By Thomas Mitchell
Recently the Nevada Division of Minerals held a series of public hearings across the state to obtain comments on its new rules regulating hydraulic fracturing, commonly called fracking, used in oil and natural gas wells.
At the hearings Division of Minerals Administrator Rich Perry explained how Nevada’s 20-page revised rules will require groundwater testing before and after drilling, pressure testing of equipment, notifications to landowners before fracking begins and abiding by strict engineering standards.
Public comments ranged from the rationally cautious to the histrionic.
“We trusted the Bureau of Land Management to protect and preserve our public land so that future generations of Americans could continue to enjoy them, and now they’ve leased millions of acres to oil and gas companies, turning wilderness into industrial hell holes that can potentially contaminate the land beyond repair,” testified Las Vegas Shannon Salter.
Asked about the potential to contaminate the land beyond repair, the Division of Minerals staff replied, “From our review of existing studies, we can’t find any substantiate contamination of groundwater from the actual hydraulic fracturing treatment.”
Speaking at hearings on behalf of Noble Energy, the primary company doing any major exploration in Nevada, Kevin Vorhaben, Rockies Business Unit Manager, said, “We firmly believe that with good regulation we can have the energy we need, the economy we want and the environment we deserve.”
In a follow up interview, Vorhaben said his company is leasing 370,000 acres in Elko County and has already drilled two wells. One should be producing oil by the end of this month.
Though modern fracking is associated with horizontal drilling, Vorhaben said, “The first wells in the basin, we would like to put in as vertical. It’s the simplest, more traditional well to drill. That allows us to gather all the formation evaluation to understand where to drill a horizontal well.”
Though many seem to think fracking is some new, untested technology, it has been used extensively since the 1940s. Vorhaben estimates 90 percent of all wells drilled today are fracked. Fracturing methods date back to the mid-1800s when drillers would drop explosives down a well to break open rock formations.
Noble Energy plans to drill four more wells this year to evaluate where to concentrate its efforts. Noble then plans to drill a dozen wells a year using a single drilling rig.
Vorhaben said the first six wells represent an investment of between $100 million and $130 million.
Vorhaben said fracking fluid is 98 percent sand and water. Under pressure the water cracks the rock formation and the sand keeps the cracks from collapsing. The other two percent consists of gel-like chemicals to keep the sand from settling out of the water. “Imagine if you went to the beach and you scooped up a cup and you put sand in it and water, the sand goes right to the bottom,” he said. “This 2 percent fluid is there to suspend the sand in the fluid so it pumps to the formation. And then they’ll pump a gel breaker to let the sand fall out.”
A lot of the water used in the process flows back to the surface and is recycled for further use. Vorhaben said a fracking job uses about an acre-foot of water, which is about what a residential home would use in a year, and typically about 60 percent of that can be recycled. Horizontal bores will use more water.
In order to reduce the footprint of its operations, Noble plans to use econode pads in Elko County — drilling four to eight wells on a single pad of five to seven acres. A well could shoot off a horizontal bore and tap oil a mile or more from the wellhead.
As for employment, Vorhaben said a typical oil drilling rig supports about 35 jobs and there could be as many as 30 jobs created during production.
Of the 370,000 acres leased, approximately 63 percent is on private land, while the remainder is largely on BLM land. On public lands a royalty of 12.5 percent is collected on the value of the oil produced, split evenly between the federal and state governments. Vorhaben said owners of private land typically receive a similar royalty.
If the company reaches its anticipated production of 50,000 barrels a day by 2021, and the price remains near $100 a barrel, royalties could amount to more than $600,000 a day. Additionally, like mining, the company would pay the net proceeds tax.
With that kind of money, one can afford to spruce up the industrial hell hole.
Thomas Mitchell is a longtime Nevada newspaper columnist. You may email him at firstname.lastname@example.org. Read his blog at http://4thst8.wordpress.com/.