Two recent articles brought to mind the trade-offs in the debate over hydraulic fracturing.
First, the Department of Environmental Conservation of New York State issued its Final Supplemental Generic Environmental Impact Statement, on the environmental impacts of allowing hydraulic fracturing in New York. New York has had a moratorium on fracking for the last several years, even though a substantial portion of the Marcellus formation underlies the state. It appears that New York is headed for a permanent ban on the practice.
I haven’t studied the EIS, which runs to several hundred pages. But it is a thorough catalogue and discussion of the environmental impacts of the drilling boom from fracking and horizontal drilling, most of which we know well by now: water use, surface spills, groundwater impacts, waste disposal, air quality, greenhouse gas emissions, health risks, visual impacts on the landscape, truck traffic, seismicity — all are discussed in great detail.
This graphic from Bloomberg article, US Fracklog Triples as Drillers Keep Oil from Market (click to enlarge):
Bloomberg says that these uncompleted wells, if completed (that is, hydraulically fractured), would produce 322,000 bbls/day, equivalent to the current production of Libya. Total drilled but uncompleted wells, according to Bloomberg: 4,731.
A new study published by The University of Texas’ Bureau of Economic Geology compares the amount of water used in producing oil from shale plays to the water used in producing oil from conventional reservoirs. The study concludes that water use for conventional and unconventional oil production is about the same. “Comparison of Water Use for Hydraulic Fracturing for Shale Oil and Gas Production versus Conventional Oil.“
The study looked at water use in the Bakken and Eagle Ford plays. The ratio of water used to oil produced ranged from 0.2 to 0.4 gallons of water for each gallon of oil produced over the lifetime of a well in both plays – or 0.03 to 0.06 gallons of water per million British thermal units of energy from the oil produced. In comparison, U.S. conventional production uses from 0.1 to 5 gallons of water for each gallon of oil produced.
The study’s conclusion: “the U.S. is using more water because HF [hydraulic fracturing] has expanded oil production, not because HF is using more water per unit of oil production.”
According to the study, the amount of water used per mmBtu produced in the Bakken is substantially less than in the Eagle Ford: water use per well in the Bakken is about half that in the Eagle Ford, and about one-third per mmBtu of energy produced.
The Ohio Department of Natural Resources has imposed rules on exploration companies requiring seismic monitoring around new well sites near fault lines and quake epicenters in the Utica Shale. According to the Columbus Dispatch, the rules require monitors at new drill sites located within 3 miles of known fault lines or areas that have experienced an earthquake greater than magnitude 2.0. Monitors cost about $20,000 each, and as many as five are needed at each well. “ODNR officials said if monitors at drilling sites detect even a magnitude 1.0 quake, fracking will immediately stop and an investigation will start. If fracking is blamed, a moratorium would be instituted 3 miles around the epicenter,” according to the article. Earlier earthquake activity near Youngstown, Ohio was attributed to an injection well, which was shut down by Ohio DNR.
Earthquakes in Oklahoma and North Texas in the Barnett Shale, and more recently in the Eagle Ford in South Texas, have been linked to injection wells, but not to hydraulic fracturing. The Texas Railroad Commission has hired a seismologist to study the matter but has not imposed any new regulations on injection wells.
Here is the Washington Post’s review of Josh Fox’s sequel documentary Gasland Part II, recently shown on HBO. I’ve previously written about Fox’s controversial criticisms of hydraulic fracturing, including a “counter-documentary” called FrackNation. In following news coverage of the growth of shale exploration and development in the popular media, I have learned that the media does not do a good job of covering complex issues like hydraulic fracturing, global warming, and gun control, issues that are easily exploited by parties on both sides of the issue by invoking scare tactics and consipiracy theories to frighten the public. I have also seen how such complex, controversial topics are politicized, like so much of public discourse today, into black and white, red and blue, with no middle ground, making it very difficult for the ordinary citizen to become informed about the facts and policy issues that political leaders should be investigating and deciding. Where is Walter Cronkite when we need him?
