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A pump jack draws oil from the ground at a hydraulic fracturing operation near Bowden, Alta.

Jeff McIntosh/jeff mcintosh The Globe and Mail

Chad Winters keeps his hand on his radio, politely giving orders to co-workers toiling at an oil property in a stretch of Alberta farmland.

"One tonne of 40/70," Mr. Winters requests over the radio. "Three thirty-three, then hold till I tell you otherwise."

Mr. Winters speaks a language few understand. He runs the show in the field when Trican Well Service Ltd. is called in to perform a controversial technique used to gather oil and natural gas from impermeable rocks.

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On this day, Trican is working for NAL Energy Corp. near Bowden, about 100 kilometres north of Calgary. Trican is there to pump water, chemical and natural additives, and nitrogen down a well at frighteningly high pressure, with hopes of forcing fissures in the rocks thousands of metres below the surface. Sand will follow, propping open the cracks, allowing trapped oil to escape. The process is called hydraulic fracturing, better known as fracking.

Mr. Winters sits in the site's computer van as he calls out changes to fracking fluid mixtures to his workers, eyeing a large-screen TV relaying data from above and below ground. Computer monitors manned by other team members fill the van. Mr. Winters has worked his way up through Trican; his days of spitting sand out of his teeth and keeping chemicals away from his eyes are over.

The pipes outside the van are pulsating as the pumper trucks shoot the fracking fluid down the well. The air smells of diesel exhaust due to the row of trucks powering the operation.

Then it goes quiet inside the van. Everyone focuses on their screens, watching coloured lines move their way up the graph. Pressure levels are nearing the danger zone. But finally the rock below cracks, and there's a sense of relief in the van as chatter resumes. "That was a bit stressful," says Lance Berg, an NAL executive on site.

The Trican crew is part of a growing army that is bringing 21st-century technology to the job of recovering crude oil and natural gas from far below the ground. Using computer-assisted drilling and fracking techniques, the energy industry is in the early stages of a revolution that has overturned decades-old assumptions about North America's depleting oil and gas resources.

But the industry is now at a critical crossroads. It must prove that fracking is environmentally safe, before a growing public backlash stops the practice in its tracks or seriously slows development of massive new oil and gas pools trapped in shale rock and tight formations. At stake is North America's energy renaissance, which promises the security of vast untapped local supplies previously seen as inaccessible, along with major economic spinoff effects that go far beyond direct jobs in the oil patch.

The public fear of fracking has come to encompass all the risks associated with development of shale gas and tight oil: from seepage of fracking fluids into aquifers, to methane in well water, to pollution from wastewater, and to earthquakes caused by re-injecting the wastewater underground.

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Whether drilling wells and fracking is environmentally destructive remains a raging debate. A panel established by U.S. President Barack Obama last year concluded that there are "serious environmental impacts" from new high-tech oil and gas development. Industry officials insist that the risks are minimal, and say fracking's effects are misunderstood.

At a conference this week in Houston, the panel's chairman, John Deutch – a professor emeritus at the Massachusetts Institute of Technology and former director of the Central Intelligence Agency – said the unconventional oil and gas boom offers "astonishingly important benefits" for North America. But he added a warning to the industry.

"Unless the environmental impacts associated with shale gas and oil from shale in the United States are not only acknowledged but addressed in a serious practical way," he said, "there is a very real danger that the great benefits we should be enjoying from this unconventional production will be delayed, or even stopped, because of public concern and public opposition."

But the Deutch panel said the industry and its government regulators have the means to reduce the risks to acceptable levels, so long as they act decisively.

The task is complicated by the fact that each well is an experiment, with its own geophysical characteristics. Regions such as Pennsylvania's Marcellus, Texas's Eagle Ford and Alberta's Cardium present their own unique challenges.

As fracking undergoes greater scrutiny, a view is emerging that the most obvious and pressing threat comes from poor well construction, in which broken or ill-fitting cement well casings can allow methane gas and fluids to leak into drinking water. Industry officials say constantly improving safety practices address these risks.

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But fracking is a complex business. Trican's luck ran out shortly after the second successful frack, and what should have been a 10-hour job turned into two days. The property is in the Cardium B zone, a tricky play that stumped NAL and Trican's engineers and geologists this round.

Between 80 and 90 per cent of frack jobs go as planned. The Bowden effort wasn't so smooth. NAL and Trican tinkered with the frack fluid recipe. They played with pressures. They adjusted the amount of nitrogen they used. But only four or five of the 12 fracks that NAL and Trican planned worked.

Clive Mountford, an engineer at NAL, thinks of a word to describe how those days feel. "Frustrating," he says.

Regulation and science

Across North America, energy companies are facing a shifting regulatory picture that will further complicate their world.

Several U.S. states have added new rules while others have imposed a de facto moratorium on fracking. Environmental groups say the state rules don't go far enough and want the federal government to step in, a move the industry deeply opposes.

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The Environmental Protection Agency is currently in the midst of its own major study on shale gas development that is due for completion at the end of 2013 and could set the stage for federal regulation.

