Hydraulic fracturing

1. April 5, 2013
What the Frack?: Making Sense (Maybe?) of the Technology, Ethics and Politics of “Fracking”
JAF2013_023.PPT
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What the Frack?:
Making Sense (Maybe?) of the Technology,
Ethics and Politics of “Fracking”
Michael L. Godec, Vice President
ADVANCED RESOURCES INTERNATIONAL, INC.
Arlington, VA
Seminar of the National Institute for Energy Ethics and Society (NIEES)
Arizona State University
Tempe, AZ
April 10, 2013

2. April 5, 2013
What the Frack?: Making Sense (Maybe?) of the Technology, Ethics and Politics of “Fracking”
JAF2013_023.PPT
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Disclaimer
The views and opinions expressed in this
presentation do not necessarily reflect those of
Advanced Resources, or any of its clients --
past, present, and/or future.
In fact, some of the views and opinions
expressed in this presentation by the presenter
may not necessarily reflect those of the
presenter.

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What the Frack?: Making Sense (Maybe?) of the Technology, Ethics and Politics of “Fracking”
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Topics for this Presentation
• Shales: What’s the big deal?
• What is “Fracking”?
• What are really the important
considerations -- can we distinguish
mythology from facts?
• What are the ethical implications of policy
alternatives?

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Shale Gas and Tight Oil
What are we talking about?
• Shale -- a fine-grained, sedimentary rock characterized by
breaks along thin laminae or parallel layering or bedding, with
low porosity and permeability
• Shale gas -- natural gas found trapped within shale formations
• Tight oil (also known as liquids-rich shales) -- light crude oil
contained in shales
• Important facts:
– The permeability of shales is very low – several orders of magnitude
lower that construction-grade cement
– Tight oil development uses the same technology as that contributing
to the recent shale gas boom.
– Without stimulation, most shales would not be economic to
produce

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Shales: What’s the Big Deal?
“Shale Gas is the most important energy development since
the discovery of oil”
Fred Julander, CEO of Julander Energy
“Mission Critical: Can Shale Gas Save the World?”
ASPO, September 21, 2009
"Ample supplies, robust emerging markets and uncertainty
about nuclear power all point to a prominent role for gas in
[the] global energy mix."
International Energy Agency, World Energy Outlook 2011
“The United States may be close to self-sufficiency in energy
by 2030 because of a "shale revolution" in the country.”
BP CEO Bob Dudley, January 17, 2013
“U.S. crude oil production on track to surpass imports for first
time since 1995”
Energy Information Administration, March 2013 Short-Term Energy
Outlook.

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What the Frack?: Making Sense (Maybe?) of the Technology, Ethics and Politics of “Fracking”
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Shales: What’s the Big Deal?

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What the Frack?: Making Sense (Maybe?) of the Technology, Ethics and Politics of “Fracking”
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U.S. Shale Production Forecast to Dramatically Increase,
Resulting in Lower in Natural Gas Prices
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Source: EIA (http://www.eia.gov/forecasts/aeo/er/executive_summary.cfm)

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What the Frack?: Making Sense (Maybe?) of the Technology, Ethics and Politics of “Fracking”
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Shales: What’s the Big Deal?
International Energy Agency Projections
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Source: Source: International Energy Agency, Golden Rules for a Golden Age of Gas: World
Energy Outlook, Special Report on Unconventional Gas, OECD/IEA, May 29, 2012

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What Changed the Game?
Horizontal Well with Multi-Stage Fracturing
Source: EnCana
• Natural gas production from
shallow, fractured shale
formations not new
 First shale well drilled in
Fredonia, NY in 1821
 First fractured well in 1947
 2.5 million fractures to date
worldwide; > 1 million in U.S.
• What “changed the game” was
the recognition that one could
“create a permeable reservoir”
and high rates of gas
production by using intensively
stimulated horizontal wells

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Distance between shale
formation and ground water
typically > 1 mile
Vertical fractures rarely
grow more than about 300 feet,
and are usually much less

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“Fracking” – Bridging a Language Barrier
• Industry defines “fracking” narrowly, to only include
the days worth of activity stimulating the well
• Opponents define it to include the entire process of
shale oil and gas development – from well site
identification to production well abandonment
• This semantic difference has contributed to many
misunderstandings between different stakeholders
o Most cited environmental concerns had nothing to do with
industry’s definition of “fracking” operations
• The characterization of “fracking” sets the terms of
the discussion and debate.

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Source: http://warrenpohatu.blogspot.com/2011/12/what-is-fracking-cuz.html
What Is “Fracking”?

