Earthquakes ?Firm halts shale gas 'fracking' after possible earthquake link
SHAWN McCARTHY
OTTAWA- Already under fire over perceived threats to local water sources, thenatural gas industry is facing a new challenge: earthquakes.
Asmall energy company halted its shale gas drilling and hydraulicfracturing program in Britain after two mild earthquakes were recordedin the vicinity, an area where such tremors are rare.
The rapiddevelopment of massive reserves of unconventional shale gas hastransformed the North American energy industry, making abundant naturalgas the fuel of choice for the electricity sector. Oil and gas companiesthat had planned to import liquefied natural gas are now looking atexporting surplus gas to Asia and other markets.
Europeancountries are eager to replicate that shale gas boom. However,environmental issues threaten to stall development in Europe, even asU.S. states such as New York and Texas clash with Washington overfederal regulation.
Now, the controversial drilling activity isbeing linked to earthquakes - first in Arkansas, where companies aredeveloping the prolific Fayetteville play, and now at Britain's firstshale gas exploration site, near Blackpool in northwest England.
U.K.-basedCuadrilla Resources suspended its hydraulic fracturing - in whichchemically laced water is injected at high pressure to crack opengas-bearing rock - pending a review of the seismic activity near thePreese Hall drilling site.
The British Geological Survey said itrecorded a 1.5-magnitude earthquake on Friday, following a 2.3-magnitudequake in April, both near the drilling site operated by Cuadrilla.Neither caused any damage.
In a statement posted on its website,the BGS said evidence suggests the high pressure "fracking" - as theprocess is also known - may have caused the quakes.
"The timing of the two events in conjunction with the fluid injection suggests that they may be related," it said.
InArkansas, the state's oil and gas commission and the ArkansasGeological Survey said they have found no evidence that drilling orhydraulic fracturing caused a series of earthquakes there this spring.
But they have not ruled out a link to the companies' practice of reinjecting wastewater into the geological structures.
"Wesee no correlation" between the drilling and fracking and theearthquake activity, AGS director Bekki White said in a telephoneinterview Wednesday. "As far as whether it is related to injection offluids, we still have not determined whether it is or whether it isnaturally occurring."
She said the area is known as a highly active seismic zone.
Thestate's oil and gas commission has imposed a moratorium on the drillingof new reinjection wells in Arkansas until the end of July. Companiessuch as BHP Billiton Ltd. and Clarita Operating LLC have said they willnot inject wastewater into existing wells until the moratorium islifted.
BHP acquired the property in Arkansas in March as part ofa $4.75-billion (U.S.) acquisition of U.S. shale gas assets fromChesapeake Energy Corp.
Company spokesman Rubin Yogarajah saidBHP is working with regulators to resolve concerns about water injectionand seismic activity.
"Our goal is to develop the FayettevilleShale in line with our values of ensuring that we fully protect people,the environment and communities in which we operate," he said.
BHPand Clarita face class-action lawsuits from residents who claim the gasdrilling triggered earthquakes, poisoned water sources, and causedother pollution. The industry says the area has naturally occurringseismic activity as well as methane in well water.
The shale gasboom has triggered battles between industry and the environmentalcommunity, and state and federal regulators over the potential threat tolocal water sources from not only drilling and fracturing, but thedisposal of wastewater.
In Canada, Quebec imposed a partialmoratorium on shale gas drilling pending further study, but the industryis booming in Western Canada, and small-scale exploration programs areplanned in New Brunswick and Nova Scotia.
This week, New YorkAttorney-General Eric Schneiderman sued the U.S. federal government toforce the Delaware River Basin Commission to undertake more extensiveenvironmental reviews below allowing shale gas drilling in the basin,which provides drinking water to New York City, Trenton, N.J., andPhiladelphia.
Texas has passed a law requiring companies toreveal some of the chemical ingredients of the fracturing fluid, andwarned the Obama administration that it would oppose all efforts toimpose federal regulations.
Travis Windle, spokesman forindustry group Marcellus Shale Coalition, condemned the "frivolouslawsuits and more unnecessary regulatory red tape - which will add noenvironmental benefit." The association represents companies developingthe prolific Marcellus deposit in Pennsylvania and West Virginia,including Calgary-based Talisman Energy Corp.
Butenvironmentalists argue there are simply too many questions about thesafety of hydraulic fracturing to allow drilling without environmentalassessment of the site.
Kate Sinding, of the Natural ResourcesDefense Council, said that while the earthquake itself was notdangerous, it provides disturbing evidence that fracking fluids couldfind their way into water supplies.
"There are these persistentquestions which I don't think anybody has answered yet about thepotential for long-term migration of contaminants," Ms. Sinding said.