Hydraulic Fracturing ("Fracking")

Opponents say fracking is bad for our communities, but our communities thrive on the energy, jobs and revenue created by innovation in energy exploration.

Summary

  • Hydraulic fracturing, commonly referred to as “fracking”, is safe, effective, and necessary for the production of oil and natural gas.
  • Hydraulic fracturing has enabled the United States to recover previously inaccessible reserves of both oil and natural gas, making our nation more energy self-sufficient, improving our economy and national security.
  • Because of geology, technology, and well construction, fracking does not contaminate ground water sources. Wells are drilled 1-2 miles below the surface, far below any groud water.
  • Fracking has enabled the increased the use of natural gas to provide electricity, lowering overall carbon emissions.
  • Fracking should be regulated, and done so at the state level. State-level regulation makes the most sense because it’s not based on one-size-fits-all federal regulations or patchwork local ones.
  • Fracking has been safely done on more than 1.7 million wells since 1947 in the United States. More than 90% of all oil and natural gas wells are fracked.
  • Neither the EPA nor any state regulator have ever found a case of contamination of underground drinking water caused by the fracking process.

Issue Background

Hydraulic fracturing, commonly known as “fracking,” is an oil and gas production technique developed 70 years ago, which uses a pressurized mixture of water and sand, sometimes with chemical additives included, to create tiny fissures in non-porous oil and gas bearing rock formations deep underground, allowing the oil or gas to flow into a wellbore.

Combined in the last two decades with horizontal drilling, “fracking” has allowed producers to recover oil and gas resources trapped in shale formations, making vast amounts of energy resources accessible for the first time.

This innovation has created the “shale boom” in the United States, allowing the nation to become one of the top oil and natural gas producers in the world, a net exporter, and increasing our national energy security. It has also created a tremendous number of good-paying jobs, and wealth for individual communities, states, and the nation as a whole.

“Fracking” is only one of many stages of drilling and completing a well. As a well is drilled, layers of steel casing are inserted. Multiple layers of casing and cement are installed from the surface until well below the water table, to ensure protection of ground water. Following well integrity tests, small explosive charges are used to create channels into the oil and gas bearing rock. Water is pumped into these channels, sometimes with additives such as a surfactant (as a lubricant), bactericide (to prevent bacteria from growing and plugging the holes) and a rust inhibitor (to prevent leakage through the casing). Pumps are then used to pressurize the water sufficiently to create small cracks within the rock, connecting pores which contain oil or gas, and allowing it to flow into the well. Sand is then added to hold the micro-fractures open.

The process, especially when combined with horizontal drilling, allows wells to be drilled from a single location, called a “pad”. This greatly minimizes the footprint of the industry and the surface impact compared to drilling wells vertically.

Fracking fluid is about 99.5% water and sand. The rest is a mixture of chemicals similar to household products found under the kitchen sink or in the garage. Operators disclose the chemicals used in fracking on FracFocus.org or in accordance with state regulation.

Numerous studies across the country have confirmed that fracking has not contaminated ground water anywhere, yet extremist environmental organizations and their ideological allies have attempted or succeeded in enacting bans on the process. These bans, or heavy regulations which serve as effective bans, deprive mineral owners of their property rights, as they restrict or prevent them from accessing and disposing of their property. These bans also deny American consumers, and the nation as a whole, access to important natural energy resources.

Because fracturing and other production methods produce resources which traverse municipal and county lines, and because most local governments lack the resources and technical expertise required to effectively manage sub-surface resources, fracking is most efficiently regulated at the state level. It is simply infeasible for lower levels of government to handle this responsibility, and a violation of federalism for the federal government to usurp this authority from the states. In 2005, Congress delegated authority to regulate fracking to the states and not to federal agencies.  Many in the environmental lobby have argued for “local control”, i.e. granting local governments the authority to enact bans on the process. This would create a patchwork regulatory environment in the state, which would make it all but impossible for energy companies to operate legally; and, of course, it would violate the property rights of mineral owners. In addition, the Colorado constitution defines the relative regulatory authority of the state and local governments and assigned regulation of subsurface mineral recovery to the state. State courts have upheld the unconstitutionality of local fracking bans several times in the last few years.

