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Texas And Oklahoma Ban Fracking Bans

frackingIn Texas, where electricity rates have been on the decline, the natural gas boom has brought about both cheap electricity and bolstered the state’s economy.

The technique of “fracking”, or injecting water in high-pressure jets to fracture shale deposits and release pockets of oil and gas to the surface, has been widely touted by its supporters as a way to achieve energy independence from foreign sources of fuel. We all remember cries of, “Drill, Baby, drill!” echoing throughout the land. In the wake of 2005’s Energy Policy Act, fracking started taking hold, and it has been growing ever since.

Is Fracking Causing Earthquakes?

In the Dallas metro area, which had seen almost no earthquake activity in the 58 years prior to 2008, there have been more than 130 temblors since.  Irving, Texas recently experienced 11 quakes in 24 hours. Oklahoma has been hit particularly hard: Having only had a handful of quakes measuring a magnitude of 3.0 or greater on the Richter scale per year from 1975 to 2008, it has seen a huge increase in seismic activity: In 2009, there were 20 earthquakes measuring 3.0 or greater; in 2011, among almost 60 such quakes, the largest earthquake in Oklahoma’s history, a 5.7 magnitude tremor, occurred. The number of earthquakes has shot up even more since then: 2013 saw 109 such earthquakes, and in 2014 there were 585. Based on numbers so far this year, it’s possible that Oklahoma will have 900 such earthquakes.

In a report issued early in May, researchers at Southern Methodist University (SMU) in Dallas concluded that oil and gas activities are “most likely” the cause for the increased seismic activity in the area they studied around the towns of Azle and Reno, near Fort Worth, which sit atop the Barnett Shale, an oil-and-gas-rich geological formation into which 17,500 new wells have been drilled over the past 15 years. The specific activity that could be linked with the quakes is not the fracking itself, but the disposal of wastewater by-product by injecting it, also at high pressure, into deep wells, which apparently causes shifting around existing faults, thereby causing the tremors.

While the SMU report resists drawing a definite conclusion as to cause, the United States Geological Survey doesn’t hedge: A USGS report released in April states that, “Earthquake activity has sharply increased since 2009 in the central and eastern United States. The increase has been linked to industrial operations that dispose of wastewater by injecting it into deep wells.”

States Prevents Cities from Banning Fracking

In its most recent legislative session, The State of Texas passed a law prohibiting local communities from enacting bans on any fracking or drilling activity–including the use of injection wells. This law is seen as a reaction to a municipal ban enacted by the town of Denton in North Texas, whose citizens were concerned about wells that were being drilled in residential areas. The oil and gas industry felt that this ban impinged upon their property rights, and The Texas Oil and Gas Association (TXOGA), along with the state’s General Land office, filed a lawsuit against the City of Denton the day after the ban was passed.

The industry went to the Texas legislature to head off any further municipal uprisings, and House Bill 40, which prohibited any further bans, was born. Passed by the Republican legislature and now signed into law on May 18 by Republican Governor Greg Abbott, who characterized the legislation as a move to limit government bureaucracy.

Denton Residents say the wells have polluted the local water, and there has been increased drilling within 200 feet of schools, public parks, and even homes.

For its own part, after years of denying any link between the burgeoning seismic activity and the growth of the fracking industry, specifically the use of wastewater injection wells, Oklahoma has taken a surprisingly strong step in acknowledging it. The Office of the Oklahoma Secretary of Energy and Environment has created a website called Earthquakes in Oklahoma ( http://earthquakes.ok.gov/ ), which features an interactive earthquake map that shows how earthquakes have gone from being very few and scattered around the state in the pre-fracking era to being numerous and concentrated in very specific locations.

Although the map itself does not state that these are the areas in which fracking activity is also concentrated, the section of the website labeled “What We Know” does affirm that the recent rise in seismic events can’t be attributed fully to natural causes and goes on to state that “The Oklahoma Geological Survey has determined that the majority of recent earthquakes in central and north-central Oklahoma are very likely triggered by the injection of produced water in disposal wells.”

However, the state of Oklahoma has followed Texas with similar legislation against fracking bans. A week after Abbott signed off on the Texas law, Oklahoma’s Governor Mary Fallin, signed a bill into law that would prevent municipal regulations of drilling activities, causing Norman, OK Mayor Cindy Rosenthal to voice concern that cities might not be able to regulate the disposal of wastewater into the drainage basins of municipal water supplies.

In Texas, natural gas is the largest source of electricity generation electricity companies and consumers have both benefited from cheap natural gas in the last several years.

 

 

Natural Gas Exports Mean Likely Higher Electricity Rates in Texas

A decade ago the idea of exporting natural gas from the U.S. would have been unthinkable.   Now energy companies are lobbying federal regulators hard to get permission to sell cheap U.S. natural gas to overseas markets.  A facility in Freeport, Texas becomes one of the first to receive conditional approval from the Energy Department to begin exporting liquefied natural gas (LNG).

The controversial practice of natural gas fracking has lead to a paradigm shift in U.S energy policy.   New drilling techniques have resulted in a surge in natural gas production in the U.S.  But energy producers have become so good at extracting natural gas from the ground they are no longer able to get a premium price for their product in the U.S.

The supply of natural gas relative to the demand makes it a much less precious community than in yeas past.  Prices have fallen dramatically.  The solution according to many is to begin exporting U.S natural gas to foreign markets where natural gas trades at much higher prices.

There are major political and financial hurtles that have to be cleared, however, before exporting can begin.  Exporting natural gas requires approval from the Energy Department.  The Department must determine that the project is in the best interest of the country.  In total there are around 20 applications pending to begin exporting.

Exporting natural gas is a capital intensive undertaking.  In order to ship natural gas it must be cooled to liquid form (liquefied natural gas) and loaded onto large vessels for shipping.  This necessitates infrastructure and large facilities; all of which means lots of money.

