Frack-o-nomics: Short-term gains, long-term problems

By Lisa Sorg - N.C. Policy Watch

Aubrey Hilliard had just eaten a meal of chicken-fried steak and lemon meringue pie when a friend Mitchell George entered the diner. The year was 1978, the place, Jacksboro, Texas, in the Fort Worth drilling basin.

“Check this out,” George told Hilliard, himself an oil and gas guy. “We’re drilling a horizontal well.”

The company had learned to frack. With federal funding, George and Co. took the next nine months to drill a 750-foot horizontal well, a fraction of the distance frackers can reach today.

That discovery 38 years ago has changed not only the energy business, but also the environment: contaminated local groundwater caused by hydraulic fluids; reduced property values caused by well pads, rigs, rutted roads and earthquakes; and even global climate change caused in part by methane leaks from wells.

Hilliard’s been in the energy drilling business since 1976. As president of the Carolina Division of Texican Natural Gas, he buy gas from producers and sells it to large institutions, including utilities, like Duke Energy. “I’m here to look out for the job creators,” Hilliard recently told the Energy Infrastructure Subcommittee, which is part of the N.C. Energy Policy Council.

But Hilliard hasn’t drilled a well in two years, he said. Although energy demand is growing, there is a glut of natural gas, forcing market prices down. The only exception is the Marcellus Shale Formation, which encompasses parts of New York, Pennsylvania, West Virginia and Virginia.

The Marcellus exception is troubling for a fracking opponents, who are fighting both drilling in North Carolina and the 550-mile Atlantic Coast Pipeline, a $5 billion project. If it receives federal approval the ACP would run through low-income and minority communities east of I-95. Construction could start as early as a year from now.

But pipelines, Hilliard noted, cannot move gas quickly — about 20 mph — compared to electricity, which moves at the speed of light. Thus, he said, the need for “storage, storage storage.”

Yet storage brings its own set of environmental problems. Underground gas storage units deteriorate. And with little federal oversight, Inside Climate News reported earlier this year, the storage units can leak potentially explosive fuel and methane.

Oil and gas can also be stored in old wells, salt reservoirs and former gas fields. But those temporary storage methods carry serious risks, as well. For example, in Texas, a leaking oil well contaminated the drinking water in a low-income minority neighborhood that was on private wells.

And even though fracking technology has progressed since George Mitchell drilled horizontally through the earth 38 years ago, wells in shale formations peter out quickly. By year three, Hilliard said, it’s not economically feasible to keep searching for gas in the well.

In Ogletree, Texas, Hilliard once found a well, that “was so good it made the inside cover of Oil and Gas Journal” — the energy publishing equivalent to Rolling Stone. “I called my wife and said, ‘We’re going to be rich.”

The well tapped out in three weeks.

Lisa Sorg is the Environmental Reporter for N.C. Policy Watch.

By Lisa Sorg

N.C. Policy Watch

comments powered by Disqus