Marcellus Shale: Water & Air Quality Are Key Issues in Resource Development

Water is the majority ingredient in the fluids used in the hydraulic fracturing process to extract gas from shale rock that is several thousand feet below the surface. In Pennsylvania, which is home to part of the Marcellus shale, has seen rapid growth in the drilling industry over the last three to four years. While the development of the Marcellus has provided many benefits to Pennsylvania, it has also put strains on the resources needed to secure a safe supply of clean drinking water. How these water resources are managed will have implications for the forward price of gas and the cost of generation for power.

On May 12, the Environmental Protection Agency (EPA) followed up on an initial request by the PA Department of Environment (PADEP) and asked six drilling companies to disclose of or recycle water used in the hydraulic fracturing process. These six companies account for more than half of all natural gas drilling in PA. The initial PADEP requested that companies voluntarily halt the transportation of waste water to predetermined waste water treatment plants. These plants had been receiving hydraulic “fracking” water for the last several years. EPA has intervened asking the six companies to disclose plans for either disposal or recycling of waste water by May 25.

In more positive yet related news, the PADEP on May 19 released the results of an air quality study showing emissions levels from horizontal drilling sites were at low enough levels to not constitute a threat to public health. The study consisted of several air quality samples taken by PADEP between August and December 2010 in Bradford, Lycoming, Sullivan and Tioga counties.

For a description of the hydraulic “fracking” process see the diagram below as well as a map of the Marcellus shale. The natural gas industry continues to assess the potential of Marcellus and other shale areas in the U.S. Any restrictions placed on drilling or additional costs that need to be considered for environmental disposal will be factored into the price of natural gas. This will have further downstream impact on the price of electricity generated from gas.

Sources: EIA, U.S. Bureau of Land Management