Narrator: The discovery of hydraulic fracturing, better known as fracking, is considered by many to be the most important change in the energy sector since the introduction of nuclear-generated electricity more than 50 years ago. In the United States, production of oil and natural gas has dramatically increased, energy prices have fallen, and domestic energy security has strengthened as the country has relied more on shale, gas, and oil and less on imports. But fracking is also highly controversial. Critics point to health and environmental concerns. And chief among them is the impact on water quality. Some studies have documented localized instances of groundwater contamination related to fracking. But surface water may also be at risk. Chicago Booth’s Christian Leuz and his coauthors published a study in Science that provides the first widespread evidence tying hydraulic fracturing to increased salt concentrations in surface waters across several US shales and for many watersheds.
Christian Leuz: Normally, I study disclosure regulation and transparency regimes, which exist for companies, for instance, with their annual reports, but also in what I’d call nontraditional areas, such as consumer protection, health care, and environmental regulation.
Narrator: The researchers came across transparency regulations for oil and gas companies in various states that required companies to disclose what substances are in the fluids that they use for hydraulic fracturing.
Christian Leuz: The question that we were then asking is: Does requiring the oil and gas companies to disclose the substances in the fluids and the composition of the fluids, does that make the practices cleaner? Does that reduce the environmental impact? Now, to answer that question, you need to study the environmental impact before and after the disclosure regime. And so—or the introduction of the disclosure regime. And so, we decided to study surface-water impact and collected some water data and started our analyses. And while we were doing that and reading up on the scientific literature, we realized that the associations that we were seeing between new hydraulic fracturing wells and elevated salt concentrations in the water weren’t established in the literature, in the scientific literature. And so we decided that that was the first piece that we should do to establish that link so that we could use it also then in our disclosure study.
Narrator: Unconventional oil and gas development combines horizontal drilling with hydraulic fracturing. Companies inject water, sand, and chemicals at a high pressure into a shale formation via a well. This process is intended to create new fractures in the rock, as well as increase the size, extent, and connectivity of existing fractures, which then allows the oil and gas to flow. During production, when the oil and gas flows to the top, the well generates large amounts of wastewater, some of which is flowback of previously injected fluids and some is so-called produced water from the deep formations. The question, however, is whether some of the wastewater potentially makes its way into the local surface waters.
Christian Leuz: We also found that the elevations in the salt concentrations are largest once the well drilling is completed, in the sort of 91 to 180–day window, which is early on in the production, when most of the produced water from the wells is being collected. And that evidence is one piece that ties the elevated salt concentrations closer to the oil and gas development process.
Narrator: The researchers also found that the associations were stronger when the wells generated more produced waters, which are a by-product of fracking, or, when the deep formations were more saline, meaning they had higher concentrations of the kind of salts that the researchers were studying.
Christian Leuz: Now it’s important to emphasize that the salt concentrations that we’re estimating, or the elevations in the salt concentrations that we’re estimating, are small and below the maximum contaminant levels that the EPA has for barium and chloride, and they’re below the health advisory levels for strontium. And so in that sense, the results should not be setting off the alarms. But they also have to be interpreted in the context of our analysis. So, first off, it’s important to know that we mostly were using water measurements from rivers. So dilution is likely a factor. Second, the wells and the water monitors, many of them weren’t particularly close. And so that’s another factor. And in fact, for some of the water monitors, they might be sitting upstream from the well, or too far from the well, so that they can’t have any impact or measure any impact, even if it exists. And so in our main analysis, the estimates that we’re getting are essentially a grand average over all of these monitors in the watershed. And as a result of that, you should expect the results or the magnitudes to be small.
Narrator: The researchers found much higher salt concentrations when they focused on water measurements that were taken within one year from the start of drilling, and for water monitors that likely are downstream and also situated within 15 kilometers from the well. But even then, they rarely had measurements that were very close, raising the question about the concentration levels of the salts at the point where they entered the river or surface water. The evidence of elevated salt concentrations in surface waters also raises the question about other, potentially more dangerous substances that were used in the fracking fluids. The researchers say they used salts because they are good markers for impact whenever it exists. But also because other, more toxic elements and chemicals are typically not, or rarely measured, and hence, not available in public databases.
Christian Leuz: Our analysis was hampered by the sparsity of the water measurement. Often, we wanted water measurements that were closer in time or closer in distance to the wells. Thus, we couldn’t analyze potentially more dangerous substances simply because they were not in the public databases, either at all, or with sufficient coverage that we could apply our statistical approach. So if policy makers want to help that we better understand the impact of unconventional oil and gas development on surface waters, then one important ingredient would be to make sure that the relevant agencies have sufficient funding for better and more targeted measurement, including of the substances that we’re most worried about.