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Source: http://christinacoleman.org/gasland/what-is-fracking
What Is “Fracking”?

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Source: http://www.cwfnc.org/what-we-do/hydraulic-fracturing/about//
What Is “Fracking”?

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Sorting Fact from Fiction?
• Environmental impacts/benefits of greater natural
gas production
• Adequacy of regulatory oversight?
• Impacts on economy and energy security?
• Environmental impacts – real or not?
− Ground water contamination
− Water use and disposal
− Chemical handling and reporting
− Air quality
− Induced seismicity
− Others

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Natural Gas Still Emits GHGs, though < Coal/Oil; Could
Displace Renewables as Low-Cost Power Alternative
Cost of producing energy before subsidies, per megawatt hour. Bloomberg New Energy
Finance, 3rd quarter 2009.

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U.S. CO2 Emissions at 20-Year Low
• Declining CO2 emissions not due to wind or solar power
• Primary reason is availability of low-cost gas
− Due primarily to shale gas development
− Gas displacing coal as fuel for power generation

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Natural Gas Believed to Play Critical Role in
Reducing Global Emissions of GHGs

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Is “Fracking” an “Unregulated” Activity?
• One side – Oil & gas industry exemptions (“loopholes”) from federal
environmental statutes allows “fracking” to be “unregulated”
• Other side – Exemptions were provided based on conclusions that
oil and gas adequately addressed under state regulations
− States were regulating oil and gas activities long before such activities
were even considered by federal statutes
− “One size fits all” federal regulations inappropriate given diversity of
geology, environment, etc. among states
− Unlike industrial facilities, oil and gas facilities tend to be small and
disperse, minimizing local impacts
− No need for regulatory duplication between states and feds
• Nature and extent of current level of activity and sophistication of the
technology not foreseen by pre-2008 laws and regulations

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Adequacy of State Regulations
• Within the last several years, every state has introduced
new legislation and/or regulations imposing stiffer
requirements – in recognition of dramatic growth in activity
• Under Congressional directive, EPA undertaking
comprehensive study of the impacts of hydraulic fracturing
− A state regulatory review is part of this assessment
• EPA is also looking at other statutory/regulatory
mechanisms to address issues of concern
• Nonetheless, several states have imposed bans or
moratoria on fracturing in place (NY, VT, NJ)
• Only NY is thought to have significant potential
− Numerous cities/towns have also issued bans or moratoria;
many are being challenged as a violation of state law
− Most moratoria driven by need for better understanding of impacts

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Source: http://chemistrytoenergy.com/shale-gas
Economic Implications of “Fracking”

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Are Ground Water Resources Safe?
Source:
http://mnprogressiveproject.com/minnesota-
needs-to-do-its-part-to-end-fracking/

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Are Ground Water Resources Safe?
• One side – “Fracking” poses substantial risk to ground
water resources
o Several researchers have claimed that low ground water quality in
some areas is linked to “fracking”
• Other side -- In some cases where contamination was
claimed, activities other than “fracking” likely the cause
o Sometimes cause is normal oil and gas operations, not unique to
“fracking”
o Activities regulated and enforced under existing authorities
o “Contamination” often existed before oil and gas development
o Methane can come from biogenic sources, coal seams, other non-
targeted formations
o Background analyses rare to determine water quality before
development began

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Are Ground Water Resources Safe?
Source: www.energyindepth.com

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Are Ground Water Resources Safe?
• EPA conducted high visibility investigations of alleged
ground water contamination in 3 locations (TX, WY, and PA)
o In all cases, investigations were suspended or no conclusive
evidence of contamination from oil and gas operations found
• EPA has is performing case study assessments as part of its
Study of the Potential Impacts of Hydraulic Fracturing on
Drinking Water Resources
o Prospective case studies, where research at the site begins
before hydraulic fracturing occurs, and then continues during
and after hydraulic fracturing activities.
o Five retrospective case studies at sites where hydraulic
fracturing has already occurred, and where contamination of
drinking water resources has been reported.

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What about Surface Water?
http://www.watershedcouncil.org/learn/h
ydraulic-fracturing/concerns-tieh-
hydraulic-fracturing/
• Concerns exist about the source of the
water pre-fracking and disposition of
waste water post-fracking
• Contamination from surface water
management probably bigger threat
than “fracking’
• Used by a Texas golf course every eight
days during the summer.
• Needed to irrigate enough cornfields to
produce 5,100 gallons of ethanol.
• Used annually for outdoor watering by 90
typical American households. –
• Used by New York City every six minutes.
• About 4 million gallons required to frack
a well, roughly equal to the amount:

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What about Surface Water?

