A key natural gas drilling technique, known as hydraulic fracturing or ‘fracking’, is under fire due to environmental concerns in North Texas.Dallas News: Hydraulic fracturing involves shooting a high-pressure mixture of water and chemicals underground to crack rock and allow more natural gas to flow out. Environmentalists argue that it can lead to contamination of groundwater supplies, while gas producers say that won’t happen.
Most North Texans use surface water and wouldn’t be affected by groundwater contamination, although some residents of rural areas such as Wise County rely on well water.
The technology is so important that Exxon (XOM) has even threatened to walk away from their acquisition of natural gas producer XTO Energy (XTO) should harsh regulation be enacted.
Hydraulic fracturing has become a necessary method to produce natural gas in so-called unconventional fields, which have been discovered in Texas, Louisiana, Pennsylvania and New York. Exxon is buying XTO to gain a big presence in unconventional fields.
If hydraulic fracturing becomes illegal in the U.S., that could shut down operations in the Barnett Shale and other big natural gas fields around the country. Such laws could wipe out profit for XTO and hundreds of other natural-gas drillers and could limit domestic gas production.
As shown in the picture above, unconventional gas, mostly via shale, can provide the U.S. with a massive source of domestic, relatively clean energy. Thus one hopes that additional fracking regulation can be avoided. Read more here.