Full Disclosure, Rapid spread of hydraulic fracturing hastens move to greener additives and transparent reporting by Maurice Smith, April 1, 2012, New Technology Magazine
One of the most contentious issues surrounding the rapid expansion of horizontal drilling and multistage fracturing—that of fracture fluid composition— is soon to become more transparent as Alberta moves to join other jurisdictions across North America to require mandatory public reporting of frac fluid chemical additives by the end of 2012. Rather than see it as an unnecessary and intrusive invasion into the sphere of proprietary and protected company assets that could hinder competitiveness, many in the oil and gas industry welcome the move, at least to a point. “From our standpoint, we would certainly be happy to see that happen,” says Ron Gusek, vice-president, corporate engineering, with Calgary-based Sanjel Corporation. “For the most part, the chemicals that we pump in the frac industry are things that you would find in your house, in some way, shape or form. So there is not any terrible secret to hide. “I think as an industry we want to be open and forthright. We recognize that probably as an industry we haven’t been good enough about disclosure and it’s time we changed that,” he says.
“I don’t see [disclosure] being a problem at all— not for Trican or any of our competitors,” says Dave Browne, Trican Well Service Ltd. vice-president, marketing. Trican already operates in jurisdictions requiring some level of disclosure, both in the United States and most recently in British Columbia, which launched compulsory disclosure in January. “At the end of a [frac] job we can give our customer a printout or an electronic version of all the additives that we put into the well,” Browne says. The issue of exactly what is being pumped deep underground, often at a rate of millions of gallons per well, is particularly volatile in the United States, where public concerns about frac fluids, as well as groundwater contamination and water use and disposal, have generated opposition to—and in some cases bans against—the large-scale fracking operations that primarily target shale gas and tight oil.
In a report detailed at the American Association for the Advancement of Science in Vancouver in February, senior academics from the University of Texas in Austin recommended regulators step up efforts to ensure the safe handling of frac fluids, suggesting that, while there was little or no evidence to show fracking contaminated aquifers, more should be done to prevent surface accidents and spills. “Surface spills of fracturing fluids appear to pose greater risk to groundwater sources than from hydraulic fracturing itself,” states the report, which also noted its environmental review was hampered by companies’ limited disclosure of the chemicals used in frac fluids, some of which are known to be toxic and carcinogenic.
“Disclosure of fracking fluids is a very big issue” for investors, says Susan Williams of the Sustainable Investors Institute (Si2), a non-profit organization based in Washington, D.C., that conducts impartial research and publishes reports on organized efforts to influence corporate behaviour on social and environmental issues. “There is a lot of investor interest in particular because it’s become a contention with a lot of members of the public and—wanting to head off any additional restrictions on drilling—investors would like to see that issue addressed by companies.” Williams is the author of Discovering Shale Gas: An Investor Guide to Hydraulic Fracturing, a report commissioned by Si2 and the Investor Responsibility Research Center released in February. She says public concern about possible water contamination is exacerbated by the lack of information on specific chemicals in the fracking fluids. While governments and the industry are moving toward more disclosure, a significant debate continues over the level of reporting required.
It may indeed be a lack of knowledge about the chemicals being used that brings about public trepidation in the first place, which can often be alleviated with full disclosure, Gusek says. He recounts a meeting with stakeholders near Pigeon Lake (south of Edmonton) in February where he laid out the company’s plans for fracking operations there. “We told them everything that was in the particular fluid system that we were going to be pumping and showed them exactly where they would find it in their house. And I think they were a lot more comfortable after that process in terms of understanding exactly what it was we brought out there, and what that would mean in terms of exposure to it. I think the realization they come to is to say, ‘We actually do have that in our house and, of course, I wouldn’t drink it there, so I shouldn’t come to your location and drink it either, but those are certainly products that can be safely managed on a day-to-day basis.’”
Frac fluids typically contain some combination of friction reducer (slick water), gelling agent, corrosion and scale inhibitors, surfactants, acid, breakers, crosslinkers and biocides, each of which can play a critical role in a successful frac. All the chemicals combined typically make up between 0.5 and two per cent of the frac fluid composed of mostly water with some sand proppant, diluting the additives to the point that “if we spilled 1,000 litres of water on the ground, 10 litres of that would actually be chemical and the rest of it would be completely harmless to the environment,” Gusek says. In the instance Gusek describes, the fluid system contained such substances as potassium chloride, which is used in low sodium table salt substitutes; a surfactant using isopropanol, a rubbing alcohol that can be found in soaps and shampoos; a buffer containing acetic acid, the main component of vinegar; and a breaker containing magnesium oxide, which can be found in a laxative, magnesium supplement or antacid. “We went through the whole process with [the local residents] so they would understand exactly what was in each of those things, and I think at the end of the day they realized we are not out there with some top secret formula that contains a lot of obscure dangerous chemicals that they have never heard of before and don’t see on a day-to-day basis. And so I think they felt a lot better about that.”
