Fracking in Illinois

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Fracking in Illinois
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Regulation
Regulatory agency Illinois Department of Natural Resources, Office of Oil and Gas Resources Management
Estate ownership Split[1]
Resources
Fossil Fuels Present Coal, oil and natural gas
Number of Wells Drilled 140,000[2]
Number of Producing Wells 32,000[2]
Fracking
Total Wells Fracked 1[3]
Other State Fracking Pages
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Fracking in Illinois depends on many circumstances, such as: available energy resources, the location of these resources, applicable laws and regulations, politics, and the power of environmental and industry groups. Decisions by policymakers and citizens, including state and local governments and ballot initiatives, affect if and how fracking occurs in a state.

Recent technological advances in oil and gas drilling--horizontal drilling and hydraulic fracturing or fracking--have created a wealth of opportunities and challenges for states that have fossil fuel reserves that can be accessed through the combination of these two technologies and the industries that support them. The increased use of fracking has been an economic boon for states, not only those with fracking but also those with supporting industries, such as frac sand mining or associated machinery manufacturing.

Those opposed to fracking argue that the potential environmental and human health impacts could be large. Although wells have been fracked for over 65 years in the U.S., concerns have been raised about the ability for federal, state and local regulatory agencies to keep up with the growth and adequately protect the environment and human health. As with any type of energy extraction, either traditional or renewable, there are tradeoffs. Hydraulic fracturing, or "fracking," is the process of injecting fluid--mostly water and sand but with additional chemicals--into the ground at a high pressure to fracture shale rocks to release the natural gas inside.

In 2013 the Illinois General Assembly passed the Hydraulic Fracturing Regulatory Act. This law has been called the strictest fracking law in the nation.[4]

As of March 2013 there is only one known fracking well in Illinois, located in White County.[3] On February 26, 2014 the IDNR issued a permit that would allow Strata-X to drill a test well totaling no more than a true measured depth of 9,300 feet.[5]

See Fracking for a full explanation of how fracking is done.
See Energy Policy in Illinois for a full explanation of policy across the state.

History

Since 1853, oil and natural gas drilling has been occurring in Illinois. Illinois has produced 4 billion barrels of oil and 4 trillion cubic feet of natural gas since production began.[6] From 1940-1950 the Illinois Basin, a fossil fuels repository stretching from southern Illinois to northwest Kentucky and southwest Indiana, was the 3rd largest oil producing basin in the United States. Production fell sharply after World War II, but the creation of new drilling technologies--horizontal drilling and hydraulic fracturing--has made drilling for once uneconomical oil and natural gas reserves possible. Currently most wells in the state that are still producing oil are only producing 2 barrels of crude oil a day.[2][7]

Economic impact

Fracking is not occurring on a large-scale in Illinois and as such the economic impacts have been relatively small. There is however much speculation on the potential economic impact of fracking in Illinois. Because of the potentially large reserves in the New Albany Shale there have been some land lease sales and royalty agreements made between mineral right owners and oil and gas companies. In order to find out who owns the mineral rights for land oil and gas developers are sending landmen to counties to research these rights, which can result in fees for county governments.[8]

Taxes, fees and revenue

Under the Hydraulic Fracturing Regulatory Act those applying for a fracking permit must pay a non-refundable fee of $13,500 per application. $11,000 of this fee goes to the Mines and Minerals Fund and the remaining amount goes to the Illinois Clean Water Fund. Both funds support the regulation and environmental protection of areas under their respective agency's authority.[9] Wayne County reported $200,000 in revenue oil and gas exploration companies from 2011-2012 from fees paid to the county for processing records.[3]

Employment

Employment in oil and gas operations in Illinois, 1996-2012

The chart on the right shows employment in Oil and Gas Extraction, Drilling Oil and Gas Wells, and Support Activities for Oil and Gas Operations in Illinois and the United States. Between 2005 and 2012 employment in these areas increased by 30-40 percent.[3]

Studies

A study from a free-market think tank, The Heartland Institute, projects full-time employment to increase by 1,034 to 47,312 jobs, depending on the level of investment in the state by oil and gas companies. This figure includes direct, indirect and induced jobs. This study also projects the total economic impact to the state to range from $207.8 million to $9,509.3 million, also depending on investment from oil and gas companies.[10][11]

Royalties and land sales

In 2012 there were reports of leasing payments ranging from $75-$250 per acre, with a 15 percent royalty payment.[12]

Environmental impact

The IDNR is currently creating and implementing systems for reporting potential and actual environmental and health impacts. Because these reporting are not yet in place there is no information available on known environmental and health impacts in Illinois.[13]

