Fracturing backers stand their ground


A federal report linking hydraulic fracturing with water contamination is providing fresh ammunition to opponents of the oil and gas production technology, but advocates showed no signs Friday of giving ground.

In a draft report released Thursday, the Environmental Protection Agency said its studies of a hydraulic fracturing site in Pavillion, Wyo., found hydraulic fracturing fluids and chemicals associated with gas production in deep water wells.

Hydraulic fracturing involves blasting a mix of water, sand and chemicals deep underground and at high pressures to break up dense shale rock and extract oil and natural gas.
The industry says the process is safe, but it has drawn strong opposition from environmentalists.

Well before Thursday’s report, state and federal regulators were developing new standards on water use at fracturing sites, well design and disclosure of chemicals used.

The Interior Department and its Bureau of Land Management are preparing a proposal that would expand standards governing the integrity of wells drilled on 700 million acres of public lands.

Separately, the EPA is writing new standards for how companies dispose of waste water from natural gas drilling sites, and what they must do before injecting diesel into the ground as part of hydraulic fracturing operations.

The new report “gives the EPA and the environmentalists a hook to hang on to,” said Dave Pursell, an analyst with the Houston-based investment bank Tudor, Pickering and Holt.
“This really pushes this whole notion of best practice on well design.”

The report is stoking calls for tighter controls — or bans — on fracturing in some areas.

And it provides fodder for an argument that the U.S. should adopt a nationwide standard for casing in wells that will be fractured, said Kevin Book, an analyst with ClearView Energy Partners in Washington.

Geographic differences

Industry leaders have long argued that states — not the federal government — are in the best position to regulate hydraulic fracturing, because of differences in geology across the U.S.

For instance, water can be recycled and reused in fracturing new wells in some parts of the U.S., but the geology of other areas makes that impossible.

“State-level regulators themselves may seek to augment existing rules in an effort to stave off federal intervention,” Book said.

The Texas Railroad Commission, which regulates the state’s oil field activities, dismissed the report’s relevance to Texas, saying the circumstances were unique to the site in Wyoming.

Texas regulations prohibit fracturing that close to drinking water, the commission said in a response emailed to the Chronicle.

“The Railroad Commission of Texas bases its regulatory decisions on science and fact,” it said.

Railroad Commissioner David Porter, who heads the agency’s task force on operations in South Texas’ Eagle Ford shale, called the EPA draft report “sensational headline-seeking” and said the geology of the Eagle Ford is vastly different from Wyoming’s oil and gas fields.

But Les Shephard, head of the Sustainable Energy Research Institute at the University of Texas at San Antonio, said it is unwise to rule out the possibility that contamination could occur in Texas.

Companies involved in hydraulic fracturing have been largely mum on the report. Industry executives have insisted before that hydraulic fracturing is safe, contending that no cases of groundwater contamination had been directly linked to the practice.

‘Economic suicide’

Last month, Aubrey McClendon, CEO of natural gas producer Chesapeake Energy, touted hydraulic fracturing as critical to the country’s future at the Jefferies Global Energy Conference in Houston.

“If the nation wanted to commit economic suicide, it could ban fracking,” he told a roomful of analysts and industry players.

A spokesman said Chesapeake won’t comment until the report goes through peer review.

Preliminary findings released last month from a study by the University of Texas Energy Institute found no direct link between groundwater contamination and hydraulic fracturing in shale gas developments.

It did find water contamination associated with hydraulic fracturing of non-shale gas wells, said Ian Duncan, who is working on the UT study.

Dlouhy reported from Washington and Sebastian from Houston. Tracy Idell Hamilton of the San Antonio Express-News contributed.