Fossil Fuels $ExxonMobil fracking risks$

Published on October 6th, 2014 | by Tina Casey

ExxonMobil Comes Clean On Fracking Risks — Not

October 6th, 2014 by Tina Casey

For whatever reason, lately it looks like drilling companies have been stumbling all over each other in a rush to disclose fracking risks and other formerly secretive aspects of the drilling industry. ExxonMobil issued a major new report to its shareholders on September 30, Andarko and EOG hopped on the bandwagon with a financial risk commitment to their shareholders last Friday, and Baker Hughes earlier pledged to disclose the secret sauce in its fracking fluid.

“Looks” is the operative word here, so let’s start with ExxonMobil and work our way down.

$ExxonMobil fracking risks$

Fracking poster (cropped) by Martin Thomas via flickr.com, cc license.

ExxonMobil And Fracking Risks

The new ExxonMobil fracking risk report is titled “Unconventional resources development risk management report to shareholders.” As our friends over at DeSmogBlog.com reported last summer, ExxonMobil issued the document in response to repeated demands by groups of activist shareholders including Green Century Capital Management and the office of the New York State Comptroller among others.

Just a wild guess, but we’re thinking those shareholders didn’t have very high expectations given ExxonMobil’s history (such as this), and the company doesn’t seem to have disappointed.

Here’s ExxonMobil VP of Investor Relations Jeffrey Woodbury with his money quote in an ExxonMobil press release announcing the new report:

Hydraulic fracturing has been responsibly and safely used by the oil and gas industry for more than 60 years, but the process isn’t without risks. This report to shareholders details how ExxonMobil uses sound risk management processes and engages with stakeholders to ensure safe and environmentally responsible operations.

Perhaps Mr. Woodbury was referring to some other report. We took a look at the ExxonMobil fracking risk opus and found a lot of fancy adjectives and graphics but practically no useful details.

We did, however, find the tell. Here it is, straight from the report:

The oil and gas industry relies upon contract service companies to provide much of the required equipment, materials, and qualified personnel during drilling, completion, and production. When these other companies are performing work on our behalf, we ensure our comprehensive risk management expectations are known to them.

Did we miss something about following up to make sure those contractors are toeing the line? If you found it, drop us a note in the comment thread.

Meanwhile, ExxonMobil is doubling down on its US shale assets, it used the occasion of the historic NYC Climate Week to remind folks that it is in the midst of a major expansion of refineries in Antwerp and Singapore, and it previously announced plans for a major new shale gas-to-plastics facility at its refinery in Baytown, Texas.

Bottom line: risks, schmisks.

Baker Hughes And Fracking Risks

Along similar lines, last April Baker Hughes created a huge buzz around the tubes by announcing that it would voluntarily disclose the chemicals in its fracking fluids.

The promise wasn’t quite all that it was cracked up to be. According to its own press materials, although Baker Hughes “believes” that full disclosure is possible, the company passed that hot potato right along to its supply chain with the following disclaimer (emphasis added):

Where accepted by our customers and relevant governmental authorities, Baker Hughes is implementing a new format that achieves this goal, providing complete lists of the products and chemical ingredients used.

Andarko And EOG To ‘Fess Up

We’re a little more optimistic about Andarko and EOG, since their disclosure pledge comes out of actions by the office of New York State Attorney General Eric Schneiderman. The AG has been in hot pursuit of fracking risks to shareholders, leveraging subpoena powers under a 1921 state law providing broad access to financial records.

Last Friday, the AG announced fracking risk disclosure agreements with the two companies and rather than calling only for internally generated reports, the agreements call for detailed disclosure through federal securities law filings.

The agreements won a cautious nod of approval from Mindy Lubber, president of the green investor group Ceres.

Here’s a taste of what will be required:

…financial risks posed by the environmental impacts associated with fracking — such as effects on drinking water aquifers, as well as those arising from chemical use and handling, water use and wastewater handling and disposal, and air emissions…

…financial risks posed by present and probable future regulation and legislation related to fracking, such as state or federal moratoriums, local bans or restrictive ordinances, or requirements for disclosure of chemicals used in fracking fluids…

…company strategies and actions for reducing, offsetting, limiting, or otherwise managing the financial effects of regulation, litigation, or environmental impacts related to fracking.

That thing about local bans is especially relevant to New York State, where scores of communities have successfully used local zoning regulations to prohibit fracking. The tactic has bled over into fracking hotspot Pennsylvania, where proponents of local control recently won a major victory in the state’s Supreme Court.

