The natural gas industry is technologically capable of tapping shale gas resources, but some companies may have trouble managing the environmental and social risks involved, according to a report by the Investor Responsibility Research Center Institute.
Discovering Shale Gas: An Investor Guide to Hydraulic Fracturing said these risks could impede profitable extraction. It also said that companies need to start replacing anecdotal attempts at transparency with more consistent, comprehensive data from across their operations.
The industry is facing three critical issues, the IRRC Institute said.
First, fracking a horizontal shale well requires between one and 8 million gallons of water and thousands more gallons of chemicals than a conventional vertical gas well. These volumes create a host of issues companies must address, the report said.
Secondly, thousands of shale gas wells may be drilled within a few years in some states. If contamination problems occur at only a small percentage, numerous communities could be negatively affected, the IRRC Institute said.
Finally, as development spreads to new areas, regulators and communities new to natural gas development are proving less tolerant of associated impacts than communities where gas production has occurred historically. Even if environmental concerns can be addressed, some communities may oppose industrialization of their surroundings, the report says.
But the institute said it is unclear if the industry has the will, short-term economic incentives or regulatory oversight to avoid environmental and social impacts that could lead to continued controversy and additional restrictions on drilling. An industry-wide commitment to transparency and best practices rather than mere regulatory compliance is essential, according to the IRRC.
In February, Ecologix Environmental Systems, an Atlanta-based wastewater treatment company specializing in the oil and gas industry, launched a mobile integrated treatment system for hydraulic fracturing that allows the re-use of water for future drilling. The system can treat up to 900 gallons per minute of frac flowback water.