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Fracking Technology Brings Promise and Worries

John Moore,|Special to CNBC.com
Wednesday, 20 Jun 2012 | 9:41 AM ET

Mention fracking in a conversation and you’ll likely get a strong reaction.

It’s become a hot-button issue, but what exactly is it? Why does the natural gas industry believe it is critical to our energy future, and why are so many people leery about it?

hydraulic fracturing process
Robert Nickelsberg | Getty Images
hydraulic fracturing process

As energy independence becomes a battle cry within government and the energy industry, it’s become crucial to take advantage of previously untapped resources.

Hydraulic fracturing, or fracking, is a technology that’s become a critical tool in extracting oil and natural gas from unconventional sources — typically impermeable rock formations such as shale.

Although the term fracking has entered the mainstream only in the last few years, its history goes back 65 years. Stanolind Oil and Gas conducted the first experimental use of fracking in 1947; Halliburton completed the first commercial treatment two years later.

And while the public has conflated fracking with new methods for natural gas extraction, it’s a process that’s used in about 90 percent of the natural gas wells in the United States. It’s also widely used in conventional oil wells to boost yields in underperforming basins.

But what’s currently getting all the attention is fracking as it is used in unconventional gas extraction. Much of that focus involves weighing the benefits against the potential hazards.

Unconventional Means

With fracking, millions of gallons of water and sand, as well as certain chemicals, are pumped underground — typically a mile or more below the surface — to break apart the rock and release the gas. The pressure causes the rock layer to crack, and the fissures are held open by the sand particles to allow the natural gas to flow.

Fracking has become a critical process in large part because of improvements in other techniques, such as horizontal drilling and 3-D seismic imaging, which have helped make unconventional gas extraction more feasible.

According to a reportby IHS Global Insight, unconventional gas activity accounted for 53 percent of natural gas production in the United States in 2010. It’s expected to grow to 79 percent of production by 2035.

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But unconventional well drilling is more energy intensive than it is for conventional wells. Robert Jackson, professor of global environmental change at Duke University, says because gas flows more easily in conventional wells, it usually isn’t necessary to drill down as far as is necessary in shale.

Unconventional wells are also more expensive to drill. According to the IHS Global report, a typical shale gas well costs $3 million to $9 million to drill. A conventional land-based oil or gas well costs about $400,000 to drill, according to the Department of Energy. Jackson notes that the decline curves for unconventional wells are steeper than conventional wells, an economic consideration that could lead to environmental concerns.

“The production appears to drop off more quickly in an unconventional well than it does in a conventional one,” Jackson says. “That means you either have to drill more wells to keep the flow up for the same amount of wells, or you have to go in and refrack wells more quickly to boost the flow back up. With refracking, there’s more impact on water use, more wastewater generated, more of the industrial activities that cause friction with people.”

Natural Gas
Natural Gas

Bad Chemistry?

The biggest environmental concern involves the chemicals used in the fracking process. The chemicals employed during fracking serve several purposes — to prevent corrosion of the well casing and limit bacteria growth in the formation, for example. But there are concerns that these chemicals could reach water supplies.

Hydrochloric acid, methanol and sodium hydroxide are among the chemicals commonly used in the process.

Some energy companies have voluntarily disclosedtheir chemical information. For the most part, companies are not required to disclose specific concentrations of the chemicals they use in order to protect trade secrets. (Louisiana and Pennsylvania require concentration disclosures only for chemicals deemed hazardous. See this chartfor additional disclosure laws.)

“Whenever you apply high pressure to a well, you increase the possibility for chemicals to leak out of the well if you don’t have proper casing,” says Tom Myers, a Reno, Nev.-based hydrogeologist. “Once it leaks out of the well, it can then hit different pathways for the fluids, be they chemicals or gas, to get to an aquifer or a spring."

Industry experts say the fracking process includes measures to protect groundwater supplies. Several layers of cement-encased steel tubes are inserted into the wellbore and extend down into the shale depth, isolating the wellbore from groundwater supplies. The well design and construction, including the casing and cementing process, must comply with state and federal regulations.

Additionally, fracking can require as much as 5 million gallons of water, with 10 percent to 30 percent returning to the surface as wastewater. But Jackson notes that the industry has taken the lead in recycling much of that wastewater for reuse in subsequent fracking projects.

Clean-tech firms — some which have been exploring alternative fuels or oil industry clean-up — have jumped into the wastewater business.

Sara Banaszak, vice president and chief economist at America’s Natural Gas Alliance, which represents the natural gas exploration and production industry, says measuring the environmental impact is difficult.

“It’s hard to generalize because how you develop one area versus another could be so dramatically different," she says. "The biggest impact from all of these resources we’re producing, strictly from a greenhouse gas or emissions perspective, is when we use them, not when we produce them.”

For Myers, the difficulty in gauging the impact is precisely the problem. He points to last December’s preliminary report by the Environmental Protection Agency that found that contaminants in a drinking water aquifer in Pavillion, Wyo., had likely seeped up from fracked gas wells.

“One of the take-home points [of the EPA study] is that they’ve not only identified a pathway for chemicals to have gotten from a fracked well to a drinking water well, but they’ve detected the chemicals in some of the deeper monitoring wells,” says Myers. “But you can’t say which specific gas well caused it. Some of the contamination may have taken 40 years, because they started fracking in the late ’60s. That’s what we’re not monitoring for at all, and we simply don’t know where and if this can occur.”

Municipalities in New York state, one of four states home to the massive Marcellus shale formation, have passed laws bannng fracking. Opposition has also been vociferous in Colorado. Vermont recently became the first state to ban fracking altogether. In Europe, France is the biggest nation among a small group to outlaw it.

TheEPA is scheduled to release a followup study in late 2012.

Balancing the benefits of fracking with the potential hazards is difficult. But right now, it’s a key component in an effort to make the most of our available resources.

“Unconventional gas isn’t booming because it’s better than conventional,” says Duke's Jackson “It’s booming because it’s what we’ve got left.”

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