Capital Commentary is the weekly current-affairs publication of CPJ, written to encourage the pursuit of public justice.


Is Fracking a Great American Success Story? (1)


Rusty Pritchard

01-31-2014


By Rusty Pritchard

January 31, 2014

This article is the first installment in a two-part series.

The decline of America’s fossil fuel industry is a thing of the past, thanks to the booming growth of shale-gas extraction through hydraulic fracturing (or fracking), a decades-old technique increasingly applied to marginal deposits of gas and oil. Shale gas production grew by 45 percent a year between 2005 and 2010, and it now accounts for about a quarter of US natural gas production (up from 4% in 2005). Domestic oil production, which had peaked in the 1980s and then steadily declined, increased as well. By the end of 2013, the United States was poised to overtake Russia and Saudi Arabia in oil and gas production, providing national income, thousands of energy jobs, and a bewildering array of claims about what it all means.

Proponents excitedly proclaimed a new era for the US economy, predicting dramatic increases in manufacturing and exports and a great cost advantage for US users of natural gas and oil relative to foreign firms. Some greens cheered the ramping up of gas production too, reckoning that the increased use of natural gas in electricity production caused a 10 percent decline in America’s greenhouse gas emissions.

Detractors, however, doubt that fracking holds such promise. Critics question the greenhouse savings. Some doubt the size of the resource, while others point out the rapid exhaustion of individual drilling sites. Moreover, fracking has significant environmental impacts, spread now over wider areas than the fossil fuel industry formerly impacted.

What is fracking?

Oil and natural gas form deep underground and reside in the pores and gaps of various rock formations, some of which readily release the oil and gas stored in their pores. Conventional drilling done from rigs on a pad directly above the reservoir can extract those fossil fuels. Other reserves of oil and gas are stored in small or poorly connected pore spaces that don’t allow for free flow. Fine grained rocks, like shale, are called “tight” formations—they may contain much oil and gas, but conventional drilling can’t be used.

Hydraulic fracturing can get at these “unconventional” reserves. A well is drilled, and then a high-pressure mixture of water, sand, and chemical additives is pumped into the deep rock formation to fracture the structure of the rock, creating small cracks which make the rock more permeable and allow oil and gas to flow to the well bore. The mixture of water, oil, and gas released from the rock is collected and separated at the surface. The process needs a lot of water, resulting in large quantities of contaminated water, all of which has to be treated and disposed of. Fracking is usually combined with horizontal drilling: once a vertical well is sunk, horizontal shafts are drilled along the beds of shale rock, so that one surface well can have very long boreholes.

The Costs of Fracking

Economic activities like fracking have social benefits that may not be accounted for in the private books of energy companies, such as job creation, job skills development, economic revitalization in rural areas, and energy independence. However, fracking has significant costs that must be weighed.

  1. Water use. Fracking uses a great amount of water that has other local uses, such as farming, municipal uses, or instream flows for the health of rivers and streams. Water pricing might be able to ameliorate allocation problems, but water is usually priced far below market rates, encouraging its overuse.
  2. Surface water pollution. As with any industrial process involving chemicals and wastewater, accidents happen, including surface spills of hazardous materials. With fracking occurring in so many locations with so many different firms and governing institutions, accidents are inevitable. Regulations could reduce this risk, if governments had the will and resources to enforce them.
  3. Groundwater pollution. The chemicals used in fracturing fluids and the hydrocarbons released by fracking can contaminate underground aquifers. Although most hydraulic fracturing occurs at depths far below sources of drinking water, contamination could occur from the well itself, from the new fractures created, or from migration of fracking chemicals between shale layers and aquifers through existing natural faults. Requiring baseline studies prior to drilling would help, as would the addition of tracers to drilling liquids.
  4. Earthquakes. Waste fluids from fracking are sometimes injected in deep wells for disposal, as they are in other industries, resulting in earthquakes, as injected liquids cause existing faults to be more likely to slip. A recent spate of earthquakes in Texas and in Ohio caused by wastewater disposal in deep wells has residents on edge.
  5. Greenhouse pollution. While natural gas has clear environmental benefits, its extraction mobilizes and releases methane, a far more powerful greenhouse gas than carbon dioxide. And as natural gas displaces investment in renewable energy, it is likely to prolong our addiction to fossil fuel.

Aside from these environmental costs, production increase at home means that Americans, accustomed to being recipients of the benefits of fossil fuel, are now exposed to the costs of fuel production. The vast scale of shale gas and oil extraction is exposing more residents to land clearing, the growth of unattractive infrastructure, and increased traffic with trucks carrying pipe, drilling equipment, water, and chemicals to numerous job sites, leading to the deterioration of rural roads. Economic and environmental impacts of fracking aside, the dynamics of this “boom” industry pose some bigger picture questions that will be the subject of the second part of this series.

- Rusty Pritchard is a natural resource economist and a consultant based in Decatur, GA. He is the co-founder of Flourish (www.flourishonline.org), a nonprofit dedicated to reviving lives and landscapes.



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Capital Commentary is a weekly current-affairs publication of the Center for Public Justice. Published since 1996, it is written to encourage the pursuit of justice. Commentaries do not necessarily represent an official position of the Center for Public Justice but are intended to help advance discussion. Articles, with attribution, may be republished according to our publishing guidelines.”