and injection
operations, sand consolidation, hydraulic fracturing etc.
injection drills: the injection agent (wastewater, gas) infests the soil surface and / or penetrates the
deeper layers due to column breaking or through cracks in the sewage network etc.;
pipes: corrosion, cracking, breaking, mechanical deformation (due to the action of bulldozers and
excavators, landslides and erosion, earthquakes, effects of extreme weather conditions) etc.;
leakage of chemical additives of the components of fracturing fluids transported in tank cars and
undergoing mixing;
The impact mitigation measures areas follows:
continuous observation and technological control of the extraction plants, of the transportation and
storage facilities, and taking measures to avoid any leaks/emissions in the environment;
detection and remedy of cracks and other leaks in pipelines, dynamic and static equipment,
through periodic checks and inspections;
fighting the effects of corrosion, wear and abrasion of depth and surface facilities and of fluid
transportation pipelines;
the removal of the vegetation and topsoil shall not be excessive; it shall be restored later, by
spreading it.
Other pollution sources having impact on thesoil:
Liquid waste: indirect emissions of chemicals by evaporation, from wastewater tanks and deposited
on the soil surface;
Solid waste:
- Drilling mud and debris. While the drilling technology for unconventional resources is similar
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to that of the production wells for conventional resources, the quantities of drilling mud and
solid waste are higher by approx. 40% in the case of horizontal drilling (DEC, 2011). For
example, a single horizontal drilling with a length of 1,200 m, at a depth of 2,100 m,
produces about 170 cubic metres of mud and debris. The drilling mud and solid waste
produced by the drilling of production wells are considered non-hazardous industrial waste
and can be transported to a solid waste landfill.
- The polyethylene waterproofing geomembranes for the water storage tanks, for hydraulic
fracturing. They can also be stored in solid waste landfills after the hydraulic fracturing
process.
Impact mitigation measures: using drilling technologies and techniques minimising theamount of debris dislodged
and the areas set aside, coupled with the careful control of the management of the sizeable quantities of rock
excavated and sometimes contaminated;
Impact of heavy traffic. It is apparent both in the exploration phase, but especially in the development
phase when the traffic intensity reaches its peak (about 500 drives for a single well) for a period of 3-
5 months (A.E.A., 2012). The impact of this activity on the environment is significant, especially if
the site is located near residential or rural areas.
Impact Mitigation Measures:
given the intensity of the vehicletransportation activities and thesize of the trucks involved, limiting
the use of vehicles and the number of drives to the required minimum, as well as their loads and
speeds; we recommend light vehicles, with low gas emissions and reduced fuel consumption, using
especially diesel fuel;
optimisation of the extraction activities, with auxiliary activities (transportation of gas, of drilling
fluids, etc.) by mainly using theexisting roads, theconcreteplatforms, secured against leaking.

Operation and preservati on
The impact on soil and subsoil is not relevant in theproduction and abandonment phases unless long-term (accidental)
migration to the surface of the fracturing fluids occurs.

NOISE AND VIBRATION
The main sources of noise and vibration are the means of transport, the drilling operations and the related equipment,
as well as the compressor unit.
In the exploration phase, the main sources of noise and vibration are the drilling operations and the related equipment,
as well as the means of transport.
In the development phase, the noise sources are represented by the engines of the drilling rigs and used for the
handling of drill pipes, generators, welding generators, utility vehicles and means of transport related to the well.
In addition, noise and vibration also occur during the execution and laying of pipes and main pipelines, of the
equipment and utilities necessary for the extraction, processing, storage and transportation of hydrocarbons.
It is expected that, for both the exploration and the development phases, most noise and vibration sources are
temporary (a few tens of days) and some will only work 2... 10 hours/day, except for drilling rigs.
Conclusions regardi ng the impact of noise
Noise and vibration are normal emissions related to drilling activities, but most are temporary, with short term effects;
several effectiveprotective measures can be taken in order to prevent negative impacts on the environment and on the
works.
For the protection of the personnel working in the vicinity of equipment that generates high levels of noise and
vibration, thefollowing are recommended:
wearing noise cancelling earmuffs;
providing the equipment with enclosures made of sound-absorbing materials;
use of other specific protectiveequipment (gloves, palm protections, boots, etc.).
The effects of noise and vibration are felt only by the personnel involved in thetechnological process (a small number
of workers).
The location of thewells in unpopulated areas, at adistance fromthe protected receptors, substantiates theopinion
according to which noise and vibration arenot a significant potential source of pollution.

