While it’s undoubtedly true that fracking has been a real game changer for the domestic energy industry, I get nervous when I see the government adopting a policy to allow more and more exports of natural gas with the growing construction of export terminals. My concern is that many areas where hydraulic fracturing is carried out are stressing their water supply, given the large amounts of water needed for the technology. Recycling is already being practiced, but the outlook is for many thousands of new wells being drilled, now that a huge new (export) market is becoming available.
Unquestionably, there is a great demand for our natural gas and this will force up the domestic price, reducing the competitive advantage our petrochemical and other producers now have versus other countries, where natural gas is priced above $ 10/MMBTU, versus around $ 3 in the U.S. This is the argument Dow is using, as the firm campaigns against large future gas exports. But the water problem seems just as compelling to me. I wonder to what extent the big drillers have figured out where they can sink all the new wells, while dealing with the worsening water situation in many areas.
A new study shows that 47% of oil and gas wells (25,450 wells reported) are already located in water-stressed areas, many in Texas and Colorado. Intensive drought has been a fact of life in Texas, while in Colorado, 80% of the available water is already being used for residential, industrial and agricultural uses.
High agriculture use, due to extensive drought conditions, is apparently responsible for the fact that water levels in U.S. aquifers (underground water storage areas) between 2000 and 2008 dropped at a rate that was almost three times as great as at any time during the twentieth century, according to a new report by the U.S. Geological Survey. The so-called High Plains Aquifer. which lies beneath parts of a number of states where fracking is and will be intensive, but where drought conditions were mostly severe, has had the highest rate of water depletion starting in the 1960s.
So, putting this in perspective, if the U.S. is on the road to exporting huge amounts of natural gas, to what extent will this then exacerbate the conflict between agricultural and residential users of water on the one hand and energy firms drilling more and more wells beyond the oil and gas production we need to be energy self-sufficient. It’s an interesting question.