The Texas oilman says that every time hydraulic fracturing, or fracking, is discussed in the region, people present the “nightmare scenario.”
“There is a lot of fear because people have told them, if they frack, they’re going to completely ruin our water system,” said Stan Sherrill, president of Shore Exploration and Production Corp. in Texas. “Nothing could be farther from the truth.”
The process of fracking injects chemicals deep into the ground to fracture shale and release gas and oil. The chemically tainted wastewater used during the drilling is then stored on site until it’s hauled away for treatment.
Opponents fear the process may cause water, air and noise pollution and turn scenic farmland into industrial zones.
Sherrill says the fears are unfounded, particularly east of Fredericksburg where his company wants to drill for natural gas.
“There’s already a lot of laws on the books here,” Sherrill said. “You guys have a lot of power.”
Drilling regulations are more stringent in Virginia’s Tidewater, which includes this area, because it’s in the Chesapeake Bay watershed.
Opponents have questioned why fracking should be allowed in such an environmentally sensitive tidal system, where every stream and tributary eventually leads to the bay.
Federal and state governments have spent billions in the past 30 years to clean up pollution and water problems in the Chesapeake Bay.
“One small accident could kill all of that,” Susan Rager, a Westmoreland County attorney said last month at a meeting in King George.
‘WE’RE VERY CONCERNED’
Sherrill has stated all along that he hoped to start drilling by the end of this year or mid-2015, although his company has not filed applications to drill anywhere in the basin.
Sen. Richard Stuart proposed a bill in the General Assembly this session that would have required more regulations concerning groundwater–and delayed drilling at least until 2016. A House committee killed that measure Feb. 27; opponents said there already are enough regulations in place.
Sherrill and others with Shore considered the action a victory. Still, Sherrill said that because of local resistance and a new governor who is not as “energy-friendly” as the previous one, it’s a different situation than in 2010, when Shore started acquiring leases.
The factors may make it harder for him to find a partner, an industry giant like Shell or Exxon that would pay the costs of drilling.
It’s a big investment. The nominal cost for drilling a gas well is about $4 million, according to the U.S. Energy Information Administration. An oil well is slightly less.
“If it looks like you’re not welcome, if there’s all kinds of roadblocks being put in front of you, I don’t know that they’ll ever come,” Sherrill said about the prospects of finding a partner. “That’s one of the reasons we’re very concerned right now.”
Sherrill then amended his statement to say plenty of landowners would love to see companies drill for natural gas in their backyards.
Shore has leased more than 84,000 acres in Caroline, Essex, King and Queen, King George and Westmoreland. The five counties are part of the Taylorsville basin, which runs from below Petersburg, through the Middle Peninsula and Northern Neck, and under the Potomac into Maryland.
Almost half the leased land is in Caroline, and Sherrill said Caroline and Essex are “needy counties” where residents want new industry.
“Not King George so much,” he said. “We probably have more problems with King George because it tends to be a bedroom community for D.C.”
Actually, King George has an unusual commuting pattern. Because of the Navy base at Dahlgren, more workers come into the county each weekday (5,493) than go out of it (3,765), according to the King George Department of Economic Development. Many are scientists and engineers who work in research and development.
NO PROBLEMS IN VIRGINIA
Those who study fracking’s impact on land and water initially worried that leaks from drilled wells would threaten aquifers, according to a recent report by Yale Environment 360.
Engineering improvements have reinforced the well casings and eliminated many of those problems, the report said.
There’s still the issue of all the water, mixed with sand and chemicals, that’s injected deep into the ground to cause the fracturing. The wastewater that comes back up the well is put in storage tanks until it’s hauled away.
There’s the threat of spills from trucks and leakage from storage ponds, and this is where “fracking’s real pollution danger comes,” according to the Yale report.
During several phone interviews from Texas, Sherrill stressed that he’s not a big fan of hydraulic fracturing. He’d prefer to frack using nitrogen, carbon dioxide or liquid propane.
Nitrogen fracks produce a foam and are more attractive for economic and environmental reasons, he said.
This type of fracking rarely produces wastewater, said Tarah Kesterson, public relations manager for the Virginia Department of Mines, Mineral and Energy, which regulates oil and gas drilling.
“There are situations that nitrogen may not be practical to use but that is a rare occurrence,” she added.
10,000 wells in state
Sherrill said Virginians who want to know more about the drilling industry should look to their own state and not worst-case scenarios in North Dakota, West Virginia or Pennsylvania, where drilling has created boom towns.
More than 10,000 wells have been drilled in Virginia “with no record of any permanent water loss,” Rick Cooper, a director with DMME, told the King George Board of Supervisors in February.
