Range Resources Corp. (RRC), Cheniere Energy, Inc. (LNG): Fracking Phobia Gets Gassed

Despite the hysteria fomented by propaganda films like Gasland and Gasland II that oil and natural gas hydraulic fracturing is responsible for everything from flaming faucets and polluted groundwater to earthquakes and back acne, the government is now in full retreat on at least two of those claims. (OK, three. I made up the nexus between fracking and back acne.)

Not only has the Environmental Protection Agency punted its studies on the fracking process as a causation of groundwater pollution, but the Energy Dept. also just released a landmark study saying the process isn’t responsible for contaminating groundwater supplies.

In fracking, which has actually been used by the industry since 1947, drillers pump large amounts of water, fluids, and chemicals into the ground under high pressure some 10,000 feet below the surface, which causes the rock formations to crack, or fracture (hence the name). The fluids contain proppants — typically sand like that provided by U.S. Silica Holdings Inc (NYSE:SLCA) or ceramic beads such as those made by CARBO Ceramics Inc. (NYSE:CRR) — that prop open the fissures, allowing the gas and oil to flow more freely.

Environmentalists have charged the industry is culpable for the damage done. In one notable example of regulatory overreach, the EPA accused Range Resources Corp. (NYSE:RRC) of polluting groundwater in Texas to such an extent that kitchen faucets could ignite from gases they were contaminated with. After it imposed a special “endangerment order” on the driller, saying its actions were responsible for at least two houses being “ready to explode,” the EPA quickly backtracked and dropped all the charges against Range Resources Corp. (NYSE:RRC) without explanation (for a government bureaucracy, it’s cool to describe 15 months as “quick”).

Turns out, Range Resources Corp. (NYSE:RRC) wasn’t responsible at all. Residents had been reporting methane in the water for years before any kind of oil or gas drilling was being done in the area. It was a naturally occurring phenomena but one that had environmental activists even ginning up evidence. In one particular circumstance, which was prominently featured in Gasland II, a court found activists, who were working with the EPA, had hooked up a garden hose to a gas vent and not a water line and lit it on fire in an effort to give the agency a reason to act. The movie’s director was apparently snookered (or willfully duped) by a hoax.

Yet oil and gas industry services specialist Nuverra Environmental Solutions Inc (NYSE:NES) has been telling anyone who will listen that fracking doesn’t cause groundwater pollution. The company, which was previously known as Heckmann and is the leading supplier of water to the oil and gas industry, says fracking occurs 10,000 feet below the surface — and water seeps down, not up, so the probability that it is responsible for the polluted water supplies is negligible.

The DOE study, which injected tracer chemicals into the fracking fluids so they could follow them, confirmed that. It injected the fluids some 8,000 feet below the surface and then monitored for them at 5,000 feet. None were ever detected, meaning that groundwater — which is typically situated around 500 feet below the surface — was about a mile away from any potential contamination.