Fracking the Tax Base
April 7, 2014 5:03 PM
Drilling pads are scattered across the landscape since horizontal hydraulic fracturing allowed extraction of oil and gas from tight shale formations in the U.S. The process known as fracking has occurred in at least 17 states with about 82,000 wells operating nationally, according to official estimates. Since 2005, Texas and Colorado have been operating the most fracking wells, with 33,753 and 18,168 wells respectively.
Graphic shows relative drilling depth for unconventional horizontal shale gas wells and conventional vertical wells. Environmentalists fear the migration of drilling chemicals into the water supply, though industry advocates say the risk is minimal.
With 16 major shale plays in the United States, production varies widely. Many of the hydraulic fracturing techniques were developed in the Barnett Shale of North Texas, primarily in the heavily populated Dallas-Fort Worth area. New York bans fracking in its Marcellus Shale. Energy companies are particularly keen on extracting so-called tight oil from the Bakken Shale of North Dakota and the Eagle Ford Shale of south Texas.
A drilling rig towers over homes in Fort Worth, Texas, where some of the most promising shale gas sites are found. In 2008, the Fort Worth, Texas received $50 million in revenues from 44 shale gas wells. In 2012, the city received only $23million from 397 wells
Fire erupted from a water storage pond at a hydraulic fracturing site in Washington County, Pa., in March 2010, one of several incidents that alarmed residents in the Marcellus Shale region. The county was included in a study of the impact of fracking operations on home values released in January.
A so-called man camp appears in North Dakotas Bakken Shale region, where gas production has brought a sudden increase in population. Citing the pressures of the population boom, Moody's Investors Service in January downgraded the city of Williston, N.D., to Baa2 from A3.
At some wells, energy producers burn or flare gas temporarily or for longer periods if they are seeking the more lucrative tight oil. Flare gas systems are used to manage small volumes of waste gas that cannot be efficiently captured and returned to the system for processing.
Bakken well flares seen from space rival the lights of Minneapolis in this view from space. About a third of natural gas produced in the rich Bakken shale region is being burned off into the air. The flared gas is valued at more than $100 million a month.
With 481 ghost towns, Texas is familiar with the cycle of boom and bust. One town that bit the dust after an oil boom was Desdemona, Texas.
The wealthy enclave of Bartonville in the Dallas-Fort Worth area is surrounded by fracking sites. But the prospect of a water tower, possibly to serve the industry, prompted a lawsuit from Bartonville resident Rex Tillerson, chairman and chief executive of Exxon Mobil.