SEISMIC ACTIVITY
Seismic prospecting is the most commonly used geophysical method in oil exploration, based on thegeneration of
elastic waves that propagatein the subsoil, their reflections to the surface being thereafter recorded.
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The generation of elastic waves is made either by controlled detonation of small explosive loads (kilograms) in wells
with a depth of a few tens of meters, or by the controlled vibration, by a hydraulic system, of an airborne metal plate,
along theseismic profiles, and in this phase the seismic risk is practically non-existent.
The injection or casting of liquid waste (deposit waters, chemical or radioactive waste) in the ground is one method of
underground storage. It was shown that such operations, consisting of the injection of large quantities of liquid in the
ground may be acause of someearthquakes.
One of the most documented cases is that of the earthquakes occurring in the Rocky Mountain Arsenal near Denver,
Colorado. Here, chemically contaminated water from a military arsenal were injected for storage into a deep drilling,
at a depth of approximately 4,000 m, whose base consisted of fractured gneiss. Injection began in March 1962, and
the earthquakes began to appear after a few months and then continued at a rate of 4-85 earthquakes per month. The
amount of liquid injected averaged 16 million litres per month, for a year and a half. The injections were then
interrupted for one year and then resumed, however they were eventually discontinued by the end of 1965, after
making the correlation between the injection of liquid and the increased seismic activity. The strongest earthquakes
had a magnitude of 3.0 to 4.0 on the Richter scale, some even exceeding a magnitude of 5.0. The elongation of the
epicentres areasuggests an arrangement parallel to one or two fault lineplanes.
In the case of the hydraulic fracturing activity, injecting fluids into productive geological formations has other
coordinates: the injection pressures and depths are comparable, but the quantities of liquid injected is lower (1.1 to 2.1
million litres per fracturing stage, i.e. 9.0 - 29.0 million litres for the whole multi-stage fracturing operation in a single
drilling, compared with 16 million litres per month for a year and a half in Denver, i.e. approx. 288 million litres), and
the fracturing injection is executed on a smaller surface (hundreds of metres) and over short periods of time (hours),
and as such the seismic activity induced by these processes is generally low, and theseismic risk is low.
Thereare two types of seismic events associated with hydraulic fracturing (AEA/ED57281/Issue Number 17).
The first is the direct result of hydraulic fracturing and its scale is microseismic. This induced seismic activity requires
very sensitive measuring equipment, positioned close to the fracturing area, in order to obtain a recording thereof. It is
usually not felt aboveground. The moment magnitudes recorded varied between -4.0 and -1.0, the hiher being -0.5 on
the Richter scale (SPE 152596 ).
The second typeof seismic event may occur when the injection and hydraulic fracturing occur near geological fault
lines. The larger the fault line, thegreater theseismic effects. Such a case was recorded at Blackpool (in theUnited
Kingdom), where a magnitude M =2.3 recorded in April-May 2011 was attributed to the reactivation of a fault line. It
should be noted that a magnitude of max. 3 is equivalent to the vibration produced by a truck (OGP, 2012). It is the
only event of its kind recorded in the last 1,000 fracturing wells executed from 2005 to present time.
Also, if we refer to the injection of fluids in general, approximately 140,000 drilling operations were executed for the
storage of liquid waste in recent decades, and there were no incidents (Zoback, 2012)
It can be said that injecting fluids, associated with hydraulic fracturing, is not responsible for producing earthquakes
affecting to some extent the environment or human activities (the magnitudes of the induced "earthquakes" are in the
negative, close to the detectability limit, by seismic monitoring). The explanation is that the increased injection
pressure during hydraulic fracturing affects limited volumes (extensions of several hundred metres), and
pressurisation takes only a limited time, afew hours, generally. Low magnitude earthquakes associated with hydraulic
fracturing (i.e. the one at Blackpool, with a magnitude of 2.3) are very rare, occurring only in connection with pre-
existing fault lines.
Greater attention should be paid to possible associated seismic activity associated to the development phase after the
hydraulic fracturing operation, if wastewater is reinjected as liquid waste into special injection wells.
There is a three-pronged approach that can be used to reduce the likelihood of seismic activity when injecting fluids
(Zoback, 2012):
o Avoid injections into active fault lines. The 3-D seismic methods allow the identification of major fault
lines, having the potential to generate significant induced earthquakes (M>6) by activation or reactivation.
This identification of the major fault lines is actually included in the geological surveys of thesite. The
possibility to activate these fault lines may be influenced by the orientation of the fault lines depending on
the regional tectonic stress field. Smaller fault lines are more difficult to detect, but their effects can
materialise only through local earthquakes of low intensity.
o Minimising deep pore pressure change. Issues appear in the case of the storage, by injection into deep
water-bearing formations, of the wastewater resulting from the hydraulic fracturing process, an activity
which can influenceseismic activity.
One of the methods consists of minimising the volume of injected fluid, which is about 25-50% of the
wastewater returning to the surface. This can be done mainly through recycling of this water and reusing it
in hydraulic fracturing processes.
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Another method consists of the injection of wastewater into the aquifer formation from which it was extracted, if the
water source used for hydraulic fracturing was a deep aquifer or deposit water, or water contained in poorly cemented
sandstone formations, with high permeability. Such formations undergo plastic deformation and do not contain elastic
deformation energy, which could be released in the formof earthquakes.
o Setting up local 3-D seismic monitoring networks. These networks, installed in the vicinity of the injection
wells, allow for the precise pinpointing of possible seismic events produced by water injection, as well as
of the orientation of the fault line(s) responsible for the earthquakes.
o Establishing, in advance, the operations protocol, depending on the evolution of the seismic activity. The
reduction of the rate at which the water is injected might be required, or the operation must be stopped
altogether (particularly in the early stages of tube drilling and injection of fluids or hydraulic fracturing) in
the event of significant seismic events. In the system proposed by the Durham University (Davis, R. et al.,
2012), in the case of induced magnitudes of M <1.7, the activity is continuously monitored until no
seismic event is recorded for at least 2 days.
o Abandoning injection into boreholes, in some cases. In case of induced earthquakes having a magnitude of
M>1.7, the pressure is reduced and the site is monitored for 10 days, and then the project is abandoned, if
the seismic events do not stop (Davis, R. et al., 2012).
In conclusion, the seismic risk caused by the injection of wastewater is very low. In addition, the risk can be
minimised by the study and proper planning, in advance, of the operations, by seismic monitoring and by
the early establishment of measures required to eliminate therisk, in the event of earthquakes.

RADIOACTIVITY
Natural radioactivity (NORM) consists in the emission of radiation by the nuclei of elements that are found naturally
in the environment. These elements are found in relatively small amounts in the environment (water, soil, gas/air),
concentrations varying widely from one area to another, and they may be mobilised during drilling and hydraulic
fracturing.
The possibility that injected fracturing fluids reach underground water sources is low when the distance between the
water sourceand the production area isof morethan 600 m. However, theserious potential risk of the migration of
injected fluids (which can mobilise various subsoil components as well) should be seriously considered, as well the
development of hydrological connections between deep strata and surface formations. If the distance mentioned above
between the production area and the water source is smaller, the contamination risk increases.
When drilling through geological formations with high radioactivity, the waste produced by the drilling process may
contain Ra and Rn radionuclides. Radon, being a gas, is dispersed into the atmosphere, while process water and mud
containing radioactive elements are collected, as appropriate, in pits and evaporation ponds. Workers are at the
highest risk of exposure to these radiation sources (EPA, 2012).
The protective equipment used, on which various materials are deposited (mud, etc.) may be contaminated, as well as
the soil's surface, which raises issues related to waste management, as the extraction process concentrates the natural
radionuclides in this waste. Depending on legislation, the waste can be stored in different landfills, taking into account
, first of all, the concentration of radionuclides present. Thus, as appropriate, the monitoring of the operating phaseof
waste disposal may be necessary, and proper handling and storage is not a risk to the population. A preliminary
management plan adapted to the local situation should be prepared, to ensure proper storage of radioactivewaste with
high radioactive content, as well as a decontamination plan, if there are leaks or spills (ASTSWMO, 2012).

BIODIVERSITY
Oil operations associated to unconventional gases carried out during various phases (exploration, development,
production, abandonment) may affect biodiversity due to habitat fragmentation (construction of roads, aboveground
pipelines, enclosures, drilling platforms), damages to the vegetation, excessivewater consumption, high noise level
due to vehicle traffic and drilling operations, etc. (AEA, 2012). Although biodiversity and vegetation is affected in
areas reduced in size, impact mitigation and biodiversity preservation measures must be taken (proper planning of
works, minimisation of the areas affected, use of the existing infrastructure - roads, bridges -, limiting the use of
vehicles and the number of drives to the required minimum, etc.).
Special attention should be given to protected natural areas, where, besides the assessment of the environmental
impact, an appropriate assessment is mandatory, according to Art. 28 of GEO 57/2007, as amended and
supplemented.

