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Gas Producers Call for Hydrofrac Chemicals Disclosure

Confidentiality agreements with service operators have prevented natural gas producers from disclosing data about hydraulic fracturing (hydrofrac) chemicals used in shale drilling, but it's "silly" and "this is not acceptable," Range Resources Corp. CEO John Pinkerton said Wednesday.

Pinkerton shared a panel at the IHS Herold Pacesetters Energy Conference in Greenwich, CT. His company was one of the first movers into the Marcellus Shale, but he said exploration efforts have been hampered there and in other shale basins because of a poor public relations effort by producers.

Service companies don't want to release information about hydrofrac chemicals because they consider the data to be commercially sensitive, Pinkerton said. Because of the "confidentiality contracts" between producers and the service companies, gas producers aren't allowed to disclose any of the chemical information. He said the veil has to be lifted.

"I've basically told them that this is not acceptable," Pinkerton said of the service companies' refusal to disclose hydrofrac material. "It's a little silly, to be honest."

Halliburton, which performed the first commercial fracturing treatment in 1949, said U.S. operators now fracture about 35,000 wells each year "with no record of consequent harm to groundwater."

Frac fluids used today, said Halliburton, "are primarily water with a gelling agent and a number of additives available to provide the necessarily characteristics..The material used to make the fluid thick (viscous) is usually a natural polymer derived from guar beans. It is the same agent used in cosmetics and soft ice cream. Fracturing fluid additives include clay control agents, gel stabilizers, surfactants, foamers, gel breakers, fluid loss additives, friction reducers, scale inhibitors, bactericides, and pH control agents."

Chesapeake Energy Corp. CEO Aubrey McClendon and XTO Energy Inc. CFO Louis Baldwin, who shared the panel discussion with Pinkerton, said the worries about hydrofracing have to be resolved.

The industry needs to "demystify" hydrofracing, said McClendon. "We need to disclose the chemicals that we are using and search for alternatives to the chemicals we are using."

Baldwin said the incidents related to hydrofrac chemicals were "infinitesimally small" considering the number of gas wells using the method to fracture shale.

But it's not just the water issues that concern gas producers, said the CEOs. Many gas-weighted producers, including XTO Energy Inc. and EOG Resources Inc., have begun developing more oily projects in response to low gas prices. McClendon thinks that's backwards. Producers instead should work on ways to expand the gas market.

"A more reasonable goal is to get our gas molecules valued more highly," particularly for transportation and power generation, McClendon said.

Pinkerton agreed. "Shame on us," he said of the gas industry's public relations efforts to date. "We've done a bad job of educating the public."

Whether a public relations effort to disclose the hydrofrac chemicals will help or hinder the gas industry is questionable. Last month the U.S. Environmental Protection Agency reported that at least three contaminated wells near Pavillion, WY, contained a hydrofrac chemical used by gas drillers (see NGI, Aug. 31). More testing is scheduled this fall and a final report is not expected for several months.

And Friday the Pennsylvania Department of Environmental Protection ordered Cabot Oil & Gas Corp. to stop using hydraulic fracturing (hydrofrac) to drill shale wells in Susquehanna County following three recent spills of a gel used in the hydrofracing process (see related story).

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