What the frack?

Fracking has hit the headlines in recent years, sending environmentalists into a frenzy. It has become synonymous with oil barons, earthquakes and contaminated waterways – a hot topic with a catchy name that has triggered public scrutiny of oil and gas exploration worldwide – yet the practice remains a mystery to many. Could fracking actually benefit New Zealanders? And what effects can it have on the environment?

What is fracking?

Hydraulic Fracturing, commonly known as fracking, is a widely misunderstood process that has revolutionised the oil and gas industry. It has extended the life of existing wells and opened vast areas of land to ‘unconventional’ oil and gas extraction.

Fracking is the process of injecting a mixture of water, proppant (literally something that props open cracks; usually sand) and a small quantity of chemicals deep into the ground at high pressure. This either cracks the rocky substrate or widens existing cracks so that oil or gas is released and can flow up the well bore to the surface.

How it works

1. Fracking can either be done on an existing well that has stopped producing, or a fresh well can be drilled. It can take around a month to drill to the appropriate depth. Fracking in NZ has to date largely been done several kilometres below the level at which drinking water lies. Properly reinforcing the well walls where they pass through this zone is crucial to protecting aquifers.

2. Once a well bore reaches a region of oil and gas-bearing rock, the well is turned and drilled horizontally.

3. A perforation gun is then fed into the well and detonates multiple charges which fracture the surrounding rock.

4. A mixture of water, chemicals and a 'proppant' such as sand is pumped into the well at pressure, forcing the cracks open.

5. When the water is pumped out the proppant keeps the cracks open, allowing the oil and gas to flow out and be extracted.

Fracking in New Zealand

Since 1989, seven fracks have occurred in Southland, 10 in the Waikato and 83 in the sandstone layers of the Taranaki basin, which has been producing fossil fuels since 1934. Until Todd Energy began to disclose information to the public about fracking last year, there had been little public knowledge about the practice and very few checks and balances from regulation.

Until 2011 no resource consents were required for fracking by the Taranaki Regional Council and even today most consents granted are non-notified, which means that the public does not need to be consulted for an operation to go ahead.

Currently there is no specific national framework regulating fracking, nor any kind of official widespread and accepted international best practice.

Can it ruin our water?

Former Minister for Internal Affairs and MP for Napier, Chris Tremain, was a prominent member of a Cabinet that largely supports the expansion of oil and gas extraction in New Zealand. However, in February 2013 he boasted to his constituents that – due to the risk to a Hawke’s Bay agricultural and horticultural economy that relies heavily on clean water – fracking near aquifers in that region would not be allowed. So if fracking is deemed by one of our own ministers to pose a risk to freshwater aquifers, should it be banned in other areas?

Fracking fluid is composed of water, plus between 0.5 per cent and 3 per cent other chemicals. These include several known carcinogens and BTEX compounds (Benzene, Toluene, Ethylbenzene and Xylene) that are well-known contaminants of water and there are concerns these could leach into our drinking water.

The US House of Representatives commissioned a study on fracking fluid chemicals and found 29 substances that were known or possible human carcinogens being used, plus a significant number of “proprietary” or “trade secret” chemicals the make-up of which is not disclosed. In New Zealand no such study has been made public and suppliers of chemicals have been known to write their own safety precautions.

Tag Oil – a Canadian company set up to exploit oil and gas resources in New Zealand – has compiled a list of what they commonly use. Included is PSA-1, which – although very diluted during fracking – is a known human carcinogen.

In the US, oil and gas companies don’t have to comply with the Safe Water Drinking Act, which regulates how pollution affects water quality across the country. This lack of control has seen several water quality incidents. In one case the US Environmental Protection Agency reported that contamination in 11 water wells in the town of Pavillion in Wyoming had been caused by fracking.

Whether fracking contaminates water depends largely on proper well construction with appropriate cement, and on the depth at which the fracturing occurs.

