The use of hydraulic fracturing to extract oil and gas from the earth dates back to the 1940s, but only in the past decade has "fracking" become an energy buzzword, alluding primarily to the shale gas boom in the United States and all of the controversy that has accompanied it. Fracking-the high-pressure injection of water, chemicals, and sand into shale deposits to release the gas and oil trapped within the rock-in recent years has been combined with horizontal drilling and other improvements in technology to harvest stores of gas and oil that previously were thought commercially unfeasible to access. In the midst of a modern boom in U.S. petroleum production, hydraulic fracturing is now done on a massive scale with new methods that put once-inaccessible oil and gas within reach. Those new methods are fueling a fractious public environmental debate. High-pressure fracking and new methods of horizontal well drilling are making it possible for producers to tap vast new plays of natural gas and oil trapped in tight sand and shale formations. The biggest, North Dakota’s Bakken Play is producing a new generation of oil millionaires in a region long stuck in economic obsolescence. By some estimates, up to 90% of today’s producing wells were stimulated by fracking. That’s cause for concern among environmentalists who tie recent reports of groundwater contamination in high-fracking areas to the high-pressure injection of toxic fracking chemicals to depths of several thousand feet. So far, official studies have not proven that link but the debate continues.
Though fracking is used worldwide to extract gas and oil, a fracking boom has occurred recently in the United States, partly driven by concerns over the costs associated with imported oil and other fossil fuels as well as energy security that is, having uninterrupted access to energy at affordable prices in ways that are preferably impervious to international disruptions, according to the Brookings Institution. In 2000, there were about 276,000 natural gas wells in the United States. But by 2010, that number had almost doubled to 510,000, according to the U.S. Department of Energy (DOE). And every year, about 13,000 new wells are drilled. According to a 2014 study, at least 15.3 million Americans have lived within a mile of a fracking well that has been drilled since 2000. The areas where fracking is most profitable include the Great Plains from Canada south into Texas, the Great Lakes region and an area known as the Marcellus Shale, which reaches from central New York into Ohio and south to Virginia, according to the U.S. Energy Information Administration (EIA). The Marcellus Shale region is particularly attractive to gas drillers because it's a rich supply of natural gas some call it "the Saudi Arabia of natural gas" or "Frackistan" and because many of the region's rural communities are economically depressed and eager to attract an energy industry that enjoys handsome profits.
Across the United States, fracking is regulated by a patchwork of state and local legislation, according to the National Conference of State Legislators. At the federal level, fracking is exempt from some of the requirements of the Safe Drinking Water Act, particularly the requirement to disclose the chemicals used in well injections. Wyoming, Michigan, and Texas, however, have regulations requiring full disclosure of the chemicals used in fracking. Dozens of other proposed regulations that control some portion of the fracking industry are now moving through the legislatures of states where fracking is a large and growing industry. Some cities are taking the matter into their own hands by banning fracking. But by most accounts, America's fracking boom especially in areas of shale gas isn't going to stop anytime soon: The Annual Energy Outlook 2012 predicted that the country's ample supply of shale gas will account for nearly half of the natural gas produced in the U.S. by 2035. More current analysis shows a much more modest outlook for fracking due to dropping gas prices and overproduction.
The Greater Permian Basin (GPB) is one of the largest and most structurally complex regions in North America. This sedimentary basin is comprised of several sub-basins and platforms. It covers an area about 250 miles wide and 300 miles long in 52 counties in west Texas and southeast New Mexico. That’s more than 75,000 square miles! Though it contains one of the world’s thickest deposits of Permian aged rocks, it was actually named after the period of geologic time (Permian: 299 million to 251 million years ago) where the basin reached its maximum depth of 29,000 feet. The evolution of the basin can be attributed to three distinct phases: (1) mass deposition (2) continental collision (3) basin filling. Before the Permian Basin was formed, this region was a broad marine area called the Tobosa Basin. The final process that created the GPB was the filling of the sub-basins with sediments. The Midland Basin, Central Basin Platform, and the Delaware basin are the three main components of the GPB that we know today. Other sections of the GPB include the Northwest Shelf, Marfa Bain, Ozona Arch, Hovey Channel, Val Verde Basin, and Eastern Shelf.
