Natural Gas Companies Attempt to Make Fracking Safer

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Hydraulic fracturing, or fracking, is the most important energy industry development in the past few decades, unlocking value for U.S. natural gas companies.

Its extensive use in the United States is completely reshaping the world energy scene.

But there is one question that lingers over the U.S. energy industry: Is fracking safe?

One of those saying fracking is 100% safe is sometimes controversial oil billionaire T. Boone Pickens.

He went on his first frack job in 1952 and recently told Yahoo!'s Daily Ticker he's never had any environmental issues with the over 2,000 wells he's fracked over the years.

Pickens said, "Nobody gives any evidence you're damaging anything."

Pickens says the U.S. has the cheapest energy on the planet thanks to fracking. He adds that the country could actually become energy independent, but likely won't because of a "lack of leadership" in our nation's capital.

He believes the U.S. should be moving quickly to an economy based on natural gas as a key fuel. Pickens points to the conversion of 18-wheeler trucks to run on natural gas as an example. He says trucking firms could save $60,000 a year on fuel costs per truck.

But that is unlikely to happen as long as fracking has the 'cloud' of environmental controversy hanging over it.

The Fracking Safety Issues

Many environmentalists say fracking has damaged the environment (particularly the water supply) and caused earthquakes in places like Youngstown, OH and Prague, OK.

A report published by the journal Geology a few months ago stated that deep underground drilling in Oklahoma had led to a significant rise in seismic activity. The main concern is with wastewater from fracking that is put into subterranean injection wells.

At the other end of the argument, the oil and gas industry says fracking techniques have been used for over half a century with no adverse effects.

This debate is occurring right now in the state of California, as highlighted by the recent Money Morning Fight Club article on fracking California's massive Monterey Shale formation.

California is in desperate fiscal straits and needs the money to be gained by fracking. Permitting fracking in the Monterey will net the state a $25 billion tax windfall, not to mention the jobs added.

But, as pointed out in the Money Morning story, environmental groups have a lot of power in the state and are reluctant to let fracking proceed.

Water seems to be a main point of contention at the moment.

Fracking a shale gas well of average depth requires from 4-6 million gallons of water, according to a report from the National Petroleum Council (NPC) in 2011. The NPC is an advisory group to the U.S. government composed of both energy industry and environmental representatives.

This makes the industry middling as far as overall water usage. The Financial Times points out that when looking at water usage per unit of energy production, shale gas production is more efficient than getting energy from other sources such as coal mining.

Industry Developing "Green" Fracking Fluids

For its part, the energy industry is trying to meet the environmental concerns head on by developing so-called "green" fracking fluids...

Natural gas giant Chesapeake Energy (NYSE: CHK) is one company working on a 100% green mixture of fluids to inject into wells.

The leaders in the oil service industry already have what they claim are environmentally-safe fracking fluids on their menu of offerings.

The leader in the fracking industry, Halliburton (NYSE: HAL), now offers "CleanStim." It uses food-industry ingredients that stifle the growth of underground bacteria that can from a thick slime, which can impede oil and gas flow. It is, however, "relatively more expensive" than most traditional fracking fluids.

The company also developed a process utilizing ultraviolet light that kills bacteria. It is paired up with a recycling process named "CleanWave", which uses electrical charges to separate contaminants, cleansing the water.

Baker Hughes Inc. (NYSE: BHI) has a fracking fluid called "VaporFrac" that replaces most of the water used in the fracking process with a nitrogen-based foam. 

Natural Gas Companies: Good, But Not Good Enough

What do the environmentalists say about the development of green fracking fluids?

Basically, it's not enough.

Scott Anderson, a senior adviser for the Environmental Defense Fund, said to the Associated Press that it's too early to say whether totally non-toxic fracking fluids are feasible.

Pennsylvania environmental group PennFuture is even more strident. Its president, George Jugovic, told the Associated Press chemicals in fracking fluids are far from their only concern.

He pointed to very salty wastewater (10-70% of water used for fracking comes back out) and air pollution as two of his major concerns.

The oil and gas industry realize that there will always be groups that will object to fracking. It can never be 100% safe, as with most things in life.

The problem occurs when, as pointed out in the Fight Club article, these groups use the court system to tie up development of energy resources in knots.

The scientific facts of the fracking process mean nothing. . .all is needed is a judge with a sympathetic ear to shut down or delay a project.

It looks as if fracking and the debate about its safety will continue for the foreseeable future.       

To find out more about tracking down profits in natural gas companies, check out some of T. Boone's favorites: Why T. Boone Pickens Likes These Natural Gas Companies.

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