The "Fracking" Issue and A Question About Morocco

The "Fracking" Issue and A Question About Morocco

by | published July 11th, 2011

As I await my next flight to London, now seems a good time to answer a couple of recent emails from your fellow Oil & Energy Investor subscribers.

If you've got a question or comment of your own, please write to me at I can't offer any personalized investment advice, but I can address your questions and comments in future broadcasts.

Let's get right to it.

Q: Kent, can you address the “fracking” issue one more time?

The 2010 documentary Gasland showed how bad things can get when 600+ chemicals are used to get the oil out of the ground, especially in close proximity to water resources. What companies employ this technique?

Also, the French recently revoked the licenses of one company – Toreador Resources in Paris – because fracking would have been their preferred method of oil extraction. The stock plummeted on the news. Will other companies (and countries) that use fracking find it difficult to lease land where the water table may be affected? ~ R. J.

A: Actually, several of you have written in with similar questions surrounding the French decision on fracking. But R.J. asks several questions here, so let me address them in order.

First, all companies that utilize horizontal drilling for shale gas extraction use hydrofracking.

Second, the French decision results from where the drilling would be located.

To date, significant shale gas deposits have been determined at Bassin d'Ales, Plaine d'Ales, Montélimar, and Moselle (where there is also coal bed methane). The first three are most advanced in terms of exploration; unfortunately, they are also in the Paris region and have population density concerns.

This has become a political issue in the days before an election… and that is rarely a good time to get an objective appraisal.

Still, the environmentalists do have it right – if a company cannot provide sufficient guarantees that drilling poses no danger to water tables, it should not receive a license.

And these French companies will have a hard time providing the required guarantee. France has no history of combining hydrofracking and horizontal drilling. There have been no environmental baseline studies completed and no previous unconventional drilling as a basis.

Third, there is shale drilling under development in other European countries: Lower Saxony (Germany), Alum (Sweden), the Makó Trough/Szolnok Formation (Hungary), the Vienna Basin (Austria/Slovakia), as well as four very promising basins in Poland.

The French have a valid concern about heavy populations in proximity to drilling. True, the Barnett in Texas was initially an urban-based play (Fort Worth to Denton)… but France's density distribution is different.

Now let's return to the documentary…

The episodes portrayed in Gasland were the results of early drilling in Colorado, where, in my judgment, the companies were clearly at fault. There have been some questions raised about more recent drilling in the Marcellus on the East Coast

, but these are quite infrequent.

Shale gas wells are at least 5,500 to 7,000 feet below the surface. Some – such as the Eagle Ford in Texas and the deep Utica, currently under evaluation below the Marcellus – are more than 12,000 feet down.

These are well below any water resources.

The problems arise in two other ways:

  1. Gas contamination on its way up to the surface, and
  2. The use of fracking fluid.

Gas contamination is a standard problem for both traditional – vertical – drilling and the newer unconventional drilling. It is not, therefore, something that has emerged only with the advent of shale gas development.

In passing, gas contamination is what caused the igniting water shown in Gasland.

Yet the problem can be resolved with the use of concentric pipe strings. Range Resources Corp. (NYSE:RRC) has an excellent system used in the Marcellus.

Regulators need to require the usage of the better pipe strings. Most of them do already.

The other matter, fracking fluid, is more contentious.

Of the hundreds of chemicals used for fracking, most are of no consequence to health or environment.

The problems emerge with the danger of leakage from the use of ethylene glycol (to inhibit the formation of scaling; also used in antifreeze), petroleum distillates (to reduce friction), and especially glutaraldehyde (as an antibacterial agent).

Once again, a secure system of returning the fluids (along with the flowback water) to the surface, and safe disposal of that water, is essential. Today this is accomplished by injecting it into deep disposal wells after processing.

However, new developments are already in field use in the Fayetteville in Arkansas and the Woodford in Oklahoma that eliminate the use of chemicals altogether… and even reduce overall operational costs per well at the same time.

