The Honorable Mayor and City Council Members. Environmental Stewardship Advisory Commission. Hydraulic Fracturing. DATE: January 17, 2014

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1 TO: FROM: SUBJECT: The Honorable Mayor and City Council Members Environmental Stewardship Advisory Commission Hydraulic Fracturing DATE: January 17, 2014 INTRODUCTION At their November 18, 2013 meeting, the City Council directed the Environmental Stewardship Advisory Commission (ESAC) to provide a report on the impacts of hydraulic fracturing, or fracking. Hydraulic fracturing is a method of extracting natural gas from the ground, and is one method that has led to increased availability and decreased costs for natural gas as a fuel source in the United States in recent years. The City Public Works department currently has one vehicle retrofitted to operate using compressed natural gas (CNG). The remainder of the fleet is fueled with biodiesel. Two fueling stations exist in Dubuque, one at the Black Hills Energy office on Cedar Cross Road, and one Kwik Stop station on East 16 th Street. During the FY2015 budget process, the City Council will have the opportunity to provide input regarding whether the City should consider investing in CNG-fueled vehicles in the future. This information is provided to help inform that discussion. It should be noted that in addition to fueling stations that draw from a natural gas pipeline, such as those listed above, additional opportunities for fuel sources do exist. Two potential examples include the energy derived from the Water & Resource Recovery Center and the methane currently captured and flared at the Dubuque Metropolitan Area Solid Waste Agency. In order for either of those options to be considered, further information about costs of fueling station construction and other variables would need to be considered. In addition to conducting their own review of credible, objective information regarding hydraulic fracturing to prepare this paper, the ESAC consulted with experts in the field, including University of Iowa Professor Tom Peters, and collected public input. Two public input sessions were held on January 23 and 24, The opportunity to provide information electronically was also available. The primary purpose of the public input sessions was to gather additional credible information regarding hydraulic fracturing. However, individuals were also able to provide their opinions or other

2 information they wanted to share; that information can be found in (to be created) Appendix A. DISCUSSION 1. What is Hydraulic Fracturing? Fracking is the common name used for hydraulic fracturing, which is an oil and gas extraction technique. Hydraulic fracturing is used to extract oil and gas resources that are otherwise difficult to get out of the ground. In short, hydraulic fracturing uses high pressures to crack underground oil-bearing rocks. Then water, sand, detergents, and other chemicals are pumped at high pressure into a well which targets the rock formation. The sand is used to help hold the fractures open and the chemicals generally help the gas and oil come out of the rock. Many of the shale gas resources in the United States have been known to exist for many years, but the way they sit in the ground and the type of rock they are in made it difficult to remove the oil and gas. Recently improved oil drilling and fracking techniques have allowed it to be economically feasible to extract that resource. (USEIA, 2012) Hydraulic fracturing is exempt from the Clean Air Act, the Clean Water Act and most other Pollution Prevention Federal laws. a. Geographical impacts of hydraulic fracturing Most United States fracking occurs in three different regions for two different types of gas recovery. In the Eastern U.S., in Ohio and especially Pennsylvania, fracking is being used largely to recover hard to get material from old oil fields. In the Northern Plains region of the United States, fracking is being used to get oil and gas from the Bakken oil shale formation. The gas from this formation is mostly being flared off rather than captured as an energy source. There is also increasing interest in the Texas region to expand hydraulic operations. There are an estimated 80,000 wells in the US. Some of the best frac sand mines in the US are located in extreme Northeast Iowa, West and Central Wisconsin, and South and East Minnesota (WIDNR, 2012). In Iowa there is a frac sand mine in Clayton County, with some interest in development of other frac sand minds in that region (Libia, 2013), including Alamakee County. 2. Opportunities and impacts associated with fracking. Like many issues, the topic of hydraulic fracturing has strong opponent and proponents. There are economic and environmental benefits to using the natural gas extracted via fracking and offsetting economic, environmental, and social consequences. This document attempts to present both the opportunities and negative impacts associated with fracking in an objective and researched way. The hydraulic fracturing industry has grown significantly in recent years as the U.S. focuses on energy independence, cheaper fuel sources, and cleaner-burning fuels. Hydraulic fracturing increases the extraction of natural gas from unconventional sources. The Interstate Oil and Gas Compact Commission (IOGCC) estimates that hydraulic fracturing is used to stimulate production in 90% of domestic oil and gas wells. Shale and other unconventional gas recovery utilizes high-volume hydraulic fracturing to 2

