FORT WORTH (CBSDFW.COM) – The debates for and against hydraulic fracturing all center on the world’s most essential natural substance: water.
Environmentalists decry the millions of gallons used each time natural gas-containing shale rock deep inside the earth is split open with it. This is exacerbated, they say, as water becomes more of a commodity during the worst drought in Texas’s history.
Residents and housing associations near drilling sites point to chemical additives in the treated water as the reason why some families can set their tap water aflame.
The natural gas industry, however, rebuffs these complaints, citing a lack of evidence that links hydraulic fracturing with groundwater contamination. Experts tout the process of fracking as a relatively cheap, safe way to harvest natural gas that powers homes across the nation.
But it all goes back to the water: what’s added to it, how much of it is used, where it comes from.
Which raises a question; what if energy companies could allay the concerns of residents, environmentalists and some elected officials by using a completely different substance?
What if it was possible to frack without water?
In 2008, Calgary-based energy company GasFrac did just that: it used a thick propane gel in place of treated water. The method, called liquefied petroleum gas (LPG) fracturing –– or simply gas fracking –– pumps a mix of the gel and sand into the shale formations more than a mile underground.
That mixture is the fracking fluid. It’s used to break up the rock, releasing natural gas bubbles trapped inside. While facing extreme pressure deep inside the earth, the propane gel turns into a vapor and returns to the surface with the natural gas, where it can be recaptured.
“We don’t do any water with the frack,” said Emmett Capt, GasFrac’s vice president of U.S. operations. “We use what actually comes out of the ground.”
Since 2008, GasFrac has successfully harvested natural gas using its method about 1,000 times, Capt said. Nine hundred of those were at wells in the Canadian provinces of Alberta, British Columbia and New Brunswick.
In 2010, GasFrac expanded its operations stateside, establishing its American offices in the far East Texas town of Kilgore, about a two-hour drive from Dallas.
About 13,000 people live in that oil-rich town, which sits atop the Haynesville Shale –– a rich deposit of natural gas that stretches underneath East Texas, Southeastern Arkansas and Northwestern Louisiana.
The technology is in its infancy. Despite the seemingly strategic placement of its stateside headquarters, Capt said the Canadian company located American operations in Kilgore for one simple reason: That’s where he lives.
“We don’t know where the core of the business is going to be,” he said, his Texas drawl shining through.
For now, that core is a bit spread out. So far, the company’s services have been enlisted in Texas just once –– by the Jadela Oil Corp., another Calgary-based company –– in the Eagle Ford Shale, near the Rio Grande border.
GasFrac also has a presence in Colorado, New Mexico, Oklahoma and Pennsylvania.
And in New York State, where former Gov. David Paterson issued a still-standing moratorium on hydraulic fracturing in Dec. 2010, Capt says the company’s method has piqued the interest of mineral rights owners in the state who are concerned with the environmental impact of drilling for natural gas.
GasFrac hasn’t received approval from the state, but Capt says officials are open to exploring the waterless method.
New York State Department of Environmental Conservation spokeswoman Emily DeSantis confirmed that department staffers have met with GasFrac to “get a general understanding of the technology.”
Nevertheless, the company has yet to submit an application to New York State to work there.
In an email, DeSantis said the state would further research the technology once GasFrac formally applies. But submitting the application is partially contingent upon finding a contractor to pay for its service, and that hasn’t happened there yet, Capt says.
“The main deal about business is you want to be busy,” he said. “If you’re just going to do one frack and one frack only, it’s not economical for us. We’ve got to get a business plan together to utilize 100 percent of our equipment.”
A tale of two studies
The fledgling company has arisen at an interesting time for the natural gas industry.
The preliminary results of two large scale, highly anticipated studies on hydraulic fracturing appear to be at odds with one another.
On Nov. 9, University of Texas geology professor Charles Groat stood in front of about 150 people during a downtown Fort Worth luncheon and announced perhaps the most compelling preliminary finding of the university’s $300,000 study.
Researchers found no proof, he said, that the act of hydraulic fracturing is to blame for groundwater contamination. When accidents happen, it’s often spills at the surface level, far from the underground aquifers where groundwater contamination would take place.
As the study put it, “many allegations of groundwater contamination appear to be related to above-ground spills or other mishandling of wastewater produced from shale gas drilling, rather than from hydraulic fracturing itself.”
Almost one month to the day later, the Environmental Protection Agency published preliminary findings of its own study on hydraulic fracturing. For the first time ever, researchers said traces of fracking chemicals were found in the groundwater beneath Pavillion, Wyo.
The industry’s response to the EPA’s findings was swift.
Encana Natural Gas, the Calgary-based energy company that fracked the Wyoming well in question, called the findings “irresponsible” and took the EPA to task for what it contends to be a report built on inconsistencies, one that “ignores well-known historical realities” of the poor quality of groundwater in that area and the presence of chemicals such as methane that occur naturally in the shallow natural gas field.
A Dec. 20 editorial in the Wall Street Journal called the study “neither definitive nor applicable to the rest of the country” and, like Encana’s complaint, cites that the U.S. Geological Survey’s longstanding records of chemicals in the groundwater were written into the record well before hydraulic fracturing was used there.