I recently ran across an article on the Energy In Depth website titled “Turning Natural Gas Into Water: Hydraulic Fracturing Doesn’t Deplete Water Supplies.” Energy In Depth is a website of the Independent Petroleum Association of America dedicated to “a research, education and public outreach campaign focused on getting the facts out about the promise and potential of responsibly developing America’s onshore energy resource base ” The article responds to an argument made by many organizations concerned about the large quantities of water used in fracing. The concern is that, while many uses of water return that water to the water cycle, water used in fracing is usually disposed of by injecting it underground, where it will never return to the water cycle.
Energy In Depth’s response to this argument is that, while injecting the used frac water — called “flowback” — does remove that water from the water cycle, the burning of the gas (or oil) produced by the wells creates more water than was used in the fracing of the wells. So, the argument goes, fracing of wells actually “creates” new water that is added to the water cycle. EID’s article goes on to calculate that, while a typical Marcellus gas well will remove 4 million gallons of water from the water cycle, that well will produce two billion cubic feet of gas which, when burned, will yield about 22 million gallons of “new” water. Within the well’s first six months of production, the gas it produces will create more than 4 million gallons of water when burned as fuel. Problem solved!
I asked a hydrologist friend of mine to look at EID’s calculations. He agreed that their math is correct, but he cautioned that the problem is not so simple. EID’s argument assumes that the energy created by burning the natural gas from EID’s typical well would not have been created by the burning of other fossil fuels. If, in other words, the gas is burned to create electricity, and if that electricity would have been created by burning coal if the well had not been drilled, then the net result is that water has been lost to the water cycle by injecting the flowback from the well.
EID’s argument also fails to consider local conditions. Almost all of the water used for fracing in the Eagle Ford and in the Permian Basin in West Texas is groundwater. Those groundwater resources are already being depleted much faster than they are being recharged, mostly from agricultural and municipal demand, but exacerbated by the current drought and the demands of the oil industry. Even though the burning of the oil and gas produced from those areas does produce new water molecules into the water cycle, that fact does not replenish the aquifers or increase the chances of rain in those arid parts of our state.
The US Energy Information Administration recently projected that world consumption of energy from all fuel sources would increase by 56% through 2040. Most of that increase will come from burning fossil fuels.
Burning all of that fossil fuel will certainly create lots of “new” water. Is that a good thing for the environment?
Energy generation uses huge quantities of water. Nuclear plants as well as electric generation using fossil fuels require water for coolant. While that water stays in the water cycle, it is nevertheless a demand that must be met, and in Texas that demand is increasing exponentially. Only wind and solar energy need no water to generate electricity, and – even though Texas is the US leader in wind energy — wind and solar are as yet a small part of electricity production.
A recent article in the Christian Science Monitor calls for recyclying of frac water. Some companies are experimenting with use of brackish (salty) water aquifers. EID and its sponsoring companies would do well to increase industry’s efforts to reduce or eliminate use of underground water in hydraulic fracturing.
A memorial service, open to the public, will be held today for wildcatter and philanthropist George P. Mitchell – actually, three memorial services, as befits one of the great Texans of the 20th century. The Houston Chronicle in fact named him Houstonian of the Century. By all accounts, he was not only an entreprenurial genius, but a kind and generous man, a family man, and a man who gave back to his communities in many ways.
In one of his last public interviews, Mr. Mitchell addressed the issue of the safety and environmental risks of hydraulic fracturing and horizontal drilling. I wrote about that interview. He said that he supports tough regulation of independent operators. “I’ve had too much experience running independents,” Mitchell said. “They’re wild people. You just can’t control them. And if it doesn’t do it right, penalize the oil and gas people. Get tough with them.”
Last year, Mr. Mitchell and Mayor Michael Bloomberg published an op ed piece in the New York Times supporting tighter regulation of the industry. What they said bears repeating. They pledged that their foundations
will support organizations that seek to work with states and industries to develop common-sense regulations that will protect the environment — and ensure that the industry can thrive.
