23 Nov 2011

Notes from AWRA -- fracking

The American Water Resources Association's annual meeting in Albuquerque was great.

I had the opportunity to meet people in person that I'd "talked" to for several years: Michael Campana (President of the AWRA, aka Aquadoc @ WaterWired), Cynthia Barnett (author of Blue Revolution), John Fleck (journalist and blogger @ Inkstain), Charlie Fishman (author of The Big Thirst).

I also caught up with or met several guys active in water markets: Chris Corbin, Matt Payne, Taylor Shipman, and Scott Armstrong (post to come).

Most of the AWRA program was technical and scientific, devoted to river morphology, water treatment, models of climate change impacts, etc., so I had the opportunity to learn from the scientists and give some economist opinions.

I was very interested in the panel on hydraulic fracturing [search for "Session 35 PANEL"], in which several experts gave "the real scoop" on the situation in the country, with a particular emphasis on fracking near the Marcellus Shale. My take-away from that event was that the regulators were indeed on top of the industry. Everyone wanted fracking to happen (yielding energy) but nobody wanted accidents to happen.

A few facts: The average frack needs about 5-8 million gallons (92+ 15-24 af) and produces about 5-12% return flows (the rest of the water/fracking fluid stays underground). Frackers recycle water in to their next injection or sometimes pay to dispose of it by injection elsewhere, but they minimize water use because it's so expensive to procure, bring to the site and remove later. So far, there have been no big "pollution events" and there are water quality monitors all over the place.*

The biggest problems/confusion appear to come from the various overlapping regulations and jurisdictions -- some of them badly constructed by legislators. Regulators are trying to get the best results in these circumstances, but sometimes (e.g., "the Halliburton exemption" from the Clean Water Act) the regulations that politicians hand down -- and regulators are required to follow -- are not very useful. That said, regulations are changing as fast as possible, as people learn by doing.

The panel said that they were not worried so much about aquifer contamination (not true in some states) as industrial accidents. The most important goal was to have a good casing around the injection well, to ensure that the high pressure water doesn't go in unexpected directions. The trickiest problems were connected with the set-up and tear-down of drilling operations by crews in a hurry. Some of the sub-sub-sub contractors were cowboys, but their ultimate employers -- the energy majors -- had too much money on the line (via daily expenses, reputation, and fear of fines) to be sloppy.

The regulators said that bonding (financial guarantees against mistakes) was not as effective in promoting discipline as "cease operations" delays that would cost millions in wasted staff time and even greater losses in stock market valuations.

Coming soon: Bill McKibben and America's water vision.

* This article says they may not be measuring pollution correctly, but it's a bit naive. This one claims that fracking causes earthquakes. That's probably true for small ones (~3.0 on Richter Scale), but we are not looking at Fukushima II here.