Shale Gas -Who,Where, Why and How

What is shale gas and why is it important?

Shale gas refers to natural gas that is trapped within shale formations. Shales are fine-grained sedimentary rocks that can be rich sources of petroleum and natural gas. Over the past decade, the combination of horizontal drilling and hydraulic fracturing has allowed access to large volumes of shale gas that were previously uneconomical to produce. The production of natural gas from shale formations has rejuvenated the natural gas industry in the United States.

Does the U.S. Have Abundant Shale Gas Resources?

Of the natural gas consumed in the United States in 2009, 87% was produced domestically; thus, the supply of natural gas is not as dependent on foreign producers as is the supply of crude oil, and the delivery system is less subject to interruption. The availability of large quantities of shale gas will further allow the United States to consume a predominantly domestic supply of gas.
According to the EIA Annual Energy Outlook 2011, the United States possesses 2,552 trillion cubic feet (Tcf) of potential natural gas resources. Natural gas from shale resources, considered uneconomical just a few years ago, accounts for 827 Tcf of this resource estimate, more than double the estimate published last year. At the 2009 rate of U.S. consumption (about 22.8 Tcf per year), 2,552 Tcf of natural gas is enough to supply approximately 110 years of use. Shale gas resource and production estimates increased significantly between the 2010 and 2011 Outlook reports and are likely to increase further in the future.

Where is Shale Gas Found?

Shale gas is found in shale "plays," which are shale formations containing significant accumulations of natural gas and which share similar geologic and geographic properties. A decade of production has come from the Barnett Shale play in Texas. Experience and information gained from developing the Barnett Shale have improved the efficiency of shale gas development around the country. Another important play is the Marcellus Shale in the eastern United States. Surveyors and geologists identify suitable well locations in areas with potential for economical gas production by using both surface-level observation techniques and computer-generated maps of the subsurface.

Source: U.S. Shale Plays Map, http://www.eia.gov/oil_gas/rpd/shale_gas.pdf

How is Shale Gas Produced?

Two major drilling techniques are used to produce shale gas. Horizontal drilling is used to provide greater access to the gas trapped deep in the producing formation. First, a vertical well is drilled to the targeted rock formation. At the desired depth, the drill bit is turned to bore a well that stretches through the reservoir horizontally, exposing the well to more of the producing shale.
Hydraulic fracturing (commonly called “fracking” or “hydrofracking”) is a technique in which water, chemicals, and sand are pumped into the well to unlock the hydrocarbons trapped in shale formations by opening cracks (fractures) in the rock and allowing natural gas to flow from the shale into the well. When used in conjunction with horizontal drilling, hydraulic fracturing enables gas producers to extract shale gas at reasonable cost. Without these techniques, natural gas does not flow to the well rapidly, and commercial quantities cannot be produced from shale.

Schematic Geology of Natural Gas Resources

Source: modified from U.S. Geological Survey Fact Sheet 0113-01.

How is Shale Gas Production Different from Conventional Gas Production?

Conventional gas reservoirs are created when natural gas migrates toward the Earth's surface from an organic-rich source formation into highly permeable reservoir rock, where it is trapped by an overlying layer of impermeable rock. In contrast, shale gas resources form within the organic-rich shale source rock. The low permeability of the shale greatly inhibits the gas from migrating to more permeable reservoir rocks. Without horizontal drilling and hydraulic fracturing, shale gas production would not be economically feasible because the natural gas would not flow from the formation at high enough rates to justify the cost of drilling.

Diagram of a Typical Hydraulic Fracturing Operation

Source: ProPublica, http://www.propublica.org/special/hydraulic-fracturing-national

What Are the Environmental Issues Associated with Shale Gas?

Natural gas is cleaner-burning than coal or oil. The combustion of natural gas emits significantly lower levels of carbon dioxide (CO₂), nitrogen oxides, and sulfur dioxide than does the combustion of coal or oil. When used in efficient combined-cycle power plants, natural gas combustion can emit less than half as much CO₂ as coal combustion, per unit of electricity output.
However, there are some potential environmental concerns that are also associated with the production of shale gas. The fracturing of wells requires large amounts of water. In some areas of the country, significant use of water for shale gas production may affect the availability of water for other uses, and can affect aquatic habitats.
Second, if mismanaged, hydraulic fracturing fluid — which may contain potentially hazardous chemicals — can be released by spills, leaks, or various other exposure pathways. Any such releases can contaminate surrounding areas.
Finally, fracturing also produces large amounts of wastewater, which may contain dissolved chemicals and other contaminants that require treatment before disposal or reuse. Because of the quantities of water used and the complexities inherent in treating some of the wastewater components, treatment and disposal is an important and challenging issue.
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Shale Gas - A retrospect

In a telephone interview, Jessica Ernst says she’s “still getting used to” being compared to Erin Brockovich (the environmental activist made famous by Julia Robert’s film portrayal ten years ago). The comparison comes easy because the outspoken Ernst, a landowner in the town of Rosebud, Alberta, is one of the few Albertans who have publicly criticized hydraulic fracturing (called “fracking,” in the trade).