In Canada, federal Environment Minister Peter Kent has asked the Council of Canadian Academies to undertake a review of the environmental impact of shale gas extraction. The independent, not-for-profit council is in the midst of that work – which involves a literature review, rather than field research – and expects to report in the latter half of 2013.

Reaction among the provinces varies. Shale gas and tight oil development is booming in British Columbia, Alberta and Saskatchewan with little additional regulatory oversight, while Quebec has imposed a moratorium while it reviews the science.

Industry associations in both Canada and the United States have published new standards for disclosure of chemicals, well construction and handling of wastewater. Industry executives feel their critics are exaggerating the risks in their determination to wean North Americans off fossil fuels.

Scientists have made some progress in studying the impacts of shale gas and tight oil development. But some researchers say far more information is needed on the long-term consequences of the intensive drilling now under way in places like Pennsylvania, North Dakota and northeastern British Columbia.

Critics have warned that the practice of injecting chemical-laced water under high pressure into the earth is high-risk, and could lead over the long term to contamination of fresh water aquifers that feed wells and municipal systems. Water contamination is fracking's hottest issue.

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An independent study released last month by the University of Texas at Austin's Energy Institute concluded that there is no evidence that fracking fluids are tainting groundwater. It notes that fresh water aquifers are typically hundreds of metres above the gas or oil zone, separated by such dense rock that fracking is required in the first place. The university's review, however, has been criticized as a literature search, which reviewed scientific findings and regulatory documents but contained no new fieldwork.

With his colleagues from Duke University, biologist Robert Jackson has sampled well water in the Marcellus shale area of Pennsylvania, where they have been several cases of homeowners complaining of tainted water. The Duke researchers also found no evidence of fracking fluids in the water, but are back in the field doing further sampling. Mr. Jackson isn't ready to make categorical statements about safety.

"My view is that we're still data limited," the Duke biologist said in an interview. "What we need most of all is more information."

And then there's the EPA study on Encana Corp.'s Pavillion play in Wyoming. After homeowners complained there, the EPA undertook a study and released a preliminary report concluding that some chemicals associated with fracking had migrated into well water.

The industry – and some scientists – question the EPA's conclusions, saying it had no baseline data for the state of the water prior to drilling, and that the government scientists had essentially found hydrocarbons in hydrocarbon-bearing areas.

The agency is reviewing the criticism and expected to come out with a final report later this year.

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Water worries

While the industry insists fracking itself is safe, industry officials concede shoddy drilling, cementing, and casing techniques can lead to leaks of methane and frack fluid.

To guard against that, Talisman Energy Inc., for example, uses two or more layers of cement and steel casing to fortify the well and protect groundwater.

"That's the real issue that regulators should be focusing on – the integrity of well design and then the integrity of well completions," said Paul Smith, executive vice-president of Calgary-based Talisman, a company that has placed big bets on shale gas development.

While industry claims that there has been no evidence of fracking fluids contaminating groundwater, they can't make the same assertion with regard to methane, the basic component of natural gas that has been blamed for tainting well water in dozens of cases.

Another Duke University study sampled 68 wells in Pennsylvania and New York State and found elevated methane levels that, on average, were 17 times higher than normal. However, Mr. Jackson acknowledged that the team had no sample of well water prior to drilling, and therefore could not say conclusively whether the methane was naturally occurring or had gotten into the water as a result of the drilling and fracking.

The team is now back at work, using chemical techniques to trace the origin of the methane to determine whether it is naturally occurring in the water or has migrated from deeper in the earth.

Talisman's Mr. Smith insists that any methane found in water wells is there naturally, and dismisses dramatic scenes of homeowners setting aflame their tap water.

"The old lighting the tap [water on fire]trick – people have been able to do that a hundred of years in Pennsylvania, way before any industry oil and gas exploitation activity took place, because of the naturally occurring methane levels in different parts of Pennsylvania," Mr. Smith said. "That's nothing new to people."

Talisman has drilled over 500 shale natural gas wells in North America and the company's water tests have shown no evidence of increased methane levels owing to its activity, he said.

A major cause of concern is contamination from the wastewater retrieved from the well during drilling operations. The waste flow is a combination of "flow-back" water, which had been injected into the well, and "produced" saline water from the shale formation.

The returned water often contains high levels of suspended solids and arsenic, and exhibits high levels of radiation. A number of researchers have raised concerns about high volumes of wastewater overwhelming the capacity of local treatment facilities, or being clandestinely dumped in local streams and rivers.

The University of Texas report concluded that the potential risk from naturally-occurring contaminants is a "major concern."

Energy companies are boosting efforts to re-use water when fracking, as a way of dealing with waste streams and to cut down on demand for fresh water supply.

One technique for disposing of wastewater is to re-inject it back underground, a practice that has raised concerns about resulting earthquakes.

On Friday, the Ohio Department of Natural Resources concluded that two tremors in December were caused by activities at re-injection sites that accept wastewater from neighbouring Pennsylvania. The state imposed new rules on re-injection operations. But Ohio did not ban the activity. Instead, it released new safety rules and vowed to monitor the companies to ensure they follow them.

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