Despite overwhelming scientific evidence of its safety, and the tremendous economic, environmental, and national benefits it offers, “fracking” has become the lightning rod issue for the environmental left, and is used as a catch-phrase to describe any and all procedures involved with the oil and gas industry.

Governing Principles

Private Property Rights: Fracking is necessary to access and develop sub-surface mineral rights, which are as much property as surface property is. Bans are a denial of these property rights.

Economic Liberty/Free Markets: Fracking is a proven and safe technique for recovering minerals, and should be available to producers for the use of developing their resources.

Federalism: Regulation of fracking is properly a state issue, not one for the federal government to interfere with. The state is the lowest feasible level at which fracking can properly be regulated without intruding on the rights of other jurisdictions.

National Security: Fracking has enabled the U.S. to become energy secure, reducing our reliance on foreign sources, and enhancing our national security. It has also led to a natural increase in the use of natural gas in electrical generation, improving our environmental condition.

Solutions

  • Maintain regulatory authority at state level, rejecting both federal regulatory takeovers and unconstitutional attempts to ban fracking locally.
  • Oppose attempts to politicize state regulatory agencies, and to rewrite their mandate to include or even prioritize, “environmental justice.” Maintain the proper role of the Colorado Oil and Gas Conservation Commission (COGCC) to ensure efficient recovery of oil and gas resources.
  • Support local control of those issues which are properly the domain of local governments – zoning laws, road restrictions, etc.
  • Oppose blanket bans on hydraulic fracturing and other oil and gas production methods.
  • Reduce regulations on energy production to reflect science and economic benefits.
  • Support policies which ensure that any entity which deprives access to property through local laws or regulations must fully compensate the property owner.
  • Enact regulatory reform that is more cooperative, and less punitive.

Key Statistics

General:

  • 95% of new wells drilled today are “fracked.”
  • Fracking accounts for 2/3 of total U.S. natural gas production and ½ of crude oil production.
  • Fracking and horizontal drilling, by allowing pad drilling, has reduced the size of the drilling area above ground by as much as 90%

Colorado statistics:

  • Oil and gas contributed $31.38 billion to Colorado’s economy in 2015.
    (Source: American Petroleum Institute)
  • Oil and gas contributed $1.2 billion to public revenue in 2014. (COGA)
  • $330 million was paid by the oil and gas industry in 2014 severance tax. (COGA)
  • Oil and gas supported 232,900 jobs in Colorado in 2015.
    (Source: American Petroleum Institute)
  • Average salary of and oil and gas job in the state is $105,168.

According to a 2016 report from IHS Economics:

  • Natural gas access contributed to 1.9 million jobs economy-wide in 2015.
  • Shale gas put an extra $1,337 back in the pocket of the average American family.
  • New natural gas transmission lines meant more than 347,000 jobs, with 60,000 in manufacturing.
  • Total natural gas demand is poised to increase by 40 percent over the next decade. Key drivers will be manufacturing and power generation.
  • U.S. supply is expected to increase by 48 percent over the next decade to meet new demand.
  • Because energy innovation is lowering production costs, IHS expects energy-intensive industries such as chemicals, metals, food and refining to outperform the U.S. economy as a whole through 2025.
  • Shale gas production has created new flow patterns that are causing existing pipelines to reverse flow and will necessitate the construction of new pipeline capacity. (HydraulicFracturing.com)

Resources:

Denver Business Journal
Colorado oil and gas sector’s impact tops $31 billion, says report
https://www.bizjournals.com/denver/news/2017/08/01/economic-impact-of-colorado-s-oil-and-gas-sector.html

Coloradans for Responsible Energy Development (CRED)
https://www.cred.org/

26 independent studies affirm fracking does not harm water quality
https://www.cred.org/scientists-fracking-doesnt-harm-water/

American Petroleum Institute
http://www.api.org/

Colorado Oil and Gas Association
http://www.coga.org/

Western Energy Alliance
http://www.westernenergyalliance.org

Colorado Department of Public Health & Environment
State health risk assessment found risk is low for neighbors of oil and gas development
https://www.colorado.gov/pacific/cdphe/oil-and-gas-health-assessment