Those EPA results still haven’t been peer-reviewed and they’re also localized to the well in Wyoming.
The EPA promises the results of a more comprehensive study on the matter by late 2012. Final results from the UT study would be published this year as well.
Fracturing with gas isn’t a completely new phenomenon, said Dr. Ed Ireland, executive director of the industry-funded Barnett Shale Energy Education Council.
In 1981, George P. Mitchell drilled the first well in the Barnett Shale, which is a more-than 5,000 square-mile stretch of natural gas-rich rock formations that sits under about 20 North Texas counties, including Tarrant, Denton, Johnson, Wise and Parker. There are now more than 17,000 active wells in the shale, Ireland said.
Mitchell, the CEO of Mitchell Energy, experimented with the hydraulic fracturing method at that initial well, which is located in southeastern Wise County near the Tarrant County line.
More than 30 years later, that well is still producing, Ireland said.
During that time, Ireland said drillers were exploring using mixes of gases, like propane, butane, liquid carbon dioxide and nitrogen.
It wasn’t until after Oklahoma City-based Devon Energy bought Mitchell in 2002 that hydraulic fracturing took off in the Barnett Shale, Ireland said.
When Mitchell Energy began experimenting with fracking, the company kept its cards close to its chest. The results of the method stayed behind boardroom doors. The practice was recorded in private studies, Ireland said, and hushed as to not tip off competitors to its effectiveness and relative affordability.
When Devon bought the company, it inherited those records and years of experience. Shortly thereafter, Ireland said, hydraulic fracturing became the industry standard –– a cheaper alternative than fracking with a gas, and one that doesn’t call for the safety requirements inherent when handling a volatile gas.
Capt described a similar pattern with GasFrac’s technology. The companies that have enlisted its services aren’t publishing the data they find on it, he said.
If gas fracking really does increase performance of the wells, as GasFrac says is often the case, the only companies that have that information are the ones that have taken a chance on it.
And GasFrac is beholden to their contractors: Capt would not discuss specific results at the U.S. wells.
A spokesman for Jadela Oil, the company that contracted GasFrac for the sole propane-fracked well in Texas, wouldn’t comment on the results at its well.
“Some of that information will be internal data and not released,” Ireland said. “The way these companies compete with each other is develop technologies their competitors don’t have.”
Capt speaks freely about gas fracking costs being higher on the outset than hydraulic fracturing: “If you compare a gallon of gasoline to a gallon of water,” he said, “which is cheaper?”
Capt estimates the cost of an LPG frack to be between $50,000 and $100,000 more than a well that is hydraulically fractured.
But, on the back-end of the gas frack, Capt says his company’s method will increase production to help offset those costs.
For example: in hydraulic fracturing, some of the additives mixed with the water are used to minimize clay swelling that occurs when fresh water is shot into the formation. Another chemical is added to the fracking fluid to stifle the growth of any life in that zone, Ireland said.
After using GasFrac’s method, Capt says, the natural gas and the propane vapor flow back to the surface without facing those obstacles, all of which are created when fresh water is pumped that far into the earth. Because of that, Capt says, the natural gas yield is higher.
“If you put fresh water on the clays, it affects the production,” he said. “We get better results because you do not have any damage to the zone where the product flows out.”
“Our product, it’s actually like mixing gasoline and oil. All it does is dilute the oil and it’ll still flow,” he added.
There’s also the matter of handling a volatile gas like propane. Mukul Sharma, a professor and “Tex” Moncrief Chair in the Cockrell School of Engineering at UT, said this is another reason some energy companies are reluctant to use a gas as a fracking fluid.
“The reason a lot of people don’t use these is, No. 1, cost; they are more expensive,” he said. “No. 2, handling; there are safety issues with LPG (liquefied petroleum gas) or handling liquid CO2 (carbon dioxide). It’s more difficult to pump.”
GasFrac’s safety measures begin with an internal safety valve attached to each of its storage containers that automatically shuts off if it detects a leak. To illustrate this, Capt mentioned the act of refilling a propane tank at a grocery store.
“You know how they break the hose loose and you see the white cloud? These things will smell that,” he said.
They’re “gas-sniffers,” he said, and once a leak –– however minor –– is detected, it hurries this information to a data van stationed about 200 feet away from the well where an employee can shut off all ignition forces and secure the area.
Company policy prevents any employee from being within 200 feet –– about three-quarters of a football field –– of the operational site, Capt said.
“We’ve got to get the companies on board, show them that we have a safety procedure in place, that we’re a safe company,” Capt said. “In every case I’ve seen so far, they see us perform one well and their minds are at ease.”
GasFrac buys the propane from producers and delivers it to the well sites.
The propane used in the fracture can be recaptured and reused or sold, and Capt says that’s a major plus for interested users. GasFrac does not offer that service yet, although Capt said it is in development in Canada.
But Sharma said going to those lengths doesn’t make much sense for companies that are experimenting with a well or two.
“In theory, the LPG in the frack is recoverable, but the question is, do you have the infrastructure and equipment in place to actually capture the fluid?” Sharma asked.
