Fracking the country side

By in Australian Economy, Featured Article

| 44 comments

By Leith van Onselen

Technological advancement and the shale gas revolution currently underway in the United States has encouraged other countries to seek to extract natural gas trapped in shale rocks or coal seams via the process of hydraulic fracking. This process essentially involves drilling and inserting a pipe deep into the ground and then pumping millions of litres of high pressure water and ‘fracking fluid’ into the shale rock or coal seam, causing it to fracture and releasing stored natural gas where it is then captured for energy production (see below image).

While natural gas is a relatively clean burning fuel, the process of fracking is highly controversial as it risks contaminating nearby water tables with both methane and fracking fluid, which is known to contain a number of carcinogens.

Over the weekend, I watched the US documentary Gasland, which is currently available for viewing via SBS on Demand (click to watch). The film documents in great detail communities in the US adversely impacted by natural gas drilling and, specifically, hydraulic fracking. The film is highly disturbing as it shows the destruction of dozens of US farming communities via poisoning of drinking water and the natural environment, often leading to severe health problems for its citizens.

While I highly recommend that you watch the documentary in full, below is a two-part extract from YouTube, which summarises the key bits:

So what has this got to do with Australia? Well, a number of companies are seeking to undertake fracking of coal seam gas reserves throughout Australia in a bid to harvest natural gas, much of which is destined for export.

However, today the New South Wales Government revealed that it would implement safeguards banning the extraction of coal seam gas near suburbs, country towns and some rural industries, such as horse breeders and wine producers, potentially ruling-out hundreds of proposed gas wells and some $4 billion worth of gas. For example, AGL, which had plans to drill in 66 gas wells near and under housing estates in Western Sydney, looks to be a big loser from the new safeguards.

Given the big question marks over the safety of fracking in the US, as well as the risks posed to ground water stored in Australia’s Artesian Basin and the agricultural industry more generally (see below video), the New South Wales Government is right to proceed with caution.

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Comments

  1. GSM

    Thanks UE. I saw Gaslands on SBS a couple weeks ago. It was pretty astonishing stuff. The uncontrolled nature of the drilling , the damage and the widespread nature of the various drilling programs (huge swathes of the US are affected) was alarming.

    I agree, NSW has made the correct decision.

    • Den

      This is classic muddying of the waters from Barry, pardon the pun. These safeguards are a farce and conveniently exclude the Gloucester CSG project, which would be the first large scale CSG project in the state. But as this area is without wineries or horse studs Barry says its ok. Why wine and racehorses are more important than food would be interesting to know.

      Unfortunately the people of Gloucester have zero federal support except for a handful of independents and the greens. Its a very sorry state of affairs and they really have no choice but to protest on a large scale.

  4. Jack

    What is bloody scary is that they are looking to frack in Sydney catchment areas, as well BOF has just authorised extended coal mining under AVON dam.

    Google minings impact on woronora in particular waratah rivulet. CSG via APEX is looking to frack in this area as well.

    “I am not anti mining but FFS some commonsense is required , you dont foul your water supply, although I suppose this is probably why we have a desalination plant !

      • AF

        Yep use the gas extracted by fracking to power the desal plant that replaces the water ruined by fracking… sounds like a money loop for someone … “Obeid style”

        • Jack

          Yep, its been a big winner for Veolia, as they benefited from the privatisation of a lot of Sydney Water’s tasks like sewage etc and they also have the contract to run the Desalination plant, and I think the Obeids have a big interest in a contracting firm that contracts to Sydney Water as well.

  5. thedoctor

    $4 Billion worth of gas?!?!? Whoopdy-do-Basil! A finite resource versus sustained, long term industries such as agriculture. Common sense surely!!!

  6. JacksonMEMBER

    The fundamental problem with this technology is the well construction – most of the problems in the Penn. cases were assocaited with poorly constructed wells, resulting in a conduit from where the gas is located (deep) to where the water is located (shallow). Excellent paper (free), PNAS is an extremely reputable journal.

    http://www.pnas.org/content/early/2011/05/02/1100682108.full.pdf+html

    Far more stringent laws in place now regarding the well construction, but even with a 1% failure rate on 10000 wells is 100 potential contamination sources.

        • PhilBest

          “Sourcewatch” – hmmmmmm, not a lot of sign of “balance” on that page, mate.

          And why is it a problem for “me”, rather than all humanity, if enviro activists continually insist on a standard of safety for everything new and innovative, that results in a collapse of the modern economy?

          This is like CAGW all over again; the battle lines are drawn between “scientists”, based on the politics they each follow. Show me one single “classical liberal” or conservative global warming alarmist, or anti-fracker, or anti-fish-farming, or anti-hydro, “scientist”.

          • Revert2Mean

            Sourcewatch is merely a compendium of links to peer reviewed papers, in this instance.

            Don’t attack the messenger, as is your wont.

            It’s a problem for “you” because your absurd statements about the harmless nature of fracking don’t stand up to scrutiny, like many of your other loony right wing fringe arguments.

    • raveswei

      Gasland is enviro-propaganda, but unfortunately most of things they said are true.

      current state of extraction technology produces very high environmental cost. If quantified and properly charged it would simply make this technology prohibitively expensive.

      • PhilBest

        “…. If quantified and properly charged it would simply make this technology prohibitively expensive….”

        I am all for quantifying and properly charging everything. That means wind turbines as well as fracking, public transport as well as cars, etc etc.

        But then of course there would be an outcry about how to ameliorate disparate impact on the lowest income earners, and on valuable jobs-providing industries, and they would be “compensated” and/or exempted, so the burden would land – again – on the poor b—-y middle class. Pity what this middle class disparate impact and the effective marginal tax rate on social mobility is doing to our economies.

