That's Fracked Up!

I just read that Chesapeke Energy is selling a $1.1 billion stake of its holdings in the Eagle Ford Shale to the Chinese state run oil company Cnooc. This is the largest ever purchase of US energy assets by a Chinese company, and it’s a scary thought to know this deal is happening in Texas.

Texas is notorious for slack environmental oversight on their oil and gas industry. The EPA has no authority to address contamination on active oil fields in the state. Instead, that authority is deferred to the Texas Railroad Commission, a department originally designed to regulate shipping rates. Unlike regulators in California and Pennsylvania, the Railroad Commission’s official policy is to allow companies to hire their own environmental consultants to monitor contamination. This has led to a long history of abuses by major oil companies like Exxon and Chevron.

Eagle Ford Shale is a rock formation located in multiple counties across South Texas. With huge deposits of oil and natural gas, its being billed as one of the hottest shale plays of the year! Chesapke Energy alone controls over 550,000 acres of this prized desert land bubbling with coyotes, marine toads and rattle snakes.

Unlike traditional oil drilling, which is considered a tried and true form of gas and oil extraction (think Deepwater Horizon), shale extraction is a much more dubious process. Shale is a fine grained rock that is known for its “fissility”, meaning its ability to shatter into many thin layers, almost like sand. Drillers exploit this phenomenon by using enormous volumes of water and chemicals to rupture the rocks and thus set free the decentralized oil and gas deposits. This method is known as “fracking”.

The scariest thing about fracking is that drilling companies do not have to disclose which chemicals they are pumping into our earth. They defend this industry secret by claiming that the chemicals are so far underground that there is no chance that they can leak up and infiltrate the water table.

This investment will quadruple the amount of rigs currently operating on the Eagle Ford Shale project. Let’s hope the Chinese government owned oil conglomerate employs some really honest regulators.