Saturday, November 17, 2012

Cost/Benefit Analysis of Fracking Reveals That Risks Outweigh Rewards

The news media was abuzz this week with a new report by the International Energy Association (IEA) saying the U.S. will become the world's largest oil producer by 2020, overtaking current leaders Saudi Arabia and Russia.

The IEA also says the U.S. could become self-sufficient in energy by 2035 and a net exporter of natural gas by 2020.

According to the IEA, this will result in a radical shift that could profoundly transform not only the world's energy supplies, but also its geopolitics.

Such an outcome could prove revolutionary, with the potential to reshape global alliances. It would have enormous implications for foreign policy and the military.

It could also result in the creation of up to 600,000 new jobs, according to the Obama Administration. For a nation struggling with such a stubborn unemployment problem, an expansion of well-paying jobs is much needed.

The prospect of the U.S. becoming energy self-sufficient has long been unimaginable and seemingly the product of wishful thinking. For decades, the U.S. has been the world's No. 1 oil importer.

However, U.S. oil production has undergone a sudden and rapid rise, jumping 15% since 2008, and oil imports are now at their lowest level in two decades.

U.S. production has seen a particularly brisk escalation in just the past year. According to the Energy Information Administration (the statistical and analytical agency within the U.S. Department of Energy), U.S. oil production has increased 7%, to 10.76 million barrels a day, since the IEA's last outlook a year ago.

Oil and petroleum imports have fallen an average of more than 1.5 million barrels per day and domestic crude oil production has increased by an average of more than 720,000 barrels per day since 2008.

"North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world," said IEA Executive Director Marian von der Hoeven in a statement.

So what's behind this remarkable transformation?

The American shale oil boom.

The global energy map, "is being redrawn by the resurgence in oil and gas production in the United States," the IEA reports.

A technique known as hydraulic fracturing, or "fracking," is allowing the energy industry to develop hydrocarbon resources locked in shale and other tight rock formations.

But though this technique will allow the U.S. to gain a previously unimagined energy independence, there is a darker side to fracking.

Fracking involves pumping large quantities of fresh water, coupled with chemicals and sand, into shale formations to crack the rock and extract the fossil fuels. Studies have revealed that fracking fluids contain a host of toxic substances, including known carcinogens and volatile organic compounds.

Fracking has the documented potential to contaminate drinking water sources, as well as pollute air and land. Additionally, the process can spoil millions of gallons of fresh water used in the drilling process that must then be disposed.

In its report, the IEA warned that the emergence of shale gas has a downside risk, contributing to increased competition for the water resources needed for energy projects. The intensive use of water, "will increasingly impose additional costs," and could "threaten the viability of projects" for shale oil and gas, and also biofuels, the agency said.

The vast amounts of water used in the fracking process are troubling, considering how relatively little fresh water is available. Of all the water on Earth, only 2.5 percent is freshwater, and available freshwater represents less than half of 1 percent of the world's total water stock.

This is problematic for the U.S. since groundwater is being used up at a rate 25 percent faster than it is being replenished, according to the government, which also warns that up to 36 states face near-term water shortages.

In June, 2009, the Obama administration released a 190-page assessment of documented and expected impacts of climate change across the United States. “Water permeates this document,” said co-author Virginia Burkett.

Lead author of the report, Jerry Melillo, added, “Water is going to be a tremendous challenge for energy.”

Fracking has been revolutionary because, unlike conventional drilling, it doesn't just create vertical wells.

Horizontal hydrofracking is a means of tapping shale deposits containing natural gas that were previously inaccessible by conventional drilling. Vertical hydrofracking is used to extend the life of an existing well once its productivity starts to run out, making it a last resort of sorts.

Horizontal fracking differs in that it uses a mixture of 596 chemicals, many of them proprietary (meaning they aren't revealed), and millions of gallons of water per frack. This water then becomes contaminated and must be cleaned and disposed.

Generally, 1 to 8 million gallons of water may be used to frack a well, and a well may be fracked up to 18 times. That's an astonishing use of water.

For each frack, 80 to 300 tons of chemicals may be used. Presently, the natural gas industry does not have to disclose the chemicals used, but scientists have identified volatile organic compounds (VOCs) such as benzene, toluene, ethylbenzene and xylene.

The documentary "Gasland," by film-maker Josh Fox, clearly illustrates the dangers of fracking. According to the Gasland Website:

• Researchers suspect that 65 of the compounds used in fracking are hazardous to human health.

• Over 80,000 pounds of chemicals are injected into the earth's crust to frack each well.

• Over 3.5 million gallons of water are used when fracking a single well.

• Fracking fluid calls for 2 million gallons of water, transported by up to 100 water-haulers.

• Upwards of 70% of fracking fluid remains in the ground and is not biodegradable.

• A loophole in the 2005 Energy Bill exempts gas drillers from EPA guidelines like the Clean Water Act.

In areas where fracking occurs, watersheds have become heavily polluted. A scientific study conducted by four scientists at Duke University found that high levels of methane gas in drinking water wells are linked to flammable drinking water.

The problem is so bad that some homeowners have actually been able to set their tap water on fire.

A recent University of Colorado-Denver School of Public Health study showed that living within a half mile of fracking sites exposes residents to pollutants like trimethylbenzenes, aliphatic hydrocarbons, and xylenes at five times above the U.S. Environmental Protection Agency's Hazard Index.

Those concerns led the residents of Longmont, Colorado, to vote to make their city the first to ban fracking in the state.

Additionally, fracking has been linked to earthquakes. Seismic activity associated with fracking has been reported in Ohio, Oklahoma and Texas. The US Geological Survey says the use of underground wells to dispose of waste water produced by fracking is “almost certainly” behind the surge in earthquakes in the central US in recent years.

Cheap natural gas has also shifted resources away from green energy technologies like solar and wind, which don't have the same environmental concerns. It may also shift attention away from energy conservation and energy efficiency, which have long been deemed crucial.

Then there is the concern of the lifespan of fracked wells. Initially, these wells allow abundant production but can soon decline abruptly. The yield for a typical shale gas well generally falls off sharply after the first year or two.

This is a problem that even industry insiders admit. Bill Kinney of Summit Petroleum Inc. acknowledges the most productive years of a fracked well are usually the first three or four.

This may be leading to a false boom in the natural gas sector, in which we soon discover that fracking does not yield nearly as much fuel as industry proponents claim.

Drilling for natural gas is also an energy-intensive business. It relies on diesel engines and generators running around the clock to power rigs, and heavy trucks making hundreds of trips to drill sites before a well is completed. So far, few companies are using natural gas itself to power the process, meaning that it relies heavily on conventional oil supplies.

It's evident that the benefits of energy independence, and the well-paying jobs associated with it, come at a steep cost that must be weighed against all of the tremendous risks.

So while the recent IEA report may be greeted by some as a panacea for our nation's energy conundrum, the numerous concerns associated with fracking may ultimately prove that its risks greatly outweigh the rewards.