Not surprisingly, given that the word sounds like a vulgarity, that one word...fracking...creates a visceral reaction among advocates for improved energy sources. Some claim hydraulic fracturing (the technical term for the practice of creating fissures in rock to release stored oil and gas) provides a once in a generation opportunity to rid the United States of coal - the dirtiest of the fossil fuels, while others skeptically wonder whether the practice causes more harm than good. Both agree that fracking has created a drastic change in the market for energy, dropping prices for natural gas - and with it electricity - and potentially pulling down oil prices as liquified natural gas becomes cost competitive. Fossil fuel energy proponents see it as a savior for an industry that just a decade ago appeared on the ropes with prices skyrocketing and public opinion falling. A technology revolution and economic collapse later, natural gas and oil have made a comeback in the eyes of the public. Prices are more reasonable, and with the economy still recovering, the lowering of prices has meant more value to the energy consumer.
This spring, the Illinois legislature considers a bill to allow fracking in the state, and provide regulation of that industry. Many voices have risen on both sides of the issue. My personal thought sits on the side of banning fracking. We know too little about the long-term impact of the practice, and it creates the potential for a minimum of forty to fifty more years of natural gas burning in this country. Expanding fracking operations will maintain the reliance on fossil fuels, and will stymy investment in alternative sources of energy. Most disconcerting, it will maintain a culture of fossil fuels for another generation - one that might turn back to coal if natural gas runs out or becomes cost prohibitive.
That is not politically likely, however, so instead I turn toward a focus on what makes sense in regulation.
Capitalism and market economics work best when the buyer and seller have all the information they need to make a transaction, and the price agreed to by the parties includes all of the costs of a good or service. In this way, all the parties in the transaction have responsibility for what occurs, and those choosing not to participate get neither the benefit, nor the consequences that flow from the transaction. Common sense regulation of hydraulic fracturing would establish such a market for the product, and thereby provide some measure of assurance that when Illinois citizens allow corporations to exploit our limited natural resources, they account for all the consequences of their actions. I hope that the Illinois legislature includes the following in their consideration of any legislation permitting fracking in the state:
1. Wastewater:
Unlike most commodities that we use to support life (e.g. metals, food), when we buy water, we do not buy a unique molecule for our present use that we then hold onto indefinitely (or as in the case of food, consume and transform). Water exists in a hydrologic cycle, constantly changing states as it passes through nature. The water molecule I buy today to drink is the same one that has been purchased by others over and over again. This point has importance in the fracking debate, as the industry uses a significant amount of water in the process of extracting methane from shale - approximately two to ten million gallons per well, and the process pulls water from local surface sources and aquifers, mixes it with often times undisclosed chemicals, then discards the water in such a way as to pull it from the natural water cycle. Although fracking companies purchase the water the first time they use it, they do not pay a premium for pulling the water from further use, a lost opportunity cost to the local water authorities and a factor that can lead to higher prices for water as the resource becomes more scarce.
Common sense regulation will include the net cost of this extraction to society. Companies should pay for the initial use of the water, and for any water that they do not return unchanged to the local watershed, they should establish an escrow that compensates the local community for the loss of that water each year in perpetuity. This will have a positive market impact, as it will reflect the importance of water, and provide an incentive to the company to minimize water use and maximize filtration of the water they do use. As an additional point of the regulation, any water stored as a result of fracking operations must disclose the chemical contents of that water. If a company wishes to avoid disclosing the mixture it uses to protect trade secrets, then they need to reclaim all the chemical mixture before releasing the water from the operations.2. Methane leakage
When drilling for methane (the largest component of what we call "natural gas"), drillers have difficulty containing all of the gas released. Although they have a financial incentive to reclaim as much gas as possible, the market price does not yet support the high differential costs of reclaiming the 5-9% of the harvested gas that operations release into the atmosphere. Since methane traps atmospheric heat at a rate 25 times that of CO2, this release contributes greatly to climate change, and almost negates the benefit of burning natural gas over coal.
When permitting natural gas drilling in any form, but especially through fracking which necessarily has a smaller scale of operations, the state should require companies to establish monitoring stations both on site and at reasonable intervals away from the drilling location in order to measure and report in real time the amount of methane leakage. The company managing the fracking operations should then pay a fee (equivalent to 25 times the market rate for carbon dioxide) to the local community for local climate mitigation and health services. This additional market incentive will reflect the actual cost of the operation to the community, and will provide additional incentive to the driller to install the technologies that will reclaim more of the methane. This fee should remain in tact for twenty years after the well has been capped, or until the methane leakage rate falls below a pre-determined level.3. Seismic activity
Much still remains to be learned about the impact of fracking on subterranean stability. Early evidence shows that initial blasting that creates the fractures in the shale have little long-term seismic impact, however the discarding of fracking fluid back into the wells potentially has caused significant increases in seismic activity in the region of the activity. This impact could last long after operations have ceased.
All fracking sites should include a network of seismic monitors with real-time communications to a central monitoring facility (either statewide or regionally) associated with one of the state universities. This provides both the regular monitoring of seismic activity, but also an indicator of where permitted fracking sites exist. In Pennsylvania, industry estimates that as many as 150,000 fracking sites exist, however the public only has record of approximately half.The financial mechanisms to make these regulations work already exist. The technology to provide the monitoring and reporting also already exist. Recognizing the importance of our limited water resources, and the value of good air and water quality should not create controversy. The evidence so far indicates that current state of the industry technology for fracking does not ensure the safety of air and water resources for the populations that surround the drilling operations. At the same time, questions have arisen about the environmental impact of unsupervised operations. Asking companies to take responsibility for their actions, and monitor their activities to ensure no harm befalls the local population does not ask too much. It asks for those who seek to profit from our state to take care of our state.
That should never be too much to ask.
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