Hydraulic fracturing. Sounds like something the guy next door did to his souped up Toyota Corolla’s suspension system. Well, it’s actually far worse. Hydraulic fracturing (aka fracking) is a process in which water, chemicals and other particles are injected into the ground, anywhere from 5,000 to 20,000 feet below the surface, in order to stimulate more production of oil and natural gas. This process (picture a highly pressurized hose going down into the earth and actually breaking apart the rock in order to get to more natural gas) has been used since the 1940s, however, only recently has it gained in popularity in the public eye because of its unhealthy side effects finally showing up after years of uncertainty and even the EPA is now showing concern.
Shareholders of natural gas companies are starting to voice concern as well. At the recent shareholder meetings of Cabot Oil and Gas Corporation and EOG Resources Inc., a third of the shareholders at both companies voted in favor supporting resolutions asking these companies to be more transparent in their disclosure of environmental hazards of natural gas production and what they are doing to minimize the risks. Keep in mind, a third of all shareholders between these two companies represents hundreds of millions of voting shares.
The natural gas market on Wall Street is closely followed and investors are opening their eyes according to a May 10th WSJ article Calm Before Natural Gas Storm. Richard Liroff of the Investor Environmental Health Network recent stated, “Hydraulic fracturing operations have been linked to significant environmental concerns that could have financial implications for the companies involved and are leading to increased regulatory scrutiny.” The full text of the Cabot shareholder resolution can be read here.
So what exactly are the side effects of Hydraulic fracturing?
The process involved leaves drinking water contaminated with metals from the fracturing process. Due to the seismic activity which occurs, the groundwater becomes contaminated with heavy metals leading to numerous health problems. In some cases, they are showing that running water actually becomes flammable or explosive because of its exposure to gases underground.
In fact, the recent winner of the special jury prize for a documentary at the 2010 Sundance Film Festival, Gasland and film maker Josh Fox describe the many stories across the country involving neighborhoods ruined because of the oil and natural gas industry’s processes. On top of the water contamination issue, the core of the earth is basically being moved to find this gas. This is being found to lead to actual seismic or earthquake like activity underground. Scary stuff if you ask me. Why in the earth (forgive the pun) would we allow these companies to actually alter the core structure of this planet in order to obtain small percentages of natural gas is beyond my thinking.
As the media, shareholder activists and the “not in my backyards” or NIMBYs grow more vocal about the negative impacts of this process, the natural gas companies will be forced to not only be more transparent in their activities, they may also soon look for alternative and less detrimental means of finding their natural gas.