By Brian A. Shactman, CNBC.com
The oil rush in North Dakota has it all. Billions of dollars. Thousands of jobs. Grapes of Wrath-like journeys from all across America as people leave desperate situations, hoping for a fresh start. Big business shoe-horning itself into small-town America.
By Spencer Platt, Getty Images
A Cabot Oil and Gas crew works on a natural gas valve at a hydraulic fracturing site in South Montrose, Pa., in January 2012.
By Spencer Platt, Getty Images
A Cabot Oil and Gas crew works on a natural gas valve at a hydraulic fracturing site in South Montrose, Pa., in January 2012.
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On the positive side, many who have made the trip to places like Williston, N.D., have come away with a job and renewed optimism for the future.
On the negative side, the incredible growth is not without its pains — inadequate housing and crime, to name two emerging concerns. But from public officials to oil executives, there is a tremendous effort to manage it all.
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However, two things beyond any one person’s control hold the potential to make the boom go bust almost immediately.
The first, oil prices, is simple. Right now, oil needs to be selling at $60 a barrel or more to make the process profitable in the huge rock formation called the Bakken. No problem there. It’s selling at around $100 a barrel with no price collapse in sight.
The second, hydraulic fracturing, or fracking, is a bit more complicated. There is a huge operating cost to drill down two miles and then two more miles laterally. In addition to the trucking, employment and infrastructure costs, the process of fracking is both costly and has become environmentally controversial.
Here’s how the process works:
After drilling, workers do what they call “perforating.” Thousands of small fissures are blasted into the rock surrounding the hole that’s been drilled. Then, a mixture of water, sand and chemicals is pushed into the fissures at tremendous pressure. The sand (sometimes, ceramics are used) wedges itself into the tiny fissures, propping them open and allowing the oil to flow out of the rock.
The chemicals make up only 1% of the fracking “water,” but several companies involved in the process refuse to disclose what goes into the ground.
There are two water issues: What happens to the water used in the fracking process and what happens to water near the drilled area.
Some residents in places like Pavillion, Wyo., are convinced their drinking water is toxic — and that fracking is to blame.
“There is a well out here that is 500 feet away from us,” said resident Louis Meeks. “They completed it in 2005, and then our water went bad.”
Meeks now uses bottled water for almost everything. He won’t even give tap water to his chickens.
The Environmental Protection Agency is testing the water in Pavillion, but stories like Meeks’ have sparked an emerging environmental movement against fracking.
In a statement, the EPA wrote that the tested water did contain “compounds likely associated with gas production practices, including hydraulic fracturing.”
Encana, which has drilled near the test locations, responded strongly, stating, “We are concerned that the EPA has jumped to some conclusions that we do not think are supported by science. “We think that a third party review would be great.”
Roger Anderson, who works in the Department of Earth and Environmental Sciences at Columbia University, cautions against a rash judgment on fracking.
“It’s been done for 100 years around the world,” he says, adding that it becomes an issue when it happens in people’s backyard.
“No one (in the general public) actually knows what is going on down there in the earth,” he said. “I think it probably scares them a little.”
The scientific and regulatory communities are trying to determine if the fear is justified.
Meanwhile, it’s become a political issue. If that spreads nationwide, it could have a tremendous impact on what’s going on in North Dakota.
Yes, it is true that the Bakken fracking is for oil and not for natural gas. And yes, there have been no major fracking controversies in North Dakota so far.
But if there were to be a nationwide moratorium on fracking — which has been discussed — the job and oil boom in North Dakota would go away virtually overnight.
Put simply, there is no other way to profitably get the oil out of the ground.
“That (a moratorium) would shut it down,” said Williston Mayor Ward Koeser, pausing and then adding: “Overnight.”
Related articles
- Lower gas exports to U.S. symptomatic of dramatic shift (business.financialpost.com)
- The EPA’s Fracking Scare (energyindependenceforstates.com)
- North Dakota Oil Jobs Emerges as the Top Destination to Find the Dream Job at Newly Discovered Bakken Oil Field, North Dakota (prweb.com)
- Grand Forks Herald on Fracking: Forget the Constitution, North Dakota should be like Norway (junkscience.com)
- EPA Threatens North Dakota Oil Boom (wdednh.wordpress.com)
- Thanks to the EPA, the other shoe may drop on North Dakota (angrydd.wordpress.com)
- NewsMax: EPA Threatens North Dakota Oil Boom(and near zero unemployment) (ctom1985.wordpress.com)
- Fracking market to grow 19% to US$37Bn worldwide in 2012 (business.financialpost.com)
- WALTER RUSSELL MEAD: Brown vs. Green In The Rust-Belt Battleground. Green complaints about frack… (pjmedia.com)
- Energy Americans Gaining Energy Independence (energyindependenceforstates.com)
- U.S. gaining energy independence (seattletimes.nwsource.com)
Why do people continue to propagate myths? Horizontal slick water hydraulic fracturing, as developed by Halliburton, is a young pup – it’s barely a decade in commercial use, not 100 years!
Please don’t regurgitate someone else’s vomit.
Posted by David Taylor | February 16, 2012, 5:02 pm