Sunday, March 8, 2009

The Debate Over Hydraulic Fracturing

Hydraulic fracturing, a decades-old practice employed to improve production of trapped oil and natural gas in tight reservoirs, is under increased scrutiny at the federal level. An energy bill is likely this spring, and environmental groups and certain members of Congress are pushing to increase regulation of the practice. Industry and consumer groups however have noted the process is already regulated at the state level and unnecessary regulation at the federal level will result in decreased production and higher energy prices. (1)

Developed in the 1940’s, hydraulic fracturing is a process used in low permeability oil or gas bearing formations to improve flow rate. The process is particularly important in tight sands and shales. A fluid (usually water and additives) is pumped at high pressure into the formation. The pressure of the fluid cracks the rock creating pathways for hydrocarbons to flow. A propant is then injected (usually sand) to prop open the newly formed cracks allowing the natural gas or oil to flow to the well and up to the surface. (2)

The process has become increasingly important, particularly with the recent move into gas shales such as the Barnett Shale in Texas. The benefits allow greater production of hydrocarbons with fewer wells, minimizing waste and surface disturbance. (3)

According to Independent Petroleum Association of America (IPAA), “ninety percent of oil and gas wells in the United States undergo fracturing to stimulate production. The use of hydraulic fracturing is estimated to account for 30% of U.S. recoverable oil and gas reserves, and is responsible for the addition of 7 billion barrels of oil and 600 trillion cubic feet of natural gas.” (4)

The Concerns
Following a 2004 study of hydraulic fracturing and its impacts by the EPA, the Energy Policy Act of 2005 exempted hydraulic fracturing from the Safe Drinking Water Act (SDWA). Congressman Henry Waxman (CA-D), former Chair of House Oversight Committee and current Chair for Energy and Commerce, has repeatedly expressed concern over the practice and held a hearing in 2007 to further examine the exemption under the SDWA. Last fall a bill was introduced by three Democrats from Colorado to repeal the exemption of hydraulic fracturing from the SDWA.

Opponents of the practice have criticized the EPA study and expressed concern that the fluids used in fracturing could potentially seep into drinking water. According to EarthWorks, EPA calculations, omitted from the final study in 2004, show that at least nine chemicals used in fracturing could pose a threat to human health. (5)

Further complicating the issue is the secrecy surrounding the fluids used in hydraulic fracturing. According to the Natural Resources Defense Council, attempts by various environmental groups to obtain chemical compositions of hydraulic fracturing fluids have been unsuccessful because service companies consider the fluid ingredients proprietary. (6)

Industry’s Defense
The oil and gas industry points out that each oil and gas producing state regulates fracturing through their respective oil and gas regulatory agencies through well permitting programs. They also point to the EPA study, released in June 2004 which found no significant environmental risks as a result of proper hydraulic fracturing. (7)

According to the Interstate Oil and Gas Compact Commission, although thousands of wells are fractured annually, the EPA did not find a single incident of the contamination of drinking water wells by hydraulic fracturing fluid injection. IOGCC, a government agency, argues that “effective state regulation has made hydraulic fracturing a safe and environmentally-sound way to maximize and conserve our nation’s natural resources.” (8)

Furthermore, the industry notes that even if the fracturing fluids were a threat migration to drinking water would be prevented through well construction techniques. Construction requirements include components intended to protect groundwater resources such as the steel pipe used in surface casing which is cemented in place to protect groundwater. (9)

If Congressman Waxman and others are successful at repealing the exemption under the SWDA, many producers argue natural gas production from shales, in particular, could come to a grinding halt. The removal of the exception would require additional permits for each new well, a long process that would slow development.

There could be a negative effect on future supplies of domestic oil and natural gas if steps are taken to curb the use of hydraulic fracturing. There seems to be conflicting reports over the fluids migration and potential dangers to drinking supplies. Policymakers should seek out the facts surrounding the effects of its use. Furthermore, unnecessary regulations should be avoided if the problem is being adequately addressed at the state level.

1 Consumer Energy Alliance Newsletter, February 2009.
2,3,4,7 IPAA Fact Sheet on Hydraulic Fracturing
5 EarthWorks. “Hydraulic Fracturing.”
6 Natural Resources Defense Council. “Drilling Down.”
8 IOGCC. “Hydraulic Fracturing.”


Khan said...
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Khan said...

Iheart you have raised an important issue. Regulations on the oil and gas industry have been imposed with out properly thinking how they will impact the oil and gas companies and the E&P business as a whole, will the reduced production of oil and gas affect the supply of energy to the nation, will they impact unconventional gas resources such as shale gas, tight gas and coal bed methane (regulations on Hydraulic fracturing will cause most of the projects to become non-profitable and therefore, we risk losing much needed production from unconventional gas resources) and many other issues.
In my opinion, what policy making for regulating the E&P business lacks is the interaction between the policy makers and the industry. This leads to policy making that is not balanced and can have adverse affects on the oil industry. Reports from EPA prove that contamination from hydraulic fracturing is low and there is no need to further study the issue. Similarly not a single case in the US has been found where hydraulic fracturing of oil and gas wells has lead to underground water contamination. Moreover, fracturing technology is really advanced now. Being a petroleum engineer, I know that by studying the stress distribution in the reservoir, fracture formation and growth in the reservoir can be strictly limited to the target reservoir resulting in contained fractures in the reservoir. In Texas, the Railroad commission requires that a certain procedure and methodology should be followed for fracturing to minimize any water contamination underground and ensure that the risk of underground water contamination is reduced. Fluid migration that you have mentioned might lead to contaminants seeping in to drinking water reservoirs is unlikely because oil and gas reservoirs have a cap rock that is capable of sustaining much higher pressures than the reservoir rock it self, leading to the conclusion that unless the cap rock is some how fractured, fluids will not migrate to a water reservoir. Secondly, conventional oil and gas reservoirs are considerably deep as compared to drinking water reservoirs, with lots of different impermeable rock formations between the reservoir and the water reservoir, leading to a low probability that fracturing fluids will end up in the water table.
So if I or you were a policy maker on hydraulic fracturing then we might have a workable regulations plan for the hydraulic fracturing.