3 a much greater extent than conventional gas development does. Horizontal wells, which may extend two miles from the well pad, are estimated to be two to three times more productive than conventional vertical wells, and see an even greater increase in production from hydraulic fracturing. One alternative to hydraulic fracturing is to drill more wells in an area, a solution that is often economically or geographically prohibitive. (Jackson, RB 2011) Proponents of hydraulic fracturing claim it has no or very minimal negative environmental impacts while it greatly increases the amount of oil and gas we can extract from the ground. Opponents claim that hydraulic fracturing creates massive negative environmental impacts that greatly offset any gains in energy independence. These negative benefits are also cited as outweighing economic benefits because natural gas is currently significantly cheaper than coal or oil, and environmental benefits because natural gas is a cleaner burning fuel source than traditional coal or oil (not necessarily of biodiesel). Additionally, hydraulic fracturing creates few jobs, has human health impacts for people and animals living near areas where fracking happens, and often affects land values and causes some to move away from their homes due to pollution concerns. 2.1 Environmental impacts Air emissions for vehicle fleets Compared to gasoline, natural gas is a cleaner burning fuel source. However, compared to clean diesel technology and B20 biodiesel fuel, CNG-burning vehicles create more negative local air impacts Greenhouse gas emissions Use of natural gas has increased quickly as a cleaner burning alternative to oil or coal use. No matter what the other environmental impacts are, use of oil and gas still has impacts on the amounts of CO2 in the atmosphere, which is the cause of the most human activity-related global warming. Some Iowa-centric examples include ethanol, biodiesel, solar, and wind. All of these technologies are becoming mature and are increasingly cost effective. Some biofuels in development, and current bio-diesel blends and electric vehicles have less impacts on climate change than CNG Groundwater contamination. a. At well site. One major environmental concern of hydraulic fracturing is its impact on groundwater resources. While there is much anecdotal information about impacts on drinking water wells, the impacts of oil and gas drilling from hydraulic fracturing on both groundwater and surface water are just beginning to be published. The United States Geological Survey (USGS) has initiated studies to look more closely at the impacts (USGS, 2012). Groundwater issues from hydraulic fracturing are likely dependent both on the care taken to drill and manage wells and on local geology. Routes of introduction of contaminants into groundwater include: improper well installation, well casing cracks, improperly closed old wells, migration through preexisting rock cracks, and creation of more cracks in the rock from fracturing. Simply, hydraulic fracturing involves pumping water with chemical mixtures into the ground under high pressures so that they can crack rock and, in many areas, those chemicals work their way through 3

