Hydraulic fracturing (commonly referred to as “fracing” or “fracking”[1]) has received substantial attention by the media, oil and gas industry, environmental groups and landowners since the onset of the “shale” boom across the United States. If you live in a state where oil and gas aren’t produced, you may not be familiar with this method frequently used in hydrocarbon recovery. If you live in a state where oil and gas are produced, particularly where non-traditional shale plays are located and hydraulic fracturing is frequently used in hydrocarbon recovery, you have likely been exposed to some truths (referred to herein as “FRACK”) and some misconceptions about the process.
FICTION: Hydraulic fracturing is a new method of hydrocarbon recovery being used by oil and gas operators in non-traditional shale plays. Because the technology is new, operators or service companies cannot fracture a well with any reasonable degree of certainty about the outcome.
FRACK: Hydraulic fracturing has been used in the recovery of oil and gas since the 1940s and can be used on both conventional vertical wells and horizontal wells. After a well is drilled, a fracturing treatment is performed. The treatment consists of pumping water and fracturing fluids (including sand and chemicals) down the well bore at extremely high pressures, the fracturing fluids permeating tightly compressed rock and releasing the trapped hydrocarbons. Technology has substantially improved and been refined in recent years, reducing costs and allowing more operators to utilize the technique in their recovery operations. Hydraulic fracturing has proven particularly useful in non-traditional shale plays where horizontal drilling is used extensively (if not exclusively) to extract hydrocarbons embedded in and between formations of tightly compressed rock.
FICTION: Operators generally do not disclose the contents of the hydraulic fracturing fluids they use in treatments. The chemicals used in the fluids are extremely hazardous and no one is regulating what goes into a well that is hydraulically fractured.
FRACK: Some operators in oil and gas producing states voluntarily participate in the hydraulic fracturing chemical registry website of the Ground Water Protection Council and the Interstate Oil and Gas Company Commission. It is likely that participation in this chemical registry by operators will increase as the general public and landowners with wells on their land seek out information about the hydraulic fracturing process. According to the site, 98% – 99.5% of the fluid used in hydraulic fracturing is comprised of water and sand. Commencing in 2012, all operators in Texas utilizing hydraulic fracturing in their operations will participate in the chemical registry.
During the past legislative session, Texas became the first state to pass a law requiring operators to disclose the composition of hydraulic fracturing fluids. Section 91.851 of the Natural Resources Code, effective September 1, 2011, directs the Railroad Commission of Texas (the “Commission”), the agency that regulates oil and gas operations in Texas, to adopt rules consistent with the statutory guidelines set forth therein. As of the writing of this article, the proposed rule is still in the comment period. Since the proposed rule is subject to change, we will only consider the substantive disclosure aspects of the instructive legislation. However, it is worth noting that the preamble for the proposed rule includes the Commission’s estimate that 85% of wells drilled in Texas in 2010 were hydraulically fractured.
Under the new rule, an operator will be required to complete the form posted on the hydraulic fracturing chemical registry website described above. The disclosure by the operator will include, along with general details about the well, (1) the total volume of water used in the fracturing treatment; (2) each chemical ingredient that is subject to 29 C.F.R. Section 1910.1200(g)(2), which contains the Occupational Safety and Health Administration’s requirements for Material safety data sheets; and (3) all other chemical ingredients intentionally included in the fracturing treatment.
An exception to the disclosure requirement is provided for in the event that the party performing the fracturing treatment asserts that the identity or amount of a particular additive is protected as trade secret information. However, a limited class of parties will be able to challenge a trade secret claim, including the landowner of the property where the well on which the fracturing treatment is performed is located, an adjacent landowner, or a state agency with jurisdiction. In addition, an exception to the trade secret claim will be made to permit disclosure to health professionals and emergency responders consistent with the above OSHA regulation.
Other states will likely follow Texas’ example and pass similar disclosure laws in order to alleviate fears about the contents of hydraulic fracturing fluids. In addition, voluntary participation in the chemical registry may also increase as such disclosures become common industry practice.
FICTION: When a hydraulic fracturing treatment is performed, groundwater is exposed to and contaminated by the chemicals used in the fracturing fluids and the hydrocarbons being recovered.
FRACK: The claim that groundwater contamination is an inevitable outcome of hydraulic fracturing is not based on fact. Fracturing a well by the method generally described above does not pose a substantially greater danger to groundwater than do operations in wells that are not fractured. Groundwater protection is an issue in conventionally drilled wells that are not hydraulically fractured. At present, there are state and federal regulations already in place specifically for the purpose of protecting groundwater.
Numerous studies have established that over the last 60 years hydraulic fracturing can and has been performed without contaminating groundwater. However, despite evidence to the contrary, a recent New York Times article[2] focused on a report by the Environmental Protection Agency (“EPA”) published in 1987, documenting a single case where fracturing fluids used on a gas well contaminated a water well 600 feet away.[3] The article is misleading in that it focuses on hydraulic fracturing as the origin of the contamination rather than addressing the probable origins of the migrating fluids, namely faulty casing in the well bore.
Multiple strings of steel casing are cemented into place to protect groundwater and other subsurface strata from being exposed to fracturing fluids and all other substances put down or recovered from a well bore. The best way to picture this is to visualize a telescope going into the ground. Surface casing is cemented into place at the uppermost part of the well bore, providing a barrier between groundwater and fracturing fluids. Typically, multiple additional strings of pipe are cemented inside the surface casing, providing additional layers of protection from groundwater contamination. If the casing, or the cement behind the casing fails, groundwater is potentially exposed to any fluid flowing through the well bore, including fracturing fluids.
The protection of groundwater has clearly been a longstanding regulatory objective in Texas. For example, the Commission provides for operators to set surface casing to protect all usable water in the specific area, as defined by the Texas Commission on Environmental Quality.[4] In addition to regulations regarding the depth to which the surface casing must be run, additional specifications exist regarding the quantity and quality of cement used to hold the casing in place.[5] Regulations exist for each type of casing run down the well bore and each regulation is intended to promote the safety and efficiency of oil and gas production.
The national hydraulic fracturing conversation is going to continue as the development of non-traditional shale plays booms in many places in the county. It will be interesting to see whether FRACK or FICTION prevails.
Kara A. Batey is an oil and gas attorney at Branscomb, PC, a law firm with offices in Austin and Corpus Christi, Texas, providing solutions for businesses, executives and families with tax, real estate, oil and gas, estate planning, probate, corporate, employment and litigation matters.
[1] See here for one of many internet discussions about the spelling of the word that is short for “hydraulic fracturing.”
[2] Urbina, Ian. “A Tainted Water Well, and Concern There May Be More.” New York Times 3 Aug. 2011: n. page. Web. 9 Aug. 2011.
[3] The complete EPA report is available on the New York Times website as background for the Urbina article.
[4] See 16 T.A.C. §3.13.
[5] Id.
