An Inside Look: Fracturing Q &A with Oil and Gas Industry Leaders – 2

Here’s the second part from my interviews with SherWare clients on their experience with hydraulic fracturing. Check out the first post here if you missed it.

Is the biggest issue the fact that you’re drilling down through the water supply or the fluids used in the process that they’re [environmentalists] against?

Hydraulic Fracturing Q&AA: Clute – “I think it‘s the fluids, but 99.5 percent of the fluid is freshwater,” he said. “There are some additives, but it’s not a big deal and we treat wells all the time with acid and solvents and this and that, but it’s in the formation. You produce it, and put the salt water in a disposal well and it’s all permitted by the EPA and states.”

Clute said this is the reason the oil and gas commissions are set up in the individual states, to protect the lease rights and ensure proper exploration and production without pollution.

“You aren’t allowed to pollute. Period. This has been ongoing for a long time,” he said. “The cleanest, most effective way to get energy out of the ground is to drill a hole, drill a well.”

A: Talmage – The “toxic chemicals” seem to be the problem, which is curious because when aren’t chemicals used by people?

“If you start defining what those are, yeah there are chemical components put into fluids depending on what you’re trying to achieve, but they are very different and there isn’t really a standard package,” Talmage said. “The kind of things you see are in relatively small percentages. For example, one that’s been used forever is KCL or potassium chloride. It’s essentially a salt and generally used in a 2 percent solution, so you’re talking 98 percent water and 2 percent KCL, which is a salt.

“When they make it out to be toxic slurries and nasty stuff, I wouldn’t be afraid to walk over there, stick my finger in and lick it, but I wouldn’t want to do that every day for 20 years. It’s that sort of idea. The level of toxicity we’re talking about then is relatively minor compared to other things.

“That being said, there might be places where they are using huge chemical slurries in some parts of the country that I don’t know about and maybe there are some concerns there. What we’re doing here, it’s not an issue. It’s not so much the concern of what chemicals we’re using but being responsible with the ones that we do and taking responsibility for that.”

What is this deal with using diesel fuel in the fracing fluids?

A: Talmage – It sounds like a bigger issue than it is because of how it’s handled and where it goes.

“A lot of people are concerned with things like using diesel fuel, but it’s not all that common to fracture with diesel, that’s more of a fluid compatibility issue if you have a formation that has issues with water specifically, as water is typically what is used,” Talmage said.

“If you think about it, you’re injecting diesel fuel, which is a hydrocarbon into a hydrocarbon bearing reservoir. So you’re kind of returning it to where it came from. You’re not injecting it into a water table and it’s nowhere near a water table, so that, to me, doesn’t make a lot of sense.

“Now, how you get the diesel safely and responsibly to your frac site and if you happen to float it back after the process, how you safely dispose or treat that is absolutely critical.”

Would it even make a difference to those protesting if only non-toxic chemicals were used?

A: Clute – What does non-toxic even mean?

“Everything is designed to have that frac job go exactly where you want it, otherwise there is no point in drilling the well, there’s no point in anything,” Clute said. “You’re just wasting money and so I think that whatever chemicals you are using are necessary. They’re used for a purpose like a de-emulsifier, or a little bit of acid to eat up whatever calcium carbonates are in there. Any of this stuff by itself is toxic; it has to be used properly. Vinegar’s toxic, ammonia is toxic – common household chemicals. Why don’t we just outlaw all the chemicals and see how far we get ahead in keeping our homes clean?”

“You can drink so much water and your cells would explode,” he said. “Water then becomes a pollutant, a poison. Anything in a large enough quantity is toxic. The issue is that these chemicals are going into the formation, a long way down underground, thousands of feet underground.”

You said an issue that’s coming up is with the storing of the water recycled and taken back from the well. If there were more regulations/standards so that it wasn’t stored in pits, it was safer, would that take off some pressure from the industry?

A: Cobb – It’s possible.

“Yes, if some of these environmentalists could be assured that the return water that is coming back from these frac jobs was stored in the best place,” Cobb said. “When we were in Ohio, we were strictly using water. But today, more and more they are developing a chemical mix that is real thick like a jelly to carry these prop sands back out of the formation.”

Cobb said that if pits were handled better or disposal wells were mostly used instead, it would also help.

6. What would happen to oil and gas industry if the FRAC Act, introduced again by Rep. Maurice Hinchey, gets passed in its current form to reverse the law now and put hydraulic fracturing directly in the Safe Drinking Water Act as many senators are looking to do in Congress?

A: Unanimous answer by all three – It will shut the industry down.

A: Clute – “It’s already regulated by the Clean Water Act and you’re not allowed to pollute,” he said. “I think you can kiss the domestic oil and gas business goodbye. I think it will become so expensive to drill and complete that it won’t be worth it.

As an industry, Clute said you have to be careful and watch what you’re doing.

“We do that anyway. We’re already regulated,” he said. “Innumerable studies have said that the fracing technology is safe and that you’ve got to work at. Have accidents occurred? Yes, they have but it’s minimal.

“This business is hard enough to produce hydrocarbons, keep the equipment running and wells producing without having to fight these kinds of battles. Men and women are out there working their a**es off to make sure people have the energy they need to make their lives work, and to throw these kinds of roadblocks in front of people that are already working hard, is ridiculous.”

A: Talmage – “That depends on exactly what that would mean. I think there would be several scenarios you’d have to consider. One would be increased regulation and depending on where it existed, it wouldn’t necessarily be a bad thing, but it would increase costs, obviously,” he said.

He said the shales now are so appealing to large companies because you can produce so much gas fairly easily, which is why the gas market has been plummeting the past two years and still is.

Shales are constantly being discovered around the world, and if the price is suddenly increased, it would make some of these plays not so economical and the volume of resources we see now would dry up, driving the price of energy higher and higher.

“So kind of a really cheap, long-term natural gas pricing, which could be really, really good for our country and in a lot of ways pull us out from the economic funk we’re in right now, you can say bye to,” he said.

“Of course, having some sort of balance, I’m all for proper regulation. If there is something we can improve, like ‘hey, this is crappy, this is not right, it is polluting way more than the small acceptable amount’, then yeah, we need to do something to fix that. I think anyone in the industry for the most part is more than willing to do that and talk reasonably, scientifically and intellectually and figure out what really needs to be done.”

Talmage said on the other hand though, if the EPA or government would ban all hydraulic fracturing, it will kill the industry in the United States.

“There would be really be no way you could make any commercial oil and gas in oil without fracturing in Ohio, and the same could be said in the Appalachian Basin and most of the stuff in the West,” he said. “You have some offshore potential still, some places like the Middle East and you’d have other countries that say, ‘Come gives us your rigs and service companies,’ and then you would have a mass exodus of companies from the United States. They would all be going and doing the exact same thing in other parts of the world with fewer regulations and environmental control. That’s a double edge sword.”

A: Cobb – “I think that it would totally destroy or stop activity. If the timber industry had to go to Greenpeace or someone like that every time they wanted to cut down a tree, I don’t think there’d be any trees cut down,” he said. “However, if a water resources board could be established that would use engineers rather than lay people to actually study this, then there is a possibility.

“But I don’t think that’s what they’re planning, and well it would make it far more expensive and we’re already having a hard time paying for gasoline now.”

Check out the last part of the interview with these three tomorrow!

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