Hydrofracturing, also known as “hydraulic fracturing” or “fracking”, involves injecting specialized liquids down natural gas wells to create small fractures in the rock, increasing the rate at which gas flows into the well.  Hydrofracturing is also used as an Enhanced Oil Recovery (EOR) technique at depleted oil fields, where liquid CO₂ or other substances are injected into one well in order to sweep remaining oil towards an operating pump. (See here for diagrams explaining EOR techniques and the usefulness of hydrofracturing.) 

This technique for enhanced oil and gas recovery is receiving increasing scrutiny on Capitol Hill.  Most of the debate concerns the potential tradeoffs between promoting domestic oil and natural gas production and protecting drinking water sources.  While other forms of underground injection are regulated by EPA to protect groundwater resources, Congress exempted hydrofracturing from regulation under the Safe Drinking Water Act (SDWA) in the Energy Policy Act of 2005 (EPAct).  Adding a layer of complexity to this policy discussion is the role hydrofracturing techniques and previously-fracked oil and gas fields may play in providing United States’ geologic sequestration capacity  for captured carbon.

In recent days, complementary bills to regulate hydrofracturing under the SDWA have been introduced in both chambers.  Bill supporters argue that excess hydrofracturing fluid has the potential to contaminate underground water supplies and migrate to the surface.  Opponents respond by citing EPA’s 2004 study concluding that hydraulic fracturing posed little or no threat to drinking water sources and warning that the regulatory burden would reduce or prevent development of significant amounts of natural gas.

Viewed in the context of the wider climate debate, these issues could have broader implications.  First, natural gas, with its significantly lower carbon emissions per unit energy than coal or oil, is an important bridge to a low-carbon energy future.  Second, because oil and gas recovery sites provide many of the most promising and practical opportunities for CCS injection, particularly in the near term, the creation of any new regulatory hurdles could decrease or delay momentum for sequestration project deployment

Hydrofracturing — A Potential Role for CCS

While hydrofracturing  has been used for years to support natural gas and oil recovery, the technique has also become a potential tool in increasing the domestic geologic sequestration capacity.

• Sequestration in Unmineable Coal Seams: These seams, which are too deep or narrow to be cost-effectively mined, provide carbon storage potential in the pores of the coal itself. As carbon dioxide is pumped into these coal seams, it displaces methane previously stored in the pores of the coal, a process known as enhanced coalbed methane (ECBM) recovery. Hydrofracturing allows CO₂ to penetrate into these seams, providing complementary benefits - accessing previously unreachable pockets of methane, allowing for both increased natural gas production, and increasing CO₂ storage capacity. (See page 6 of this document for a diagram showing the role of fracking in ECBM.)
• Sequestration in Deep Saline Formations: These formations, of saltwater-saturated rock, hold the most promise for widespread carbon storage, as they are more extensive than other potential storage reservoirs and are located in areas with exisiting coal-fired power plants. These formations, however, have lower permeability, meaning that fracking of injection zones could improve injection rates and cost effectiveness.
• Sequestration in Depleted Oil and Gas Fields: The majority of carbon sequestration projects demonstrated to date have been conducted on former oil and gas fields. Many, if not most domestic oil and gas fields have been or will be subjected to hydraulic fracturing in the course of their operations (indeed, the federal government provides tax credits to companies that use enhanced oil recovery methods to maximize well productivity). This means that even if hydrofracturing activities were to stop today, policymakers would have to develop working methods for making CCS viable and safe in previously drilled (and fracked) areas.

Reconciling Hydrofracturing Regulation and CCS Policy

In July 2008, pursuant to the SDWA, EPA released proposed Underground Injection Control (UIC) regulations governing carbon sequestration wells. The proposed regulations would prohibit various activities that could endanger sources of drinking water.  The proposed regulations would allow limited fracking “to improve wellbore injectivity” where the responsible EPA or state officials deems it permissible.  The proposed regulations also acknowledge the current statutory exemptions for unmineable coal seam sequestration and enhanced oil recovery, stating that “these hydraulic fracturing operations are used to enhance oil and gas recovery and for ECBM recovery, and in general are exceptions to the definition of underground injection under the SDWA.”  EPA nonetheless requested comments on “the extent and scope to which hydraulic fracturing should be allowed during GS injection, and whether the use of fracturing for the purposes of well stimulation is appropriate.” 

The impact of new hydrofracturing restrictions on CCS operations and capacity will vary from site to site.  Sequestration sites utilizing former-ECBM and deep saline formations typically occur at depths far below level of drinking water aquifers, making it unlikely that any associated fracturing activities would affect drinking water sources. The relationship between fracking at EOR sites and any sort of drinking water regulations are not addressed in the EPA’s proposed rule, even though many of the most promising domestic sequestration site locations are in pre-existing oil and gas fields.  If policymakers are to avoid a head-to-head standoff between developing CCS capacity and exploiting US energy reserves, they may have to find a way to resolve hydrofracturing’s role in oil and gas production with the potential that oil and gas fields have as future host-sites for geologic sequestration.

For further information about this topic, please contact Akin Gump.