Next, here's a direct question related to my recent travels.

Q: If Morocco is any good, why is TransAtlantic Petroleum pulling out? ~ Norman C.

A: The Canadian TransAtlantic Petroleum Ltd. (AMEX:TAT) stated in a June 28 SEC filing that it was likely to cap an exploration well and move associated equipment to its Turkish operations. The well in question, GRB-1, is on the Asilah exploration permit in Morocco.

The company further said that the well would probably be abandoned as noncommercial. However, the company provided no information in the filing about why it has decided to move equipment to Turkey.

The move comes only some three weeks after TAT acquired the production and oilfield assets of Thrace Basin Natural Gas in Turkey. The company may simply consider this one a better overall development opportunity.



Please Note: Kent cannot respond to your comments and questions directly. But he can address them in future alerts... so keep an eye on your inbox. If you have a question about your subscription, please email us directly at

  1. miodrag savic
    July 11th, 2011 at 12:21 | #1

    Hi Mr.Kent,
    How to help to be more info about energy.I am still in Balkan.
    Miodrag S.

  2. Maurice G. Keeny, M.D.
    July 11th, 2011 at 12:45 | #2

    Kent, In your July 11th reply about fracturing, was there some reason
    you didn’t mention GASFRAC’s LPG fracturing? Seems a viable alternative to hydraulic fracturing and seems to eliminate the ground
    water contamination issue. Questioning One!

  3. Malcolm Douglas
    July 11th, 2011 at 12:53 | #3

    Are you ecommending RRC as a good buy now?

  4. Albert Johnson
    July 11th, 2011 at 12:54 | #4

    Hi Kent,
    While you were traveling I was visiting Potter County, PA. There were stories re fracking in newspapers from Pgh to Buffalo. PA closed down the only two sites in the state that were receiving wastewater from wells that had used fracking. The state determined that they were unable to remove all the toxic chemicals during the treatment process before the wastewater was released into local waterways. As a result all wells in PA had closed until the issue could be resolved.
    CBS “60 Minutes” had a segment last night on fracking. I suspect after comments are received they will have a follow-up segment to air more recent developments. CEO of Chesapeake Energy did a good job during the program.

  5. S.G. Linardos
    July 11th, 2011 at 13:00 | #5

    Subject `; Gasfracking This specific company claims it uses a process such that water in not used. Consequently, minimizes polution problems. Symbol ( GSFVF ) Would appreciate any insight you may have as to wether this an acceptable process in the current environment.
    Thank you SGL

  6. john m van zandt
    July 11th, 2011 at 13:02 | #6

    i fracked one of the first wells-if not the first well- in Rice county Kansas in 1953// 3600ft deep and brought a Mississippi chert lime well that was hard and tight and producing 13bbls a day at 2.85/bbl up to 350 bbls/day..This was perpendicular drilling only and not horizontal which did not the time sand in an inert gel was used..had to bribe the night drilling superintendent to try it as contractor feared a blow out and distruction of his rig…buying my first natural gas Honda car this week, john m van zandt

  7. July 11th, 2011 at 13:47 | #7

    Please force the government to open leases in the good ole U.S. of A.
    Our gasoline just runs better!

  8. Nathaniel Fine
    July 11th, 2011 at 13:48 | #8

    Dr. Moors,
    What credibility is there to the “whisper” that a world-class oil deposit has been found in Israel; 250 billion barrels?
    If this is true, what will be the politcal jockeying of European and Middle Eastern countries because of it? Thank you

  9. Stuart Wesson
    July 11th, 2011 at 14:17 | #9

    I know that you are in another region, but what is your feeling about the price of Oil and Chavez’s serious health problems…

  10. Russ Quick
    July 11th, 2011 at 15:40 | #10

    Dr. Moors–What isyour opinion re: the status of Compton Petroleum which seems to be doing all kinds of financial restructuring. Will it pay off?

