6/28/2013 8:30 PM ET|
Can the US frack its way to freedom?
Using new technology to tap huge underground deposits holds the promise of American energy independence -- along with worries of environmental harm and health threats. The stakes couldn't be higher.
Fracking. The mere utterance of the word thrills investors in energy companies making big oil and gas finds in shale deposits in Texas, the Appalachians and North Dakota.
It makes environmentalists shudder because it involves so many unknowns.
But make no mistake: Fracking is a big deal. It has allowed oil and gas companies to develop on-land oil and gas prospects that almost no one had thought could be brought to market with any hope of profitability. It's one of the primary factors for the resurgence in U.S. production of natural gas and crude oil that's bringing the country closer to the long-sought goal of energy independence.
The U.S. imported 41% of its oil in the first five months of 2013, the Energy Department says, down from 65% in 2005. Some projections say the combination of new supplies from fracking and alternative energy sources and energy savings from conservation could make the U.S. energy self-sufficient by 2030, although the country will still be an oil importer.
Fracking is technically "hydraulic fracturing," which means using small explosions and lots of water and smaller amounts of chemicals to free up oil and gas resources locked in rocks that lie far below the earth's surface.
Fracking has set off a huge boom in natural gas exploration and production in Texas, North Dakota, Montana and the Appalachians. It was largely responsible for a 14.4% jump in U.S. oil production in 2012 to 6.47 million barrels a day -- the most since 1995.
Along the way, it has turned North Dakota into the country's fastest-growing state for three years running and has attracted thousands to Texas seeking jobs in energy.
The secret to fracking's success is that exploration engineers figured out how to:
- Drill 5,000 feet below the ground's surface into shale deposits packed tightly with oil and natural gas.
- Bend the drilling pipe so wells can be laterally drilled out as far as several miles.
- Set off small explosions in the hard shale deposits to free up the oil and gas.
- Pump water, chemicals and sand at high pressure to release the gas and the oil and bring it all to the surface.
The modern form of fracking was developed after World War II, but big fracking emerged in the 1970s and 1980s. As oil analyst Fayed Gheit of Oppenheimer & Co. told MSN Money, fracking has "totally transformed" the domestic oil and gas industry.
Fracking's potential, particularly in exploring for natural gas, came on so swiftly that even mighty Exxon Mobil (XOM) realized it didn't have the in-house expertise. So it bought XTO Energy, one of the largest natural gas producers, for some $31 billion in stock.
Fracking has made a lot of money for its investors. EOG Resources (EOG), which split off from Enron in 1999, has seen its shares rise 1,520% since 2000 and 160% since the market bottom in 2009.
Fracking, however, isn't exempt from the laws of supply and demand. So much natural gas came to market that prices collapsed in 2012.
And yet -- and this is a big "and yet" -- fracking is reviled by many people and feared by many more. In part, this is the energy industry's fault. No one will forget the May 2010 BP (BP) oil spill in the Gulf of Mexico. When the industry creates a mess, it creates a big mess.
Fracking creates fears that the water-sand-and-chemical brews will escape concrete casings installed in virtually all U.S. oil-and-gas wells and contaminate below-ground aquifers, or that flammable natural gas will turn up in domestic water supplies. You can find videos, such as this one on YouTube, of people getting water from their kitchen tap to ignite.
One reason for the fear: In the 2005 Energy Policy Act, the fracking industry was specifically exempted from violations under the federal Safe Drinking Water Act. State regulations weren't affected, but the question is whether state regulators have the will or resources to act.
The energy industry likes to say there's never been a case where fracking has harmed an aquifer, but the record of problems is growing. A New York Times report documented a contamination in Jackson County, W. Va., in the mid-1980s. And a Vanity Fair magazine article documented groundwater contamination issues around Dimock Township, a small town in northeast Pennsylvania, from wells drilled by Cabot Oil & Gas (COG). The controversy was the basis for the anti-fracking movie "Gasland."
Fracking was halted in 2010 after regulators found that faulty Cabot drillings allowed methane to seep into 18 Dimock drinking-water wells. Drilling was permitted again last summer after many lawsuits filed by local residents and litigation from the state of Pennsylvania were settled. Cabot continues to claim it was not responsible.
Because of all the controversy, it's believed that drilling and environmental practices have improved greatly. The industry set up a voluntary reporting database called FracFocus so people can research the chemicals used at many drilling sites. But a Bloomberg News report said many wells aren't included in the database, and a Harvard Law School study this spring said FracFocus offers only spotty reporting, lacks a searchable database and allows an "overly broad" allowance for trade secrets.
