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Fracking: popular in some places, mixed reaction in others

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A Cuadrilla Resources drilling site in Balcombe, southern England, August 15, 2013.

Gareth Fuller/REUTERS

Hydraulic fracturing is booming in some parts of Canada, but is being approached with caution in many countries

In July, Britain became the latest country to dip its toe in the water in the potentially lucrative – but highly contentious – world of fracking. The British government gave permission for new shale gas exploration and development, including hydraulic fracturing, or fracking.

It was the latest major development in the unconventional oil and gas revolution, which has been an economic boon in several countries – most notably the United States, where natural gas production grew by about one-third between 2005 and 2013.

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Fracking has already changed the world's energy outlook, even in the face of criticism. The technology involves drilling horizontally, only several hundred metres below the surface, into below-ground shale and injecting water and chemicals into the rock formation's cracks, releasing trapped oil or gas. "The techniques that are being employed today in shale gas exploration are not significantly different than they were 60 years ago," says the Canadian Society for Unconventional Resources, an industry-backed group.

Unconventional gas and oil has boosted the economy in hot spots such as North Dakota; its Department of Mineral Resources says the state produced more than a million barrels a day in April, 2014, up more than 20 per cent from the year before. The unconventional gas boom has also been embraced in some regions of Canada, including the Montney and Horn River fields in northeastern British Columbia; the U.S. Energy Information Administration describes the latter area as a "world-scale" shale basin.

Nevertheless, fracking is not universally embraced and many countries still ban or resist its development. In April, the Council of Canadian Academies, an independent group that pulls together scientists and research, urged a go-slow approach until the environmental implications are better understood.

In the face of concerns such as water wastage and safety, companies are working on new technologies to improve the processes.

GE has invested more than $15-billion (U.S.) in recent years in oil-and-gas technologies and is focusing on research to make operations cleaner and more efficient – for example, by harnessing Big Data collected by machines about the operations below the ground. GE announced last year that it's building a $110-million research centre in Oklahoma to look at oil-and-gas extraction technologies, including fracking.

So which countries and regions allow fracking and which don't?

Despite Britain's green light to exploration, unconventional gas is strongly opposed in many parts of the European Union, especially France, where it is banned, and Germany, where it is stalled. Even where it's being considered, there are murky legal issues to overcome. The British guidelines allow development in national parks and "areas of outstanding natural beauty;" the latter is likely in the eyes of the beholder, and the legal definition will come under scrutiny.

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Fracking is not high on the agenda in regions rich in conventional energy, such the Middle East and Russia, but it does raise controversy elsewhere. Here's a recent snapshot of where the question of whether to frack or not to frack is hottest.

Canada: Fracking is booming in Alberta, British Columbia, Saskatchewan and southwestern Manitoba. Quebec has a moratorium on shale exploration and development, while in Ontario there is no fracking going on, though there are at least three known shale deposits. New Brunswick allows fracking exploration, which sparked protests last year, and Nova Scotia has just completed public hearings, with an expert panel reporting to the provincial government later this year.

There are exploration leases in the Northwest Territories and there is seismic testing in the Yukon, though the Council of Yukon First Nations passed a resolution declaring traditional territories fracking-free. Prince Edward Island has no fracking operations, nor does Newfoundland and Labrador, though proposals for energy development near Gros Morne National Park, a UNESCO World Heritage Site, have raised environmental concerns.

United States: Fracking is regulated state-by-state. Pennsylvania, North Dakota and Oklahoma have enjoyed a boom; other states such as New York do not allow fracking but are constantly reviewing their rules. In Colorado, where fracking is allowed, local initiatives are on the ballot that would severely restrict operations near built-up areas.

Europe: While Britain has opened the door, it is still firmly closed in France, and Bulgaria. Germany has allowed fracking but the coalition led by Chancellor Angela Merkel has put it on hold. Poland has large shale gas reserves and is pursuing fracking. Many other European governments are demanding further research into fracking before making decisions.

South Africa: Three companies have received permits to frack roughly 20 per cent of the country, which is heavily dependent on coal-fired power. A moratorium was placed on one environmentally sensitive area and then lifted.

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Australia and New Zealand: There is minimal fracking activity in both countries.

China: China completed its first horizontal shale gas well in 2011, and its recoverable reserves are nearly 50-per-cent higher than the U.S,, according to the U.S. Energy Information Administration.

Japan: Oil company Japex recently started commercial production of shale oil in the north, in what is Japan's first fracking operation.

Whatever your position, it seems that fracking has a robust future. "Shale has changed the equation, says U.S. energy expert and author Daniel Yergin. "Abundant, relatively low-priced supplies now make natural gas a highly competitive alternative to both nuclear and wind power and even to coal generation. It has the added advantage of being relatively low-carbon."


For more innovation insights, visit www.gereports.ca


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