Fracking

By | Updated Sep 29, 2016 5:43 PM UTC

Fracking to extract oil and gas from shale rock has produced a flood of new energy in the U.S. and Canada, lowered fuel prices and created tens of thousands of jobs. It’s helped the two countries cut their use of coal, the dirtiest fossil fuel, by 30 percent since 2008 and lessen their dependence on foreign energy. At the same time, it’s associated with earthquakes, greenhouse-gas emissions and water and air pollution. The question is whether the costs and benefits can be balanced by reducing the bad effects through technology and regulation, or whether fracking presents a threat so grave it must be banned, as many communities have.

The Situation

Hydraulic fracturing, or fracking, was largely responsible for a 54 percent increase in the U.S. output of oil and natural gas from 2008 to 2015 and has made the country the world’s biggest producer of the two. Fracking generates a little more than half the oil and natural gas the U.S. produces today. The practice has yet to take off outside North America. Environmental concerns have provoked a backlash, with bans or limits imposed by several European countries, Canada’s Quebec province and hundreds of U.S. communities. With a drop in the price of oil, some U.S. frackers, concerned about turning a profitscaled back. Total U.S. crude oil production is expected to decline by an estimated 8.5 percent in 2016. The Obama administration in early 2015 issued the first regulations on fracking on public land, which accounts for about 11 percent of natural-gas and 5 percent of oil production. However, a federal judge in June 2016 struck down the rules, saying Congress hadn't given the Interior Department the power to regulate fracking.

Source: U.S. Energy Information Administration

The Background

The first commercial use of fracking was in 1949 in Oklahoma. The technique involves forcing water mixed with sand and chemicals into a well to create fissures in shale rock so the oil or gas trapped inside escapes. Advances in another innovation, horizontal drilling, came in the early 1980s and provided access to shallow layers of shale deep underground. The subsequent exploitation of the Barnett Shale formation in Texas proved large-scale fracking was economically viable, not least because of high oil and gas prices.

The Argument

Advocates of fracking point out that abundant natural gas has let many U.S. power plants abandon coal, helping drive down energy-related carbon emissions 12 percent from 2005 to 2015. They note that U.S. net energy imports as a share of consumption in recent years have hovered around 10 percent, at levels last seen in the 1980s, decreasing U.S. dependence on Persian Gulf oil. The environmental risks of fracking, proponents argue, can be mitigated. Operators can reduce leaks of methane, a potent greenhouse gas, for instance, by testing and repairing pressure safety valves. Pollution of nearby water sources can be minimized by ensuring that wells are properly sealed with cement. Fracking’s champions say the risks of small earthquakeslinked mainly to the injection of wastewater into underground wells — can be lessened by mapping deep-rock formations and avoiding areas where tremors might result. They say frackers can trim their tremendous consumption of fresh water by recycling wastewater or using foam or gel as alternatives. Opponents say fracking is inherently too hazardous to tolerate. They say that methane leaks not only offset the greenhouse-gas savings from fracking but could outweigh them. Critics say strictly enforced regulations nationwide are required before operators would make investments that might curb environmental risks. They argue that the oil and gas industry has the power to block comprehensive regulation, leaving in place an existing patchwork of gap-filled laws. Opponents argue that the abundance of fossil fuels fracking produces will prove a curse because it will delay the development of renewable alternatives and thus impede the effort to slow global warming.

The Reference Shelf

  • A video animation of the fracking process by National Geographic.
  • Reporter Gregory Zuckerman’s history of fracking and the wildcatters it made into billionaires.
  • A report from Exxon Mobil on the risks of unconventional drilling, including fracking.
  • A Bloomberg News QuickTake on fracking in Europe.

Bradley Olson contributed to the original version of this article.

First published Nov. 13, 2014

To contact the writer of this QuickTake:
David Wethe in Houston at dwethe@bloomberg.net

To contact the editor responsible for this QuickTake:
Lisa Beyer at lbeyer3@bloomberg.net