Not in my backyard, or NIMBY, has long been a rallying call of any and all who oppose large-scale development when it occurs in their neck of the woods. In the energy world NIMBY movements have run the gamut from “dirtier” fuels like coal and oil to renewables like wind and solar power. On the heels of the shale gas revolution in the United States, the controversial practice of hydraulic fracturing, or fracking, has already attracted its fair share of opponents. The most recent, however, is perhaps the most unexpected: Rex Tillerson, Chairman and CEO of energy giant ExxonMobil. The Wall Street Journal reports that Tillerson has joined a suit to block the construction of fracking-related infrastructure near his sprawling home outside Dallas.
ExxonMobil is the largest producer of natural gas in the United States. Additionally, the company leads all world supermajors in daily combined oil and gas production. As the $40 million man behind it all, Rex Tillerson has been a staunch advocate of hydraulic fracturing as a catalyst for “American economic recovery, growth, and global competitiveness.” He is also a harsh critic of its regulation. In 2012, Rex described the federal regulatory process as a “road map of how not to get anything done.”
At first glance, the abrupt change of face is certainly odd. However, examination of the suit reveals that Tillerson’s position is a bit more subtle. His concern is not related to the act of fracking itself, but instead its side effects, which pose a serious threat to his property value. Cross Timbers Water Supply plans to construct a 15-story water tower for the purpose of oil and gas exploration in the nearby shale formations. The plaintiffs in the Tillerson suit cite associated traffic and increased noise pollution as reasons to abandon the project. According to the allegations, Tillerson’s only gripe is the potential depreciation of his $5 million estate. Interesting how Tillerson’s position on the positives of fracking is tempered when the fracking resides at his doorstep. The dissonance on the topic of fracking is truly captured where you have one of the World’s most outspoken supporters of fracking – fracking with minimal regulation at that – joining a lawsuit seeking to prohibit fracking infrastructure where NIMBY is at the crux of his legal claims due to property value concerns. Thus, even for those in the fracking-know, there is still very much unknown about the broader implications of fracking.
Hydraulic fracturing as a means to extract hydrocarbons has been around for nearly a century with over one million wells fracked during this time. Over this span, the fundamentals have changed little. A well is drilled and a fracture is created. This fracture is then propagated through high-pressure injections of various fluids, primarily water, and proppants, which allow the gas or oil to escape, up the wellbore. What has changed however, is the frequency with which fracking is carried out and the chemical composition of the fracking fluid.
Regarding the uptick in frequency, nearly half of the natural gas consumed today is from wells drilled in the last 3.5 years. In the coming decade 80 percent of new wells will utilize hydraulic fracturing. Moreover, approximately 60 percent of the remaining recoverable onshore gas is trapped in shales and other unconventional formations. The recent boom has largely been brought about through modifications to the fracking fluid. The chemical compounds are critical to the success of any frack job and slight modifications may yield a significant competitive advantage. Naturally, “trade secrets” abound, which are, deservedly so, cause for concern. However, fracking is not the lawless Wild West it is often portrayed to be.
While the US has implemented little federal regulation to date, the states have admirably addressed environmental protection at each stage of the operation. The Environmental Protection Agency (EPA) extensively monitors fracking developments and has already deemed the chemical additives to be safe when properly used. Additionally, the agency has given the industry a clean bill of health, having found no confirmed instances of groundwater contamination. Headway has also been made in regards to transparency. FracFocus, the online chemical disclosure registry, has provided hundreds of companies, ExxonMobil included, a public outlet to make known the chemicals used in every fractured well.
All that said, Tillerson’s suit will not settle the controversy and offer any final judgment on the practice of hydraulic fracturing. For better or worse, it is here to stay, at least in the United States. When operated safely, the economic and geopolitical gains seemingly far outweigh any negatives. However, Tillerson’s actions corroborate what others before him have suggested; fracking is a dirty business loaded with uncertainties. Best practices are only currently being written and any understanding of the effects of fracking, including induced seismic activity, environmental concerns beyond just the water supply, and the like, will take years, perhaps decades, to realize. France and Germany are already among the European nations who have put a halt to fracking on their territories in an effort to preserve their environment’s integrity. Others are closely watching the situation in the United States, waiting to see if all that glitters really is gold.