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SOCIAL AND ECONOMIC ENVIRONMENT
Shale gas provides reliable and affordable energy, while also providing opportunities for local development and
creating new jobs for the residents of the areas in which deposits arelocated and mined.
The social impact of mining these deposits takes into account theassessment of the effects on thesitearchitecture,
with direct influences on the territorial and administrative configuration and of the quality of the lands located in the
areas of thewells and of the deposits, the effects on the quality of life and on the health and safety of thepopulation.
The social impact forecast and the social impact mitigation measures are assessed in relation to each type of activity,
namely: exploration, development, production and abandonment.
In the exploration phase, there are anumber of issues relevant to the assessment of the social impact, regarding the
use of the lands and of the local infrastructure.
At this stage, thediscomfort caused by the movements of the exploration equipment, theincursion of strangers into
the local community all generate a feeling of insecurity and fear about the loss of control over the use of property
considered to belong to the community, especially land and roads. Population outreach, presenting the benefits of the
development of such a project for the community, is a way to mitigate the adverse effects at this stage of
implementation.
As this stage consists of the actual execution of the wells, there are several aspects worth noting, related to the
assessment of the social impact.
One of the issue that needs solving is the purchase of lands, for the well installation and subsequent production. Land
use may include physical and economic displacement of people, the purchaseof large areas required for the further
exploitation of thedeposits.
Meanwhile, a question of interest is the use or, if necessary, thecreation of the road infrastructure required for thesafe
use of the equipment and auxiliary plant used for the execution of the wells for production purposes.
Heavy traffic of transporting equipment and heavy trucks in the area raises the issue of noise pollution and of high
levels of exhaust emissions, with direct influence on the quality of life of its residents. Also, the current infrastructure
and public facilities in the area may be affected, due to the traffic of heavy machinery and to the increased frequency
of trucks transiting the area, used to carry equipment and human resources to and from the wells' location. On the
other hand, access to the drilling area also involves the development of the transport infrastructure in the area, leading
to improved road connections and logistical support.
Last but not least, well drilling for production purposes involves setting aside large areas of land, thus having a direct
impact on subsistence agriculture and on means of support.
In the production phase, the impact affects the local infrastructure, housing, goods and services by: creating
opportunities for new jobs and increasing living standards in the region, creating opportunities to develop and
improvelocal services by increasing demand and purchasing power, by increasing cultural diversity, and social and
commercial revitalisation.
Meanwhile, the mobilisation of qualified human resources from other areas leads to a cultural diversification that
increases the risk of conflicts with the locals, and the changes, both generated by the new architecture of the areaas
well as indirect changes, through the diversification of services and the increase of the number of personal
development, can lead to adverse reactions. These are: resentment, fear of new things or experiences, distrust in the
good faith of investors or for foreigners brought to the area for their expertise or to perform technical operations
involving a high degree of professionalism and specialisation.

CULTURAL AND ETHNIC CONSIDERATIONS, CULTURAL HERITAGE
In each of the four implementation phases of unconventional gas recovery projects, the activities of the investor shall
serve to meet an indispensable requirement in order to avoid conflicting situations, or even conflicts with the local
population: they will observe local sensitivities and traditions through accurate information, at theunderstanding level
of the communities, on the various stages of the works to be undertaken. This will be preceded by a preliminary
investigation, with the help of specialists in the sociological and ethnographic fields, to identify these local
particularities.
An important aspect, in order to avoid any material incongruences, consists of drafting projects so as not to be affect
the national and local cultural heritage, following a feasibility study which must include monuments and heritage sites
located in theareathat will be affected in the long termby the investment. Thebudgets prepared for theprojects in
question must include funds for therestoration and conservation of the heritage sites discovered.
We believethat, following the preparatory steps mentioned above, it is extremely important that theresidents of the
areas affected by the projects be given the opportunity to express, in referendums, informed opinions on the proposed
investments.

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5. ECONOMIC IMPACT OF NON-CLASSICAL GAS RESOURCES RELATED ACTIVITIES IN
ROMANIA ON A NATIONAL AND REGIONAL LEVEL

Energy Trilema - Why Are New Primary Energy Sources Requi red
The essential element regarding the use of gas from unconventional sources is the potential impact on the security of
Romanias supply with primary energy, the increased affordability of energy to theconsumers and the reduction of
green house gases emissions.
The importance of ensuring a country's energy supply security consists in the impact on economic stability (no
healthy economy may exist without the possibility to have uninterrupted energy supply, in the required quantity and
having the required quality), social stability (the lack of affordable energy fundamentally impacts the living level,
cultural life, health and the development of a people), and even political stability of that country (a country is
vulnerable when it depends on a single source of energy coming from outside, which may have a final impact on its
political life, and even independence).
In many cases, thedependence on energy imports is considered to be a measure of energetic insecurity. However, this
should not be generalized, and this matter should be nuanced: the solution is a convenient mix of sources, and the
import is not that bad, as long as there are viable physical connections, and commercial accessibility. Due to the fact
that the imports depend on the size of a countrys own resources, the energetic strategy should lead to that mix of
primary sources which is the most convenient for that country, applying the simple principleof the highest possible
diversity. However, if the internal sources may be extended, the problem is essentially simplified, by reducing the
need for imports.
Consequently, natural gas is essential for the sustainability of any energy sector, and the possibility of discovering
new sources i s beneficial both for the proper operation of this sector, and for the purpose of reducing t he
environmental impact.
In the absence of any new sources of natural gas, in a matter of about 15 years we may end up heavily depending on
the natural gas imports. Obviously this situation requires decisive measures to extract new gas resources.
In concl usion, taking into consideration the possible participation of thenew natural gas sources to Romanias energy
sector, it results that:
The energy supply security is critical for Romania, and may be essentially improved by expanding the
countrys gas sources and diversifying the interconnections with the neighboring countries.
Without the intervention of the new natural gas sources, including shale gas, the dependence upon imports
would soon become a burden. The experience of the two winter crises due to the shut down or cut down of the imports
of gas is relevant from this point of view.
Without any economic gas sources ensured, Romania is unable to meet its commitments resulting from the
application of the energy/climate change package.
Also, the achievement of the renewable sources utilization target of 24% by the year 2020 depends on the
settlement of the issue regarding the balanced operation of the national electricity system, natural gas playing an
essential part in the solution to this problem.
Essentially, the development of the nonconventional gas recovery in compliance with all environmental
requirements may generate critical advantages at the level of the country and of the region.

Promoti ng Soci al and Economi c Benefi ts
Oil and gas industries generate significant revenues for the national economy. Sound macroeconomic management
and governance are required to ensure that the money generated from these projects is invested in local communities
through policies that foster economic development and poverty reduction. Moreover, the knowledge of social and
economic impacts both positive and at risk is essential to help the design of sustainable policies that would contribute
to bringing long term beneficial activity both on an economic level that includes research and development, as well as
on a job creation and social welfare development that increases the buying power and, with it, the safety and stability
of the economic environment to thebenefit of business in general.
Basi c Resul ts of the Impact Assessment
The data we aretaking into consideration stems from various sources such as IEA regarding theevolution of gas
consumption; the EU recent studies regarding the nonconventional gas resources and impacts as well as studies on job
creation in the gas industry including both direct and indirect ones.
We only mention here a recent June 2013 report by US-EIA showing for Romania an evaluated figure of
1.4442Gcm (51Tcf) of shale gas reserves.
We are considering the time frame starting in 2011 and ending in 2030. It should be noted that in this period: (i) not
all the resources are consumed and (ii) that the extraction will start in 2019 (the previous years are used for
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exploration activities) with a slow increase given by the limitation of well drilling and operation capabilities (the
number of wells per year is limited by a value resulting from technology considerations in recent EU reports).
The evolution of thenew gas production is given in the figure below:

Source: authors calculations
This quantity of gas is related to the wholegas production as depicted in the following figure:


Source: authors calculations
One immediateimpact is thefact that after the year 2023 (in our scenario) Romaniawill have available gas for export.
This stems from the fact that the evolution of production has been chosen to match the one of consumption and loses.
The growth coefficients are equal to the GDP evolution.
Considering themarket prices of gas theexpensefor imported gas that changes to income fromexported gas is
represented in the next figure as a percentage of GDP each year. One should note that income from exports, are given
as negative (entries) in the economy while theexpensefor exports aregiven as positive percentages of the GDP.