We will encourage better state regulation of fracking around five key principles:
Disclosing all chemicals used in the hydraulic fracturing process;
Optimizing rules for well construction and operation;
Minimizing water consumption, protecting groundwater and ensuring proper disposal of wastewater;
Improving air pollution controls, including capturing leaking methane, a potent greenhouse gas; and
Reducing the impact on roads, ecosystems and communities.
The latest research, including peer-reviewed studies out of Carnegie Mellon University and Argonne National Laboratory, suggests that if properly extracted and distributed, the impact of natural gas on the climate is significantly less than that of coal. Safely fracking natural gas can mean healthier communities, a cleaner environment and a reliable domestic energy supply right now.
We can frack safely if we frack sensibly. That may not make for a great bumper sticker. It does make for good environmental and economic policy.
Not words from a stereotypical Texas wildcatter. The industry would to well to follow his advice.
The drought in Texas, along with improved recyclying technology, has driven efforts to increase recycling of water used in hydraulic fracturing of wells. According to one estimate, the fracing of wells in 2011 consumed on the order of 135 billion gallons of water – about 0.3 percent of total U.S. freswater consumption. (Golf courses in the U.S. consume about 0.5 percent of all freswater used in the country.) But if you own land in the Eagle Ford field, those numbers don’t mean much. Water use in some counties is lowering the water table in the Carrizo-Wilcox aquifer, the principal source of frac water for the Eagle Ford, causing some existing wells to dry up. In West Texas, the lack of available groundwater has forced companies to look at recyclying their frac water to extend the useful life of the water they can find for fracing.
Two bills now pending in the Texas legislature – House Bills 3537 and 2992 – would require the Texas Railroad Commission to develp rules to require rthe recycling and reuse of frac water returned from wells. The Commission has recently adopted rules to make it easier for operators to recycle water. And another bill, House Bill 379, would impose a 1-cent-per-barrel fee on wastewater disposed of in commercial injection wells.
Devon Energy, a leader in recycling of frac water in the Barnett Shale, testified to Texas lawmakers that recycling is 50 to 75 percent more expensive than sending frac water to injection wells. There are now about 50,000 injection wells in Texas, and the number is growing rapidly. Recyling is much more common in the Marcellus, where injection wells are not available and water must be hauled long distances for disposal.
The talk about recyling of frac water has raised an interesting legal question: whose water is it?
Groundwater is part of the surface estate in Texas. The owner of the mineral estate has the right to use so much of the surface estate – including groundwater – as is reasonably necessary to explore for and produce the minerals. Typically, an oil and gas lease grants the lessee the right to use groundwater, just as it grants the lessee the right to use the surface of the land, to explore for and develop the oil and gas under the leased property. Unless the lease provides otherwise, the lessee has no obligation to compensate the surface owner for the groundwater used. The operator may drill a water well and use that water for drilling and fracing wells on the lease, without compensation to the surface owner.
If the owner of the mineral estate also owns the surface of the land, the lease may require the lessee to compensate the lessor for use of the surface estate. In such instances in Texas, leases now often require the lessee to pay for groundwater used, at up to 50 cents per barrell or more.
Landowners in Texas also have sometimes contracted to sell their groundwater to operators for use in fracing wells. The operator, after contracting with one surface owner to obtain a groundwater supply, may build a large holding pond to store and use water for fracing of wells located on several leases in the vicinity of the pond, piping the water to its wells.
In those instances where the groundwater is sold to the operator, the operator has title to the water and should be able to recycle and use it as it pleases. But where the operator has taken groundwater under its general right to use the surface estate pursuant to its lease, the issue is less clear. The operator has the right to use the water, but may not acquire title to the water. Until recycling technology came about, the used frac water was just a waste product of the drilling operation that had to be properly disposed of. Once water is recycled, it has an economic value, and the surface owner of the property may claim that the water still belongs to it.