New Zealand’s water table is usually no more than 900m below the ground (often at around 300-500m) and while in Taranaki fracking occurs several kilometres down (Todd Energy for example has never fracked less than 3,200m beneath the surface), in the Waikato and Southland fracks have occurred as shallow as 350-400m.

Compared to the water contamination caused by dairying (especially in Taranaki) fracking’s water issues are barely on the radar; there are no cases of water table contamination in the history of fracking in New Zealand. However the parliamentary commissioner for the environment Dr Jan Wright says adequately protecting against this possibility will require regulation.

Where does it all go?

An important consideration is disposal of the millions of litres of contaminated fracking fluid which is accompanied by tonnes of drilling waste (known as tailings). Fracking fluid is either re-used, disposed of by injecting it into a hole in the ground (often in an old well that has stopped producing) or spread on to land in a process called ‘landfarming’.

Landfarming is touted as an effective way to manage the waste from fracking. In this process contaminants are broken down biologically and returned to the earth, and the consent process can measure this by testing the land. However, no testing is required for any milk or meat subsequently grown on the land,  and breaches of consent often occur without penalty.

On one landfarming site on the property of Colin Boyd in North Taranaki near the McKee Production wells, water testing in 2009 showed unconsented amounts of oil and grease discharging into the stormwater system. There were also unconsented levels of sodium and petroleum hydrocarbons. And while there is no consent condition relating to barium – a chemical that causes acute and chronic health concerns for humans – double the internationally accepted level of barium soil contamination was found.

Furthermore, the only soil sample taken on the Boyd landfarm also identified breaches for chloride (over three times the consented limit), hydrocarbons (over six times) and total soluble salts (more than double). Despite these multiple failures, Taranaki Regional Council concluded that the site had achieved a “good” level of compliance and reduced the number of tests to be applied there from 12 to eight per year.

Injecting waste into disposal wells may be more of a cause for concern than landfarming. In the US, poorly constructed disposal wells have been the cause of several water contamination issues and wastewater injection is also the cause of the much-publicised seismicity (earthquakes) that can occur with fracking.

Fracking and quakes

The Christchurch City council has declared the city a “fracking-free zone” because of the risks of triggering earthquakes – so is this a risk that we should all worry about?

Humans have caused earthquakes before – a magnitude 4.6 earthquake was triggered by the filling of Lake Pukaki in the Mackenzie Country in the 1960s. And it has been proven that fracking has caused quakes – up to a magnitude 5 in Colorado and two earthquakes near Blackpool in the United Kingdom were deemed to be “highly probably” caused by fracking by the British Geological Survey, spurring a moratorium that has now been lifted because the chances of this occurring again have been described as remote.

In the history of operations in Taranaki, none of the 3,000 monitored earthquakes there have been attributed to fracking, but this is a very different region geologically to other areas that are being prospected for oil and gas, such as the East Coast where seismic activity is much more prevalent.

Expensive micro-seismic monitoring can help to garner a better understanding of what lies beneath – which is ultimately what everyone is after. So although a steadfast rule is yet to be created, when Dr Wright makes her regulatory recommendations this year, we can expect advice on how the issue of induced seismicity (human-caused earthquakes) should be approached.

A global cooler?

As hundreds of new wells in the US are drilled and fracked, the huge quantities of cheap shale gas produced are being credited as a ‘bridge’ fuel that will reduce dependence on coal.

Coal-fired electricity plants are rapidly being replaced in the US with those using natural gas extracted by fracking. Gas creates less CO₂ when burned than coal, and accordingly in the first quarter of 2012, US CO₂ emissions (responsible for over 18 pre cent of worldwide emissions according to the UN) dropped to a 20-year low.

While these figures seem promising Robert Howarth, a scholar at Cornell University, has published a study contending that because drilling for gas releases methane (which is 25 times more damaging to the atmosphere than CO₂), gas production is actually worse for climate change than coal over a long period of time.

Howarth’s study has since been criticised, but the only way to know for sure is to require detailed measuring of the methane gas that escapes during fracking.

