Fracking spurs debate, energy boom

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Hydraulic fracturing, or fracking, is a drilling process in which an L-shaped shaft is bored first vertically, then horizontally, through shale deposits several thousand feet below the surface.

The process gets its name from what happens next: Once drilling is complete, the shaft is punctured so that a mixture of water, chemicals and sand can be forced -- under extreme pressure -- into the surrounding shale.

The shale fractures, releasing hydrocarbons such as oil and natural gas that are trapped inside. Once drilling is complete, the well is capped and tied into nearby pipelines, allowing the hydrocarbons to be captured and used.

Hydraulic fracturing is not new. Drilling companies have fractured shale for decades to release and extract trapped hydrocarbons nearby. What has changed, however, is the scale of the energy available due to advances in horizontal drilling.

Instead of one well extracting oil and natural gas in a small area around a vertical shaft, horizontal drilling allows a single well to draw hydrocarbons from a much larger region of underground shale.

As a result, according to the U.S. Census Bureau, the oil and natural gas extraction sector of the national economy grew a staggering 24 percent between 2007 and 2012.

Fracking's effects on the environment remain an open and hotly debated question. In some regions, fracking is believed to have altered the chemistry of groundwater as hydrocarbons leach into underground aquifers. It also has been blamed for small earthquakes in what had been geologically quiet areas such as Youngstown, Ohio.

Despite such concerns, fracking's economic impact is staggering.

Massive expansion:

U.S. energy production is expected to continue to grow in the next 25 years, fueled mainly by sharp growth in fracked oil and natural gas.

According to the U.S. Department of Energy's Energy Information Administration, natural gas production in the Utica Shale region of eastern Ohio has jumped tenfold since January 2012 to 1.5 billion cubic feet per day.

Meanwhile, the Marcellus Shale region, which includes Pennsylvania, New York and West Virginia, now accounts for 18 percent of all the natural gas produced in the United States, the administration says.

Once drilled, a well can remain active for up to 30 years, producing oil and natural gas. Landowners, who received thousands of dollars per acre for the lease of their mineral rights before drilling, also receive residual payments -- anywhere from 15 to 19 percent of the revenue -- for the hydrocarbons generated by the well.

Depending on the well's production, the result can be thousands -- even tens of thousands -- of dollars per day in newfound income for landowners.

You can reach Larry P. Vellequette at lvellequette@crain.com -- Follow Larry P. on Twitter: @LarryVellequett

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