This is just one of the many interesting new legal issues raised by new technology in the oil field.
The E&P industry is continuing to face public criticism of its use of fresh groundwater in fracing wells and its failure to disclose the chemicals added to frac water.
On February 5, the Investor Environmental Health Network (IEHN) issued a press release announcing that shareholders have filed resolutions with Cabot O&G, Chevron, Exxon Mobil, EOG Resources, ONEOK, Pioneer Natural Resources, Spectra Energy, Range Resources and Ulta Petroleum challenging the companies “to quantifiably measure and reduce environmental and societal impacts” of their exploration activities. The resolutions focus on water issues, asking the companies to disclose the amount and sources of water used, how they track and measure naturally occurring radioactive materials (NORM) in frac water, whether and to what extent the companies use closed-loop systems in handling frac water, and what efforts are being made to reduce the amount of fresh water used. Shareholder proposals were filed by Calver Investments, Green Century Capital Management, the New York City Office of the Comptroller, the New York State Common Retirement Fund, the Sisters of St. Francis of Philadelphia, and Trillium Asset Management. IEHN and the Interfaith Center on Corporate Responsibility published a report in 2011, “Extracting the Facts: an investor guide to disclosing risks from hydraulic fracturing,” intended to list and encourage best risk management practices by E&P companies, including reducing and disclosing all toxic chemicals, minimizing fresh water use by substituting non-potable sources, and using closed-loop systems to store waste waters.
Last week, New York Comptroller Thomas DiNapoly announced that the state’s pension fund had reached an agreement with Cabot O&G to disclose its practices for minimizing the use of toxic chemicals in frac fluids. DiNapoli withdrew his shareholder proposal submitted for Cabot’s upcoming proxy statement. DeNapoli has negotiated similar agreements with Hess, Range Resources and SM Energy.
Halliburton, which provides frac fluids for the industry, has developed a “green” frac fluid called CleanStim that uses only food-industry additives. Halliburton production manager Nicholas Gardiner said that Halliburton has developed a chemistry-scoring system for fracfluids, with lower scores being better. CleanStim has a zero score, he said, but is “relatively more expensive” than many traditional fracking fluids. Terry Engelder, a geologist at Penn State, said: “Eventually industry would like to end up with a mix of just water, sand, and food-grade additives. Companies are learning to deal with fewer and fewer additives.”
The Texas House Energy Resources Committee held a hearing last week about fracing and water use. Industry spokesmen testified that they are using more brackish water and reusing flowback frac water; recycling water; and covering their retention ponds that store fresh water to limit evaporation. A spokesman for Fountain Quail Water Management said that 900 million gallons of flowback water have been recycled back to freswater in the Barnett Shale over the past nine years. He also announced formation of the Texas Water Recycling Association. A Devon Energy spokesman saidd that Devon had recycled about 700 million gallons of frac water since 2005. He said it costs 50 to 75% more than disposing of the water by injection. NBC News reported on a new water desalination technology that can clean up brackish water so that it can be used in fracing.
Meanwhile, Texas’ law on disclosure of chemicals in frac fluds has come under criticism because of its trade-secret “loophole.” A Bloomberg report said a sample of frac fluid disclosures from 370 wells reported in August 2012 showed that Baker Hughes averaged 9.1 non-disclosed ingredients per well, Halliburton averaged 9.3, and Superior Well Services averaged 32.5. Lon Burnam, the Democratic state legislator who co-authored the law, said that “this disclosure bill has a hole big enough to drive a truck through.”
On another topic: a final good-bye to Aubrey McClendon, who has resigned from Chesapeake, the company he founded. He receives a nice parting gift of $45.2 million over the next four years and $33.5 million in restricted stock. He was previously removed as Chairman of the Board because of heavy criticism of alleged conflicts of interest and the company’s poor market performance. It will be interesting to see how Chesapeake survives without him. While much of the criticism of his tenure is undoubtedly deserved, his huge contribution to the natural gas boom of the last ten years should not be forgotten.