The Freeport facility can likely be up and running sooner than other projects because, ironically, it was originally built by Dow Chemical and several other partners as a LNG import facility.   This was at a time when natural gas prices were much higher and there were concerns about having enough natural gas in the U.S to meet domestic demand.  A consortium of investors will now be retooling the facility to ship LNG out of the country.

To the Texas consumer, this development is a mixed bag.  Energy is a large part of the Texas economy. What is good for the energy industry is generally good for the state.  However, once natural gas exports begin, it will almost certainly mean higher prices.  Since Texas electricity rates a driven in large part by the price of natural gas, electric rates will almost certainly go up.   This would first be reflected in the wholesale electricity market and ultimately be passed on to consumers by electricity providers.

See Also: New York Power Plant Could Go From Coal To Natural Gas
See Also: How Texas Will Lead America’s Energy Future

 

Water And Energy: A Double Dilemma In Texas

Recently industry analysts have coined to the term Water-Energy Nexus to describe the important relationship between energy and water. Just about every method of producing energy requires a surprising amount of fresh water.  Likewise, our modern water infrastructure requires a great deal of energy to maintain.  Global shortages in both energy and water mean that the problems must be addressed with common solutions.

Few places in the world feel the water-energy nexus more than Texas. Texas has been dealing with well publicized difficulties with electricity capacity. State officials worry that the capacity of the Texas electricity grid will not be able to keep up with growing demand.  At the same time, population growth and recent drought have put a strain on the Texas water supply.

Natural gas and coal are the primary fuels used to produce Texas electricity.  Both of these types of energy require large amounts of water.  Fresh water is required to extract the materials from the ground; particularly in the case of natural gas.  Hydraulic fracturing, or “fracking”, requires that large amounts of water be pumped into the ground to free trapped natural gas.

Both types of energy also require large amounts of water for the power plants that burn them to create electricity.   Fresh water must continually be pumped in to cool the equipment used to convert the fuel to electricity.  This has created a situation where producers of electricity are sometimes competing with agricultural or municipal users of water for limited fresh water resources.   In recent years, the water-permitting process has sometimes lead to problems getting new electricity generating projects underway.

Wind energy and solar energy are among the least water intensive energy sources.  However, these sources are not economically competitive with cheaper sources like natural gas. Texas has one of the biggest wind energy sectors in the world.  The industry has been nurtured by tax credits, state level renewable energy mandates and an abundance of wind in west Texas.  Despite this, however, wind is still a minority contributor to the state’s electricity portfolio and will continue to be so for the foreseeable future.

One recent report proposes a switch from coal to natural gas for Texas electricity as a more water friendly approach to the state’s electricity needs.   Although both types of energy are relatively thirsty compared to wind or solar, natural gas tends to require less water per unit of electricity even when fracking is taken into account.

According to the report by researchers at the University of Texas at Austin, “Replacing Texas’ coal-fired power plants with natural gas combined cycle plants (NGCCs) would reduce annual freshwater consumption in the state by an estimated 53 billion gallons per year, or 60% of Texas coal power’s water footprint, largely due to the higher efficiency of NGCCs,”

Natural gas is already the largest source of electric power for the state.  As a power to choose state, Texas electricity is driven largely by market dynamics.   The recent low electricity rates in Texas are largely due to cheap natural gas.  Natural gas is already positioned to gain more ground in the state because it is cheaper than coal and doesn’t carry the additional regulatory burden of coal.  The newest report adds an yet another argument for natural gas going forward.

Quick facts:

  • More water is used globally in the production of energy than for irrigation.
  • Per power plant, nuclear energy consumes the most water.
  • 190 billion gallons of fresh water per day is withdrawn from U.S. water sources to support electricity production.
  • 85% of the growth in U.S. water demand over the next 20 years is expected to come from the energy sector.

See Also: Texas Electricity Rate Increase – How Much Will Your Bill Go Up?
See Also: Was The Dallas Earthquake Caused By Natural Gas Fracking?
See Also: Pre Paid Electricity Texas

Was The Dallas Earthquake Caused By Natural Gas Fracking?

According to a scientist with the University of Texas at Austin’s Institute for Geophysics, the magnitude 3.4 earthquake and related aftershocks felt in the Dallas area on Saturday, September 29th, 2012 were caused by the storage of wastewater from hydraulic fracturing (fracking) of natural gas.

Fracking involves pumping large amounts of water, sand, and chemicals into the ground to break up shale rock formations and free up long trapped natural gas.  This process results in large quantities of wastewater that must be deal with.  One common method of dealing with wastewater is pumping it deep underground into large reservoirs.

One such wastewater injection well was opened on an area of land just south of DFW airport in 2007.  According to the scientist, the DFW area has since experienced multiple earthquakes of greater than 3.0 magnitude.  This is despite the fact that the area had never recorded a single earthquake of that size prior to 2008.

The Good with The Bad

Dallas electricity rates, like the rest ofTexas, have been the cheapest rates seen in a number of years.  This is due largely to the natural gas boom in the state.  A large portion ofTexas electricity is generated from natural gas.  The increase in natural gas production has meant cheap natural gas prices.  This has lead to cheap electricity.

The link between fracking and earthquakes is not new.    A study recently published in the journal Proceedings of the National Academy of Sciences found that 24 earthquakes over a 2 year period from 2009 to 2011 in the area of the Texas Barnette Shale formation had epicenters within 2 miles of one or more wastewater injection wells.   

Saturday’s earthquake was felt in parts of Irving, Grand Prairie, Hurst, and the DFW area.  It prompted a number of 911 calls but resulted in no reported injuries. 

See Also: Will Texas Switch To A Capacity Market For Electricity?