Canadian Plastics

Much ado about fracking

Canadian Plastics   

Economy Materials hydraulic fracturing

Hydraulic fracturing can open vast stores of cheap natural gas, to the benefit of North America’s chemical and plastics industry. The weird part is that, after more than 60 years, the process has suddenly become a lightning rod for controversy, and even outright bans. Here’s why.

With all the controversy swirling around hydraulic fracturing these days, you’d think it had just been unleashed from out of nowhere on an unsuspecting public — sort of like Godzilla descending suddenly on Tokyo to terrify thousands of fleeing Japanese.

But the truth is, it’s been around longer than a lot of us. Commonly called fracking, the process was first commercially introduced in the oil and gas industry way back in 1949, and involves pumping water, chemicals, and a proppant down an oil or gas well under high pressure to break open channels in the rock holding the oil or gas. The proppant can be a material such as sand, and is designed to hold the cracks open once they’re formed. This allows oil or gas to flow to the well with less resistance, which increases the amount of material that can be recovered.

It sounds simple enough, but in recent years fracking has become a political hot potato of the first magnitude, compared to which the battle over the Keystone XL pipeline sometimes seems as friendly as a knitting circle. France has banned the procedure, as has New York State. Closer to home, the governments of both Nova Scotia and New Brunswick have banned large-scale fracking operations; Quebec, meanwhile, enacted a fracking moratorium several years ago that prompted a NAFTA lawsuit against Canada by U.S. firm Lone Pine Resources. So after more than 60 years, why is the process suddenly such a big deal, dividing hundreds of thousands of people into two sharp camps of supporters and opponents, both claiming to have science on their side?

There are two reasons. First, until recently, the application of fracking was on conventional, vertical wells. But over the past decade or so, fracking began to be commercially applied to horizontal wells. This allowed more area underground to be accessed, which required ever greater amounts of water and fracking chemicals that were often being pumped down to pay zones beneath aquifers. According to the U.S. Energy Information Administration, new developments in drilling and extraction technology have opened the door for the capture of more than 2,000 trillion cubic feet of recoverable gas — enough to take us, at current rates of consumption, well into the next century.

A fracking well.

A fracking well.


The second reason for all the controversy is that the marriage of fracking with horizontal drilling has enabled economic oil and gas production in North America’s many shale formations for the first time. And here, as they say, is the rub. One of the largest shale gas formations is the gigantic Marcellus Shale Basin, which lies underneath parts of New York, Pennsylvania, eastern Ohio, western Maryland, and West Virginia — areas with large numbers of people who are unaccustomed to having oil and gas exploration carried out in their backyards. In other words, a significant chunk of the American populace suddenly has a stake in the issue.

It’s because of the new underground vistas created by horizontal drilling that fracking has become particularly important to the chemical industry — and by extension, to plastics processors. The oil and natural gas recovered contain many of the vital raw materials that are used to manufacture plastics goods. Even better, the sudden tide of inexpensive natural gas and related feedstocks has transformed North America into one of the cheapest places on earth to make plastic. As a result, the petrochemical industry in both Canada and the U.S. has launched the biggest building spree it has seen in many years.

According to the American Chemistry Council (ACC), the shale boom has already resulted in more than US$125 billion in investments in U.S. chemical facilities, with more on the way. These projects — consisting of new factories, expansions, and process changes to increase capacity — could lead to US$81 billion per year in new chemical industry output and 637,000 permanent new jobs by 2023, the ACC said. And more than half of the investment is by firms based outside the U.S. In Canada, meanwhile, Nova Chemicals Corporation is also investing heavily, and has revamped its Corunna, Ont. cracker to utilize up to 100 per cent natural gas liquid feedstock from the Marcellus Shale.

Access to low-cost natural gas is one incentive; location is a second. Currently, most of the oil and natural gas processed in the U.S. is handled on the Gulf Coast, but bottlenecks are developing there, and there’s a big transportation cost savings to processing it close to the source in the Marcellus Shale, which is within a 250 mile radius of some 50 per cent of North America’s plastics processing industry.

The growing investments of the chemical makers have been matched, however, by growing opposition to fracking among others — opposition that has come to centre around three main issues. The first is the risk of contaminating water supplies with fracking fluids — and it’s the issue that tends to get the most attention. On the one hand, a report by the Environmental Protection Agency (EPA) concluded that fracking “results in impacts on drinking water resources, including contamination of drinking water wells.”

On the other, fracking proponents argue that there are thousands of feet of impermeable rock between the fossil fuel pay zones where fracking occurs and any aquifers, meaning there is really no chance for fracking fluids to migrate from the fracking location to the aquifer. In his 2014 book Groundswell: The Case for Fracking, Canadian author Ezra Levant took a state-by-state look at fracking in the U.S. “Though hydraulic fracturing has been used for over 60 years in Texas…records do not reflect a single documented surface or groundwater contamination case associated with it,” he writes. “Also, drillers have been fracking for oil in South Dakota since the Fifties, and for gas since 1970, and still the state reports ‘no documented case of water well or aquifer damage by the fracking of oil or gas wells.’”

In truth, competing studies have been commissioned by both sides, with some concluding that fracking could contaminate aquifers, and others concluding that there is virtually no possibility of this happening. In perhaps the most objective study, a task force commissioned by U.S. Energy Secretary Steven Chu found that “the likelihood of properly injected fracturing fluid reaching drinking water through fractures is remote.”

And even if it does happen? A 2014 Yale University study estimated that shale gas production contributes over US$100 billion to U.S. consumers annually, through job creation and lower gas prices providing relief in the form of lower heat and electricity bills. Compared to which, the study estimated that the cost of groundwater contamination could be US$250 million per year, which is a mere 1/400th the estimated benefit.

Opponents of fracking claim, secondly, that the procedure adds carbon dioxide emissions to the atmosphere. This is an argument that supporters of fracking also dispute, because — as Levant points out in his book — “the U.S. has seen the most dramatic decline in carbon emissions of any country in the world over the past five years, and fracking is one reason for that.” Cheap natural gas, Levant and others argue, has resulted in many utilities swapping in cleaner burning natural gas to replace coal.

The opponents, in turn, counter by saying that if the level of methane leakage from fracking operations is sufficiently high, methane’s contribution to carbon emissions will more than offset the benefit from replacing coal. A widely cited — and widely criticized — study by Robert Howarth, a professor of ecology at Cornell University, concluded that the leakages rates were indeed so high that natural gas produced from fracking was worse overall than coal. The EPA contradicted Howarth’s study and found far lower rates of methane leakage, as did a study from the University of Texas.

Third, there’s a subset of die-hard environmentalists who, it’s fair to say, don’t want to see any expansion in the usage of natural gas, period — even if it’s replacing coal — since the chemical is still a fossil fuel, and all fossil fuel consumption, they believe, should be replaced by green energy alternatives. In Canada, for example, both the Green Party and the David Suzuki Foundation have called repeatedly for a shift to renewable energy sources in direct proportion to the phase-out of fossil fuels; and not surprisingly, both are highly critical of fracking.

For the moment, the last word might just belong to chemical engineer and Wall Street Journal science writer Robert Rapier. “Ultimately, fracking is like so many other ways of producing energy — there is always a cost associated with it, and as a result we make trade-offs, which are acceptable to some, but not to others,” he writes. “Thus, fracking will continue to be embraced by some for the economic benefits and condemned by others for the environmental risks.”

To this latter group, then, it’s as dangerous as our old friend Godzilla.


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