Despite its risks and costs, LPG fracking remains an exciting technology among experts and industry leaders. The reason why is perhaps the method’s biggest advantage: gas companies would no longer need between 3 and 6 million gallons of water to frack a single well.
Back in New York State, where the moratorium against hydraulic fracturing still stands, state researchers devoted nearly a page of their Generic Environmental Impact Statement to the technology, acknowledging that LPG fracturing “not only minimizes formation damage, but also eliminates the need to source water for hydraulic fracturing, recover flowback fluids to the surface and dispose of the flowback fluids.”
In other words, it supports Capt’s argument.
“Needless to say, it’s environmentally friendly,” Capt said. “We don’t damage the formation and the water usage is none.”
A drought and a double punch
At Benbrook Lake, a stone’s throw from the west side of Fort Worth, the maze of cracks in the dry earth at the foot of the Benbrook Marina meets water about a quarter of a mile from where seven boats lie dormant, beached on the parched land.
On Oct. 8, the lake’s level reached 676.13 acre feet, about a six million gallon drop from its normal elevation and the lowest recorded level the lake has ever been, according to the Army Corps of Engineers.
The low water levels have crippled business at the Benbrook Marina, says owner Ron Rogers. The Tarrant Regional Water District, which manages the water in Benbrook Lake, controls 72,500 acre-feet –– roughly 23.6 trillion gallons –– of water from lakes and creeks in the area.
The district sells water to the cities of Fort Worth, Arlington and Mansfield as well as to the Trinity River Authority, which provides drinking water to residents in the Mid Cities area –– Grapevine, Colleyville, Hurst, Euless, Bedford, among others.
Evaporation has made some five trillion gallons of water disappear from Tarrant Regional-controlled lakes, said Chad Lorance, the water district’s spokesman. On top of that, “60 to 70 percent” of water usage this summer went toward landscaping.
“Combine that with evaporation,” he said. “You’ll see where the water’s gone.”
Rogers’s bottom line can’t tell where it all went, but it’s certainly not at the 47-year-old’s feet anymore –– not like it was in 2008, at least, when he had a wait-list for boaters wanting to use his wet-slips.
That was before the gangly weeds began to gradually ascend through the cracks in the ground, and well before Rogers had to start mowing his boat slips.
On a bluff that sits thirty feet above the shore on the west side of the lake, operational natural gas rigs stare off into the distance, far past the drying body of water.
Locally, the amount of water Tarrant Regional sold to gas companies in 2011 is fairly negligible compared to what the heat sizzled away and what was claimed by deep cracks in the bottom of the lakes created by the drought-stricken earth.
Through August, Lorance said of the total 101 billion gallons of water the district sold its clients, about 839 million gallons went to gas companies –– roughly .83 percent.
During the past 30 days, Lorance said the district has pumped 95.15 million gallons of water back into Benbrook Lake from other Tarrant Regional-controlled bodies of water each day.
Over a week, Lorance said, that amount equals all of the gallons sold to gas companies from January through August of last year. Numbers past August won’t be available until March, Lorance said, as the agency finalizes its annual report tracking water usage that will be sent to the Texas Commission on Environmental Quality.
But it’s difficult, Rogers says, to see the drilling rigs using water –– never mind the amount –– from the district while the worst drought in the state’s history continues its dry dominance: he’s literally watching his business evaporate along with the lake itself.
It may not mean much for Benbrook Lake’s levels, but what about when all the water across the nation used for fracking is taken into consideration, he asks?
“It looks like a lot of land,” Rogers said, staring out on the lake from his marina. “If they continue to do this each and every year, I mean, I don’t make enough in the spring and summer.”
The industry’s ‘Seabiscuit’?
However new, GasFrac’s method is something that’s being analyzed by educators and the industry.
Sharma, the UT professor, said the university’s Cockrell School of Engineering –– which sports the best graduate program in the nation for petroleum engineering, according to U.S. News & World Report –– developed the world’s first computer software that allows students and educators simulate fractures with something that isn’t water.
Sharma said the model illustrates exactly what happens when a certain amount of gas or oil, from propane to nitrogen, is used in a frack.
“We can actually do a lot of design work on these types of fractures,” he said.
Spokespeople for both Chesapeake Energy –– which purports to be the second-largest producer of natural gas in the country –– and Devon Energy acknowledged LPG fracturing technology when asked about it, although neither company has adopted plans to use it in the Barnett Shale.
“While we will continue to monitor its progress, we have no immediate plans to employ it within our operations,” said Chip Minty, spokesman for Devon, which catapulted into the Fortune 500 shortly after acquiring Mitchell Energy in 2002.
Two months ago, GasFrac named Zeke Zeringue, former president of Halliburton Energy Services Group, as its new CEO. And in November, GasFrac was presented with the first-ever Technological Innovator award at the World Shale Gas Conference & Exhibition. The platinum sponsor of the event was Chesapeake.
But for now, executives like Capt are remaining patient and confident that their service will catch on. It’s now a waiting game.
“It’s just like owning Seabiscuit,” Capt said. “The horse is gonna’ run, we know it’s gonna’ win sooner or later. It’s frustrating, but we’re getting a lot of interest in this thing.”