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We need cheap energy in America to revive our economy. We also need to protect the environment. We have the skills talents and abilities to do both. Lets' get with it!!!
Oh, solar is 'free'? I have a solar panel on my RV roof to help keep the battery charged. It cost me $700, and barely puts a trickle charge into the battery? The RV uses all LED lighting. But, if I listen to the radio (an 'in-dash' auto radio) all day, there is barely enough power left to watch TV on an LED TV for a couple hours.
I have a small gas-powered generator, $325. It charges the battery bank in 3 hours, and will run 4 hours on a quart of gas. Once the battery bank is charged, it lasts 3 days.
Which is cheaper? Solar, that costs more and does less? Or a quart of gas every 3 days?
Remember back in the day when a "reporter" actually made an attempt to verify their facts? The "examples" of water contamination referenced by this "reporter" (e.g. Dimock) have all been investigated and refuted by EPA as well as State regulatory bodies. It is not only the energy industry that says there have been no verified instances of water contaminination by fracking, the recently departed head of EPA testified to that fact in front of Congress. Guess this goof forgot to mention all of that.
If we don't develop our energy resources now, and the middle east turns into a War Zone, we will be short on oil as badly as we were on military resources in 1941...
Too bad high schools and colleges don't teach History anymore? It's said that 'They who do not know history are doomed to repeat it'.
Having crude oil and more refineries would free the US from ever having to deal with any other country.
The US is the greatest source of oil and natural gas. Quit exporting it! Use it in this country? Huh? Yes, we ship oil and natural gas OUT of the US. Then, the US buys oil from other countries.
Well, we can't drill... Oh, but Mexico can, and they sell it to the Chinese! They refine it into high-sulfer diesel or gasoline. Canada will end up selling their crude oil to China. We can't have a pipeline in the US... We can't drill for our own oil or gas...
What is wrong with this equation?
What your article fails to tell the reader:
1. Horizontal drilling can take away the mineral rights of property owners;
2. More of the oil/gas from American soil is sold overseas than is sold here;
3. Fracking won't change this;
4. Today's oil companies are monopolies owning everything from exploration to retail outlets;
5. With oil profits as high as they are, why are the companies not spending more to upgrade
refineries to eliminate breakdowns that are used as excuses to increase prices for even more
Well, it beats the he** out of putting up hundreds 50 story turbines next to private property with no compensation!
The money changers can put 500 foot turbines within 750 feet of your property lines and it "doesn't count" because it's green. Well, it's not green and any other ideas must be qwashed because this is where the big boys are making Piles of Money...at the tax payers' and ratepayers' expense.
Do not try to sell an actual green way to generate power! They don't want to hear about safely using the tides or anything else. W/O a big profit margin...it won't happen.
...oh yeah - and I like this part: "In the 2005 Energy Policy Act, the fracking industry was specifically exempted from violations under the federal Safe Drinking Water Act......What -cuz, only Communists want safe drinking water?!
..so each state will make their own rules on this, something like this: "Hey it is against the law to crap in this end of the hot tub!!"
...Wake up dough heads - safe drinking water is a national responsibility and a national treasure - like air, it moves from state to state!!
OK, all you tree-huggers and 'green energy' LIBS. Go home on your bicycles, shut off your air conditioning, turn off your TV and live in the dark. When YOU quit driving your SUV's, turn off your heat or AC, use CFL bulbs in ALL your lamps or LED lighting, quit flying to places, and stay home... Quit trying to tell ME how I have to cut energy use!
I already USE all CFL bulbs, only use the heat or AC when necessary, and only heat to 60 in the winter and cool to 70 in the summer. I ride a bike with a basket to the grocery store, a half-mile away. Summer or winter.
When I see Al Gore or Nancy Pelosi riding bikes, I might start to think about reducing MY energy use even lower...
OK all you tree-hugging LIBS... When the next war begins, and there is no more oil?
No more gas for your SUV or Limo. No jet fuel for your personal jet. Lucky, we still have coal-fired electric plants, so you can still post your stupid Sh*t on here?
Heyt Big Al Las Vegas
And an even BIGGER one is depending on a bunch of muzzies that think it's still the 13th century
I guess if they discovered enough oil to support the demand 1,000,000 times over it would have no positive impact for John Q. Public. The price is never coming down...... Frack them azzholes.
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