Halliburton (NYSE: HAL) is in the hotseat for refusing to provide details to the Environmental Protection Agency on chemicals used in the hydraulic fracturing – a widely used technique to boost production in natural gas wells by injecting high pressure water, sand and chemicals to break up surrounding bedrock.
The EPA subpoenaed the energy giant for refusing to provide information on their drilling fluids as part of a government study on the impacts of fracking operations on drinking water. Eight other companies provided the information voluntarily.
Halliburton’s resistance to regulators is not new. Hydraulic fracking was made exempt from the Safe Drinking Water Act by the so-called Halliburton loophole pushed through in 2005 by then Vice president and former Halliburton CEO Dick Cheney. The Energy Policy Act of 2005 stripped the EPA of authority to regulate fracking, and now it seems that Halliburton is resistant to the government even looking at the issue.
“We have met with the agency and had several additional discussions with EPA personnel in order to help narrow the focus of their unreasonable demands…” said company spokesperson Teresa Wong.
The stakes in this issue are high. Ninety percent of natural gas wells now use fracking and shale gas may amount to 60 percent of domestic gas supply by 2020. Lawmakers are under pressure to reduce reliance on foreign oil and natural gas may be a large part of that mix.
After his “shellacking” in the midterm elections, President Obama signaled this month that he was willing to work with Republicans to aggressively develop domestic natural gas deposits: “"We've got, I think, broad agreement that we've got terrific natural-gas resources in this country. Are we doing everything we can to develop those?"
But at what cost? Due to the Halliburton loophole, companies can inject chemicals such as benzene, toluene, formaldehyde, and hydrochloric acid through aquifers into underlying gas deposits without even identifying these substances to regulators.
A recent article in Vanity Fair outlined the lax enforcement of this burgeoning industry:
According to Theo Colborn, a noted expert on water issues and endocrine disruptors, at least half of the chemicals known to be present in fracking fluid are toxic; many of them are carcinogens, neurotoxins, endocrine disruptors, and mutagens. But Colborn estimates that a third of the chemicals in fracking fluid remain unknown to the public.
Up to 300 tons of chemicals are used in each fracture, and each well might be fractured as many as eighteen times. The danger is that fracking fluid will migrate into overlying aquifers, permanently contaminating local drinking water supplies. The HBO documentary Gasland aired this summer and highlights numerous instances of fouled drinking supplies, gruesome health impacts and even people lighting their tapwater on fire.
Only about fifty percent of contaminated water injected into the ground is recovered during extraction. This toxic wastewater must be evaporated off, impacting local air quality, and then trucked to treatment facilities.
Several companies now are racing to develop the massive Marcellus Shale region that stretches from New York to Ohio. Fracking might potentially release 50 trillion cubic feet of natural gas – enough to supply the east coast for 50 years. This would also put at risk the Delaware watershed that supplies drinking water for 17 million people from New York City to Philadelphia.
A conflict is looming between those pushing for additional gas extraction and those concerned about where their water is coming from. This week's skirmish between the EPA and Halliburton is a small sign of things to come.
While natural gas is often seen as a “clean” fuel, more and more people are starting to ask questions about how it is extracted, and what other energy sources we should be developing instead.
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