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Tags: Andarko, Baker Hughes, EOG, ExxonMobil, Fracking, fracking risks

About the Author

Tina Casey Tina Casey specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. Views expressed are her own. Follow her on Twitter @TinaMCasey and Google+.

Bob_Wallace

” there is no plausible mechanism by which chemicals would get into aquifiers”

Leaking well casings have been a problem here and there.
- Mint
  
  True. I was thinking about the deep horizontal drilling into less permeable i.e. the “unconventional” part.
- rockyredneck
  
  There are always risks. Even a conventional water well can contaminate an aquifer. It has happened, and sometimes with disasterous results. The point is that it is impossible to reduce the risk to zero for any activity.
  - Bob_Wallace
    
    Sometimes one can’t remove all risk, but that doesn’t mean that one shouldn’t do their best.
    
    We need to know what is being injected during fracking. Then we can decide if it’s a risk that we want to take. Or it might turn out that one company has a safe recipe for their secrete sauce that would let other companies lower their risk factor.
Larry

Bravo! Well said
Mike

As an environmental engineer, I will tell you from a purely scientific perspective fracking’s safety and risks are relative to local geology and results from any one study of a singular well or a group of wells in a geographically close area can be used to make an assessment of the effects of fracking in other areas (whether those externalities be negative or positive). I hope for the day when this becomes a scientific debate and not an ideological and/or political one. I apologize to those of you who have strong anti fracking opinions or feel you have been negatively affected by fracking operations in your locality. More environmental studies and community dialogues should have taken place, and the regulations need to be updated to mandate them, however a blanket moratorium on fracking in the US is a) not environmentally sound, b) not economical for the domestic and global economy in regards to maintaining current levels of economic livelihood for individuals, and c) is not the answer once you read the peer reviewed and scientifically accepted studies on the subject.

Here are a couple (definitely not all) links to articles and studies regarding fracking’s affect on water and soil contamination levels. These studies, from the same globally renowned research and education institution come to different initial conclusions before recognizing the affects of local geology on water and soil contamination levels. These are only media summaries and I implore those of you who are interested to find the full scientific reports to further educate yourselves on this important issue. Thank you

http://www.usatoday.com/story/money/business/2014/09/15/faulty-gas-well-pollute-water/15631955/

http://oilprice.com/Energy/Energy-General/Duke-University-Study-Links-Fracking-to-Ground-Water-Contamination.html
http://www.michaeljberndtson.com/ Michael Berndtson

There’s many types of risks associated with an industrial endeavour. Way over simplified, risks assessment can sorted into two groups: 1) process related and 2) environmental.

Process risks will always be in a modern industrial society and typically dealt with using hazards and operability studies at the design phase and a well written plan for operations and maintenance.

Environmental risks are associated with the endeavour (fracking) on human health (typically third party or neighbors surrounding a well field) and impacts on the air, water and land. Environmental risks can also be managed by careful planning and operations procedures.

However, there are two types of environmental risks: 1) bad design, construction and operations of the endeavour and 2) an inherent risk associated with the endeavor on the environment, regardless of type 2 environmental risk group).

Exxon and others appear to be saying any risk associated with fracking is due to contractors and subcontractors and practices. They are not admitting there are inherent risks of fracking.

So, per usual, it’s the contractor’s fault. Nevertheless, the oil and gas industry works on a tiered approach to exploitation. There have always been and always will be many layers of owners, operators, contractors, subcontractors, etc. Basically to spread out the financial risk.
M98987

Right Wing CEO’s are the worse business CEO’s. It seems to be the rule. Too dumb to give up on Dead End Technologies. That Antwerp refinery is going to crack tar sands from Canada.

Three Things to Do:
1) Get out of Carbon Now, as the right wing is going to drive these companies all the way to bankruptcy, with NO transition to Solar and wind.
2) Insulate more.
3) Get Out of Gas ASAP, and drive them out of business.

Hopefully, they will see the economics sooner then bankruptcy, but, if you look at the trade journals they read, you’ll see there’s NOTHING on Solar and Wind.

They have No Plan B.
- M98987
  
  Get out of carbon, by selling all companies in the carbon business. This means you’ll have to get out of index funds.
  
  Or, extract 30% of your fund and move to a Green Energy Mutual Fund or an ETF.
  