  11. jack gordon
    July 11th, 2011 at 15:46 | #11

    i know nothing about israeli petroleum resources but they do have oil shale in the negev, it is crushed to size & burned in circulating fluidized bed (CFB) boilers for electric power.
    > jack

  12. Bob Dumper
    July 11th, 2011 at 16:01 | #12

    re; your 7-11-11 article on fracking

    Are there reasons such as cost, other issues, patented methods etc. that fracking without chemicals which is being done in Arkansas and oklahoma would not work in an urban area like Paris?

  13. delbert forslo
    July 11th, 2011 at 17:37 | #13

    Re Gasland documentary: You failed to address problems of water contamination from the many other powerful toxins, such as heavy metals and arsenic, etc., which are found associated with fracking process used today. Please comment. Thank you.

  14. July 11th, 2011 at 18:40 | #14

    Dr. Kent:
    I disagree with your comment regarding the 4th generation of Nuke reactor designs. The Westinghouse AP1000 is neither simple to build, or passively safe and it is certainly not”small”. At 1300 Megs it will take over 5 years to build onsite, only union trades used and will cost in excess of $4 Billion dollars to commission.

    General Atomics an upstart designer has gone back to the pebble bed technology, refined it a tad and it is being built in China.

    Where is the leadership in this country. We should be building it here in the USA. DAME SHAME. They also have a design for a small 250 meg nuke that burns up spent fuel.
    Say good riddens to Yuca Mountain. Mr. Linden Blue is asking the Energy Dept for 1.7 Billion to prove up the design.

    Small price to pay for a high temperature truly passive reactor that will burn up our nuke garbage? Or spend over $50 billion so G.E. can stay in business for a few more years?

    Ken in Napa Ca.

  15. Doyle Hawks
    July 11th, 2011 at 21:31 | #15

    Where do I find your comments to the people who have questions
    on these emails?

  16. Jon Theus
    July 12th, 2011 at 00:09 | #16

    The first fracturing (not “fracking”) was performed in Michigan in late 1930s by Dow Chemical, later “Dowell.” Standard Oil also claimed to be first. The method was to run light crude into the production zone through holes punched by “shaped charges” at carefully measured locations in the casing. The oil was then pumped through these holes into the strata. When this cracked, round “beach sand” (to prop the fractures open) was added to the oil and pump pressure run up to as much as 10,000 psi. Sometimes oil feed lines ruptured, instantly covering the lease, equipment, and workers with a fatal sea of fire.

  17. mickey
    July 12th, 2011 at 02:49 | #17

    Ethylene glycol is not a scale inhibitor!!!! Phosphonates or phosphate esters are commonly used. It could possible be used as a winterizing agent, albeit an expensive one. It could also be used as a hydrate inhibitor, but methanol is much cheaper. You don’t seem to be any better informed than the greenie weenies!

  18. Nicolas
    July 12th, 2011 at 10:12 | #18

    Everybody is talking about hydro fracturing and it seems that also nobdy knows about:
    GASFRAC Energy Services Inc’s. proprietary LPG (Liquefied Petroleum Gas) Fracturing Process utilizes gelled LPG in place of conventional fracturing fluids. The unique properties of the LPG fracturing process result in significant savings on material expenses and fracture clean up, as well as increased well productivity.
    It’s really time to change!

  19. George
    July 12th, 2011 at 11:02 | #19

    @S.G. Linardos
    Being an investor in Gasfrac Cy. I would appreciate any comments you should get on your question.

  20. Steve
    July 13th, 2011 at 17:52 | #20

    I cannot help but imagine the possibility of the entire mid Atlantic region succumbing to a mud volcano awakened by fracking around Pennsylvania farmland. See: Sidoarjo mud flow. It cannot be stopped. It cannot be contained. After the BP gulf spill, who knows what mischief geology has in store for us? Just how smart are we in the face of greed? Man would be wiser to pursue maximum efficiency in the consumption of energy rather than pursuing maximum energy for maximum gain.

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