4 newly created and already existing cracks in the rocks and eventually make their way to groundwater. Instances of groundwater quality degrading, and in some cases becoming undrinkable or causing severe health problems, have been reported (Fitzgerald, 2013). b. Disposal of fracturing fluid. Significant concern also exists with disposal of the fracturing fluid as a potential ground water contaminate and air pollution source, and a serious risk concern is transportation to disposal sites. Approximately 44 million Americans rely on a private water supply for household and agricultural use, typically sourced from shallow aquifers. In areas of extensive shale gas drilling, some homeowners have claimed that hydraulic fracturing has contaminated their drinking-water wells with methane and waste waters. (Jackson, RB 2011) Methane is not regulated in drinking water by the EPA drinking water standards. Methane in water is a safety hazard; it can cause asphyxiation or explosive hazards in confined spaces when it migrates from water into the air. (Jackson, RB 2011) Surface Water Concerns exist both regarding the large quantity of water that is used during the hydraulic fracturing process and in the potential quality impacts on surface water. Hydraulic fracturing requires between two and five million gallons of water per well, up to 100 more than traditional extraction methods. Surface water concerns are mostly due to the way chemicals are handled during well site construction, but can also come from post-fracking contaminated ground water sources that feed surface water. One third of the water used comes out of the well at the end of the process and needs to be disposed of safely. The chemical mixtures used in hydraulic fracturing vary depending on the local geology and are proprietary formulas, so a complete list of the chemicals used is not available nor required. (USGS, 2012: Fitzgerald, 2013) Companies claim they are trade secrets, and these proprietary formulas are currently excluded from the Clean Air, Clean Water and Right to Know Acts under an exclusion referred to as the Haliburton Exclusion. This unknown may put first responders and medical professionals in a compromised position when responding to potential accidents and illness. Chemicals typically include friction reducers, surfactants, gelling agents, scale inhibitors, acids, corrosion inhibitors, antibacterial agents and clay stabilizers (Jackson, R.B., 2011) The disposal of this water-chemical mixture typically occurs through conventional waste water treatment methods, recycling or injection into wells Fugitive Methane Emissions at Well Sites Earthquakes There is recent evidence that injection wells can cause local earthquakes (Ellsworth, 2013). These earthquakes tend to be very small, with magnitudes below two, but there is some concern that because hydraulic fracturing typically happens deeper in the crust 4

5 than most human activities that cause earthquakes, there may be a risk of larger earthquakes. 2.2 Economic impacts from hydraulic fracturing Just like other fossil fuel resources, the natural gas resources we are currently mining will not last forever. However, the current estimates, although uncertain, suggest that there are at least several decades worth of natural gas resources (USEIA, 2012; Fitzgerald, 2013). 3. Non-Well Site Implications 3.1 Frac Sand Mining Previously-discussed environmental hazards occur at or near the well sites. The industry also impacts the tri-state area. Frac sand mining has created its own set of controversies revolving around local pollution and short-term economic gain. The environmental concerns from these mines mainly are related to health impacts from particulate matter in the air around the mines (small air-born silica sand grains), various pollutants from equipment and sand processing in the mines, damage to roads from transporting the sand, noise, loss of property values near mines and degradation of roads connecting to transfer facilities, and general environmental degradation. Demand for this specifically-sized sand preferred by hydraulic fracturing companies has thus greatly increased along with the increase in fracking. (WIDNR, 2012) 3.2 Transportation (truck, rail, pipeline) There have been recent reports of truck and train accidents due to shipping the excess oil and gas. Pipelines are not necessarily better as they often sprout leaks. Other transportation issues are primary related to air quality, whether it is from transporting frac sand, or all of the issues involved in transporting the gas and its used waters from extraction. Many of the above-discussed environmental hazards are a product of the rapid development of this industry, and recent trends in improved safety indicate that they could be avoided. Technology has evolved quickly in this industry and regulations and monitoring has not yet caught up to it, leaving private companies with much flexibility. In our review of the available data, the ESAC found multiple studies that were currently underway, indicating that a delay in any decisions made regarding this topic may be prudent. 5

6 References Ellsworth, W.L Injection-induced earthquakes. Science. 341: Fitzgerald, T Frackonomics: Some economics of hydraulic fracturing. Case Western Law Review. 63: Jackson RB, B Rainey Pearson, SG Osborn, NR Warner, Avengosh 2011 Research and Policy Recommendations for Hydraulic Fracturing and Shale-Gas Extraction. Center on Global Change, Duke University, Durham, NC. Libra, RD Annual Report of the State Geologist. Iowa Geological and Water Survey, Iowa Department of Natural Resources. US Energy Information Administration (USEIA) What is shale gas and why is it important? (accessed on ). USGS Water quality studied in areas of unconventional oil and gas development, including areas where hydraulic fracking techniques are used in the United States. Fact Sheet Wisconsin Department of Natural Resources (WIDNR) Silica sand mining in Wisconsin. 6