Source: authors calculations
The capability of the new gas resources to eliminate imports, at least for a number of years, creates a strong urge to
start extraction. Westress hereonce again that in the timeframe considered the quantities of new gas produced are not
exhausting the reserves. It is seen that the increase in imports due to (i) depletion of conventional gas and (ii) increase
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in consumption, that costs close to 1.5% of GDP is changed once the non-conventional gas is coming in. The increase
in production may lead to exports that could bring into theeconomy 0.5% of GDP in revenues.
Another impact we have evaluated is the oneon the gas price. Thenew gas production was considered to enter the
market at the internal gas price (a rather conservative approach since exports were also considered at this value).
In the figure that follows the price evolution for the given time period is presented. The increase in price due to
increased imported quantities is reversed once the nonconventional gas reaches the market. Our scenario shows a
potential decrease in price of about 30% at the end of the period. This decrease is keeping the gas at cost plus enough
to include investments, taxes and sizeable profits.

Source: authors calculations
One other impact is the creation of jobs: direct and indirect. Various sources give different values of indirect jobs to
each direct job created that range from 3 (the most conservative given by US gas industry data to 5 the least
conservative). We havetaken very conservatively thelowest value of 3 indirect jobs per 1 direct one.Thetotal number
of jobs resulted in 4517 direct and 13552 indirect ones at thenational level thus a total of 18069jobs.
The taxes on jobs were assessed, as well as the sizeof the tax on profit. Theresults are presented in thefigure below:

Source: authors calculations
An assessment done in each region of the specific parameters associated to socio-economic impacts related both to
positive effects result in a division of the direct jobs (based on the ratio 3 in Vaslui, 1 in Constanta regions being
proportional to therespective surfaces of theperimeters in each county). Thus, the direct number of jobs created at
local level is given in the next figure. The figures range in about 4800 for the direct jobs and 14400 for the indirect
ones giving a total of 19200 jobs in all. Obviously the above figures are based on a very conservative value of indirect
jobs creation per direct job (i.e. 3), various studies go as far as 5 for this ratio.

Source: authors calculations
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1. LEGAL FRAMEWORK APPLICABLE TO THE CAPITALISATION OF NATURAL GAS
RESOURCES FROM UNCONVENTIONAL DEPOSITS

The legal framework that defines the conduct of any human activity is nowadays a complex system, comprising
fundamental constitutional rules, detailed in the primary legislation, which in turn are explained in the secondary
legislation, like orders, decisions, regulations, instructions, codes of good practice, etc.., designed as a whole to ensure
the smooth running of thehuman society.
The oil field, including theunconventional resources sub-domain, is no exception.
The comprehensive report and its abstract analyses issues related to the oil and environmental legislation, how it
harmonises with the European legislation, the regulations applicable to the oil field in Romania, examples of
regulations in countries that havemade significant progresses in harnessing non-conventional resources and proposals
for the completion of the regulatory framework applicable to our country.
The main principles underlying the Petroleum Law no. 238/2004, which contains provisions applicable to the "up-
stream field, on the exploration, development, exploitation, abandonment of reservoirs and transportation of crude
oil and natural gas through the national supply systemare:
the scope of application includes all oil resources existing in theunderground of the country, present as a gas or
liqui d, and makes no distinction according to their generation, geological and petro-physical characteristics of
the collecting rocks, type of deposit or mining technology, thus their classification as resources from
conventional or unconventional deposits;
the recovery of crude oil and natural gas resources is performed through concessions, based on petroleum
agreements of thetax royalty type, concluded with theNational Agency for Mineral Resources, established
by law as thecompetent authority, which shall enter into forceafter their approval by Government Decision;
the duration of the petroleum agreements is 30 years, extendable by another 15 years;
In addition to the general principlesof recovery of oil resources, thelevel of the royalties, theholders rights
and obligations, the primary oil legislation establishes two important principles: the non-discriminatory
treatment applied to the owners and the stability of the contract terms.

By the adoption of the Petroleum Law no. 238/2004, the Romanian legislation in the oil field has become compatible
with the European legislation, represented by the "Hydrocarbons Licensing Directive" (94/22/EC), which aimsto
ensure non-discriminatory access to the activities of prospecting, exploration and mining of hydrocarbons.
A first conclusion is that in Romania, at the level of the European Union and its Member States and also in other
countries with a tradition in the field of mining of hydrocarbons, the primary oil legislation is applicable to all types
of hydrocarbons, regardless of the conventional or unconventional nature of the fields or the adopted production
technology.
The secondary legislation is the result of the interaction between the primary petroleum legislation, which deals with
major issues generally applicable to theoil field and theparticularities of a certain activity, such as the exploration
and mining of resources from unconventional fields, which require a separate, moredetailed approach.
The regulations are meant to create an ideal framework for the oil-industry operations of exploration and recovery of
unconventional natural gas reservoirs, so as to achieve an acceptable combination between the economic advantages
and the disadvantages related to the potential hazards that any human activity can imply on the environment and
habitat and to reduce potential risks to acceptable levels by increasing the operators' discipline. Regulations are also
aimed at raising the confidencelevel of thegeneral public, of the decision makers and media communicators in the
safety of applied technologies and procedures.
The remark fromthechapter on primary oil legislation, that Romania has no specific provisions for unconventional
gases, also stands in terms of regulations and technical guidelines applicable to the exploration and usage of these
resources.
From the analysis of the regulations currently in force in the field of unconventional gas and shale gas in particular,
we find:
the regulation of the activities is closely related to the level reached by the exploration and mining
activities in different countries, states or provinces of unconventional gases, theUS being a leader from
this point of view. The comprehensive report enumerates the issues covered in the field of gas mining in
different countries;
Romania is no exception to this rule, the activities in this area being in their early stages, as there are
virtually no specific regulations for the exploration and mining of unconventional gas deposits;
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the regulations are applicable locally and take into account the geological, economic and social situation
of each area that falls under this regulation, and they are developed based on scientific studies,
observations accumulated from regulated activities, and sometimes as a result of unwanted incidents;
based on the 150-year experience in the Romanian oil industry and considering worldwide best practices
in the field of unconventional gas, we suggest the regulators develop and enforce a set of regulations
specific to this field, equally useful to oil companies, policy makers, NGOs and the population.
The oil legislation is essential in harnessing the resources from unconventional deposits, but it is not sufficient. When
conducting oil operations, the provisions of thelaws on environmental protection, access to land and building permits,
access to resources and infrastructure, protection of public health, taxation, etc. are applicable.
Since one of the main issues for the recovery of natural gas from unconventional deposits is not highly regarded by a
part of the public, who doesn't have, in general, extensive knowledge of the oil field, the CENTGAS comprehensive
report includes a review of the applicable laws in this field.
Starting from the observation that the European legislation is almost fully harmonised with thenational legislation,
the extended form of the CENTGAS report mentions a total of 26 European directives regarding environmental
protection, which also have applicability in the field of natural gas from unconventional deposits and specifies the
national legislation which transposes them.
Proposals for the amendment of the legisl ati ve and regulatory framework
Romania's rich experience in the oil field, the performance of hydraulic fracturing and horizontal drilling oil
operations for the recovery of conventional hydrocarbons facilitate the development of a set of new regulations meant
to establish codes of good practice for the technicians, but also to give confidence to policy makers, local
administrations, NGOs and the population that the risks inherent to any human activity are maintained at an
acceptable level for the recovery of shale gas, without exceeding the risks related to conventional hydrocarbon
mining.
The analysis of the primary and secondary legislation applicable in Romania, the EU directives, the comparison with
the situation in other countries that have made progresses in terms of the mining of unconventional gases, combined
with data from other modules of the study were theelements that led to the following proposals for the amendment of
the legislative framework:

