The nationwide boom in hydraulic fracturing—aka fracking—means energy-extraction companies in the U.S. can produce thousands of barrels of oil and millions of cubic feet of natural gas from once-inaccessible places. They’re also producing something else: oceans of brine from drilling as well as fracking fluid, the chemical-laced water used to blast open cracks in buried rock where fossil fuel lurks. That wastewater has to go someplace. John Kasich, Ohio’s governor, isn’t sure he wants his state to be it.
The preferred way to dispose of the brine and fracking fluid—typically a stew of water and a long list of chemical additives, including rust inhibitors and antibacterial agents—is to pump it out of sight, out of mind into deep, cavernous wells built for the purpose. Ohio’s geological underbelly, composed of permeable rock formations, is ideally suited for such holding tanks. The state is home to 176 of them, operated by more than 80 companies, including an affiliate of Houston-based giant EnerVest and smaller outfits such as BT Energy in Fleming, Ohio. Compare that with just six active wells in neighboring Pennsylvania, where the geology makes drilling less practical. Over the past two decades, Ohio approved an average of four new storage wells a year. Last year, it jumped to 29.
All that underground space has made Ohio a leading importer of wastewater from other states. Last year, oil and gas companies injected 511 million gallons into Ohio’s wells, the most on record, according to the state’s Department of Natural Resources. More than half came from elsewhere. Of the 94.2 million gallons of drilling wastewater that Pennsylvania’s Marcellus shale operators sent to disposal wells last year, 98 percent went to Ohio. Currently, well owners pay the state a fee of 5¢ per barrel for fluids originating within Ohio and 20¢ for out-of-state wastewater. Ohio collected $1.45 million in fees last year, according to Ohio Natural Resources.
Kasich isn’t thrilled with the idea of Ohio becoming known as a dumping ground for other states’ industrial waste, though there isn’t much he can do about it. The Republican governor is pushing for tough new regulations to protect the environment, among them rules requiring oil and gas companies to account precisely for the chemical makeup of the spent fluid.
He’s also proposed taxing oil and gas drillers in Ohio as much as 4 percent of the market value of what they pull out of the ground, saying he’ll use the money to reduce the state income tax. The oil and gas tax has not been warmly received by the industry or by Republicans in the state legislature, who say it will hurt smaller companies trying to get a foothold in a growing industry. “When something’s in its infancy, and you’re going to put an onerous tax on it, that’s going to have a definite effect,” says Jerry James, president of Marietta-based Artex Oil.
Kasich believes he’s struck the right balance between attracting business and looking out for the public. When Barack Obama visited the state this month, he and Kasich talked about fracking. “I told the president that all of the rules and the regulations that we’re putting together … could serve as a national model as to how to proceed to be environmentally sound and yet still create jobs,” Kasich said last week.
Oil and gas companies haven’t put up as much of a fight over the proposed regulations, perhaps because they were introduced in the aftermath of a series of bizarre earthquakes near Youngstown that have been linked to the underground wastewater. There had been no record of quakes in the area before D&L Energy, based in Youngstown, began injecting wastewater into a well about 9,200 feet underground in December 2010. Starting in March, there were 12 quakes within a mile of the well ranging from magnitude 2.1 to a 4.0 quake that hit on New Year’s Eve.
A March 9 state report concluded that “a number of coincidental circumstances appear to make a compelling argument for the recent Youngstown-area seismic events to have been induced.” The state said evidence suggested fluid from the Youngstown well “intersected an unmapped fault in a near-failure state of stress causing movement along that fault.” D&L Energy maintains the cause of the earthquakes has not been conclusively determined, and says it will pay for its own study. In a statement, the company says it “has always been an environmentally responsible and legally operating energy producer that voluntarily implements industry best practices that exceed current laws and regulations.”
Ohio’s Department of Natural Resources has proposed a ban on drilling into deep rock formations and wants geological reviews before new wells are approved. State Representative Robert Hagan, a Democrat who represents Youngstown, doesn’t think that goes far enough. He’s called for an indefinite moratorium on injection wells until their impact can be studied more closely. “Some people have accused me of screaming, ‘The sky is falling,’” Hagan says. “But when the earth is moving, we have an obligation to find out why.”