As Chris Tucker of “Energy In Depth” (a project of the Independent Petroleum Association) told NPR in January 2013, “It starts with F, ends in C, K. It sort of has this naughty connotation to it.”
He added, “Fracking has been distilled down to a curse word.”
And like marriage, which some have described as “legalized and contractual…” let’s just say, “sexual relations,” Louisiana has embraced fracking.
After all, as the Garth Brooks song says, “It pays big money, and we’re all into that.”
Perhaps we should qualify that statement, though: it “pays big money” to some.
At the height of the Haynesville Shale drilling frenzy in 2009, northwest Louisiana landowners were receiving as much as $30,000 per acre in lease bonuses. The average, one year before. had been $150 per acre.
An online publication, thepineywoods.com (now thedodsontimes.com), published an article on the shale leasing “frenzy,” quoting Shreveport attorney “Allen Senbaugh” (now better known as state Rep. Alan Seabaugh) warning, “Landowners are advised to seek professional guidance before leasing land. I have clients who have received $100 or $200 per acre for their Haynesville Shale leases that are worth $24,000 to $30,000 per acre, and it is reported that 5,000 oil and gas ‘lease hounds’ are ‘beating the bushes’ to lease up the Haynesville Shale rights for a pittance of what they are worth.”
Why were the drilling companies tripping over themselves and each other to buy up leases in the Haynesville Shale? Oil prices were running $100 per barrel, and natural gas had been selling for nearly $13 per million BTU.
But there was also Louisiana’s “sweetheart deal” on severance taxes.
In 1971, Louisiana’s Dow Chemical plant made headlines when it contracted with Cherrington to drill and lay 2000 feet of 24-inch pipeline beneath the Atchafalaya River – and he was successful.
In 1994, deep horizontal drilling was still considered to be “experimental”, then Governor Edwin Edwards got behind a bill granting a two-year rebate of severance tax for minerals extracted through the new process, hoping to encourage it. State economists predicted it would have little effect on state revenue, and for nearly 15 years, they were right. But when fracking technology was added to horizontal drilling to tap oil and gas deposits in deep shale formations, then boom!
Since the Haynesville Shale boom began in 2008, Louisiana has now foregone more than $2-billion in severance taxes. The oil and gas industry loves the 2-year exemption, because fracked wells deliver 90% of their minerals within the first three years, with a steep decline in production after that.
As Gifford Briggs with the Louisiana Oil and Gas Association said in 2015, “These types of wells operate for relatively short periods of time. They never last the two years the exemption is available on each well.”
In 2015, the Louisiana legislature modified the 100% severance tax exemption for horizontal wells, but it only goes into effect if the previous year’s average price for oil exceeds $70 per barrel and the prior year’s average price for natural gas goes over $4.50 per million BTU. The exemption drops down on a sliding scale based on the oil and gas prices, falling to zero if and when oil sells – for a year – at over $110 per barrel and/or natural gas goes above $7.00. None of that has happened yet.
The simplified (and relatively harmless-sounding) explanation of hydraulic fracturing is that it is merely glorified sandblasting – delivering sand suspended in liquid, under pressure, to peel open the layers of shale, just like removing layers of paint. Shale, which is soft, stratified sedimentary rock formed from layers of clay or mud, can be split open along its fragile slabs – like layers of paint being peeled. Oil and gas, trapped between the layers, is then released and brought back up the well to the surface.
Unlike sandblasting paint, however, which is done at a pressure of between 50 and 90 pounds per square inch (psi), hydraulic fracturing requires pressures of around 9000 psi. And it’s being done two to three miles below the earth’s surface.
The “controlled explosion” of the subsurface shale by hydraulic fracturing has created clusters of earthquakes in areas that had never been subject to them before: Pennsylvania, Ohio, southern Colorado, central Arkansas, multiple parts of Texas, and – most notably – in Oklahoma.
In September 2016, the U.S. Geological Survey (USGS) registered a 5.6 temblor epicentered near Pawnee, OK, which rattled residents in six surrounding states. These “induced earthquakes” now mean Oklahoma is comparable to California for hazards of structural damage due to earthquakes.
And on May 6 this year, the USGS recorded a 4.6 earthquake off the Louisiana coast, south-southeast of Buras.
There are more than a thousand fracked wells in the Gulf, off Louisiana’s coast. BP’s Deepwater Horizon (of the 2010 explosion, 11 deaths, and massive spill infamy) was one of them.
The USGS maintains the quakes are not primarily caused by fracking itself, rather by disposal of “wastewater” afterward.
The makeup of that “wastewater”, also known as “proppant” – and the quantity of it requiring disposal – will be explored in part two of our series.