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Natural Gas and Hydraulic Fracturing

A Risk Versus Return Analysis
Abstract
Natural gas has become one of Americas most precious fuel commodities, providing power and
heat to a significant percentage of Americas homes and industries. As the science behind hydraulic
fracturing continues to develop, this same method of extraction remains the subject of widespread
criticism due to inherent environmental hazards. This criticism has essentially split the American
conscious in half those opposed to hydraulic fracturing and those in avid support of the economic and
atmospheric benefits that natural gas provides. This analysis will compare both of these risks and
respective benefits, and why the benefits of natural gas can serve as a gateway to our nations long term
energy and environmental needs.
Introduction
The natural gas movement continues to gain momentum as more onshore locations around the
world obtain the green light for exploration. The U.S. Department of Energy predicts that annual natural
gas consumption in the U.S. alone is projected to rise to 30.7 trillion cubic feet by 2025 and worldwide
consumption of natural gas is to reach roughly 151 trillion cubic feet by 2025. With its higher fuel
efficiency, reduced greenhouse gas emissions, and untapped abundance, it is evident why this clean-
burning source of energy is becoming more universally desirable. Primarily burned in commercial,
industrial, and residential settings, natural gas is a highly efficient and relatively less carbon intensive
source of fuel when compared with coal or oil. Despite its relatively cleaner emissions, however, a great
deal of attention has been called to the environmental risks associated with the current hydraulic
fracturing practices necessary to extract natural gas from shale. Threats of subsurface contamination of
water, faulty well construction, blowouts, above-ground leaks, and spills of waste water and chemicals are
crucial contributors to the controversy surrounding hydraulic fracturing and its affects upon society. Risk
versus return is the primary tradeoff shaping the debate of natural gas, because while it is a comparatively
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cleaner source of energy, the questionable dangers and risks of extraction have drawn negative attention
to shale gas development and led many people to wonder if natural gas is as clean as its reputation.
Despite this controversy, aborting shale gas exploration is certainly not the answer. Natural gas
should and will continue to be consumed as a cleaner and more efficient source of energy, but hydraulic
fracturing does not necessarily have to be the future of extraction. The analysis discussed in this paper
will explore the environmental benefits of natural gas when utilized as fuel generation, the hazardous
risks of hydraulic drilling, and how potential alternative fracking techniques and uses of natural gas can
allow the payback of return to outweigh the risks of supply.
Natural gas is composed of methane and heavier, more complex hydrocarbons such as ethane,
propane, and butane. Nearly all natural gas is located in underground reservoirs, as it was formed over
thousands of years ago when layers of buried decomposed plants and animals were exposed to intense
heat and pressure. Over time, sand, mud, and other sediments drifted downward and lithified, preserving
the organic matter into sedimentary rock, which is commonly referred to as source rock. These
accumulating layers of source rock created the heat and pressure responsible for changing the organic
matter into hydrocarbons (Busby, 4). Some of these hydrocarbons gradually expelled from the
sedimentary rock and traveled upward towards the surface, creating a shale or gas reservoir. The
hydrocarbons that remained in the source rock constitute as shale gas and shale oil (What is the Origin of
Shale Gas). Shale gas can be anywhere from 1,500 to 3,000 meters beneath the surface, and because of
the compact nature of the source rock, the gas is trapped within the fine spaces of the rocks grainy
texture. In order to extract this trapped shale gas, a well must be drilled that is capable of penetrating the
impermeable rock and reaching the depth of the shale gas entrapment. While the first producing U.S.
natural gas well was drilled into a New York shale formation in 1821, commercial drilling during the 19
th

and 20
th
centuries targeted the expelled gas that accumulated in the gas and oil reservoirs (Zoback,
Kitasei, Copithorne, 2). It was not until the past decade that two techniques, horizontal and hydraulic
fracturing feasibly and economically allowed for operators to penetrate this shale gas buried thousands of
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feet deep.
The process of hydraulic fracturing begins by drilling into a vertical wellbore. Operators insert a
steel pipe called a conductor casing into the wellbore as the well begins to pass through shallow
sediments and soils near the Earths surface. Cement is then pumped into the casing and followed by
water, which pushes the cement out through the bottom of the casing and then back upward to fill the
space between the surface casing and the wellbore. This cement is designated to seal off the wellbore
from fresh water supply and to prevent contamination of fresh water aquifers. Drilling continues to pass
through thousands of feet of rock formation, some of which contain natural gas and briny water
containing concentrated salts and contaminants (Zoback, Kitasei, Copithorne, 3,4). When vertical drilling
nears the top of the target formation, the route takes a 90 degree turn at what is commonly referred to as a
kick off point, and the wellbore is positioned to drill through the rock formation horizontally. The pipe is
removed and a drilling motor is inserted to commence the horizontal drilling. When the horizontal target
distance is reached (potentially up to 10,000 feet away), the process of cement casing the well takes place
once again and a temporary well head is installed. Small electrical charges, or perforations, are sent at
intervals through the casing where operators intend to fracture the shale. Water mixed with sand and
chemicals is then injected into these perforations at high pressures, causing a hydraulic fracture to open in
the surrounding rock. The sand flows through these perforations to open the fractures and remains in
place, allowing natural gas and water to migrate into the well (Zoback, Kitasei, Copithorne, 3, 4).
