Saturday, February 20, 2010

Freaking Fracking and the Power Plays to Kill Natural Gas Drilling?

By Kirsten Korosec | Feb 19, 2010

An upcoming congressional investigation of hydraulic fracturing — a controversial high-pressure drilling process that’s significantly boosted North American natural-gas production — has been advertised as a mere fact-finding mission. In reality, though, it’s a clear first move toward overt federal regulation of the environmentally questionable practice.

Congressional Democrats are already worried that the chemicals used in the process could contaminate drinking water. Hydraulic fracturing, or “fracking,” pumps a high-pressure mix of water, sand and chemicals thousands of feet underground, breaking up shale formations to release trapped oil and gas. The chemicals used in fracking make up less than 0.5 percent of the overall mix by volume, but they often include hazardous substances such as benzene — a known carcinogen.

The stakes are huge, and not just for the oil and gas industry. Thanks to improvements in fracking, drillers can now reach vast tracts of previously untouchable gas trapped in shale. It has changed the industry, for sure. But it’s also a resource that could make the United States self-sufficient in natural gas supply by 2030.
Even the folks behind the investigation — Reps. Edward Markey and Henry Waxman — acknowledge the importance of fracking.
Hydraulic fracturing could help us unlock vast domestic natural gas reserves once thought unattainable, strengthening America’s energy independence and reducing carbon emissions, Waxman said in a release.
So, what’s the big deal, really? Why not regulate the practice and get on with it already? The industry is convinced that the EPA would make fracking either illegal or so expensive as to ruin its commercial viability. Exxon (XOM) was worried enough about the prospect of EPA regulation that it included a fracking-related escape clause in its $41 billion acquisition of independent oil and gas producer XTO Energy (XTO).
Unfortunately for the industry, the investigation is already amassing the firepower it needs to make the case for federal regulation. Halliburton (HAL) and seven other oil-field companies, including Schlumberger (SLB) and BJ Services (BJS), are at the center of the investigation by the House Energy and Commerce Committee and have been asked to turn over information about the chemicals used in fracking, how much water is consumed and how companies dispose of waste water during the process.

Halliburton and BJ Services already appear to have have broken a promise to the EPA not to use diesel fluids in their fracking processes, according to Waxman. Between 2005 and 2007, Halliburton allegedly used more than 807,000 gallons of seven diesel-based fluids. BJ Services reported using 2,500 gallons of two diesel-based fluids, although it acknowledged violating the agreement and has taken steps to correct the error.
Granted, the EPA agreement was voluntary, and it’s not even entirely clear whether Halliburton even violated it in the first place. But it doesn’t matter. This is what folks are going to focus on. Not the success of the unconventional natural gas industry in the United States. Not the positive safety record of fracking to date. And not the benefits of using natural gas as a bridge fuel to wean ourselves off of foreign oil and towards domestic resources.
Instead, it will come down to who should be trusted: the EPA or America’s favorite whipping boy?

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