Issues related to the environmental legislation
It should be decided whether the oil pads offered for concessions are subject to thestrategic environmental
assessment process, according to GD 1076/2004 on establishing the environmental assessment procedure for
plans and programs.
It should be specified which are the oil operations for which the environmental impact assessment is
requested and especially thetime when this assessment is required.
Amending the legislation with prerequisites that require the holders of petroleum agreements to undertake a
study of the initial environmental parameters, which assess the environmental conditions at the start of the
petroleumoperations and provide data for comparisons in theassessment of their own works.
Imposing rules for the monitoring of environmental parameters, of allowable values relativeto the initial
values and establishing periodic intervals and rules for reporting and control.
Establishing measures and deadlines for remedying environmental damage and responsibilities of the holders
of petroleum agreements.
Imposing theobligation to disclose the chemicals contained by the fracturing fluid.

Issues related to water use and waste management
As an extremely important component of the drilling activity, both as an environmental factor and as part of the fluids
used in thedrilling process, it is necessary to comply with at least the following:
preparing a hydrological and hydrogeological study to assess thepotential of basins and water bodies;
preparing a study regarding the impact on aquifers, the use of certain volumes and determining the limit
volumes that can be recovered without affecting local communities;
monitoring network of aquifer formations in the area where drilling works are being carried out for the
exploration /mining of unconventional gas; monitoring should be started before the execution of exploration
drilling works and will end after a certain period of time (which will be obtained after modelling the flow of
groundwater in the area of interest) after the completion of the abandonment stage;
the holders' obligation to replacewater sources affected by their own activity;
developing rules and procedures on themanagement of solid and liquid wastes.

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Technical regulations for petroleum operations
Well location
When choosing the location of the wells where oil operations specific to unconventional gas are to be performed,
especially high-volume hydraulic fracturing, regulations for the following are deemed necessary:
the distance from homes, schools, hospitals, water courses, floodable areas, drinking water supply sources,
monuments, roads, electricity networks, piping, etc.;
the maximum surface allocated to well locations;
the minimum distance to the faults detected by seismic prospecting;
the measures to protect the soil against erosion.
Building thewells
minimum rules for cementing and running casing;
the landing depth relative to drinking water aquifers, imposing certain types of steel for columns and certain
types of cements;
cementing control;
type of preventers;
checking the columns at a pressure higher than that to which they the shall be used in the fracturing operation;
establishing maximum allowable pressures in thefracturing operation;
investigating the wells.

The monitoring and control of petroleum operations
micro-seismic monitoring of hydraulic fracturing;
using wells to monitor the qualitative and quantitative impact on aquifers (number of wells, monitored
parameters, frequency of measurements);
supervision of hydraulic fracturing operations by experts certified by NAMR, similar to the procedure applied
for the well abandonment operations, established by Order of the President of theNARM no. 8/2011;
post-abandonment monitoring (duration, parameters, etc.);
periodic inspections of the petroleumoperations undertaken by specialists from the responsible authority;
monitoring the seismic activity caused by the high-volume hydraulic fracturing activity.


7. CONCLUSIONS AND RECOMMENDATIONS

CONCLUSIONS
Considering the decrease in the production of hydrocarbons from theoperational deposits, Romania has to explore
and exploit new conventional and particularly unconventional oil and natural gas fields in order to meet the
requirements in domestic consumption and maybe an additional quantity for export.
The multidisciplinary CENTGAS study shows how geological, technical, environmental impact, economic impact and
legislative framework aspects work together to capitalise the gas resources from unconventional deposits and
highlights how these fields mutually condition each other in achieving this objective.
Following this study and the synthesis of a rich bibliographic material together with the rich experience of the authors
in the petroleum industry, the conclusions are as follows (we mention that the comprehensive version of thereport
(400 pages) and the summary of the report (100 pages) include much more extensiveconclusions):

Romani as geol ogi cal potential regarding the existence of unconventi onal gas resources

Although the extent of geological research is insufficient so far to determine the unconventional gas reserves,
Romanias subsoil is credited with favourable perspectives.
In Romania, clay formations having a gas-bearing potential (shale gas) of gas shale type are located in orogen
units, in folded structures (which outcrop but also extend to the deep areas of the Oriental Carpathian
Mountains), as well as in platform units (from the Carpathian foreland), at depths exceeding 2,500 3,000 m
(Moesian Platform Romanian Plain with its extension to Southern Dobrogea, Scythian Platform (Brlad
Depression), south of the Moldavian Platform). Moreover, potential conditions of existence are met in the
Getic Depression, the Pannonian Depression and the Transylvanian Basin.
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The results of the analyses show a high potential for the Silurian formations in the Moesian Platform,
Scythian Platform and Moldavian Platform. The Oligocene formations in the Oriental Carpathian Mountains
and the Getic Depression have an average potential. For the Permian and Jurassic formations in the Southern
Carpathian Mountains (Resita-Moldova Nou area), for t he coal measures and Jurassic format ions in the
Moesian Platform and for the cretaceous and Miocene formations in the Transylvanian Basin the potential is
low. The information available for thePannonian Depression and the Continental Platformof the Black Sea
does not allow such assessment.
The age of the formations of interest cover a time span from Inferior Palaeozoic (Silurian 425 million years)
to Neozoic (Palaeogene 30 million years). The Palaeozoic formations, which are very old, sum up optimum
value parameters close to theinternational standards.
The thi ckness of the formations is variable (100 2,000 m), and its values are influenced by the tectonic
framework, the paleo-relief of the basin during their accumulation and the frequency of the drillings
intercepting these formations. Formations thicker than 50 m, with lithological homogeneity, have to be
considered for the operational phase.
Formations with a good potential are considered to be those with TOC values higher than 2 4%, the values
of the vitrinite reflectance Ro:1.5%, with 2
nd
3
rd
type kerogen, and which had an ageing temperature higher
than 430
o
C. Such formations can be explored.