Hydraulic drilling for shale gas has allowed for a significant domestic rise in natural gas
utilization. Shale gas accounted for 39% of all natural gas produced in the United States last year (Koch).
As shale exploration rises, the United States is beginning to see a trend of natural gas gradually replacing
carbon intensive fuel sources like coal, particularly in industry. Natural gas accounts for 35% of total
energy used industrially, primarily for process heating and conventional boiler use (MIT, 10).
Additionally, while residential and commercial sectors account for over 40% of total United States energy
consumption, these two sectors account for more than 55% of U.S. natural gas demand when factoring
electrical generation and direct use of natural gas in homes and businesses (MIT, 112). Direct uses for
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natural gas in residential and commercial sectors include space and water heating. Finally, while it
encompasses a minimal percentage of natural gas usage in the U.S., there are approximately 11 million
natural gas vehicles on the road worldwide (U.S. Energy Information Administration).
Natural Gas Extraction: Risks and Rewards
Every source of energy available to the global economy has both risks and benefits. Some view
natural gas as the breakthrough transition fuel between coal and renewables, while others are suspicious
of whether the ends justify the means (Steele, Hayes, 249). The means of extraction, hydraulic drilling,
have been a frequent target of environmentalist condemnation, and their concerns are justifiable.
Hydraulic fracturing requires 400-40000 m^3 of water to maintain downward pressure and cool the
drillhead, and 7000-18,000 m^3 of water is needed for the actual hydraulic fracturing of each well. These
significant quantities of water are typically acquired from local surface waters or municipal regions where
water sources may be scarce or used delicately (Gregory, 183). Quantity is only one aspect of concern
regarding fracking water however, as quality of this water reverted back to local regions has raised
speculation of potential health and environmental hazards. While natural gas is acclaimed for its cleaner-
burning emissions, it is composed of mostly methane, a heady greenhouse gas. Many argue that fugitive
methane leaks that occur at the wellhead throughout the fracturing process may be counteracting the
cleaner emissions of natural gas and further accelerating climate change (Steele, Hayes, 249).
Additionally, a flowback process of fracturing fluids occurs anywhere from a few days to a few weeks
post-fracturing. Minerals and organic constituents existing in the shale formation may dissolve into the
fracturing water, which creates a briny water solution composed of high concentrations of salts, metals,
oils, greases, and soluble organic compounds. This water is typically impounded at the surface for
disposal, treatment, or reuse, raising concern for its potential contact with locals and their natural
resources (Gregory, 183). Only a small percentage of this flowback water is returned to Publicly Owned
Treatment Works for wastewater management, which leaves the operational management of the
remaining wastewater to raise fear for potential human contact (Gregory, 184). Overall, the common
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denominator of natural gas speculations remains the fugitive methane emissions. Natural gas systems are
the single largest source of anthropogenic methane emissions in the U.S., and methane is the second most
prevalent greenhouse gas behind carbon dioxide (Howarth, 1). Fugitive methane escapes via a variety of
occurrences, including natural gas leaks from drilling sites, processing plants, storage facilities, and
pipelines. These methane emissions have prompted people to wonder if natural gas usage is, in the long
run, equally as environmentally hazardous as other fossil fuels.
Without risks, nonetheless, there can be no return, and the returns of natural gas can arguably
justify the risks for the time being. The Massachusetts Institute of Technology recently released an
intensive study on the demand and potential use of natural gas, highlighting the five key components of
natural gas utilization that have contributed to the heightened global demand. These respective benefits
include clean burning, less carbon intensive composition, 92% efficiency delivered to the burner tip,
flexibility to changes and demand fluctuations, and versatility (MIT, 99). In raw comparison to coal and
fuel oil that release ash particles and possess a high carbon ratio and high nitrogen and sulfur contents,
natural gas releases small amounts of nitrogen oxides, virtually no ash or particulate matter, and much
lower levels of carbon dioxide (Vivek, 77). As the reduction of carbon dioxide emissions is the
frontrunner of government priorities to move towards sustainable energies, the minimal carbon dioxide
emissions of natural gas offers hope in a transition to completely clean renewable energy sources.
