What's FRACKING?

[Oscar]

Study: Fracking a contamination risk

http://marketplace.publicradio.org/disp ... -fracking/

Wednesday, January 20, 2010

A new study finds hydraulic fracturing, a process energy companies use to free up oil and gas reserves from rocks, can also contaminate ground water with known carcinogens. Environmental advocates want the process regulated. Sam Eaton reports.

Steve Chiotakis: Well this morning, Congress is scheduled to look into ExxonMobil's planned purchase of natural gas giant XTO Energy. But the hearing may be less about the buy-out than controversial drilling practices natural gas producers use. From the Marketplace sustainability desk, here's Sam Eaton.

Sam Eaton: It's called hydraulic fracturing, or fracking. Energy companies inject water, sand and chemicals into rock formations. That creates thousands of cracks in the rock freeing up hard-to-reach oil and gas reserves.

But a new study by the Environmental Working Group says the process can also contaminate ground water with known carcinogens, like benzene. That's why the report's author, Dusty Horwitt, says Congress needs to regulate fracking under the Safe Drinking Water Act. Right now, oil and gas companies are exempt.

Dusty Horwitt: You know, the industry has talked about the cost that, you know, it will have to pay to comply with these laws that everyone else has to comply with. But they don't talk so much about the cost of cleaning up contaminated water, which can be astronomical.

Horwitt says water contamination in upstate New York, for example, would force New York City to spend billions of dollars building a new treatment plant. The oil industry says fracking is completely safe.

I'm Sam Eaton for Marketplace.

[Oscar]

Fracking Fluids Part I: A controversy coming to an energy investment near you

http://www.resourceinvestor.com/News/20 ... r-you.aspx

Keith Schaefer, oilandgas-investments.com Published 3/8/2010

The controversy surrounding fracking fluids is getting louder. Websites and media savvy organizations are getting more press on this issue, using a very simple and powerful pitch – are the chemicals used in fracking fluids in oil and gas wells contaminating our drinking water?

North American investors have not been directly hit by this issue yet, meaning that a company’s stock hasn’t plummeted because they had to stop drilling over these concerns – yet.

“Fracking” is sending a specially designed fluid down an oil or gas well at ultra-high pressure. The fluid, usually water – but can contain some chemicals with very long names – gets blown out into the reservoir rock, creating cracks and channels to allow the oil & gas to get to the well.

The technologies of horizontal drilling and fracking has allowed the industry to access huge untapped resources of oil and gas in shale rock, which is called “tight” because shale is more dense, or tight, than the sand formations which has produced almost all the oil & gas in the world. All the shale gas plays in the US and Canada, and the Bakken oil shale play in North Dakota and Saskatchewan have created billions of dollars of shareholder wealth and given North America self sufficiency and independence in natural gas.

Fracking and horizontal drilling ended the big bull run of natural gas prices from 2002-2008, where prices went from under $2/mcf to over $14/mcf. And many industry experts are now saying so much natural gas has been discovered because of newly developed fracking ability that prices won’t see double digit prices for many years.

(I wrote a story on the growing importance of fracking – to the industry and to investors – which you can read here: http://tinyurl.com/yjxexl6)

But the fracking-fluids-potentially-contaminating-water issue has legs – which really surprises me that I haven’t heard more pro-active PR from the industry about their side of this story. Investors ought to be aware of this issue, especially in shale gas/oil plays close to large population centres, such as the Marcellus Shale Gas play in New York state (where one gas stock in particular has me very, very intrigued….). I fear this could be a PR disaster for the industry if they don’t handle this properly. (Of course, this would be bullish for natural gas prices across North America….there’s a silver lining everywhere. A cynic might even say this issue – which is mostly heard in the US - could be one of the saviours of the Western Canadian gas industry.)

I asked a friend of mine at a Canadian fracking company – who for obvious reasons wants to stay anonymous – to explain this issue for me in simple terms. He says sometimes there are some “nasty” chemicals used in fracking, but he estimated that 70% of frack jobs use ingredients you buy at a grocery store.

In my next story – Fracking Fluids Part II, he will share his “secret” recipe, outlining how he makes homemade frac sand from ingredients at the grocery store.