Equi pments, techni ques and technologies speci fi c to oil operati ons for capi talising unconventi onal gas
At present, mainly horizontal wells are used together with hydraulic fracturing to exploit natural gas from gas-
bearing clays (shale gas).
To perform the drilling of horizontal wells, special measures have to be taken in order to carry out the
programme of construction and fitting of the wells in general and particularly those in curve, inclined and
horizontal intervals. These measures regard the setup of the string of drill pipes, the drilling fluids used,
monitoring the routeof thewell, preventing the loss of wall stability in theintervals to be strengthened,
preventing specific problems when inserting the pipe strings in the curve sections and preventing them to
be caught in the curve, very inclined and horizontal intervals, avoiding the blocking of productive beds and
so on.
Considering the higher costs for building wells for shale gas exploitation, as compared to the exploitation
of conventional gas deposits, as well as the longer duration for performing all operations, modern drilling
rigs are needed, i.e. performing and reliable rigs and with ahigh level of automation of the handling and
drilling operations, able to reach a high drilling speed, without major operation risks, and it is necessary to
prevent and avoid the occurrence of technical, technological and ecological accidents.
The activities of well drilling and putting into service need a constant consumption of industrial water, in
large quantities, in order to prepare and condition drilling fluids, to prepare cement pastes, to maintain and
cool down certain machinery and drilling tools, as an intangible reserve for fires and so on, and especially
to perform the multiple operations of hydraulic fracturing of the productive beds by means of thesafest
and most efficient methods.
To perform the hydraulic fracturing operation several specific units are needed, performing various
functions. To perform the hydraulic fracturing for shale gas exploitation wells, pressures higher than 1,000
bar are needed, work that can be performed with cementation, fracturing and additive adding plants made
in Romania, ACFA 1000 or ACFA 1422 type.
We must point out that an exceedingly high number of straight, directional and even horizontal wells have
been drilled in Romania, and thousands of hydraulic fracturing operations have been performed in order to
increase the production of oil and gas from conventional deposits, without a major technical, technological
or ecological accident.
In conclusion, we earnestly statethat Romania has optimum conditionsto drill horizontal wells for shale
gas exploitation, together with modern and performing drilling rigs and tools, machinery for hydraulic
fracturing, very skilled designers and operators having a rich experience in theoil and gas industry, and
complete laws and gui delines in compliance with the European and worldwi de standards on environmental
protection and on the protection of thecommunities in theconcerned areas, and so on.

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Impact of unconventi onal gas extracti on on water, ai r, soil and subsoil , bi odi versi ty, heri tage, and soci al -
economi c envi ronment, specifying the mi ti gation measures until an insi gni fi cant (minimum, reversi ble or
temporary) impact is generated

Water
Water supply is made from surface water sources or underground water sources, according to the water needs of the
process. The water needed to carry out the activity shall be provided differentially, according to the stage of woks,
such as follows:
The potential impact of the shale gas extraction activities on water is reduced through the medium of aseries of safety
measures, specific to each project stage.
The compliance with the design, and the use of modern hydraulic fracturing technologies, and the implementation of
the safety measures set will reduce the impact of the shale gas extraction on the environmental factor (surface and
underground) water.
At the same time, there will be no used water discharges in the environment, and the proposed used water
management shall ensure the elimination of the potential sources of water pollution.
Ai r
The measures required to reduce the impact on theenvironmental factor air, for each work stage, regard mainly the
use of thebest practices in drilling and hydraulic fracturing so that pollution with methaneis avoided upon passing
through the sensitiveareas in the subsoil.
If the volume of works is reduced and a working schedule is established and the working schedules of the machinery
within the work site are correlated with the working schedules of the production bases, the permitted maximum values
are not expected to be exceeded.
The potential impact generated is estimated as insignificant.
Soil and subsoil . Seismi ci ty
The impact on soil and subsoil can be manifested, particularly in the development stage, by the pollution potential of
the drilling activities and of the transportation of fluids through pipes or tanks, by the resulting liquid and solid waste
management and by the heavy traffic of machinery. The impact can be prevented or reduced to a minimum by the
optimisation and constant control of these activities.
The seismic risk determined by unconventional gas exploitation is very low. Moreover, the risk can be minimised by
proper study and planning in advance of the operations, seismic monitoring and establishment in advance of the
measures required to eliminate the risk in caseof earthquakes.
Noise and vi brations
Noise and vibrations as normal emissions of thedrilling activities have, generally speaking, a temporary character,
and their effects are short-term effects; in order to prevent the negative impact on the works and on the environment,
efficient safety measures can be taken.
The location of the wells in uninhabited areas, far from the protected receivers, justifies saying that noise and
vibrations are not apotentially significant source of pollution.
Bi odi versity
The impact of the shale gas extraction activities on the biotic component will be of low importance. Thus, the
agriculture in a small perimeter is replaced by a provisional industrial activity, and no measures additional to those
proposed for water, soil and air protection are necessary.
Social and economi c envi ronment
The works needed to set up the work platform and access road, with their related infrastructure, will have a positive
influence on the life of the community in the area, but at the same timethey may have potential discomfort factors for
the population.
The works proposed to be carried out, doubled by a series of safety measures, will have a preponderantly positive
impact on the population in the area, determining an improvement of both the short- and long-term local and zonal
socio-economic situation.
Cul tural , ethni c and heritage conditi ons
The potential impact forecasted will manifest itself strictly in the area where the works are carried out, for short
periods of time. The potential impact is reversible, so that it will be completely eliminated when the works are
completed.
Possible material incongruities are avoided by developing the projects so that they do not affect the national and local
cultural heritage, based on a feasibility study including the heritage monuments and sites in the area to be affected by
the envisaged investment.

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Economic and soci al impacts
In the scenario taken into consideration, a number of important conclusions have been drawn on the impacts of new
gas production related to: (i) import and export evolution based on increased production; (ii) impact in GDP; (iii)
impact on the gas market price; (iv) impact on the jobs both direct and indirect at the national level (state budget) and
local level.
Resuming these results we may statethe following:
(i) import and export evolution the increase on the production of unconventional gas being greater than the
expected evolution of the internal consumption (given by the evolution of GDP) may lead, at the beginning of the
next decade, to the possibility for gas exports from Romania. Obviously, thereare other alternatives to manage the
excess gas such as to fill underground deposits for future use.
(ii) impact on the GDP at current import prices for gas the impact on the GDP is significant around 1.5%).
Considering that the new gas production is substituting imports in the Romanian economy the impact on GDP is
continuously decreasing and may even reverse once exports set in to values in the range of 0.5% of GDP. It should be
noted that this situation is strongly decreasing the vulnerability of the economy but, on the other hand, it will require
an increase of the gas network with a need for more investment required by exports and/or gas storage capacity
increase.
(iii) Another important result is the significant reduction of the price of gas in the market due to the large quantities
of new gas production that are eliminating expensivegas imports. The immediate gas price reduction is about 12%
while theoverall reduction for the given timeperiod is expected to be about 33%. Actually, till 2019 theprice will
increase since the imports will compensate the reduction of classical internal production of gas and then the new gas
production will start decreasing prices.
(iv) Impact on the jobs at national level is measured by the tax entries to the state budget (resulting from job
taxation) that are reaching substantial values (in thetenth of millions of US$). By comparison the tax on profitsis
smaller a result that stresses the importance of job creation in the new gas production. The indirect jobs per each
direct job was taken, in a conservative manner, to be at the lower level of 3. Even so the impact on the budget is
substantial and the counties where the direct jobs are created are expected to witness local economic activity increase
after the gas production is setting in. Dirrect jobs are considered at 2000$/job/month while indirrect ones at
1500$/job/month and the taxes at 50%, which allows to estimate total budgetary revenues of 176.2 M$/year. Wehave
not assessed the effects on community development at the level of education, cultural development, or companies
founding, that require a moreextended study.

We underline the fact that the sizeable economic and social impacts resulting from the analysis above are just a basic
evaluation, done based on conservative assumptions. A model was built that allows simulating various scenarios for a
future, analysis as more datawill be comming in from the exploration and exploitation activities.

Legisl ati on appl icable to unconventional gas

The primary oil legislation is perfectly consistent with the European legislation, and it is applicable to all typesof
hydrocarbons whatever their generating conditions, their deposit characteristics, their state of aggregation or their
exploration and exploitation technologies, or, in other words, their conventional or unconventional character; it
imposes the basic rules for capitalising oil resources and sanctions two important principles: thenon-discriminatory
treatment applied to the holders and the stability of the contractual terms.
The secondary oil legislation represented by technical instructions, regulations, good practice codes, and monitoring
and control rules has alacunary character in our country; it is necessary to supplement it with the above-mentioned
provisions.

