Hydraulic Fracturing "Fracking"

Definition:

Hydraulic Fracturing, also known as ‘fracking’, is a well stimulation process used to maximize the extraction of underground resources (oil, natural gas, and geothermal energy) that utilizes pressurized injections of fluids into a geologic formation with the intent to create fractures through which additional resources can be captured.

Definition as stated by the EPA in their Hydraulic Fracturing Research Study.

http://www.epa.gov/safewater/uic/
pdfs/hfresearchstudyfs.pdf

Money Management Knowledge Base:

Hydraulic fracturing is a drilling technique that has drastically increased our ability to extract usable resources from deep in the earth. The ‘fracking’ process is used primarily in geologic formations that are not very permeable, meaning the resources in the formation cannot freely and easily pass through the sedimentary rock². In these situations, ‘fracking’ is performed to allow the resources to be captured and removed.

During the hydraulic fracturing process, pressurized liquids are pumped into the well to the ‘pay zone’ of the geologic formation². This fluid, known as ‘fracking fluid’, is a mixture of primarily water and sand, with a small chemical component. 99.5% of the fluid is made up of water and sand³. The remaining .5% is a combination of chemicals that aid in creating fractures and can be found in common, everyday items like cosmetics³.

‘Fracking fluid’ is continuously pumped into the well until the pressure in the hole is great enough to cause the rock strata to fracture². Once these new fractures have been opened, the solid component of the hydraulic process, typically sand or ceramic beads, are forced into the fractures to broaden them and ensure they remain open once the pumping pressure is released¹. Once fractures have been opened and secured, the natural resources flow in from the newly created fractures to be extracted¹.

(Youtube Video on Hydraulic Fracturing found on Chesapeake Energy’s web page Hydraulic Fracturing Facts. http://www.hydraulicfracturing.com/Pages/information.aspx ).

Image as displayed in the Earthworks.com article Hydraulic Fracturing 101.

http://www.earthworksaction.org/FracingDetails.cfm

The use of hydraulic fracturing has greatly increased the scope of our energy resource exploration. Through the use of ‘fracking’, regions that held natural resources that were deemed irretrievable have become viable avenues for drilling and exploration. This technology has drastically increased our supply of natural resources, as well as our ability to locate and utilize additional deposits. The increase in availability of natural resources through utilizing hydraulic fracturing could cause a significant decrease in the price of those resources. Because oil and natural gas are so widely used in almost every industry in the United States, a decrease in their prices could translate into greater profits for companies who use them. That increase in profits could lead to better stock performance in the U.S. exchanges.

References:

1. Hydraulic Fracturing Research Study. The United States Environmental Protection Agency, Office of Research and Development. June 2010. Web. 5 March 2011.

2. Hydraulic Fracturing, 101. EarthWorks. Web. 5 March 2011.

3. What Is Hydraulic Fracturing and What It Is Used For. Energyindustryphotos.com. 2008. Web. 5 March 2011.

4. Hydraulic Fracturing Facts. Chesapeake Energy. Web. 8 March 2011.

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