Fracking is a technology used by the oil and gas industry to access “unconventional” natural gas deposits trapped in shale, coalbed, and tight-sand formations – potentially at the expense of underground water supplies.

After her well water was contaminated by nearby fracking in 2006, Ernst decided to go public, showing visiting reporters how she could light her tap water on fire, and speaking out about Alberta land owners’ problems with the industry, especially Calgary-based EnCana. EnCana is Canada’s second biggest energy company (after Suncor) and is now also a major player in British Columbia, with hundreds of natural-gas wells in the province.

Ernst, a biologist and environmental consultant to the oil and gas industry, says EnCana “told us ‘we would never fracture near your water.’ But the company fracked into our aquifer in that same year [2004].” By 2005, she says, “My water began dramatically changing, going bad. I was getting horrible burns and rashes from taking a shower, and then my dogs refused to drink the water. That’s when I began to pay attention.” More than fifteen water-wells had gone bad in the little community.

Tests revealed high levels of ethane, methane, and benzene in Ernst’s water. “EnCana told us they use the same gelled [fracking] fluids as in the States.” Fracking has become a huge controversy in the US, with pending legislation that would impact its regulation.

Ernst says she heard from “at least fifty other landowners the first year” she went public, and she continues to get calls. Groundwater contamination from fracking “is pretty widespread” in Alberta, “but they’re trying to keep it hidden.” Canada has no national water standards and conducts little information gathering about groundwater.

Chromium-6 In The WaterBeing an activist on behalf of her community is not the only connection Ernst has with Brockovich. Through expensive Freedom of Information requests, Ernst obtained post-fracking water well monitoring data that showed the Alberta Environment people had found hexavalent chromium in Rosebud’s well water. “The government hasn’t told this to people” in the hamlet, says Ernst.

Hexavalent chromium, otherwise known as chromium-6, is the extremely toxic substance Brockovich found in the drinking water in Hinkley, California, which led to a major class action lawsuit against Pacific Gas & Electric, which finally paid the plaintiffs more than $200 million (€146M) in 2006.

Ernst, who knows the industry well, says chromium-6 “is used in fracking and drilling.” In an odd coincidence, Erin Brockovich herself is currently involved in investigating a mile-long plume of chromium-6 contamination of drinking water – apparently caused by fracking and drilling – in Midland, Texas. In July 2009, Brockovich investigators told the press they have evidence that hydraulic fracturing specialist Schlumberger is to blame. In the continuing case, Brockovich is representing 40 householders whose water has been contaminated.

Trade SecretsIn 2006, when EnCana was fined $266,000 (€194,000) by the state of Colorado for “failure to protect water bearing formations,” a company spokesman complained to the press that environmentalists had been spreading “misinformation” about fracking and creating a climate of fear about hydraulic fracturing fluids.

The public however, has no way of knowing what’s in the fracking fluids because the chemicals used are considered a “trade secret” – or rather, many trade secrets.
Oil and gas companies like EnCana, Imperial Oil, Suncor, ConocoPhilips, ExxonMobil, etc., generally don’t do the hydraulic fracturing themselves, but instead hire specialty services to do it. Each of the big players in the multi-billion-dollar fracking industry – Halliburton, Calfrac Well Services, Schlumberger, BJ Services (all of which operate in Western Canada) – has its own recipe for fracking fluids, of which they are fiercely protective. The precise nature and concentrations of the chemicals in these “proprietary fluids” are not even fully known to government regulatory agencies.

By examining drillers’ patent applications and government worker health and safety records, some environmentalists and regulators in the US have been able to piece together a list of some of the fracking fluid ingredients. These include potentially toxic substances such as diesel fuel (which contains benzene, ethylbenzene, toluene, xylene, and napththalene), 2-butoxyethanol, polycyclic aromatic hydrocarbons, methanol, formaldehyde, ethylene, glycol, glycol ethers, hydrocholoric acid, and sodium hydroxide.

