Natgas execs seek disclosure of Marcellus drilling chemicals

Thu Sep 24, 2009 5:42pm EDT

Related Topics

* Chesapeake, Range Resources call for disclosures

* Marcellus Shale a key natural gas development

* Industry says hydrofracturing process safe

By Matt Daily

NEW YORK, Sept 24 (Reuters) - Two top U.S. natural gas producers called on the industry to release data about the chemicals they use in the fast-growing Marcellus shale development to counter fears it was polluting water supplies.

The Marcellus, which stretches from West Virginia across most of Pennsylvania and into New York, could hold a 10-year supply of natural gas for the United States, but its development is sparking a backlash from some residents who say they are at risk.

New technologies have enabled gas drillers to tap into rock deposits and release natural gas using a process called "hydrofracturing" that injects water and chemicals into the deposits.

The vast energy potential of the field has drawn interest from dozens of companies, including Chesapeake Energy (CHK.N), who says the process is safe and will turn the Marcellus into a lucrative source of natural gas for decades.

"We as an industry need to demystify (hydrofracturing)," Aubrey McClendon, chief executive and chairman of Chesapeake, told an energy conference this week.

"We need to disclose the chemicals that we are using and search for alternatives to the chemicals we are using," he said.

Scientists have yet to find definitive evidence that drilling chemicals have seeped into ground, but dozens of anecdotal accounts have emerged that water supplies in gas-producing areas have been tainted.

People in gas-drilling areas say their well water has become discolored or foul-smelling, killing pets and farm animals who drink it and causing children to suffer from diarrhea and vomiting.

On Tuesday, Pennsylvania regulators cited Cabot Oil & Gas for spilling chemicals at a natural gas well. [ID:nN22368094]

Environmentalists have complained that the energy companies refuse to disclose the specific chemicals used in the fluids that are injected into wells and then later stored in pools before undergoing treatment.

That lack of disclosure prevents them from testing water and soil samples for specific incidents of pollution.

John Pinkerton, chief executive of Range Resources Corp (RRC.N), one of the first energy companies to enter the Marcellus, said producers' disclosures were limited by the oilfield service companies who do not want to release what they consider to be commercially sensitive information.

"We're under confidentiality contracts with the service companies," he told Reuters. "I've basically told them that this is not acceptable. It's a little silly to be honest."

Oilfield service companies such as Schlumberger Ltd (SLB.N), Halliburton Co (HAL.N) and BJ Services BJS.N all provide hydrofracturing services to the companies.

A spokesman for Schlumberger said it and the chemical companies that provide the fluids release lists of chemicals, acids and salts typically used in the process, but that the chemical companies will not give more details.

"When it comes down to the different chemical makeup of these compounds, that's where it gets into proprietary third party information," the spokesman, Stephen Harris, said.

Halliburton said 99 percent of its fluid was made up of sand and water, and the remaining chemicals complied with state and federal regulations.

"We make a significant investment in developing effective fracturing fluid systems and we are careful to protect the fruits of the company's research and development efforts," Halliburton spokeswoman Cathy Mann said in an email.

Louis Baldwin, chief financial officer of XTO Energy XTO.N, said the number of incidents of spills or leakage was "infinitesimally small" given the thousands of wells in which hydrofracturing had been used.

(Reporting by Matt Daily; Editing by Phil Berlowitz)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.