New study examines implications of shale gas production on Canada’s water supplies
The Munk School of Global Affairs at the University of Toronto has released a new study on the risks that Canada’s shale gas development presents to our water resources. Titled “Fracture Lines: Will Canada’s Water be Protected in the Rush to Develop Shale Gas?,” the report looks at the state of shale gas development in Canada and claims that the pace of development demands greater scrutiny by regulators in order to assess potential impacts and ensure that shale gas production does not occur to the detriment of Canada’s water resources, landowners or communities around gas development.
To develop shale gas in a cost-effective way, companies must use a combination of new, horizontal drilling techniques and a technology called “hydraulic fracturing.” In plain terms, hydraulic fracturing involves pumping vast amounts of fluid into a gas well at extremely high pressure in order to produce mini-earthquakes in the rock that surrounds the well. The objective is to open cracks in the rock through which tightly stored gas can be released and find its way into the gas well. Thanks to recent advancements in drilling and fracturing techniques, companies can now drill up to 30 horizontal wells from a single location, and fracture each well 10 times or more (up to 17 in some cases).
Hydraulic fracturing fluids (called ‘frac fluids’ by the industry) are made up of water, a mix of chemicals that may be toxic and fulfill various purposes (e.g., the prevention of micro-organism growth in fractures and of corrosion in metal pipes), and sand or another agent to ensure that the cracks remain open and allow the gas to continue to flow through them.
The Munk School report explores ways through which frac fluids or methane could potentially migrate to, and contaminate, the underground aquifers that typically are hundreds of meters above horizontal gas wells. It also raises concerns about the impacts of hydraulic fracturing operations on water quantity and availability, as each frac job requires millions of gallons of water, and on surface water quality, given the potential of the wastewater that is pumped back to the surface after each frac job to contaminate lakes, rivers, creeks or other bodies of surface water. Just as important, the study claims that Canadian regulators are ill equipped to address and mitigate the potential impacts of natural gas production and hydraulic fracturing operations in British Columbia (where most shale gas production is currently taking place), New Brunswick, Quebec, Alberta, Saskatchewan and Ontario.
The issues described in the Munk report emphasize the need for investors in Canada to engage with companies in the shale gas industry to ensure they are implementing best practices and taking available steps to minimize risks associated with hydraulic fracturing operations, from wellbore design to disposal of wastewater resulting from the process.
What SHARE is doing
SHARE has been engaging with Canadian companies on the issue of hydraulic fracturing since 2009, when we started a conversation with Encana Corporation on the company’s efforts to protect water resources from hydraulic fracturing operations in the United States and Canada. Since then, Encana has considerably improved its public disclosure on hydraulic fracturing operations, and continues to add new information on its website. SHARE also has ongoing dialogues with Talisman, Trican Well Service, Nexen and Imperial Oil on their management of risks associated with hydraulic fracturing operations, and their efforts to protect water resources during shale gas development.
Among the best practices that SHARE encourages companies to adopt are disclosure of water testing and monitoring before and after hydraulic fracturing operations, the hiring of independent researchers to conduct scientific studies on water quality to substantiate the claim that hydraulic fracturing is not having a negative effect on drinking water resources around company wells, the development of frac fluid specifications in supply agreements with contractors, the disclosure of all the chemical ingredients of frac fluids used in company wells, and the widespread use of “green” frac fluids, which some companies have developed.
Trican Well, for instance, reported that its EcocleanTM frac fluids are non-toxic, biodegradable and non-bioaccumulating and meet applicable safe drinking water standards. However, for competitive reasons, the company will not disclose the full list of chemical ingredients of its EcoCleanTM fluids. SHARE is calling on all companies to disclose the full list of chemical ingredients of their frac fluids, including Chemical Abstract Service (CAS) numbers, while not asking for the concentration of each ingredient so as to protect their commercial interests.
Fracture Lines: Will Canada’s Water be Protected in the Rush to Develop Shale Gas? by Ben Parfitt for the Program of Water Issues, Munk School of Global Affairs at the U. of Toronto (Sept. 15, 2010 -released Oct. 14, 2010)
SHARE, Hydraulic fracturing and water pollution: Investor risks from North America’s shale gas boom (May 2010)
SHARE, Shareholder Engagement Activity Report, Q3/2010 (p.5)