Economic benefits

Energy industry bodies such as the Petroleum Exploration & Production Association of New Zealand (PEPANZ) have made much of the economic benefits of fracking, but despite their assertions, questions remain as to whether noticeable economic benefits will trickle down to people outside of the region.

It certainly won’t trickle down into cheaper fuel for your car – all the oil produced in New Zealand is of a very high quality and is exported overseas, earning plenty for those who can suck it out, yet doing nothing to change our local pump prices.

Gas is a different story though. Our population enjoys cheap gas prices as our demand is met locally by wells in Taranaki. Growth has become possible for job-creating local industries, and gas also provides us with a storable energy security solution for when renewables such as wind and hydro power (which are at the mercy of our increasingly unpredictable weather) don’t meet demand.

Regulation

Not all the neighbours of well sites in Taranaki agree with PEPANZ about the benefits of the industry. For most it is not the actual fracking that concerns them as much as the impact that energy operations have on the whole. They are subjected to loud, continuous noise from drilling and flaring (which lights up the sky when excess gas is burned off) and heavy, dangerous traffic on the road.

Locally the biggest criticism is that the Taranaki Regional Council allows the industry to ‘unbundle’ the different elements of their operations and apply for separate consents. For example roading, drilling, flaring and disposal of drilling wastes are each consented for. By themselves these activities’ effects are regularly deemed as ‘not more than minor’ (meaning that consent applications do not need to be publicly notified), but if the whole operation was subject to one consent process, opponents believe that industry would have to notify them so that they could at least have a say.

One operator in particular – Greymouth Petroleum (which continually refuses to talk publicly about its operations) – obtained a non-notified consent to put a drilling rig less than 10m from a neighbouring property. When complaints were laid, they simply put a mound of dirt along the fence line (left), claiming that this made the effects of the constant grinding noise ‘not more than minor’. By contrast Todd Energy, which has a history of supporting the local community,  has in the past offered affected neighbours a trip away during the noisiest drilling operations – a sign perhaps that as fracking comes under the spotlight industry is recognising that it must balance human and environmental considerations with financial gain.

Who can you trust?

Dr Jan Wright, the Parliamentary Commissioner for the Environment (PCE) has been working on a major report into fracking in New Zealand. Split into two parts, the first half of the report was released in November last year and the second part, which deals with how fracking is done here and what regulations should be put in place, will be released sometime this year.

The PCE is an independent Officer of Parliament with a reputation for authoritative, hard-hitting investigations into environmental issues. The Commissioner’s job is to hold the Government to account for its environmental policies and actions and she has wide-ranging powers to gather information and question people under oath. However the government has no obligation to follow her recommendations.

So far Dr Wright says:

• On the face of it continuing to frack in New Zealand will be of minimal effect to the environment, so long as best practice is followed.
• The petroleum permit application process does not require an assessment of environmental risks and this needs to change
• Best practice still needs to be developed here as we currently have a light-handed approach to regulation. Problems like water contamination have happened overseas where regulation has been inadequate.
• The chances of earthquakes can be greatly reduced if proper testing is enforced. This will be taken into account when recommendations are made.

The verdict

Green Ideas says:

• Regulating well strength is the most important factor, and must happen as a requirement of fracking being allowed in New Zealand.
• Seismic security is a public concern and must be addressed in regulations.
• Oil and gas companies should be required to take out some kind of insurance in case of accidents. The public shouldn’t have to shoulder the burden if an environmental disaster were to occur.
• The resource consent process for fracking should be more rigorous and notified.
• The recommendations of the Parliamentary Commissioner for the Environment should be adopted by government when they are issued.
• If New Zealand is going to bear the brunt of practices like fracking the public should see benefits in the form of lower petrol prices

Handy links

The first report from the Parliamentary Commissioner for the Environment
Blocks offered in 2012 for exploration
Full map of existing permits

Sam Judd stayed in Taranaki courtesy of The Copthorne Hotel Grand Central.