Discussion Topics

Economics

The value of hydraulic fracturing is determined by natural gas prices, as well as prices for crude oil and natural gas liquids which include ethane, propane, butanes, and pentanes.  The ratio of these varies between geologic formations and drilling companies target formations based on the presence and market value of each. During periods of low natural gas prices, the value of natural gas liquids has allowed the high initial investment of hydraulic fracturing to remain profitable [1]. Ethane is the most abundant of the natural gas liquids and in parts of the Marcellus shale can comprise as much as 16% of the gas stream, compared to 2-8% in other formations [2]. Ethane is a building block for the production of many plastics and chemicals in our daily lives including soda bottles, polyester clothing, shampoos, detergents, plastic cutlery, PVC pipe, cleaning products, and synthetic motor oil [3].

[1] U.S. Energy Information Administration: http://www.eia.gov/todayinenergy/detail.cfm?id=1150
[2] National Public Radio: http://m.npr.org/story/146803953
[3] Boardman Energy Partners: http://benergypartners.com/Facts_About_Natural_Gas.html

[ Return to top ]

Energy Security

Estimates put the United States’ supplies of shale oil resources at somewhere between 300 and 700 trillion cubic feet, with most of the technically recoverable gas located in Louisiana, Texas, Oklahoma, Arkansas and the Northeast United States [1]. Proponents of large-volume hydraulic fracturing and, subsequently, increased natural gas extraction have voiced the benefits that it provides to U.S. energy security including helping to diversify the nation’s energy sources, reducing its reliance on imported energy, and providing economic benefit from the export of excess supplies and job creation [2][3][4].  Opponents, on the other hand, have argued that natural gas is an inappropriate “bridging” fuel because it is a non-renewable fossil fuel, is unpredictable in terms of future developments, and poses risks to the environment and public health [1][3].

[1] “GAO-12-732: Information on Shale Resources, Development, and Environmental and Public Health Risks”

[2]  http://www.worldenergyoutlook.org/publications/weo-2012/#d.en.26099

[3] “Should fracking stop?” Nature
[4] Kinnaman 2011

[ Return to top ]

International

While the United States is the current leader of shale gas extraction technology, other regions of the world have significant natural gas reserves that are either currently in production or identified as technically recoverable. The largest shale gas reserves outside the U.S. have been identified in China, Argentina, Mexico and South Africa [1]. In 2010, US Department of State hosted a Global Shale Gas Initiative Conference and showed their interest in the international situation[2], which has several motivations including: to maintain leadership in technology and become a reference in regulatory, environmental and business development [2][3];  to support US companies and business abroad; to increase natural gas exports [3][4];  to discourage the use of coal as energy source in other parts of the world [4]; to use as a Geopolitics strategy [3][5]. Hydraulic fracturing is considered as a possible technology to be implemented globally and shale gas explorations are being performed in countries like Canada, Argentina, China, Norway, the Netherlands, Poland and Algeria, among others. However, the international development of shale gas production is slowed down by country-specific limitations and local economical, regulatory, environmental and geopolitical concerns [2][3][4].
 
[1] U.S. Energy Information Agency, 2011. World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States, http://www.eia.gov/analysis/studies/worldshalegas/pdf/fullreport.pdf
[2] Susan Sakmar, 2011. The global shale gas initiative: will the united States be the role model for the development of Shale gas around the world?.  University of San Francisco Law Research Paper No. 2011-27
[3] MIT Interdisciplinary Group, 2011. The future of Natural Gas. http://mitei.mit.edu/publications/reports-studies/future-natural-gas
[4] David L. Goldwyn, Special Envoy for Int’l Energy Affairs, U.S. Dep’t of State, Briefing on the Global Shale Gas Initiative Conference (Aug. 24, 2010) 
[5] Wu Sike, 2013. Shale Gas Will Transform Geopolitics. China US Focus Website, http://www.chinausfocus.com/political-social-development/shale-gas-will-transform-geopolitics/

[ Return to top ]

Biophysical - GHGs

Natural gas extracted from large volume hydraulic fracturing has been touted as a cleaner source of energy since it is associated with less climate change-causing greenhouse gas emissions (GHGs), especially compared to coal [1].  However, estimates of the actual levels of pollution produced by this extracting process vary greatly between studies and suggest that the benefits may not be decisively better than conventional gas [2].  There are particular concerns about the amount of methane that is released during the extraction, given that it is one of the more potent GHGs.  Hydraulic fracturing processes also release a number of other air pollutants, such as hydrogen sulfide and other volatile organic compounds (VOCs), that have been shown to have negative health impacts [3].  Some have argued that these emissions can be controlled through technical fixes and potentially yield additional profits for companies [2][3][4].  The EPA issued new regulations in 2012 that will go into effect by 2015, under the Clean Air Act, and are expected to decrease both methane and VOC emissions from the oil and natural gas industry [3][5].

