WHAT THE FRACK?

Sorry – couldn’t resist the title.

We at California Oil are focused on educating the public about the environmental impact of natural oil seeps, and the creative solution to clean up the environment along a spectacularly beautiful and bountiful section of the California coast.  What the frack does fracking have to do with that?

Fracking (the common term for hydraulic fracturing or HF) is a process in which a mixture of water, sand and chemicals (the chemicals are less than 4% of the total) is pumped at high pressure into rocks to release oil and natural gas. As described by the U.S. Environmental Protection Agency (EPA) (2012), HF is a technique used to produce economically viable quantities of oil and natural gas, especially from unconventional reservoirs such as shale, tight sands, and other formations.  

According to the American Oil and Gas Historical Society (AOGHS), oil and gas producers have used HF in the drilling of vertical wells for more than 100 years. While the first commercial HF job was conducted in the 1940s, “the technique quickly became the most commonly used method of stimulating wells.” Today, HF is applied to the majority of U.S. oil and natural gas wells to enhance well performance, minimize drilling, and recover otherwise inaccessible resources. About 90 percent of the wells in operation have been fractured – and the process continues to be applied to boost production in unconventional formations (AOGHS 2012).

In the past decade the HF technique began to be applied in a state-of-the-art technique in horizontal wells targeting natural gas formations.  As a result the nation has enjoyed what the Wall Street Journal in a February 28, 2013 article describes as a "Gas Boom Projected To Grow For Decades” (Gold 2013). This has resulted in a surplus of natural gas that has driven down the cost of energy and has resulted in natural gas displacing a significant portion of the coal historically used in the production of electricity.  More recently HF has been expanded to target tight oil formations such that 2012 oil production in the United States was at the highest level in the past 25 years.

With the increase in the development of horizontal shale wells in various regions of the United States, HF has become the focus of significant attention. Some have questions about the safety of continued use of this technology. Congress and the EPA are examining whether the practice is likely to contribute to the contamination of surface or groundwater, and whether it poses risks to public health or safety (Division of Oil, Gas, and Geothermal Resources [DOGGR] 2013).

An example of potential energy access through HF in our state (and the main reason we should give a frack) is Monterey Shale. The land that spans Monterey, San Benito, and Fresno counties rests on a large chunk of Monterey Shale, a formation of underground minerals long eyed by the energy industry for its potential to yield billions of barrels of oil (Lee 2012). The U.S. Energy Information Agency (EIA) estimates that the Monterey Shale field alone holds 15.4 billion barrels of oil, rivaling America’s total conventional reserves (EIA 2013, Mills 2013).

And these economics alone are enough to draw a “Frack Yeah!” out of even the most anti-oil crowd.

Frack Yeah!!

California collects about $15 billion in tax revenues for every billon barrels of state oil production (Considine and Manderson 2012, Mills 2013).  With that assumption, by simply opening up Monterey Shale oil development tax receipts could total $250 billion over the coming two decades. Economists Robert Hahn and Peter Passell point to another $30-80 billion in broad economic and social benefits that ripple through the economy for every billion barrels of oil production. (Hahn and Passell 2008, Mills 2013).  The Bureau of Ocean Energy Management (BOEM) (formerly the Minerals Management Service) has estimated that there are 2-4 billion barrels of oil in the Santa Barbara Channel and a total of 14-19 billion barrels offshore California (BOEM 2013).  If residents in the Monterey, San Benito and Fresno counties begin to realize the economic benefit of developing the Monterey Shale it would be difficult for Santa Barbara residents not to demand the same source of new funding to assist with education and basic social services.

With projections by the International Energy Agency that the state could be energy-independent by 2017, no wonder even Bill Maher is saying “Thanks Shale” (Maher 2013).

HF gives us access to all that oil in all that shale. Then why are so many saying “No Fracking Way!!”

Some say that environmental concerns outweigh the economic benefits.  According to the Center for Biological Diversity (2013) HF has “left a grim trail of damage across America.” The Center also points to water-contamination problems associated with HF in Pennsylvania, Ohio and Wyoming. A recent documentary, Gasland, and its associated website, as well a drama entitled Promised Land, has brought more attention to potential environmental impacts of HF.  At the same time reviews of those productions have documented how they are at variance with the proven science of HF. In fact, Lisa Jackson, the first EPA Administrator under President Obama, stated during testimony to the House Committee on Oversight and Government Reform, that “I am not aware of any proven case where the fracking process itself has affected water…” (EPA 2011).

Get me the Frack out of here!

Hold on - it’s easy to assume that a HF impacts in areas highlighted by Gasland and Promised Land are the same as those that occur in California.  But geologic structure is way more complicated than that.

According to Tupper Hull, Vice President of Strategic Communications for the Western States Petroleum Association (WSPA), member oil companies conducted some form of HF on 628 wells in 2011. Mr. Hull has stated that the amount of water used for HF is "minuscule" compared to agriculture and that HF in the Monterey shale formation would take place many thousands of feet below the surface, far away from the groundwater aquifers. "The likelihood of any contamination from hydraulic fracturing itself is as close to zero as I suppose you could get." 

Can the general public separate Frack from friction??

Apparently not. A forum on HF was held in September 2011 in Santa Barbara, California. Santa Ynez Valley landowners were calling for more regulatory oversight of HF. Equally vocal Santa Ynez Valley landowners had protested proposed regulations designed to reduce impacts on endangered species from activities on their lands. More or less regulation - What the Frack do they really want?