Additionally, electricity generation is the main nonresidential use of natural gas. Coal has remained the
dominant fuel for the worlds thermal electric power plants due to its low cost, ease of transport, and
availability. However, replacing a coal generating unit with an efficient natural gas-fired generator can
practically eliminate sulfur dioxide emissions, reduce carbon dioxide by two thirds, and reduce nitrogen
oxides by nearly 95%. (Vivek, 79). The MIT natural gas study concluded that replacement of existing
coal boilers with high efficiency natural gas boilers could reduce annual carbon dioxide by 52,000 to
57,000 tons per year (MIT, Appendix 5A). In regards to the high consumptions of water used for
hydraulic fracturing, a recent Texas study concluded that using natural gas can potentially offset this
water consumption due to high water efficiencies. The study by the Jackson School of Geosciences at the
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University of Texas at Austin concluded that the water saved by using natural gas combined cycle plants
relative to coal steam turbine plants is 25-50 times greater than the amount of water used in hydraulic
fracturing to extract the gas. Increasing generation from natural gas plants has enhanced drought
resilience of the Texas power plant fleet by reducing the water demand, allowing power plants to operate
without gas combustion turbines. These changes could potentially apply to the U.S., which has reportedly
seen a 30% increase in natural gas for electric power production since 2005 (Scanlon, 12). Although the
universally ultimate goal is zero carbon emissions and waste, a drastic global transformation cannot take
place over night, and natural gas usage has provided the steps to eventually evolve towards a cleaner
standard of life.
The natural gas debate remains active today, and the ethics of hydraulic fracturing and the
respective environmental risks cannot be ignored. As demand for natural gas continues to ride, however,
shale gas exploration will as well. Potential alternatives for hydro-fracturing have been explored, though
not gained significant momentum. A small energy company, GasFrac, based in Calgary, Alberta
developed a waterless fracturing method, utilizing propane gel. Like water, propane gel is pumped into
shale formations, however, does a kind of disappearing act underground. The pressure and heat reverts the
gel to vapor, and it returns to the surface for possible reuse and collection. The propane get does not carry
the chemicals, salts, and organic constituents that water does. While still awaiting a patent in the U.S., the
technique has been used roughly 1,000 times since 2008 in Canadian gas wells (Brino, Nearing). While
this technique is by no means necessarily the future of shale gas extraction, it is progress towards
developments for safer fracturing. The reserved abundance, relative cleanliness, and high efficiency of
natural gas should and will not be ignored, and for this commodity the prices of hydraulic fracturing will
continue to be paid. However, developing alternative fracturing techniques and more regulation for
management of wastewater and subsurface runoff can allow for these risks to be controlled for the time
being, while energy companies and researches continue the race towards complete carbon-free emissions.
The ultimate goal of the war on climate change is to reach sustainable sources of energy that can end the
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hazardous human dependency on current carbon intensive fuels, and as previously mentioned, natural gas
could very well be the link connecting societys current and hopeful lifestyles.
Conclusion
The tradeoff between natural gas and hydraulic fracturing is not easily weighed. While natural
gas emissions include less carbon dioxide, nitrogen oxides, and particulate matter than coal and oil,
fugitive methane leakages associated with natural gas extraction have arguably counteracted these cleaner
emissions. The benefits of natural gas extend beyond these clean emissions, however, and include high
efficiency, potential for a decrease in water usage by power plants, and have slowly begun to
breakthrough into transportation cost and fuel savings. The University of Texas conducted a study
analyzing the utilization of natural gas in current power plant fleet operations and concluded substantial
water savings that counterbalanced the high water volumes necessary for hydraulic fracturing.
Additionally, an extensive study by the Massachusetts Institute of Technology concluded that replacing
existing coal boilers with natural gas fired generators can reduce substantial carbon dioxide emissions.
While the hazardous methane leaks into subsurface and underground water resources remain a fracturing
challenge, alternative techniques involving shale gas fracturing are developing and improving,
particularly propane gel fracturing in Canada. Shale gas exploration will continue to be necessary in order
to meet the rising global demands of natural gas imports and exports, and research and development is
showing trends towards cleaner fracturing practices. With new methods of extraction surfacing coupled
with the extensive research and development that is innovating and improving fracturing practices every
day, it is clear that natural gas will continue to have a profound impact on the worlds energy needs.
Natural gas extraction will provide cleaner energy at a financially advantageous cost to consumers, will
create millions of jobs in America, will power the worlds cities, and will fuel the automobiles, buses,
wind turbines, and homes of tomorrow. Simply put, the economic stakes are too high to overlook the
energy source that is powering over a quarter of this countrys energy demands and heating over half of
the homes here in America (American Petroleum Institute, 2014). Therefore, while producers and
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regulators continue to strengthen safeguards to ensure safe extraction and a decreased environmental
impact, the world should continue to reap the benefits of this low cost, cleaner, and more efficient energy
solution.

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