Hydraulic fracturing

The world faces multiple energy and environmental challenges. We must provide safe, reliable, affordable, and environmentally responsible supplies of energy in order to sustain and improve living standards for people worldwide. Given its abundance, affordability, and lower carbon profile, natural gas is already helping us to address these challenges.

Around 2025, we expect natural gas to surpass coal as the second-largest source of energy, behind oil. In our Outlook for Energy, we project natural gas will satisfy more than 25 percent of the world’s demand for energy in 2040, which represents about twice the amount used in 2000. This demand will be met through a major technological shift that has unlocked massive reserves in the United States and around the world.

Powering a brighter, cleaner energy future
A major use of natural gas is as a fuel to produce electricity. Increasing natural gas use in power generation presents a very cost-effective and large-scale option currently available to reduce greenhouse gas emissions.

Compared to coal-fired plants, natural gas-fired power plants can cut carbon dioxide (CO₂) emissions by up to 60 percent. In addition, gas-fired plants significantly reduce particulate and waste generation, and virtually eliminate mercury emissions, while also having low emissions of nitrogen oxides and sulfur dioxide.

Another benefit of natural gas-fired power generation is that it is competitive without subsidies or mandates. Moreover, where governments adopt policies that make CO₂ and other emissions more costly, natural gas will be even more competitive in the power generation sector, as compared to coal. Installing carbon capture and storage technology could also further reduce emissions.

Hydraulic fracturing
As the world’s largest public natural gas producer, ExxonMobil brings supplies of this cleaner-burning energy source to global markets in a safe, reliable, and responsible manner. As part of this undertaking, we engage with stakeholders on a range of topics related to natural gas production and transportation.

With the rise of unconventional natural gas and oil production around the world, one topic garnering significant media and political attention is the industry-wide practice of hydraulic fracturing.

Extracting natural gas from certain formations, including shale, tight sandstones, and coal beds, requires drawing the resource through openings about one half the width of a human hair. Hydraulic fracturing uses water pressure to create hairline fractures in rocks deep underground so natural gas can flow. The amount of time needed to fracture each well stage is typically only four to eight hours, as compared to the weeks it can take to complete the many steps needed to drill a well.

Interestingly, hydraulic fracturing is not a new technology. Our industry has safely employed the technology as part of drilling more than 1 million wells since the 1940s. What is new is the combination of the fracturing practice with other techniques, such as horizontal drilling and multizone stimulation.

Addressing stakeholder concerns
Stakeholder groups have recently expressed concerns about potential environmental and health issues, including freshwater use, the migration of gases and hydraulic fracturing additives to groundwater or to the surface, and the handling of by-products.

ExxonMobil addresses these concerns by carefully designing and completing our wells and rigorously managing the entire process. ExxonMobil chairs the American Petroleum Institute working group that has developed four best management practice documents encompassing the life cycle of unconventional resource development. We work with state governments and multi-state entities to address concerns, establish effective regulatory frameworks, and implement industry consensus on best management practices.

Government and independent reports confirm that stimulating wells with hydraulic fracturing poses no inherent risk to water supplies. Part of this finding has to do with the fact that natural gas resources are separated from groundwater by thousands of feet of impermeable rock. Still, our industry takes extra precautions to protect and conserve water supplies.

Protecting fresh water Water supply, especially in water-stressed regions, is an environmental issue of growing importance and one ExxonMobil takes seriously. Hydraulic fracturing requires fresh water, though not nearly as much as other energy production operations. Compared to coal production, hydraulic fracturing uses about one-tenth the amount of water.

To minimize environmental impacts and burden on local water infrastructure, ExxonMobil is using increasing amounts of recycled water. In 2011, our operations in the Marcellus region in the northeastern United States will expand the use of recycling produced water in our fracturing process. In addition, pipelines will be laid where feasible to transport fresh water for the process. This will reduce the need for pits to temporarily store fresh water and will reduce truck traffic. In all cases, we appropriately treat or dispose of remaining by-products according to local, state, and federal regulations. Additionally, all of our drilling rigs in the Marcellus region use closed loop drilling fluid systems. These systems eliminate drilling pits, reducing the overall site footprint.

With reports of potential contaminants in drinking water sources, the use of additives in hydraulic fracturing fluids has been a focal point of debate. ExxonMobil’s natural gas production operations use the smallest proportion of fluid additives needed to be safe and effective. Fracturing fluids typically used in our operations contain approximately 99.5 percent water and sand, and 0.5 percent special purpose additives. These ingredients are necessary to reduce friction, prevent bacterial growth, and minimize scale formation that can corrode pipes.

A vital component of building community trust is transparency of operations. We support the disclosure of the ingredients used in hydraulic fracturing fluids, including on a site-specific basis. We work with industry associations to provide regulators and first responders the information they require about fracturing ingredients. We also participate in the state-based national database for fracturing fluid ingredients jointly sponsored by the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission. This database is now available to the public and provides a transparent, consolidated source of information across industry on a site-by-site basis.

ExxonMobil and XTO Energy Inc. Merger
The merger of ExxonMobil and XTO Energy Inc. combines the strengths of our organizations to help us to further unlock the growing natural gas potential in the United States. According to the Massachusetts Institute of Technology, there are enough unconventional natural gas resources in the United States to meet the country’s needs for 100 years at current consumption rates. This is great news for America’s energy security and the economy. Natural gas production generates jobs and revenues for local, state, and federal governments. In 2008, natural gas contributed $385 billion to the U.S. economy and supported nearly 3 million American jobs.