RECOMMENDATIONS

Based on the multidisciplinary analysis of certain geological, technical, economic, environmental protection and
legislation aspects having asignificant impact on theexploration and exploitation of unconventional natural gas, the
authors of the study recommend the following:

Systemati c geol ogi cal research of Romanias basins wi th an unconventi onal gas potenti al
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In order to determine the existing resources, by basic research programmes, funded from the national
budget, and by leasing theconcerned perimeters to companies able to bear the high costs of geological
and geophysical exploration, and by deep-well drilling (3,000 4,000 m); the old formations in the
Carpathian foreland, Palaeozoic and particularly Silurian ones, can be of maximum interest.
In theexploration stage each geological unit has to be examined and considered separately,
because the geologic features (stratigraphic, sedimentologic, organogenetic, and tectonic
features) are very different, they present specific conditions of storage and release of the
natural gas and, implicitly, require different technologies of exploration and exploitation.
The shale gas reserves have to be assessed following the design and drilling of exploration
wells establishing, by a 3D approach, the geometry (architecture) of the rock bodies, their
thickness, side extension, lithological homogeneity, and permeability of theformation upon
the whole. Theresearch for the assessment of the reserves of tight gas (from thePannonian
Depression and the Transylvanian Basin), gas-bearing coals (from the Anina Basin and, in the
future, from the Dacian Basin), and gas hydrates in the Black Sea must go on.
Introducti on and imposing the use of the newest technol ogies and good practi ce rules in
unconventional gas drilling and expl oi tation, characterised by a high degree of performance and
safety and insi gni fi cant ri sks of produci ng damages to the populati on and the envi ronment
Capitalisati on of the techni cal experience exi sting in Romania
The training and experience of the specialists involved in drilling activities and of those
involved in environmental protection has to be capitalised in Romania as well (not just
abroad) in the exploration and exploitation of shale gas by hydraulic fracturing in technically
and ecologically safe conditions.
Moni toring the quality of the environmental factors
In order to carry out thecomplex activities of shale gas extraction it is necessary to prepare
and implement a plan for monitoring the quality of the environmental factors, identifying the
effects of the rehabilitation works on the environment during the construction period, as well
as after completing the works.
The plan shall comprise the points to be monitored, the monitored parameters and the
monitoring frequency. Interactive and constant consultations with the authorities are needed
to completeand materialise themeasures to be implemented and applied (e.g. cessation of
works, measures to reduce effects, etc.) for each typeof impact.
Devel oping the economi c impact for di fferent scenari os of development of the fiel d of
unconventional gas, in order to provi de the politi cal deci sion makers wi th the possi bili ty to choose
the optimum strategy for capi talising the resources of the country;
Introducing new techni cal regulations regarding well posi tion and construction, monitoring and
control of oil operati ons, at the same time wi th the strengthening of the regul atory, moni toring and
control operational capacity of the authori ties competent in the fiel d.
*
The authors of the study believe that the development of anational strategy for medium-term (2013 2020) and long-
term (2013 2050) capitalisation of thenatural resources has to take into account the following elements:
Romaniahas a favourable geographical position.
Romaniahas highly diversified energy resources.
The mineral resources are distributed harmoniously, balanced in relation to the big urban and industrial
centres and in relation to the infrastructure.
Romania has a long tradition (more than 150 years) in the oil industry, and it can be used in capitalising
unconventional resources.
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Because of the early discovery, most oil and natural gas fields are in an advanced stage of exploitation, and
the production is at low ebb, but there are premises for the development in depth and in extension of the
known accumulations.
The existence of some unconventional resources takes shape; their use is possible in the near future if
appropriate investments will be made in basic research and exploration.
Accessing the restructuring aids for upgrading and endowing the operation with new technology (through EU
projects).
Developing the national base of mineral resources: through annual programmes of geological research;
completion of a centralised databank on classic and unconventional mineral resources. The National Agency
for Mineral Resources works on this project.
Ensuring the stability of the contractual conditions and granting proper fiscal facilities, based on elaborated
analyses of the production costs/oil and natural gas priceratio, with aview to best capitalise the reservesof
the country.
Using oil and natural gas reserves locally by reactivating the exploitation in fields where production ceased;
this may help regional development and the training of thepersonnel needed for these activities.

As a final conclusion, the authors of the CENTGAS report, prepared at the initi ati ve of the Romanian Nati onal
Committee of the Worl d Energy Council , think that pointing out Romani as potenti al of gas from
unconventional deposi ts, esti mated as si gni fi cant, and proceeding with thei r systematic expl oration and
exploi tation are an opportuni ty and a necessi ty of the moment, provi ded modern technol ogies are implemented
and an appropri ate regul atory framework reducing potential risks to acceptable values is adopted.
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APPENDIX A

LIST OF THE AUTHORS OF THE CENTGAS REPORT NATURAL GAS RESOURCES FROM
UNCONVENTIONAL DEPOSITS POTENTIAL AND CAPITALISATION
Pos. Name Title Institution Position
1 Anastasiu Nicolae
Professor, PhD,
corresponding member of
the Romanian Academy
University of Bucharest
Emeritus Professor,
Adviser and 1
st
Degree
Senior Researcher
2
Antonescu Niculae
Napoleon
Engineer, professor, PhD Oil & Gas University of Ploiesti Honorary Rector
3 Avram Lazar Engineer, professor, PhD Oil & Gas University of Ploiesti
Director of the Department
for Drilling, Extraction and
Transportation of
Hydrocarbons (FETH)
4 Bandi Stefan Engineer, PhD
SIPG Campina (Society of Oil &
Gas Engineers) Grigore
Ioachim Training Centre
Associate Professor
5 Barac Mihai
Engineer, PhD, 2
nd
degree
researcher
INCDIF ISPIF Bucharest
(National Institute for Land
Improvement Research &
Development)
Adviser
6
Batistatu Mihail
Valentin
Engineer, PhD Oil & Gas University of Ploiesti Associate Professor
7 Branzila Mihai PhD in geology Al. I. Cuza University of I asi Professor
8 Buliga Gheorghe Engineer, PhD SIPG Association Chairman
9 Chera Constantin Archaeologist, PhD
Museum for National History
And Archaeology
Archaeologist
10 Ciocaniu Stefan
Engineer, PhD in Mining
and Oil & Gas
S.C. GEO TOTAL S.R.L Administrator
11 Coloja Mihai Pascu Professor Oil & Gas University of Ploiesti Rector
12 Cosma Contantin Professor, PhD Babes-Bolyai University Professor
13 Dinu Corneliu Engineer, professor, PhD University of Bucharest Honorary Professor
14 Dinu Florinel
Engineer, PhD, associate
professor
Oil & Gas University of Ploiesti,
School of Oil & Gas Engineering,
Department for Drilling,
Extraction and Transportation of
Hydrocarbons
President of the Teaching
Staff Union in the Oil &
Gas University of Ploiesti
15
Dragota Carmen
Sofia
PhD
The Institute of Geography of the
Romanian Academy
1
st
Degree Senior
Researcher
16 Florea Maria
1
st
degree senior
researcher, engineer, PhD
LUCIAN BLAGA University of
Sibiu
Associate Teacher
17 German Silviu Mihai Geologist Danubian Energy Consulting Senior Advisor
18 Gheorghitoiu Mihai Engineer, PhD Oil & Gas University of Ploiesti Contributor Professor
19 Ignat Ioan Engineer
S.N.G.N. ROMGAZ S.A.
Medias
Adviser
20 Malureanu Ion Engineer, professor, PhD Oil & Gas University of Ploiesti
Chairman of the Oil & Gas
University Senate
21 Marcu Mariea Engineer, PhD Oil & Gas University of Ploiesti Associate Professor
22
Marunteanu Cristian
Dan Valentin
Engineer, professor, PhD University of Bucharest Professor
23 Mocuta Traian PhD in oil geology Oil & Gas University of Ploiesti Associate Teacher
24 Moldovan Mircea PhD in nuclear physics Babes-Bolyai University Research Assistant, 1
st