US Fracking ControversyAs a sign of just how controversial hydraulic fracturing has become in the US, Exxon Mobil Corp.’s US$29 billion (€21.5b) takeover of fracking specialist XTO Energy Inc. includes a clause stating that any changes to US law that make fracking “illegal or commercially impracticable” would allow the companies to terminate their deal without paying a $900 million (€666) breakup fee.

By 2007, there were 449,000 natural gas wells in 32 American states, an increase of more than 30 percent since 2000, with serious episodes of groundwater contamination near drilling sites documented in seven states.
Companion legislation (S.1215/H.R.2766) – the Fracturing Responsibility and Awareness of Chemicals (FRAC) Act – is currently before Congress to require regulation of hydraulic fracturing under the federal US Safe Drinking Water Act, as well as disclosure of all chemicals used in fracking fluids. New York City Council, the mayor of New York, and a New York Times editorial have all called for a ban on hydraulic fracturing throughout the watershed from which the city obtains its drinking water. That watershed is part of the huge Marcellus shale area being staked out for natural gas drilling and fracking of tens of thousands of wells.

Drilling in CanadaMeanwhile, the BC government has been pushing drilling for unconventional sources of natural gas since at least 2005, offering $50,000 (€36,500) royalty credits for every well drilled before December 2008, and selling oil and gas “sub-surface rights” at a fever pitch.

Both BC and Saskatchewan have been courting the industry with lax or no environmental regulations and promises of low royalties charged to the companies. The Petroleum Services Association of Canada (PSAC) predicts a 10 percent increase in drilling in BC in 2010, mostly in the Montney shale field of northeastern BC and the Horn River Basin near Fort Nelson.

In 2006, researchers for West Coast Environmental Law published a report noting that the oil and gas industry had identified at least six areas of BC holding coalbed methane (CBM) natural gas potential: Peace country in the north east; Elk Valley in the southeast; Vancouver Island; the south central interior (around Merritt and Princeton); northwestern BC (around Telkwa and Iskut); and the Queen Charlotte Islands.

Nanaimo Daily News (Nov. 7, 2009) reported that Vancouver Island’s CBM gas deposits – stretching from Chemainus to Parksville, and in the Comox-Campbell River area – are currently not of interest to the industry. Nonetheless, a group called Citizens Concerned About Coalbed Methane-Vancouver Island, has for the past year been pushing for development under its action plan, “Building a Safe Future for CBM.”

In 2008, BC took in a record $2.4 billion (€1.75b) from these leases, which is now its biggest source of royalties’ income.
Fracking is also in high demand in the Bakken natural gas field in southern Saskatchewan, where 1,000 wells have been drilled and fracked over the past five years. PSAC is predicting 1,935 new wells will be drilled there in 2010, and 300 new wells in Manitoba. As a result, Alberta has just announced that it is removing environmental and regulatory “hurdles” in order to entice the natural-gas industry back.

Huge shale developments are also planned for Quebec, New Brunswick and Nova Scotia. The Utica shale gas field in Quebec covers an area of 5,000sq.km (1,930sq.m) that runs along the St. Lawrence River from Montreal to Quebec City.

The industry is especially interested in the Utica shale because it is close to the New York City market, with export capacity available on TransCanada Corp.’s pipeline system. If the US curtails natural gas development in the Marcellus shale, the Utica could provide gas to the New York market.

Horizontal Drilling AddedThe newest technology used by the industry increases the scope of fracking. By drilling horizontal wells, where the drill bit is steered along a horizontal trajectory, the well bore is exposed to as much of the shale gas reservoir as possible. Combined with hydraulic fracturing, the two technologies create many kilometres of contact area for natural gas to flow into a well, giving the operator a fast payback.

BC energy activist Arthur Caldicott, a frequent contributor to the Watershed Sentinel, explained by email: Fracking “is a nearly-continuous operation in shale gas production. Wells may be fracked up to seventeen times along their entire length.”

Now some geologists are saying that the use of horizontal drilling and fracking for shale production exhausts the well within a mere eight years, with a decline in output of 75 percent in the first year alone. Some are even calling the sector “a speculative bubble.”

In other words, the drilling and fracking endanger the groundwater and deplete rivers and lakes all for a quick payoff to the industry and the province, after which the taxpayer is left with the clean up.
A new report from BC Auditor-General John Doyle states that the BC oil and gas commission must “improve its oversight” of the industry in order to adequately manage the risks of contamination during drilling, production and final site restoration. The minimum cost to restore one well site is $100,000 (€74,000).

While natural gas is touted as a “clean energy” source, the method of extracting this fossil fuel is dirty indeed.