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Monday, October 7, 2013

Strategic CSR - Fracking

The article in the url below details the environmental consequences of fracking—in particular, in Colorado:
“While Colorado's drilling boom produces record amounts of gas and oil, the multiplying wells also are bringing up far greater quantities of a salty, toxic liquid waste — 15 billion gallons a year.”
The knowledge and ability exists to recycle this water—at a minimum into water that is sufficiently pure to be re-used in the fracking process and, ideally, could be converted into water pure enough to drink:
“If cleaned properly, all that liquid could become safe water to restore rivers, irrigate food crops and sustain communities in an era of drought and declining water supplies. Or at least it could be reused by oil and gas companies to reduce their draw of fresh water from farmers and cities.”
The economic incentive, however, is to discard the water as waste, with only the most progressive firms seeing the potential in recycling:
“Technology exists to clean liquid waste right up to drinking water standards, but it's expensive, about three times as costly as buying fresh water for drilling and fracking, which runs about 17 cents a barrel, and burying waste untreated for about 70 cents per barrel. State regulators also don't require oil and gas companies to deploy such technology.”
As a result:
“… Colorado leaders have no policy for reusing oil and gas industry waste. More than half is injected untreated into super-deep wells – filling rocky voids from which oil and gas was extracted. Other waste is dumped in shallow pits, stored in evaporative ponds or discharged after partial treatment under state permits into waterways.”
Companies continue to abuse the situation without any concern of real consequences:
“The Colorado Oil and Gas Conservation Commission, charged with both promoting and regulating the oil and gas industry, has issued 3,191 permits letting companies dispose of liquid waste in evaporative ponds, shallow pits and 300 super-deep injection wells. Disposal in pits and ponds can lead to toxic emissions and contamination of groundwater.”
Oil and gas companies are an important component of the Colorado economy. They add a great deal of value, but use a great deal of the state’s resources in the process:
“The liquid waste comes from drilling boreholes at oil and gas wells. First, drillers inject about 300,000 gallons of fresh water. Then frackers inject 1 million to 5 million more gallons, mixed with sand and fracking fluids, to loosen oil and gas in shale rock. This all blends with briny underground pools that are often saltier than seawater and laced with metals. When drilling and fracking is done, the waste rockets back up the boreholes and, if not trapped and treated, can sterilize soil, sicken animals and hurt human health.”
Given that fresh water is a scarce resource in Colorado, an effective regulatory system would at least seek to encourage recycling; if not compel it. Given the negative public perception of the fracking process, however, an industry with sufficient foresight would proactively initiate such a program. There is a lot of gas left to extract in Colorado (and elsewhere in the U.S.) and there is broad societal interest in it being removed with as little ecological damage as possible:
“Growing volumes of waste are likely because oil and gas wells in Colorado, currently around 50,000, are increasing by about 3,000 per year.”
Take care
David Chandler & Bill Werther
Instructor Teaching and Student Study Site:
Strategic CSR Simulation:
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Oil, gas companies urged to clean, reuse muck, but process expensive
By Bruce Finley
April 14, 2013
The Denver Post
Late Edition – Final