Risks of contamination by toxic chemicals strongly drive public fear of the hydraulic fracturing operations (commonly known as fracking) used to capture natural gas and oil from shale. The public fears known chemicals (such as acids and biocides that are toxic) as well as the unknown chemicals hidden behind claims of confidential business information.

These fears, together with a wider array of concerns about the environmental and community impacts of shale energy operations, translate into the potential loss of companies’ social license to operate. There's a possibility that these concerns could also lead to increased numbers of bans and moratoria both in the United States and around the globe.

Oil and gas producers have made sizeable strides in disclosing many of the chemicals. But three major questions remain substantially unaddressed:

• First, and most importantly, do producers have systems in place to evaluate whether they are using more toxic chemicals than necessary?
• Second, what are producers doing to encourage their suppliers to provide safer alternatives?
• Third, what tools can suppliers use to develop and market safer alternatives?

The economic benefits from smarter management of chemicals include lower costs when fewer chemicals are used, reduced environmental damage and litigation risk from operating errors and accidents. Another potential benefit: reduced delay on projects that might arise from community opposition.

The oil and gas industry understandably downplays the hazards from fracturing chemicals. It stresses they are a very small percentage of the fluids going down the bore hole — approximately 1 percent or less— and these chemicals are commonly found in household products. This rationale ignores scale and life cycle.

Millions of gallons of fluid (mainly water) are used for fracturing, so for a single well thousands of gallons of chemicals will be hauled to the job site and stored on location -- then pumped down the hole. For example, a fracturing operation using three million gallons of water would likely use 15,000 - 30,000 gallons of chemicals. Multiply this by thousands of wells drilled in major shale plays and you'll get the picture. Some of these fluids will return to the surface and require storage, treatment and disposal. The greatest contamination risks appear to stem from spills on the surface and from poorly constructed wells.

Here’s a five-part prescription the energy industry should follow to lower fracking’s chemical impact and address community concerns with more meaningful public disclosure.

1. Develop a chemical reduction program. Relatively few shale energy producers publicly describe their programs for reducing and eliminating worrisome chemicals. For example, Encana has established a Responsible Products Program. Through its Responsible Product Assessment Tool that taps government toxicity databases, Encana assesses chemicals and decides whether to eliminate them or reduce their risks. Encana prohibits the use of any hydraulic fracturing fluid products containing diesel, 2-Butoxyethanol (2-BE) or benzene and has determined that none of its fracturing products contain arsenic, cadmium, chromium, lead or mercury.

Next Page: Chesapeake Energy's Green Frac program

Chesapeake Energy established its Green Frac program in 2009 to systematically review chemical use. Chesapeake states it eliminated 25 percent of the additives used in fracking fluids in most of its shale plays. UK-based BG Group states, “We do not use diesel or benzene, toluene, ethylbenzene and xylenes (BTEX) chemicals in hydraulic fracturing fluids in any of our unconventional gas operations.”

To systematically reduce chemical risks, all energy-producing companies in shale plays should commit to quickly phasing out “the worst of the worst” chemicals. They should dedicate staff or consultants to continually evaluate chemical additive use and, in requests for proposals and other procurements, should ask their contractors to provide reduced toxicity options. Producing companies should routinely report the results of such efforts publicly.

2. Create a chemical scoring system. There's money to be made from safer chemical alternatives. Oilfield services company Baker Hughes has developed a toxicity scoring system and new product lines so that producing companies can select less-toxic additives to meet their needs. Similarly, Halliburton has also developed a toxicity scoring system and new product lines. Halliburton even presents on its website a cumulative tally of gallons of biocide eliminated through use of its CleanStream process that relies on ultraviolet light for bacteria control.

3. Develop safer alternatives. Baker Hughes, one of the primary providers of hydraulic fracturing services to oil and gas producers in the United States, has demonstrated how a scoring system can be used to drive competition among chemical suppliers to provide safer alternatives. It has placed the highest priority on eliminating diesel oil from its fracturing additives. In 2011, it reported successfully forgoing the use of at least 7.5 million gallons of diesel oil per year through product reformulation. By doing so, it has also removed benzene and some other toxic components of diesel oil.

4. Press suppliers for alternatives. Baker Hughes next pursued priority pollutants designated by EPA under the Clean Water Act. Napthalene, one of these, was present in a 100,000-gallon-per-month product used by Baker Hughes. The company encouraged its chemical suppliers to develop safer alternatives. An initial reformulation dropped the toxicity score by more than 50 percent and displaced 85 percent of the old product in the marketplace. A second chemical supplier then provided an even safer alternative whose toxicity score is roughly one-quarter of the initial safer alternative, and that’s now been introduced into the market.

Baker Hughes also targeted a chemical known as 2-BE, a “poster child” toxic chemical, having figured in a high-profile legal settlement in which health damage from its use in hydraulic fracturing was alleged (Baker Hughes was not involved in the litigation). Baker Hughes asked two suppliers to remove 2-BE from a surfactant product. One supplier removed the 2-BE but a second went even farther and also removed toxic methanol, dropping the toxicity score much farther. 2-BE has now been eliminated from Baker Hughes’ environmentally preferred hydraulic fracturing product line.

5. Increase disclosure. Oil and gas producers point to the website fracfocus.org as their primary means for disclosing chemical use. Fracfocus is a noteworthy improvement on the virtually nonexistent disclosure of several years ago, but it reveals chemical use only on a well-by-well basis and provides no readily discernible information on broader corporate toxicity reduction programs.

Moreover, its disclosures are principally the chemicals listed on Material Safety Data Sheets (MSDS). The limitations and omissions of these data sheets have been noted by Baker Hughes and other commentators. Baker Hughes deliberately goes beyond MSDSs, incorporating evaluation of chemical components not disclosed in MSDSs in its product toxicity scores. Increasingly, states that are adopting Fracfocus as a disclosure tool are requiring information on non-MSDS chemicals to be listed. Regardless of whether states require it, more companies should be doing such reporting of non-MSDS chemicals.

Most shale energy producers discuss in only the most general terms their efforts “[to develop] and use … more environmentally benign ingredients.” A toxicity scorecard pioneered by consumer products company SC Johnson and Son, Inc. (SCJ) provides an example of how companies might better demonstrate to concerned communities their commitment to chemical risk reduction. SCJ's Greenlist process ranks the materials in its products based on their impact on the environment and human health, rating materials from a 0 ("restricted use") to a 3 ("best"). The detailed scoring criteria are elaborated in a superb SC Johnson case study [pdf] prepared for the Green Chemistry and Commerce Council. The goal for individual products and the company as a whole is continual innovation away from the poorest-rated materials towards the best.

SCJ’s corporate commitment has yielded impressive results. During the first 10 years of the program, beginning in 2000-2001, SCJ increased its use of “best” ingredients from 4 percent to 27 percent. The company’s use of chemicals in both the two highest-rated categories — "better" and "best" — increased from 18 percent to 51 percent, while use of the lowest-rated materials decreased from 10 percent to 4 percent.

Shale gas and oil development is a far more diverse and dynamic market than the consumer market served by SCJ, so developing a toxicity reduction tracking system will be a far greater challenge. Notwithstanding this difficulty, if oil and gas producers and their fracking contractors can report such quantitative results, they would clearly demonstrate how they are implementing a toxicity reduction policy. In view of immense public skepticism about the energy industry’s environmental concern, their current vague expressions of support for “more environmentally benign ingredients” just don’t cut it.

Dr. Liroff is principal author of Extracting the Facts: An Investor Guide to Disclosing Risks from Hydraulic Fracturing Operations

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