NATURAL GAS RESOURCES FROM UNCONVENTIONAL FIELDS
- POTENTIAL AND RECOVERY
- - ABSTRACT-

WEC/RNC
CENTGAS PROJECT
37

Claudiu Degree Technician
25 Munteanu Ioan
Engineer, PhD, assistant
lecturer
University of Bucharest Assistant Lecturer
26 Musatescu Virgil
Engineer, PhD &
economist, PhD
Polytechnic University of
Bucharest
Project Manager SOP
HRD ID 52761,
benefici ary: the
Polytechnic University of
Bucharest
27 Nemes Toderita Engineer, professor, PhD
Lucian Blaga University of
Sibiu
Professor
28 Nita Dan Constantin PhD Babes-Bolyai University Research Assistant
29 Oaie Gheorghe Geologist, PhD
National Institute for Research &
Development for Marine Geology
and Geoecology
Managing Director
30 Onutu Ion Engineer, professor, PhD Oil & Gas University of Ploiesti
Professor, Vice-dean of the
School of Oil and
Petrochemistry
Technology
31 Parepa Simion Engineer, PhD Oil & Gas University of Ploiesti
Lecturer, Department of
Mechanical Engineering
32 Patruti Alexandru Engineer, PhD Romaqua Group S.A. Adviser
33 Pavlovschi Neculai Engineer, PhD - Professor
34 Popa Mihai Emilian PhD University of Bucharest Associate Professor
35
Pruna Mihaela
Florentina
Associate professor Romanian-American University Dean
36 Purica Ionut
Engineer, PhD, professor
& PhD in economics
IPE INCE Romanian
Academy (Institute for Economic
Forecast National Institute for
Economic Research)
Senior Researcher
37
Radu Gheorghe
Engineer, PhD
S.N.G.N. ROMGAZ S.A.
Medias
Director of the Business
Development Department
38
Radu Varinia Raluca
Attorney LL.B, M.A,
MBA
Varinia Radu Law Office
Bucharest Bar
Partner Attorney
39
Saramet Mihai
Remus
Engineer, PhD, professor Al. I. Cuza University of I asi Adjunct Professor
40 Seghedi Antoneta PhD in geology
National Institute for Research &
Development for Marine Geology
and Geoecology
1
st
Degree Researcher
41 Tabara Daniel PhD, lecturer Al. I. Cuza University of I asi Lecturer
42 Tudor Darie Engineer, PhD, professor Naval University of Constanta Professor
43
Uzlau Marilena
Carmen
Lecturer, PhD
Hyperion University, School of
Economics
IPE ((Institute for Economic
Forecast) Romanian Academy
Dean
Researcher

The Executive Secretariat of RNC-WEC ensured the organisational support for the creation of the CENTGAS report
Natural gas resources from unconventional reserves Potential and valorisation by hosting monthly meetings of the
Directors Board, of the Science Board, weekly work meetings with the 5 module coordinators, traveling in the country and
abroad, scienti fic events which promoted CENTGAS.

The Executive Secretariat of RNC-WEC:
- Gheorghe Balan Executive General Director
- Silvia Prundianu Head of Events, Comunication and Internal Public Relations Department
- Violeta Georgiana Pera - Head of Secretari ate, Comunication and External Public Relations Department
- Elena Pavel Head of Financial and Marketing Department
NATURAL GAS RESOURCES FROM UNCONVENTIONAL FIELDS
- POTENTIAL AND RECOVERY
- - ABSTRACT-

WEC/RNC
CENTGAS PROJECT
38




Romanian National Committee of the World Energy Council
Executive Secretariat

WEC/RNC Di rectors Board Decisi on

The Decision of the Directors Board no. 145 dated 12.07.2012, approves the establishment of:
THE EUROPEAN CENTRE OF EXCELLENCE IN GAS FROM SHALE GAS, without legal personality,
within theorganizational structure of the WEC/RNC with head office in Bucharest, 1-3 Lacul Tei bd., sector 2, called
CENTGAS.

- The European Centre of Excellence in Gas from Shale Gas has the foll owing scope of acti vi ty: A
comprehensiveunderstanding of the potential represented by natural gas shales and the issues regarding
the exploration and development of shalegas in Romania.

Ti tle of the project. The potential of natural gas from unconventional reserves and the status of exploration
and development of shalegas in Romania.

The project team. The project is bases on the combined effort of a multi-disciplinary team of over 40
specialists

The projects objecti ve is to gradually collect and analyze the information on shale gas in Romania in an
international and European context.

Relevant fiel ds covered by the project: Geology, Mineralogy, Oil reserves geology, Geophysics,
Technology and equipment, Environmental protection, Economy, Sociology, Archaeology, Legislation,
Energy security policies

The project structure on 6 modules, including thenames of the module coordinators-managers:
- Module 1: General issues potential and val orisati on
coord. Prof. Nicolae Anastasiu, m.c. of the Romanian Academy
Prof. Niculae Napoleon Antonescu
Module 2: Unconventional energy resources in Romani a
coord. Prof. Nicolae Anastasiu, m.c. of theRomanian Academy
Module 3: Equi pment, techni ques and technol ogies - specifi c equi pment, techni ques and technol ogies
for drilling, completi on and production of unconventional gas wells
coord. Prof. Niculae Napoleon Antonescu
Module 4: Oil operations associated with unconventi onal gas and potential environmental impact
coord. PhD. eng. Alexandru Patruti
Module 5: The economi c impact of unconventional gas resources in Romani a, at the national and l ocal
level s
coord. Univ. lect. PhD. eng. Ionut Purica
Module 6 : The appli cable law on the devel opment of unconventi onal gas resources
Eng. Mihai Silviu German

The General Executive Director of the WEC/RNC shall carry out theprovisions of the hereby decision.

Iul ian Iancu
WEC/RNC Chairman
NATURAL GAS RESOURCES FROM UNCONVENTIONAL FIELDS
- POTENTIAL AND RECOVERY
- - ABSTRACT-

WEC/RNC
CENTGAS PROJECT
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ROMANIAN NATIONAL COMMITTEE OF THE WORLD ENERGY COUNCIL
Adress: Bdul. Lacul Tei nr.1-3, cod 020371, Bucureti sector 2
Phone: +40372.821.475; +40372.821.476
E-mail: ghbalan@cnr-cme.ro
Website: www.cnr-cme.ro

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