  Enough to insure that it will make up for the carbon losses coming to all index funds.
- Mint
  
  Cheap natural gas is critical in making coal go away. The low price in 2012 is what made coal hit its minimum in the US that year, but just when we thought coal was on its deathbed, its use has risen since then. NG also pairs beautifully with cheap but intermittent wind to provide a coal substitute.
  
  Furthermore, cheap natural gas is a great way to stop diesel pollution by long haul trucks. At higher prices, this movement may not happen.
  
  Fracking can be have disastrous consequences, but it can also have minimal effects. We shouldn’t write it off entirely. Just regulate it properly by monitoring water quality, studying what type of formations are susceptible to ill effects, etc.
  
  It’s not ideal, but better than a lot of alternatives we’re currently using.
  - TedKidd
    
    And you think frackgas has lower environmental and health externalities than coal?…
    
    You think it’s a bridge fuel? I may be a bridge, but the bridge leads nowhere…
    - Bob_Wallace
      
      My impression is that NG has a very significantly lower heath impact than coal. Do you have facts that are different?
      
      As for environmental impacts, I don’t know how to compare coal and NG if we’re talking a 1:1 exchange of NG for coal. Fracking is bad, methane leaks are bad. Mountain top removal is bad, coal’s higher CO2 is bad.
      
      But here’s where the math changes. We aren’t talking about closing coal plants and running NG plants 24/365. We’re talking about NG as a fill-in for when wind and solar are not producing. Coal can’t play that role, coal is not dispatchable.
      
      We’re talking about a <50% role for natural gas. More than 50%, perhaps as much as 70% solar and wind would be providing the needed electricity.
      
      So if coal and natural gas are roughly equally bad if we use less than half as much NG per MWh then NG is "less than half as bad".
      
      The dispatchability of NG is our bridge to a renewables + storage future grid. It allows us to incorporate large amounts of wind and solar now while we develop better storage solutions. As storage develops we will replace NG and that is already happening.
      - TedKidd
        
        Would you agree we have no idea what the cost of polluted aquifers will be?
        
        Would you agree we have no idea how much methane is leaking or being intentionally vented?
        
        Coal is a very mature industry. I’m not an expert but usually externalities for mature industries are much more accurate than they are for nascent ones.
        
        Unconventional Hydrofracking, and the chemicals being pumped into the ground are very very new. And due to clean water and air exemptions we don’t even know what chemicals are being used. There are numerous fracking externalities not presently costed that will be hard to know until we are deep into paying for them.
        
        So I think concluding that one or the other is “less dirty” is presumptive and myopic. Lauding frackgas as clean is premature, and could prove to be catastrophically incorrect.
      - Bob_Wallace
        
        “Would you agree we have no idea what the cost of polluted aquifers will be?”
        
        Yes. Now, to what extent have we polluted aquifers with our more than quarter million NG wells?
        
        “Would you agree we have no idea how much methane is leaking or being intentionally vented?”
        
        No, we measure atmospheric methane. Plus we have regulations going into effect that should greatly reduce the amount of methane release from drilling/fracking.
        
        I agree that we can’t, at this time, determine that one or the other is “less dirty”. But I’m pretty comfortable with 100% coal >dirty than 30% natural gas.
    - Mint
      
      Of course it has lower externalities than coal. It’s not even close.
      
      Less than a tenth of the particulate matter, NOx, and CO, less than 1% of the SO2, no sludge, no coal mining…
      
      Even the warming from methane leakage is a short term problem (I feel the method used to calculate GWP is misleading). As soon as we stop using NG in 50 years or whatever, the NG in the atmosphere degrades quickly, halving every 7 years.
      - TedKidd
        
        Would you agree we have no idea what the cost of polluted aquifers will be?
        
        Would you agree we have no idea how much methane is leaking or being intentionally vented?
        
        Coal is a very mature industry. I’m not an expert but usually externalities for mature industries are much more accurate than they are for nascent ones.
        
        Unconventional Hydrofracking, and the chemicals being pumped into the ground are very very new. And due to clean water and air exemptions we don’t even know what chemicals are being used. There are numerous fracking externalities not presently costed that will be hard to know until we are deep into paying for them.
        
        So I think concluding that one or the other is “less dirty” is presumptive and myopic. Lauding frackgas as clean is premature, and could prove to be catastrophically incorrect.
        
        Anonymous Mint – do you have a horse in this race? Please disclose the industry you work in?

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