Filed under: Energy, Environment | Tags: Huge Benefit, Hydraulic Fracturing, Oil Patch Revolution
The Environmental Protection Agency has issued a 1,000 page report briskly titled “Assessment of the Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources.” The Executive Summary is only 28 pages.
The EPA report says that there is no systemic danger to drinking water supplies from fracking. There have been a few instances of improper drilling techniques, and a very few identified cases where one or more mechanisms led to contamination of drinking water wells, but the number of cases was small compared to the number of hydraulically fractured wells.
The New York Times reported:
The report identified 151 cases from 2006 to 2012 in which fracking fluids or chemicals spilled on or near a drilling well. The spills ranged from 5 gallons to more than 19,000 gallons, with equipment failure the most common cause. Fluids reached surface water in 13 cases and soil in 97 cases, the report said. None of the spills were reported to have reached groundwater.
The environmental movement was outraged. They have their approved story line, and certainly are not going to accept any correction. One group, Earthworks, insisted that the report says the opposite of what it actually says. Expect comments that “the government is trying to cover up…”
Horizontal drilling and hydraulic fracturing ,”fracking,” has increased domestic crude oil production of 3.6 million barrels a day in less than four years. reversing almost four decades of decline. In response to sharply lower prices, domestic oil producers have shed jobs and cut operating rigs by more than half.
The smartest competitors have worked relentlessly to increase their productivity. Leading operators report that they can produce more profitable oil today at a price of $65 a barrel than they could three years ago at $95 a barrel.
Wells in light tight-oil formations can be drilled and completed for millions—not billions—of dollars, and the majority of the estimated recovery will occur within a year or two of bringing it on line. Capacity across a diversified portfolio of wells can be turned on when future prices justify it, and off when they don’t. That turns upside-down the traditional model of oil megaprojects that require billions in upfront capital, years of lead time, and always-on production irrespective of price.
All this means that, for the first time in history, oil production is becoming a modern manufacturing process. The frackers are engaged in “just-in-time” production, analogous to the methods pioneered by Japanese manufacturers in the 1970s and 1980s, which led directly to hyper-efficient global supply-chain management perfected by Wal-Mart in the 1990s. (emphasis added)
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