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    oil and gas investing

    Introduction to Fracking

    Investing News Network
    Aug. 27, 2013 04:00AM PST
    Energy Investing

    Hydraulic fracturing, also known as fracking, is a process by which energy companies stimulate the extraction of natural gas and oil from underground wells. 

    Hydraulic fracturing, also known as fracking, is a process by which energy companies stimulate the extraction of natural gas and oil from underground wells.

    According to FracFocus, the national hydraulic fracturing chemical registry, the first commercial application of the process as a way to produce oil or gas occurred either in Kansas in 1946 or Oklahoma in 1949. Since then, fracking has become a widespread practice throughout the industry and has been used on more than 1 million wells across the globe.

    How does fracking work?
    Fracking involves injecting a special pressurized liquid – typically composed of water, sand and chemicals – into an underground oil- or gas-rich formation. The injection creates fractures in the rock that allow oil and natural gas to escape through a new or existing well. In other words, the process creates paths that speed up the rate at which the fossil fuels can be extracted. Frac sand helps hold the fractures open.

    These days, fracking is most common in shale formations. Across the United States and many other areas of the world, there are underground shale formations that contain large amounts of natural gas and oil.

    Why is fracking needed?
    The world’s massive supply of these resources is useless if it can’t be accessed. Fracking helps energy companies reach oil and gas reserves that would otherwise remain untapped. This could be the case for a number of reasons, such as a shale formation that is very tight. Fracking also helps extend the life of older oil and gas wells that may have soon discontinued production.

    According to FracFocus, experts believe that over the next 10 years, hydraulic fracturing will be necessary to keep 60 to 80 percent of all wells in the United States in production.

    Fracking is also frequently combined with the horizontal drilling method, thereby becoming an even more successful way to extract fossil fuels.

    A controversial method
    Despite its benefits, hydraulic fracturing has opponents. Primarily, many people are worried about the potential harm the method could do to the environment.

    A main concern is that the fracking process contaminates drinking water supplies because it might be leaching methane gas and toxic chemicals into the ground. According to a study by Duke University, methane concentrations are 17 times higher in drinking-water wells located near fracking sites compared to other wells. The fear is that this contaminated water is then used as drinking water in nearby cities and towns.

    Opponents of hydraulic fracturing are also staunchly against the amount of water it uses. According to a report from the U.S. Department of Energy, drilling and fracturing a horizontal shale gas well, for instance, can usually require anywhere from 2 million to 4 million gallons of water. On the other hand, the DOE points out that this amount is small compared to what is used in other industries such as agriculture.

    Still, the fracking process also produces wastewater after the fact, which tends to go unused. This adds to the amount of water consumed and wasted.

    Differences and similarities between oil and gas fracking
    Fracking for oil and gas both involve injecting pressurized fluids into the ground. In both cases, the fractures that are created allow energy companies to more easily capture the natural resources from the ground as they flow up. They can be accessed through either shale formations or oil and gas fields.

    In general, the two processes are very similar. Some wells will only contain gas while others solely hold oil, but there are many reserves that contain both fossil fuels.

    The main difference between the two methods is that most shale oil formations only need to be fracked once, whereas natural gas formations generally require multiple fracking processes to access the reserves, according to FrackingOil.com.

    Additionally, according to the U.S. Energy Information Administration, there are fewer natural gas rigs in operation compared to oil rigs. As of February 2013, there are 1,332 operating crude oil rigs in the United States but only 426 that extract natural gas.

    Finally, while both resources provide energy for people around the world, fracking for natural gas is considered more beneficial in some circles because the gas is replacing other potentially more harmful energy sources like coal. Many studies have shown the increased use of natural gas for energy has reduced harmful emissions in the air.

    horizontal drillinggas reservesoil and gas investingunited states
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