All the wells are in the coalfields of Southwestern Virginia, and 8,600 of them produce natural gas, Kesterson said.
About half the state wells were hydraulically fractured, and “there have been no major problems in natural gas production regulated by the agency,” Kesterson said.
DMME officials point out that drillers have used fracking for 50 years in Virginia, with no problems. In the past, wells were drilled vertically, about a mile below the surface.
Starting in the 1990s, new technology allowed drillers to go down and then across–for a mile or more.
The horizontal approach allows wells to have 15 to 25 fracks on them, which can produce more gas, according to “Just the Fracks, Ma’am,” a book by Greg Kozera, president of the Virginia Oil and Gas Association.
In the past, each of those fracks would have required a separate vertical drill.
Shore doesn’t have any current well operations in Virginia, according to DMME. Its leases say that the company is based in Dallas, Texas, but Shore is incorporated in Virginia and Sherrill hopes to operate solely from its Bowling Green office within the year.
Shore is known in Virginia, Sherrill said, because of the work it did 30 years ago in exploratory drilling.
CAN’T ‘OVERHYPE’ THEM
There have been several informational meetings about fracking in the region, but no one from Shore Exploration has been a presenter. Sherrill spoke briefly at a meeting sponsored by the Friends of the Rappahannock in December in Bowling Green, after he asked to say a few words.
Bob Fogg, who has leased his King George property to Shore for possible drilling, wondered in early February why the sessions have included opponents only.
“I’d like to know the real truth, not just the one side you’ve been hearing so far,” he said.
Two weeks later, King George resident Mary Trout asked King George supervisors why Shore hasn’t taken the initiative.
“If this drilling is supposed to be so great for this area, why isn’t Shore Exploration being proactive about educating the community?” she asked.
Sherrill said his company wants to share “the real facts,” but he hasn’t scheduled any town-hall sessions to answer questions from residents or officials.
Nor has he contacted the affected counties about making presentations to local officials.
One of his contractors, Kenneth Snow, has asked to present information to the King George supervisors, and Chairman Joe Grzeika said one will be scheduled.
Sherrill said he’s “kind of caught in a Catch-22.” He wants people to get excited, but he doesn’t want to “overhype them.”
In Virginia, counties would get a severance tax, paid directly to them, based on how much natural gas is drawn from the area. Sherrill is afraid that, if he told supervisors they could expect a certain amount of money from gas drilling, “they’re going to plan for the money and spend it” before they ever see it.
Sherrill stressed repeatedly that localities “have nothing to worry about” with drilling and everything to gain.
“Things are not going to be drastically changed, other than there’s going to be a lot more money coming into the counties,” Sherrill said.
–Staff reporter Rusty Dennen contributed to this story.
Cathy Dyson: 540/374-5425
MARCELLUS VS. TALORSVILLE
Here’s a comparison between the Taylorsville basin in this region and the Marcellus Shale formation in the Appalachian region.
SIZE: Under the surface of much of Ohio, West Virginia, Pennsylvania and New York, with small areas in Maryland, Kentucky, Tennessee, and Virginia
ESTIMATED GAS: 410 trillion cubic feet of natural gas
WELLS: Figures from Pennsylvania speak to the boom that’s taken place. When drilling started in 2007, there were 27 wells. By 2011, the number of wells skyrocketed to 2,073 in the Keystone State alone.
LEASES: As wells began to produce natural gas, signing bonuses–the term Pennsylvania uses for leases–climbed from a few hundred dollars per acre to more than $2,000 per acre in 2008.
ROYALTIES: The standard rate in the Marcellus Shale basin is 12.5 percent of the value of gas produced by a well.
SIZE: Locally, it’s under parts of five counties: Caroline, Essex, King and Queen, King George and Westmoreland, all east of Fredericksburg.
ESTIMATED GAS: 1.06 trillion cubic feet of natural gas
WELLS: None. No applications have been filed for drilling, although a Texas company has leased 84,000 acres for potential drilling.
LEASES: Most local residents who signed with Shore Exploration and Production Corp. got a one-time fee of $15 per acre and a seven-year lease. Some signed leases for five years and got a one-time fee of $10 per acre.
ROYALTIES: Shore pays one-eighth of the gross production of the well. “Considering production cost, this can be 20 to 25 percent of the profit of the well,” according to points emphasized by Oscar Willhite, a landman with Shore.
–Geoscience News and Information, U.S. Geologic Service and Pennsylvania Department of Environmental Protection.
(c)2014 The Free Lance-Star (Fredericksburg, Va.)