The Rising Influence of Rising Affluence

[DewDiligence]

Faulty Wells—Not Fracking—Blamed for Water Pollution

[This is probably old hat to most readers of this board.]

http://online.wsj.com/article/SB10001424052702304537904577277814040731688.html

›March 12, 2012, 7:37 p.m. ET
By RUSSELL GOLD

Some energy companies, state regulators, academics and environmentalists are reaching consensus that natural-gas drilling has led to several incidents of water pollution—but not because of fracking.

The energy officials and some environmentalists agree that poorly built wells are to blame for some cases of water contamination. In those cases, they say, wells weren't properly sealed with subterranean cement, which allowed contaminants to travel up the well bore from deep underground into shallow aquifers that provide drinking water.

Many community activists have said that hydraulic fracturing itself—a process that uses water, sand and chemicals to break up shale rocks and release gas—can pollute drinking water. The energy industry has countered that the technique, which it has used for decades, isn't to blame for water contamination.

The energy industry has been struggling to convince critics that fracking is safe. If the industry can persuade them that the chief pollution risk is poorly constructed wells—and that risk can be minimized—it might encounter less resistance from the public to expanding oil-and-gas production.

Mark Boling, executive vice president and general counsel of Southwestern Energy Co., a major natural-gas producer, said he has examined several incidents in Colorado and Pennsylvania where gas drilling appears to have caused gas to get into drinking water. "Every one we identified was caused by a failure of the integrity of the well, and almost always it was the cement job," he said.

A. Scott Anderson, a senior policy adviser with the Environmental Defense Fund who is working with Mr. Boling, agreed. "The groundwater pollution incidents that have come to light to date have all been caused by well construction problems," he said.

Both men are calling for a stronger set of standards for well construction, including better cementing and more testing to ensure that wells and cement have no leaks.

Cement failures have long plagued the industry. Mr. Anderson estimates that cement in about one in 10 wells fails to work properly and requires remedial work. Federal investigators have said that cement problems were a major cause of the Deepwater Horizon disaster in April 2010, when natural gas escaped from an offshore well in the Gulf of Mexico and exploded, killing 11 workers and setting off a mammoth oil spill.

Pennsylvania and New York have adopted new well-construction standards to try to prevent pollution. Ohio is expected to issue new rules this week.

Cementing is an essential aspect of drilling ]no kidding]. Energy companies thread steel pipes into bored holes and squeeze cement around the pipes. The cement prevents gas or fluids from moving between the pipe and the exposed rock. A poorly cemented well can create a path for contaminants to migrate upward and leech into shallow porous rocks that hold drinking water.

Some critics say it is the fracking process itself, which takes place far underground, that can cause pollution. Wilma Subra, chairwoman of Stronger, a nonprofit group made up mostly of state oil-and-gas regulators, said that cracks caused by fracking can extend out of the shale and "allow natural gas and frack fluids to migrate out."

Others say that even if fracking is safe, it doesn't mean drilling poses an acceptable risk. "You may be able to fix one issue, but it doesn't make the whole drilling process OK," said Maya Van Rossum, head of the Delaware Riverkeeper Network and an opponent of gas development in the river's watershed.

Mark Zoback, a Stanford University geophysicist who served on the National Academy of Engineering investigation into the Deepwater Horizon blowout and more recently sat on an U.S. Energy Department committee that studied shale production, said it is important to focus on the real risks.

"There are three keys—and those are well construction, well construction and well construction," he said. [LOL—was Zoback a realtor (“location, location, location”) in a prior career? :- )]

In its August report on shale production, the Energy Department committee recommended that companies run tests on every well to identify inadequate cementing, and it called for more inspections to confirm operators promptly "repair defective cementing jobs."

One of the largest documented instances of water contamination occurred in Bradford County, Pa.—after wells had been drilled but before any fracking took place. Chesapeake Energy Corp., the nation's second largest natural-gas company, has conceded that poor well construction may have played a role in high levels of natural gas found in local aquifers, according to letters to state regulators.

A state investigation concluded Chesapeake failed to cement its wells adequately, allowing gas to leak from pipes into the groundwater. Chesapeake agreed to pay $900,000 in fines and payments to the state, but never publicly acknowledged it caused the problem. In a news release last May, it said the investigation was "inconclusive." The company recently declined further comment, citing pending landowner lawsuits.

In an August 2010 letter to the state, a Chesapeake executive said that one of its wells "may be considered to be the most compelling source" of gas that reached the surface. Chesapeake found evidence suggesting the cement in one well had developed small channels that allowed gas to flow through it.

In the settlement, Chesapeake agreed to change how it built wells in Pennsylvania. It has begun using three interlocking pipes, instead of two, which adds an additional barrier to prevent gas movement.

The Oklahoma City-based company said the changes would increase costs per well by up to $500,000, or about 10%.‹