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A Fractured Debate

April 5, 2012 | Posts

A New kind of natural gas mining is shaking up Ohio and brings with it the promise of jobs and affordable energy, but critics say there might be an unforeseen impact on the environment.

The process of hydraulic fracturing, known as fracking, produces natural gas from rock forma­tions that exist deep below the surface that might not be reached by other mining techniques.

For lawyers working in the gas and mining indus­try, the growth of horizontal drilling and fracking in the state means more work in a number of loca­tions, and firms are increasing their focus in this area. It isn’t limited in a single practice area either.

“The oil and gas drilling boom in Ohio involves issues in various areas of law: real estate, environ­mental, corporate, estate planning, construction, and litigation,” said Joseph Koncelik ’93, formerly the director of the Ohio Environmental Protection Agency and now working for the Cleveland firm Frantz Ward LLP. “The need for legal expertise to service the industry should increase significantly in the coming years.”

Lawyers in all specialties may find oil and mining creeping into their practices thanks to the growth in fracking. Determining pre-existing mineral rights is a complex issue that needs to be resolved before land can be leased to a drill­ing company, Koncelik pointed out. Once that’s settled, there is still the negotiation of lease agreements between landowners and drilling companies for the rights to the land. Then, there are construction issues associated with drilling and the associated operations.

Government lawyers will continue to play a role in monitoring drill sites and ensuring com­pliance with regulations. Estate lawyers could be involved with planning for landowners experi­encing financial benefits from leases. There is the potential for litigation involving nuisance claims from neighbors. Plus, toxic tort claims may be brought in the future by those who claim injury from exposure to chemicals or claims that groundwater has been contaminated.

“There is a laundry list of legal issues that will likely develop as the industry progresses in Ohio,” Koncelik said.

What is fracking?

Hydraulic fracturing is especially effective with shale beds, and Ohio sits on both the Utica and Marcellus shale formations. The Utica Shale for­mation is more than 1.5 miles below the surface, according to a state geographical survey, and the shale beds can reach to 1,000 feet deep.

Drilling for natural gas in Ohio has been hap­pening for more than a hundred years; fracking is just a new method, said Koncelik. “To get the gas out, fracking is the process of injecting water, sand, and a small amount of chemicals at high pressure to break up the rock and release the gas so that it can be recovered.”

Fracking is most effective when combined with the process of horizontal drilling. Once the drill reaches the bed in question, which in Ohio is most often shale, the drill shifts so that it runs parallel through the rock bed. This allows greater surface-area contact with the part of the rock actually producing natural gas, rather than just passing through it one time vertically. Once the horizontal pipe is in place, the fracking liquid – that combination of water, sand, and chemicals – is sent through the pipe into the shale bed. This liquid creates small fractures in the rock bed itself, which leads to an increased release of natural gas.

The process is more expensive than vertical drilling, but shale drillers believe it also will yield greater rewards, which means more gas and oil collected through the pipeline than would be pos­sible to gather through conventional means.

Worries about byproduct, groundwater safety

The disposal of flowback water and concerns about the potential for groundwater contamina­tion as a result of the extraction process are at the heart of the fracking debate.

Environmental groups allege the injection of water at high pressure will break down the rock bed and subsequently contaminate aquifers used for drinking water, Koncelik said. A number of grassroots organizations, such as Save Local Wa­ters and the Burning River Anti-Fracking Network, have sprung up to oppose potential contamination of drinking water through the fracking process.

The EPA traced contamination of groundwater in Wyoming back to fracking taking place nearby. But, Koncelik noted, the situation in Wyoming is significantly different from the drilling in Ohio and nearby states. “The gas wells in Wyoming were drilled only about 800 feet below ground,” he said. “The wells in the Marcellus Shale can be 5,000 feet deep or more.”

The Ohio Department of Natural Resources, which monitors shale mining, has not recorded in­cidents of groundwater contamination. Likewise, Pennsylvania, which has shale at similar depths as Ohio, has conducted its own investigations of more than 200 wells and found no contamination.

Even if the fracking process occurs too deep to contaminate groundwater directly, disposal of the flowback water used in the extraction still presents an environmental hazard if not handled correctly.

For fracking to be effective, it needs water. A great deal of water.

“One well may use up to 8 million gallons of wa­ter in about a week,” Koncelik said. “While most of that water will stay underground, some 10 percent will rise back to the surface as flowback water.”

Because horizontal drilling requires more water, that means more contaminated flowback water ris­ing to the surface, said State Rep. Kathleen Clyde ’08, who represents Kent and the surrounding areas.

Pennsylvania, which has been the site of boom­ing fracking industry for years, produces hundreds of millions of gallons of flowback water every year. While it can be stored temporarily in a number of ways, finding a permanent, safe solution for disposal is proving challenging.