[1] Alvarez 2012.
[2] Johnson and Boersma 2013.
[3] “The Future of Fracking.” Environmental Health Perspectives.
[4] http://www.epa.gov/outreach 
[5] http://www.epa.gov/airquality/oilandgas/actions.html

[ Return to top ]

Biophysical - Water

The impacts on water supplies from large volume hydraulic fracturing are some of the most commonly voiced concerns in debates over industry regulation [1].  These concerns include the impacts of fracturing fluids and additives, wastewater, erosion, and increased traffic on surface water and groundwater quality and the impacts that the massive amounts of water required for these processes, cited as being up to 6 million gallons per well, have on local water supplies, particularly because hydraulic fracturing is exempt from Safe Drinking Water Act regulations [2][3].  At this point, a definitive link between hydraulic fracturing and water pollution has not been established because the technology is so new; however, there are ongoing studies looking at the potential impacts of these processes on water quantity and water quality including ones being conducted by the Environmental Protection Agency [4][5][6].  The disposal of waste water below the surface in disposal wells has also reportedly led to earthquakes in parts of the Midwest and Texas [3][7][8].  It has been argued that any potential risks of hydraulic fracturing can be controlled through best management practices [4].

[1] Groat and Grimshaw 2012
[2] EPA 2010

[3] GAO report
[4] Nature paper

[5] Johnson and Boersma 2013
[6] http://www.eia.gov/forecasts/ieo/hei.cfm
[7] http://www.technologyreview.com/news/508151/studies-link-earthquakes-to-wastewater-from-fracking/;

[8] http://www.ldeo.columbia.edu/news-events/seismologists-link-ohio-earthquakes-waste-disposal-wells

[ Return to top ]

Social

Some of the major concerns around the growth of the hydraulic fracturing industry include the social issues that affect the communities where these companies are operating.  Boomtowns are springing up around the country as the industry expands, bringing with it temporary influxes of people, investment, and infrastructure, in many cases to areas that are economically depressed [1][2].  While this has led to cases of new jobs and economic growth in the short-term, there have also been reports of increased traffic, workplace accidents, crime, and housing costs associated with industry activity [3][4][5][6][7][8][9][10].  There has also been criticism that reports have overestimated the economic benefits that hydraulic fracturing operations have for the communities and states in which they are located and fail to account for the full breadth of social costs, such as “nuisance, noise, and loss of privacy” [11].  In the long term, whether the social consequences of high volume hydraulic fracturing for these communities will be positive or negative remains uncertain, especially as these companies begin to move out of the current boomtowns and onto new locations.  Emerging concerns include the impacts of high volume hydraulic fracturing expansion on agriculture and tourism [8][12].

[1] http://stateimpact.npr.org/pennsylvania/boomtown/

[2] Jacquet 2009
[3] http://www.alternet.org/fracking/fracking-boom-towns-rife-workplace-accidents?page=0%2C1

[4] http://www.midwestenergynews.com/2013/01/10/u-s-chambers-fracking-job-boom-behind-the-numbers/
[5] http://usatoday30.usatoday.com/news/nation/story/2012-05-29/fracking-environment-gas/55845708/1
[6] http://www.thedaily.com/page/2012/01/02/010212-news-fracking-boomtown-1-6/
[7] Williamson and Kolb 2011
[8] Ward and Kelsey 2011
[9] Schafft et al. 2013
[10] Urbina 2012
[11] Kinnaman 2011
[12] Garrison, Hill and Mark 2011


[ Return to top ]

Media Representation

Media coverage of hydraulic fracuturing, mostly through popular news outlets, has grown significantly in the last 30 years, peaking in the late 2000s [1]. Similar to other politically-controversial topics, much media coverage of the debate over large volume hydraulic fracturing is filled with strong, polarized opinions that have infiltrated even the most objective media outlets [2].  In some cases, this has also included the mischaracterization of reports about fracturing, often without retraction, and discreditation of the science about and scientists working on these issues [3].  At the same time, there has been a wide diversity of articles discussing both concerns and benefits of large volume hydraulic fracturing and representing a wide range of opinions from industry to grassroots stakeholders [4].

[1] Bierman et al. 2011
[2] Kinnaman 2011.

Other Useful Background Sources

[ Return to top ]

Ernest C. Young Hall, Room 170 | 155  S. Grant Street, West Lafayette, IN 47907-2114 | 765-494-2600

© 2017 Purdue University | An equal access/equal opportunity university | Copyright Complaints | Maintained by The Purdue University Graduate School

If you have trouble accessing this page because of a disability, please contact The Purdue University Graduate School.