Hydraulic fracturing and drinking water

on Sep 29 in Oil Exploration tagged by Trevor Hicks

Schlumberger has announced its intention to be more open about the chemicals used in hydraulic fracturing. As a brief catch-up, innovation in hydraulic fracturing techniques are what have opened up the vast supplies of shale gas in the United States. These new supplies are causing storage to overflow and prices to stay extremely low relative to crude oil, currently about 1/3 the price in fact on a net energy equivalent. But there are wide concerns about the impact of the chemicals used and of particular concern is the fact that their formulations are considered trade secrets and not disclosed on MSDS sheets. This makes it difficult to assess possible groundwater contamination or to provide medical treatment to people exposed to the chemicals.

As usual this is a shrewd strategy for Schlumberger, they haven’t actually given anything away yet but announced a willingness to play ball with government and environmental groups. Halliburton is typically tone-deaf and their quote demonstrates a futile commitment to stonewalling:

Halliburton spokeswoman Cathy Mann said the company’s fluid formulations are proprietary. Asked whether the contractor seeks to increase disclosure of the content of those mixtures, she said Halliburton is “careful to protect the fruits of the company’s research and development efforts.”

My intuition is that the service companies are generally correct - I would expect actual groundwater contamination from fracturing processes to be exceedingly rare. For contamination to occur, either the cement and steel casing near the top of the well would have to fail, in which case the failure isn’t exactly caused by fracturing, or there would have to be fluid migration from very deep under the earth to reach groundwater sources. But this would be quite surprising, the very fact that there is a commercial hydrocarbon reservoir implies that there is a very good geological seal in place. I’m not a geologist, but I can imagine plausible scenarios where such contamination could occur, but as I mentioned I think it would be extremely rare.

Further, my intuition is that oil and gas operators and service companies are responsible for more contamination than the industry is admitting to. But I would expect that the contamination of water sources is not coming from the fracturing itself, rather it’s from unreported spills or improper containment or transportation of these chemicals at the surface. As long as the environmental groups are focused on what is happening downhole, I think they will not get very far. The science is against them. I would like to see more attention paid to how fracturing chemicals are handled at the surface, it just seems clear to me that’s the best opportunity to reduce environmental risk from fracturing. Bear in mind that’s a computer guy’s gut instinct, take it for what it’s worth.

I should also add in the principle of honest disclosure that I was an employee of Schlumberger for many years, I worked in product development for fracturing for three of those years and I still own some stock in the company.