To prevent contamination, there are regulations in place in Ohio to prevent flowback water from mingling with local waters. Flowback water can’t be introduced to the water treatment plants. Com­panies also are encouraged to recycle the flowback water and reuse it in another well.

Proposed moratorium divisive

Dozens gathered at the Ohio Statehouse in January in support of anti-fracking bills before the Ohio Legislature. Senate Bill 213 and House Bill 345 would halt horizontal drilling until the federal EPA produces results from a study of the relationship of hydraulic fracturing to drinking water resources and the chief of the Division of Oil and Gas Resources Management issues a report analyzing how Ohio’s rules address issues raised in the EPA report. (Both bills were in committee as of printing deadline.) The prospect of a fracking moratorium in the state is divisive.

“I don’t think a moratorium on fracking is a good idea,” Koncelik said. “Ohio is trying to com­pete for new steel mills, pipelines, and refineries associated with the industry. Putting a morato­rium in place would put Ohio at a competitive disadvantage to states like Pennsylvania and West Virginia to attract those jobs.”

Jack Pounds ’70, president of the Ohio Chemistry Technology Council, agrees. “We believe that the legislation enacted recently by the Ohio General Assembly and the rules developed to implement that legislation are comprehensive and the basis for assuring all Ohioans that the benefits from Ohio’s shales can be realized without harm to people or the environment.”

Clyde said there are areas where questions linger, though, involving the amount of water required to stimulate a well, the nature of chemi­cals used in the fracturing process, the possible contamination of water sources from drilling or spills, and possible increases in air pollution.

“While I have serious concerns about the possi­ble environmental impacts of hydraulic fracturing, I also realize that there could be many benefits to the state,” Clyde said. “I would prefer to work with all stakeholders – citizens, government, and industry – to ensure we have strong regulation and adequate oversight.”

Koncelik believes part of the resistance to the practice can be attributed to the misconception that the oil and mining industry is not already regulating fracking and horizontal drilling. “Oil and gas drilling is regulated,” he said. “Air permits must be secured for the drilling rigs. Wastewater must be disposed of in accordance with proper regulations. New wells must receive permits be­fore they are installed.”

Regulation and enforcement are critical to Ohio’s future in fracking, Clyde said.

“It is essential that citizens, government, and industry work together to ensure that we protect our environment as we look to expand oil and gas drilling in our state,” she said. “Among other things, we must ensure that there are firm stan­dards for well construction and completion, disclo­sure of chemicals used in the fracturing process, and firm regulations about the storage, treatment, and disposal of water and waste from wells.”

Proponents tout job creation

Ohio has received more requests for new well permits the past three years. As of 2009, there was only one permit issued for horizontal drilling in the Utica Shale formation. That number rose to 45 in 2011, according to the Ohio Department of Natural Resources. Fracking proponents see shale development as a potential energy boon in Ohio, bringing jobs and increased economic develop­ment to economically depressed areas.

“The great news for Ohio is that these jobs asso­ciated with oil and gas drilling have been in areas hardest hit by the state’s decline in manufactur­ing. We are only at the beginning stages of seeing the economic benefits,” Koncelik said. “The Utica Shale deposits present a tremendous opportunity for the state.”

It’s not just the oil and mining industries ben­efiting directly from the increased fracking activ­ity in the state. Plans were unveiled recently for a $650 million steel mill in Youngstown, Ohio to help produce the massive amounts of steel needed for wells. The chemistry industry has a stake in increased fracking in Ohio, as well.

“The ethane from the shales has the poten­tial to give the chemical industry in Ohio access to the most competitively priced raw materials of anywhere in the world except Saudi Arabia and Canada,” said Pounds, of the Ohio Chemis­try Technology Council. “Speaking only for the chemical industry — I can say that the develop­ment of shale gas, and especially the wet gas fields in Eastern Ohio, means that the chemical industry in Ohio will experience a renaissance.”

Clyde is more cautious: “It is hard to tell exactly how increased natural gas production may affect Ohio overall. While there will certainly be jobs created, it is hard to say how many.”

As more companies look to Ohio as a possible source of drilling, there is a chance for landowners to lease their land for significant profit, but this is not without its dangers. “An overlooked area of concern is the need to protect consumers and make sure that they are not taken advantage of when signing gas leases. Often, consumers are at a disadvantage when dealing with issues surround­ing mineral leasing,” Clyde said. “We must make sure that consumers don’t fall victim to predatory or high-pressure leasing tactics.”

The debate on fracking is far from over and will play out across the country and in Ohio. As studies continue on the impact of the practice and technology improves, this could be the start of a booming industry in Ohio. Or it could mean contaminated drinking water and earthquakes if environmental fears prove correct.

“As a technology, fracking has tremendous potential to improve all our lives — and we should all expect that potential to be realized and, at the same time, expect that it be employed by respon­sible people using the best practices, with appro­priate government rules in place,” Pounds said.

One thing is certain: For good or bad, fracking’s potential impact on Ohio could be massive.