Hydraulic fracturing – or ‘fracking,’ as it is more snappily known – is a fairly new way to extract energy, and not without its critics. But the US and UK governments are keen
Shale oil and natural gas (methane) are formed within layers of organic-rich rock deep below the earth’s surface (between 0.5 and 2.5 miles). The shale is not very permeable so the gas and oil are effectively trapped, unless the shale is fractured.
Unlike conventional gas and oil reserves, shale stocks cannot be reached through vertical drilling. The two-stage process also involves boring horizontally to reach the optimum site for tapping into the rock.
To release the trapped gas and oil, a high pressure mixture of sand, water and chemical additives is injected into the rock, creating fissures along which the gas and oil flow out and up to the well, in a process known as hydraulic fracturing or ‘fracking’.
One of the many objections to the fracking process is the concern that contamination of water systems can occur, either from chemicals – such as the carcinogen benzene – leaking into aquifers (water-bearing rocks, which typically sit above the level of shale seams) or when waste water is removed at the surface.
As it is relatively new – it began in 1949 – the long-term effects of fracking on wildlife and the environment are unknown, but in the US, Canada and Australia it has been accused of destroying water supplies, air quality and health, and causing earthquakes.
America’s biggest source of shale is the Permian Basin, which covers 75,000 sq miles of Texas and New Mexico. The area accounts for around 30% of US oil production but its infrastructure is under strain.
As shale oil and gas deposits are quickly depleted it soon becomes less economical to extract what is left. Thus the global oil giants are able to expand for short-term gains, while smaller operations get swallowed up.
China has vast shale gas resources, which it is struggling to make profitable. The UK, likewise, has discovered potentially lucrative seams, but the country’s relatively high population density means opposition from residents is a problem.
What they say
“It’s quickly becoming industrial engineering. How good are your logistics? How do you manage your supply chain?”
Robert Clarke, Geologist and research director at consultancy Wood MacKenzie (as told to The Economist)
“If energy, one of the world’s most valuable and strategically important economic sectors, becomes mired down in a trade war, who knows where the damage will end?”
Dan Eberhart, CEO of oilfield services company Canary, writing in Forbes magazine
“This year undoubtedly marks a critical tipping point for the shale oil industry. The wildcatters are cashing out, the majors are moving in and shale drilling is growing up”
Chris Tomlinson, Business, energy and economics commentator with The Houston Chronicle
As controversial mining processes go, fracking has to be up there with the most notorious. Its money-making potential has been bigged up by politicians from George Osborne to Donald Trump, but many countries – including France and Germany – have rejected it on safety grounds. Fracking’s increased production of oil and gas is said to have had a positive effect on the US economy, but on top of the associated risks to health and the environment, its ability to continue to deliver economic benefit is unproven. One of the problems is that the process itself is very resource-heavy – companies in the Permian Basin now have to use twice as much sand and water than they did in 2014 to extract fossil fuels – and due to the finite nature of deposits, returns are soon outweighed by the costs of extraction.