The Midland and Delaware sub-basins share mutual characteristics such as age and lithology, but depths, nomenclature, and development vary throughout the GPB. The sub-basins rapidly subsided, while the platform remained at a higher elevation. This resulted in areas having very different water depths and depositional environments. The basins accumulated terrigenous clastics that are associated with deep water environments, whereas coarse grains associated with shallow reef environments were deposited along the platform. Differences in sedimentary depositions and tectonics initiated stratigraphic discontinuities between the two sub-basins.
The Midland Basin
The eastern Midland Basin accumulated large amounts of clastic sediments from the Ouachita orogenic belt during the Pennsylvanian (323 to 299 million years ago). As these sediments were deposited, they formed a thick subaqueous deltaic system that consumed the basin from east to west. During the Permian period, the delta system was covered with floodplains and was nearly filled by the Middle Permian.
The Delaware Basin
The western area of the GPB, the Delaware Basin, was a structural and topographical low that provided an inlet for marine water during most of the Permian. Minor sedimentation was received from the low coastal plains that surrounded the basin. While the Midland Basin was almost full of sediment by the Middle Permian, the Delaware became host to reefs built by sponges, algae, and microbial organisms. These organisms, along with the deepwater inputs supplied by the Hovey Channel, promoted carbonate buildups that formed a higher elevation area which separated the shallow water and deep water deposits. Depth also had an important impact on the way sediments were deposited in the basin. The Delaware Basin is approximately 2,000 feet deeper than the Midland Basin, thus causing the sediments to experience nearly twice as much pressure during burial. This is a leading factor in the stratigraphic discontinuities between the two sub-basins.
The Permian Basin is arguably the most important oilfield in the world. Nearly three-quarters of the recent increase in crude oil production from the Permian Basin is from the Spraberry, Wolfcamp, and Bone Spring formations. More than ever, the fast-growing Permian Basin is being relied on to quench the world's thirst for oil. The Permian is the largest and most important source of oil supply growth in the world. That's because the Permian Basin's unique geology makes it easier and cheaper for major players like Chevron (CVX) and Pioneer Natural Resources (PXD) to drill for vast deposits of oil. The best-performing wells in the Permian can break-even at just $22 a barrel, according to a report by analytics firm GlobalData. Those extremely favorable economics help explain why the number of active oil rigs in the Permian Basin has nearly quadrupled since the low in April 2016. But that growth has limits. The most pressing problem: surging production has overwhelmed the region's limited system of pipelines. New ones are being built, but not fast enough to keep up. That's caused some shale companies to dial back. The number of drilled but uncompleted wells in the Permian Basin has nearly doubled over the past year, according to the US Energy Information Administration. It's also caused Permian crude to trade at a discount to benchmark US prices -- as much as $18 a barrel cheaper. And then there are supply chain constraints in the Permian.
For instance, fracking all that oil requires vast amounts of sand that must be trucked in from elsewhere, driving up drilling costs.
Transporting sand and other materials can also create a burden on the roadways in West Texas. The Texas Department of Transportation recently estimated that motor vehicle fatalities in the Permian Basin have soared almost 30% between 2016 and 2017, according to a report by Height Capital Markets.
Another challenge created by the boom: water. The process of extracting oil from shale wells requires a great deal of water -- a precious commodity in Texas due to recent drought conditions and a growing population. At the same time, each shale oil well can give off millions of gallons of contaminated water trapped thousands of feet underground. This "produced" water is often put back into the ground in disposal wells or trucked out of the area. But the swelling volumes of water have become more and more expensive for Permian Basin companies to deal with. Some shale companies are even experimenting with recycling the water to use it for future projects. "The sheer volume of water is unprecedented," wrote Wood Mackenzie principal analyst Ryan Duman. The firm said that water expenses could eventually knock as much as 400,000 barrels of anticipated daily production growth offline.
Also, Sand is called proppant in fracking because it the grains prop open cracks in shale rock to allow oil and gas to escape. The Permian accounts for nearly 40 percent of the market demand, but by 2023 will account for almost 50 percent, Savisky said. The trend is tied to increased spending in the Permian, an increase in the amount of sand per lateral foot, and a need for finer sand particles, increasing the overall amount used.
Long story short, fracking is big business and here to stay.