A bonus – in the parking lot after the Santa Barbara HF forum, this author overheard two women discussing an East Coast earthquake that “fracking” had caused – the earthquake that registered on seismic equipment from Boston to Washington, DC.  It is amazing What the Frack people are willing to believe.

There are other regions that are holding public meetings on HF, but the reality is this:
-HF is regulated:
-State and Federal agencies are reviewing existing regulations to ensure they are applicable to all activities;
-Oil and gas operators are OK with additional regulation;
-Oil and gas operators are already disclosing HF activities; and
-HF is a proven technique deployed by the industry for over 100 years.

EPA is working with states and other key stakeholders to help ensure that natural gas extraction does not come at the expense of public health and the environment.  Concerns associated with overall natural gas and shale gas extraction, including HF, are already well known. EPA is reviewing the existing regulatory and permitting framework, and performing specific studies with regard to HF.

All oil and gas wells drilled and constructed in California must adhere to strict requirements. These requirements include general laws and regulations regarding the protection of underground and surface water, and specific regulations regarding the integrity of the well casing, the cement used to secure the well casing inside the bore hole, and the cement and equipment used to seal off the well from underground zones bearing fresh water and other hydrocarbon resources. (See California Public Resources Code sections 3106, 3203, 3211, 3220, 3222, 3224, 3255; Title 14 of the California Code of Regulations, sections 1722.2, 1722.3, 1722.4, etc.) (DOGGR 2013)

U.S. Department of Energy (DOE) research has developed several alternative fracturing techniques designed to accomplish specific tasks. Care is also taken to contain the fracturing within the oil reservoir to avoid intersecting adjoining aquifers that would introduce excess water into the oil-producing zone.

With the potential for economic boom, energy independence from a proven technology in a state with well-regulated use, the question remains…

California – What the Frack are we waiting for?

The U.S Bureau of Land Management (BLM), in December 2012, released an environmental assessment evaluating the potential environmental impacts of a lease sale of the 18,000-acre property overlying Monterey Shale. The lease sale is scheduled to occur on May 22, 2013.

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References

AOGHS 2013. Shooters – A “Fracking” History.      Posted by bruceW on January 17, 2013 in Did You Know?  Petroleum Pioneers, Petroleum Technology. American Oil and Gas Historical Society . http://aoghs.org/technology/shooters-=well-fracking-history.

BLM. 2012. Environmental Assessment, Lease Sale, Monterey Shale DOI-BLM-CA-0900-2012-40. U.S. Department of the Interior, Bureau of Land Management.

BOEM 2013. Department of the Interior, Bureau of Ocean Energy Management. www.boem.gov

Center for Biological Diversity 2013. http://www.biologicaldiversity.org/campaigns/california_fracking/index.html

Considine, T. and Manderson, E. 2012. Balancing Fiscal, Energy, and Environmental Concerns – Policy Options for California’s Energy and Economic Future. Timothy Considine, Professor of energy economics (tconsidi@uwyo.edu) and Edward Manderson, Postdoctoral Research Associate (emanders@uwyo.edu), University of Wyoming.

DOE 2012. U.S Department of Energy. http://www.netl.doe.gov/technologies/oil-gas/publications

DOGGR 2013. Hydraulic Fracturing in California. State of California, Department of Conservation, Division of Oil, Gas, and Geothermal Resources, 2013. http://www.conservation.ca.gov/dog/general_iformatio/Pages/HydraulicFracturing.aspx

EIA 2013. Review of Emerging Resources – U.S. Shale Gas and Shale Oil Plays. U.S. Energy Information Administration.  http://www.eia.gov/analysis/studies/usshalegas/

EPA 2013.  Natural Gas Extraction – Hydraulic Fracturing. U.S. Environmental Protection Agency (EPA). http://www2.epa.gov/hydraulicfracturing

EPA 2012. Study of the Potential Impacts of Hydraulic Fracturing on Drinking Water Resources, Progress Report. U.S. Environmental Protection Agency, Office of Research and Development, Washington, DC.

EPA 2011. Testimony by Lisa Jason, US EPA Administrator, to the House of Representatives Committee on Over sight and Government. May 2011.

Fracking Insider 2013.http://www.frackinginsider.com/regulatory/hydraulic-fracturing-state-regulatory-roundup-vol-11/

Gold, R. 2013. “Gas Boom Projected to Grow for Decades.” Russell Gold, Wall Street Journal, February 28, 2013.

Hahn, R. and Passell, P.  The Economics of Allowing More Domestic Oil Drilling. Working Paper, AEI Center for Regulatory and Market Studies. Revised: September 2008 http://ssrn.com/abstract=1265728.

Lee 2012. “Monterey shale mineral formation center of debate over fracking.” Stephanie M. Lee Santa Barbara News Press, September 10, 2012.

Maher, B. 2013. Meddle East – Bill’s Blog February 5, 2013. http://www.real-time-with-bill-maher-blog.com/real-time-with-bill-maher-blog/2013/2/5/meddle-east.html

Mills 2013. “California Could Be the Next Shale Boom State.” Mark P. Mills, Wall Street Journal. January 16. 2013.

WSPA 2013. Hydraulic Fracturing in California Fact Sheet http://www.wspa.org/hydrofracking.aspx