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What about Surface Water?
Many Operators Now Treating and Reusing
Frack Water Flow Back
http://www.environmentalleader.com/2012/05/14
/stricter-regulatory-standards-end-of-legal-
loopholes-needed-for-fracking-safety-nrdc-says/

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What about Air Quality?
• One side – Natural gas development emits methane, volatile
organic compounds, hazardous air pollutants, and GHGs
− Methane has 25 times more impact on warming than CO2
− Few claim life cycle GHG emissions from power generation with gas
supplied from shales greater than associated with coal power generation
• Other side -- Emissions from natural gas power generation are
half of that of coal
− New EPA proposed NSPS for GHG emissions from power generation are
essentially based on this
• Fact – sources of data to support either side’s claims are
insufficient – more data are needed!
− Data being collected as part of EPA’s Mandatory Greenhouse Gas
Reporting Rule should help clarify and inform
• Recent World Resources Institute study concludes that
methane leakage rates need to be below 1% for life cycle
climate impacts of gas to be less than coal

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Why Can’t We Know What is Being Put in the Ground?
• One side – Communities have a “right to know” what
“toxic chemicals” are being used in fracture stimulations
• Other side – Revealing chemical compositions of fracture
fluid formulations reveal valuable corporate trade secrets
• Fact – Most states require reporting of chemicals used in
fracturing to state regulatory agencies and emergency
response authorities
− But requirements on how its reported, and how proprietary
information is protected vary considerably from state-to-state
• Fact -- Industry is developing less toxic alternatives to
critical chemicals

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Some Chemicals Used in “Fracking”

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More Environmentally Benign Fracture Fluid
Additives are Being Developed
To minimize environmental risks, the
BJ SmartCare family of fracturing
fluids and additives uses quantifiable
and standardized chemical
evaluations to assess products and
identify possible alternatives. Photo
at left courtesy of Baker Hughes
Source: Halliburton

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What about the Threat of Earthquakes?
• Some researchers are demonstrating the frequency and
intensity of small earthquakes is increasing in areas of
expanding shale gas development
− Though establishing an undisputable linkage for causation has
proven illusive
• The National Research Council that concluded “hydraulic
fracturing a well as presently implemented for shale gas
recovery does not pose a high risk for inducing felt seismic
events.”
• Instead, the researchers found — like the USGS did a few
months ago — that injection wells were more commonly
the culprit for induced seismicity

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What about Other “Quality of Life” Considerations?

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Can These New Natural Gas Resources Be
Developed In An Environmentally Sound Way?
• Assuring Safe Hydraulic Fractures
• Drilling Appropriately Constructed Wells
• Reducing Land Use/Social Impacts
• Recycling Water and Reducing Water Use
• Appropriately Siting Disposal Wells
• Controlling/Capturing Methane Emissions
Numerous efforts underway to establish multi-stakeholder
developed guidance and best practices
Improved approaches for pursuing this resource are available,
without imposing unnecessary costs.

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Examples of Efforts Focused on Best Practices
• American Petroleum Institute “HF series” of best practices
guidance documents for hydraulic fracturing
• Marcellus Shale Coalition
• Barnett Shale Energy Education Council
• Appalachian Shale Water Conservation and Management
Committee
• Individual corporate Statements of Principles
• STRONGER state regulatory reviews
• Secretary of Energy Advisory Board recommendations
• National Petroleum Council recommendations
• World Resources Institute recommendations

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Center for Sustainable Shale Development
• CSSD -- independent organization with mission to support
continuous improvement and innovative practices through
performance standards and third-party certification.
• CCSD provides a forum for diverse stakeholders to share
expertise with common objective of developing solutions/ serving
as center of excellence for shale gas development
• CCSD is collaborative effort of environmental NGOs,
philanthropic foundations, O&G companies and others
• CCSD prepared to offer “seal of approval” to companies meeting
established performance standards
• Note – not all environmental groups or O&G companies are
supportive of this effort
• See http://www.sustainableshale.org/

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Conclusions
• Sorting fact from fiction in the shale gas debate
is difficult
o This difficulty poses dilemmas for policy-
makers and regulators
• Conflicting environmental objectives
complicate transparency and rational
assessment
o Reduce fossil fuel dependency at all costs vs.
o Developing sound sustainable approaches to
shale resource development
• Ethical issues abound between and among
critical considerations
• Individual values can play a critical role in
where one stands on this issue
o And how they perceive the “facts”