  8. Alex Heyworth

    Gasland is in part propaganda film rather than documentary. At least some of the footage is highly misleading. For example, footage of people lighting the gas coming out of their water pipe. A 1976 study by the Colorado Division of Water found that this area was plagued with gas in the water problems back then. And it was naturally occurring.

    As the report stated there was “troublesome amounts of methane” in the water decades before fracking began. It seems that in geographical areas gas has always been in the water.

    Rice and Ladwig (1983) comment in a similar vein: “Methane-rich gas commonly occurs in ground water in the Denver basin, southern Weld County, Colorado. The gas generally is in solution in the ground water of the aquifer. However, exsolution resulting from reduction to hydrostatic pressure during water production may create free gas, which can accumulate in wells and buildings and pose an explosion and fire hazard” here

    Fracking itself is rarely the culprit in groundwater contamination. Usually it is leakage from a badly constructed or corroded well (ie the drilling and well construction is the faulty link in the chain, not the fracking).

    A sensible recent paper examining the issue can be found here with a series of recommendations. None of the recommendations envisage stopping fracking, they are all about regulating and controlling it better. If similar measures were in place here, I suspect fracking would be a non-issue.

    • PhilBest

      Thanks, Alex; there are papers like that one all over the place, but as with CAGW “science”, it is only one sort that gets all the airtime and column-inches in the media.

  9. PhilBest

    There is nothing that will help mankind secure energy supplies and support civilisational progress and lift millions out of poverty, that will not be opposed by the loony leftwing environmentalists with Hollywood’s aid and abetting. Nuclear. Hydro. Hydrogen. Fish farming. Forestry. Fracking.

    “We may get to the point where the only way of saving the world will be for industrialized civilization to collapse.”

    – Maurice Strong, former under-secretary general of the United Nations, organiser of the 1992 Rio Conference, and of the early IPCC appointments.

    http://www.forbes.com/sites/larrybell/2013/02/05/in-their-own-words-climate-alarmists-debunk-their-science/

    • Revert2Mean

      Yawn. The “All Greenies want is to collapse industrial civilisation” meme in combination with the “Maurice Strong” meme.

      Can’t you leave this tosh on the right wing blogosphere, where you found it?

      • PhilBest

        Did Maurice Strong say that or not; is he a repudiated loony or a celebrated mainstream figure with the media-enviro-UN complex; and why is it moderate and honest environmentalists like Bjorn Lomborg, Patrick Moore, Ted Nordhaus and Michael Shellenberger, who are repudiated, demonised, and smeared by the Green Left?

  11. krazy.galah

    I can see it now. USA no longer invades or shapes foreign policy because of oil interests but water interests instead they ruin their own.

    Canada might want to beef up its defence.

  12. johnyaku

    There are large areas of northern NSW where 98% of the community or more have signed declarations that they want their community to be a CSG free zone.

    Surely that should count for something.

    Other articles on MB have shown how current directions in CSG/LNG production facilities are likely to lead to /higher/ energy costs.

    Even leaving aside the environmental destruction, the Australian community has nothing to gain from this.

    Time to pull the plug.

  13. 3d1k

    From a US perspective an interesting debate to watch. From our own, I think generally safety controls would be superior and the structure of the industry is quite different in terms of ‘setting up shop’. Gasland was an effective tool, part fact part fiction.

    I see Al Gore has recently been reported as coming out against widespread fracking and urging caution in terms of the rush to export LNG – then on the other hand we have this advice that fracking in the US probably the only way to achieve Obama’s carbon goals.

    http://www.guardian.co.uk/environment/2013/feb/16/fracking-obama-climate-change-goals

  14. johnyaku

    And then there is the dubious economics of the entire operation.

    From the “Shale Bubble” report released today.

    KEY FINDINGS, SHALE GAS

    High productivity shale gas plays are not ubiquitous: Just six plays account for 88% of total production.
    Individual well decline rates range from 80-95% after 36 months in the top five U.S. plays.
    Overall field declines require from 30-50% of production to be replaced annually with more drilling – roughly 7,200 new wells a year simply to maintain production.
    Dry shale gas plays require $42 billion/year in capital investment to offset declines. This investment is not covered by sales: in 2012, U.S. shale gas generated just $33 billion, although some of the wells also produced liquids, which improved economics.

    KEY FINDINGS, TIGHT OIL (SHALE OIL)

    More than 80 percent of tight oil production is from two unique plays: the Bakken and the Eagle Ford.
    Well decline rates are steep – between 81 and 90 percent in the first 24 months.
    Overall field decline rates are such that 40 percent of production must be replaced annually to maintain production.
    Together the Bakken and Eagle Ford plays may yield a little over 5 billion barrels – less than 10 months of U.S. consumption.

    KEY FINDINGS, THE FINANCIAL PICTURE

    Wall Street promoted the shale gas drilling frenzy which resulted in prices lower than the cost of production and thereby profited [enormously] from mergers & acquisitions and other transactional fees.
    Industry is demonstrating reticence to engage in further shale investment, abandoning pipeline projects, IPOs and joint venture projects.
    Shale gas has become one of the largest profit centers in some investment banks, in direct parallel with the decline of natural gas prices.
    Due to extreme levels of debt, stated proved undeveloped reserves (PUDs) may have been out of compliance with SEC rules at some shale companies because of the threat of collateral default for some operators.
    With natural gas prices far higher outside the U.S., exports are being pursued in an effort to shore up ailing balance sheets invested in shale assets.

    http://shalebubble.org/

  15. pellicle

    Classic,when those of us with science qualifications in environmental science comment about externalities like this the responce here is dismissal and denial. Yet when an economist watches a 3 year old video which is of news then they suddenly know all about it.

    Economics is the Sad Science indeed