“I make a frac gel using household items – MacGyver style,” he told me. “I am literally using items my wife buys regularly and can in a few moments generate a stable frac gel that the kids can hold and play with. For less than 20 bucks you can whip this together and cover frack gels for ~70+% of all work done in fracturing.”

Stay tuned; MacGyver will tell all in Part II.

Keith Schaefer is publisher of www.oilandgas-investments.com.

[Oscar]

Alberta firm eyes Ontario's untapped shale gas

http://www.thestar.com/business/article/
782552--alberta-firm-eyes-ontario-s-untapped-shale-gas.

While U.S. northeast, Quebec capture the spotlight, Mooncor is securing rights to quantify deposit here
By Tyler Hamilton Energy and Technology Columnist March 20, 2010
A junior oil and gas company from Alberta has been quietly scooping up land rights in southwestern Ontario, part of an audacious plan to bring Alberta-style exploration to the birthplace of Canada's petroleum industry.

MORE:
http://www.thestar.com/business/article/
782552--alberta-firm-eyes-ontario-s-untapped-shale-gas.

= = = = =

Shale gas 'fracking' in Ontario brings water concerns
From: <bpatterson@canadians.org>
Sent: Saturday, March 20, 2010 7:20 AM

The Toronto Star reports that Calgary-based Mooncor Oil & Gas Corp. has been buying land rights in southwestern Ontario for shale gas drilling.

Mooncor intends to drill in the Kettle Point Formation known as Antrim Shale in Lambton and Kent counties, and the Collingwood/Blue Mountain formations known as Utica Shale.

"It has already locked up nearly 23,000 acres (9.30776 hectares) of land in Lambton and Kent counties..."

"Shale gas is called an unconventional natural gas because extracting it isn't as easy as drilling a deep hole into a reservoir and simply pumping its contents to the surface. Instead, the gas is trapped in cracks, pores and organic material within a sedimentary rock called shale, which is made mostly of clay minerals. The resource may be widely dispersed, but getting at it is tricky. It must often be coaxed out using a horizontal drilling technique that hydraulically fractures ('fracking') (emphasis added. Ed.) the rock and causes the gas to flow toward a vertical collection well."

As described by Environmental Leader news, "the hydraulic fracturing process involves taking water from the ground, pumping fracturing fluids and sands into the wells under pressure, then separating and managing the leftover water after withdrawing the gas."

The Toronto Star report continues, "As the rest of the industry rushes to develop shale-gas projects in the prolific Marcellus shale deposits of the U.S. northeast (from New York State and Pennsylvania to West Virginia) and the Utica shales of Quebec, Mooncor is gaining a solid foothold in Ontario."

The article notes that the gas can presently cause an "egg smell' in well water, but also that "the rush to develop the Marcellus Shale has led to widespread concern about the hydraulic fracturing process and how the use of toxic chemicals in that process could affect the local watershed and make residents who rely on well water sick."

"New York State has banned high-volume drilling of horizontal wells until it can thoroughly study the concerns. The U.S. Environmental Protection Agency has also weighed in and could soon have more industry oversight as a result of a congressional investigation of the practice."

The Wall Street Journal reported yesterday that this past Thursday the EPA "launched a study to determine whether (hydraulic fracturing) is contaminating water supplies."

The WSJ notes, "Last month, Steve Heare, director of EPA's Drinking Water Protection Division, said at a conference he hadn't seen any documented cases that the fracking process was contaminating water supplies. Bill Kappel, a US Geological Survey official, said at the same conference that contamination of water supplies is more likely to happen as companies process the waste water from hydrofracking. In some instances, municipal water systems that treat the water have reported higher levels of heavy metals and radioactivity."

The Toronto Star article notes that, "A green light from regulators, however, could unleash a wave of shale-gas development in Ontario." In fact, Natural Resources Canada and Ontario's Ministry of Natural Resources promote shale gas drilling in Ontario.

Mooncor is also "preparing to spin off a separate company called DRGN Resources that will focus its efforts on both conventional and unconventional gas drilling."

The full article - which largely presents this drilling as a good opportunity for the province - is at:
http://www.thestar.com/business/article ... -shale-gas.

Brent Patterson
The Council of Canadians
www.canadians.org/campaignblog