NOT ALL DISCLOSURE IS EQUAL
Williams, however, is not convinced the public is content with the level of disclosure being offered, which can significantly differ by jurisdiction. She points to three main points of contention that have arisen in the United States: the determination of hazardous chemicals, trade secret exemptions and ease of public access to data. While companies in the United States must produce Material Safety Data Sheets (MSDSs) describing additives, MSDS s only report chemicals deemed to be hazardous in an occupational setting under standards adopted by the U.S. Occupational Safety and Health Administration (OSHA ), she says. “One issue there is that additional chemicals [not listed by OSHA] might be hazardous if you look at them in terms of bioaccumulation,” says Williams. Colorado, which has recently inaugurated new regulations, is one of the leaders in requiring higher levels of disclosure, she says. “They are requiring all chemicals, not only chemicals determined hazardous by OSHA , but all chemicals to be reported, and then taking it a step further by asking them to report their concentrations as well.” Drillers must also disclose the chemical family of any proprietary chemical and its concentration. Some companies consider portions of their fluid formulas, including the composition and concentrations, to be proprietary information. Thus far, all states allow trade secret exemptions; some states make the final determination for what is considered a trade secret, while others allow companies to make that determination, Williams says. But while trade secrets may be exempted from full disclosure, companies are required to disclose any hazardous chemicals’ properties and effects, and specific chemical identities must be made available to health professionals, employees and designated representatives under certain circumstances.
A hydraulic fracturing chemical registry website, FracFocus.org, was established last April by the Ground Water Protection Council (GWPC) and the Interstate Oil and Gas Compact Commission to allow public access to reported chemicals used within their area. Several states require disclosure to the non-governmental site, while British Columbia has activated a similar database, FracFocus.ca, based on its American cousin. The B.C. site was built to accommodate future participation by other jurisdictions across Canada. FracFocus.org users can run queries by state, county, operator and/or well name for a specific well to generate a report that lists the trade name, supplier, purpose, chemical ingredients, chemical abstract service number and maximum percentage of ingredients in the mix, when available. Initially, FracFocus posted only the chemicals that appear on an MSDS , but in September the GWPC announced it would provide for the reporting of all chemicals added to the fracking fluid, except for proprietary chemicals.
As of November, there were more than 7,000 records in the FracFocus.org system and 80 companies participating, though the numbers—and the legislation driving them up—are changing so fast even FracFocus has trouble keeping up. “The changes in state public disclosure laws are occurring so fast that posting a comprehensive list of all states contemplating or preparing laws in this area is not possible as it would change on a frequent basis,” the website states. While FracFocus is a step in the right direction, Williams says it has its limitations. “FracFocus is very useful if you are a resident who lives near a well and you want to see what’s happening with that well, such as what chemicals were part of the fracking fluid in that particular well. But if you are an investor, FracFocus is pretty limited in its usefulness because it’s not a searchable database. For instance, if you have a concern about a particular chemical, you would have to go through every single well report to find out which companies are using that chemical. You can’t aggregate data by company or identify which companies use a particular chemical—it’s simply not a searchable database. “FracFocus has indicated if they can get additional funding they would like to make it a searchable database, so they are working towards that,” Williams says. “And part of the new legislation in Colorado says that for now companies should disclose information on FracFocus, but if FracFocus hasn’t taken steps to make its data searchable by 2013, then the state will build its own database and make it searchable.”
Meanwhile, service companies are making progress in the increasing “greening” of frac fluids, which in the end could make disclosure inconsequential if new products pose no public health risk. Baker Hughes Inc., for example, promotes its family of BJ SmartCare environmentally preferred fracking fluids, and Halliburton offers its CleanSuite products for hydraulic fracturing and water treatment. Greening its fluids “is a continual process for us,” says Browne, whose company’s investment in innovation has made it the only pumping services company to make the list of Canada’s top 100 corporate research and development spenders in 2007-09 and 2011 (as defined by RE$EARCH Infosource Inc., a division of consulting firm The Impact Group). Trican’s Research and Development Centre in Calgary houses stimulation, cement and reservoir characterization laboratories as well as coiled tubing tool development facilities. The company has made several advances to make its fracturing processes more environmentally friendly, Browne says, creating fracking products that are biodegradable, non-toxic and non-bioaccumulating. One example is its development of blenders that allow chemicals to be mixed as they go downhole rather than in surface tanks beforehand, decreasing the chances of chemical spills and leading to less waste of premixed fluids. “The way we do it now is on-the-fly. We are taking the [gelling agent guar gum] powder out to the job site and mixing it with water in a special machine as we go,” says Browne. “We are striving as an industry to develop greener and greener systems,” adds Gusek, whose company has developed an internal rating system to measure the environmental footprint of its fluid systems. In one case, the company was able to replace three out of four additives in a treatment using hydrochloric acid, which is often used “as a spearhead in front of a frac, to help to break down the rock before the main frac treatment gets there.” The lower-toxicity additives trimmed the treatment’s score in half, creating “a substantially lower impact blend, without any change in the performance—and it didn’t have any impact on the cost,” Gusek says. [Emphasis added]
[Refer also to: Trican Donates $5 Million to Fight Childhood Cancer ]