Air

As with any type of energy extraction there are several areas of risk when it comes to air quality and fracking, including air pollutants such as VOCs and methane. Although fracking produces fewer carbon emissions than coal-fired power plants it produces more methane emissions during the extraction process and methane traps 20 times more carbon dioxide than other greenhouse gases. Some environmental groups have also raised concerns that methane could be leaked during the extraction process, resulting in unnecessary pollution.[14][15] Most of this pollution occurs during the well completion phase. Fracking operations can also emit known carcinogens, which have been linked with increased rates of cancer.[16]

A 2014 report from the U.S. Environmental Protection Agency found a decrease of 3.3 percent in overall greenhouse gas emissions and a 12 percent decrease in methane emissions from 2011 to 2012. Natural gas extraction is the second largest producer of methane, after cattle.[15][17]

Earthquakes

The Central and Eastern United States have been experiencing an increase in earthquakes over the last few years, according to the U.S. Geological Survey (USGS), the government agency responsible for such data. Studies from the USGS have not found fracking directly responsible for this increase in felt earthquakes, however, the USGS is looking into regulations that would use seismic data to determine thresholds dictating when and where fracking can occur.[18] There is a growing body of evidence suggesting that this growth in the number earthquakes has been caused by the increased use of injection wells to dispose of fracking wastewater. While fracking has been rarely known to cause earthquakes, there is an established scientific link between earthquakes and the disposal of fluids in deep, underground injection wells. Once a well has been fracked the water that returns to the surface is called wastewater, which contains large amounts of salt and other contaminants.[19] Some of this water can be recycled, but that water which can't be recycled is often stored in injection wells. These injection wells are generally considered the safest and most cost-effective place for wastewater remaining from fracking operations to be stored. Injection wells are located thousands of feet underground and are encased in cement. Multiple drilling wells often rely on one disposal well for storing their wastewater. The U.S. Environmental Protection Agency estimates there are 144,000 of these wells across the United States receiving 2 billion gallons of frack fluid per day.[18][20]

Induced seismology, or man-made earthquakes, have been around for decades and can be caused by mining, damming rivers and injecting fluids into underground wells. Earthquakes are caused by injection wells as water is pumped into underground wells, causing the faults under the earth to slip. Even though scientists at the USGS have even been able to cause earthquakes on purpose by carefully injecting liquid into the earth, the link between injection wells and earthquakes is not fully understood. One of the largest concerns for scientists and regulators is that they do not have the tools to predict whether wastewater will cause seismic activity. These concerns are compounded by the lack of knowledge about where faults are located across the Central and Eastern United States. The USGS is just beginning to map these areas in more detail in order to understand the seismic risks. As of June 2014, these earthquakes have typically been small, two or three in magnitude on the Richter scale, but at least one scientist has raised concerns that earthquakes could grow in intensity if old injection wells continue to be used for storage.[18][19]

Water

When it comes to water protection and fracking there are four main areas of risk: the depletion of fresh water sources, spills and leaks of fracking fluid into water, mismanaged produced water and flowback and stormwater pollution. Up to 10 million gallons of fresh water may be required to frack one well. Stormwater, flowback, produced water and waste water can be harmful because they contain total dissolved solids and naturally occurring radioactive materials. Because of the huge growth in fracking there are still many uncertainties about the effects of fracking on water. There are studies that link fracking to groundwater contamination, but they remain controversial. The U.S. Environmental Protection Agency is releasing a report in 2014 on the potential impacts of fracking on drinking water, and is working on effective programs for managing these potential risks.[21][22] Any fracking in Illinois may not use this much water however. Because of the shallow shale rocks in the state most oil and gas extraction companies are expected to use gels or other fluids during fracking.[23][14][15]

Health

Because of the huge growth of fracking little is known about the potential impacts to human health. Government agencies dealing with human health issues have raised concerns about some chemicals that can released during the fracking process including VOCs. The Centers for Disease Control is working with the EPA and federal, state and local agencies to better understand potential impacts better.[24][25]

Geographical areas of activity

Below southern Illinois is the Illinois Basin Province. There are several large-oil producing formations including Clay City, Salem-Louden Anticlines, DuQuoin Monocline and La Salle. There are:

  • eight shale plays within the Illinois Basin
  • one coalbed methane play
  • one continuous play
  • two unconventional
  • six conventional plays.[26]

Oil was discovered in the Illinois Basin in 1866 in Litchfield. Major production from this basin began in 1905. There have been three waves of production in this basin, the first was from 1905-1910. The development of exploration techniques led to another wave from 1930-1940. The third wave occurred in 1950 with the development of fracking.[26]

Map of shale plays and formations in Illinois
Oil and gas reserves key.png

Unconventional plays

  • The Post-New Albany Play contains both oil and natural gas, although oil makes up a majority of the recoverable reserves, and covers 34,000 square miles. The shale rock in this formation is more than 460 feet thick. The Post-New Albany play is a mature play and accounts for more than 95 percent of the production within the Illinois Basin. Despite its age, or maturity, the play is expected to have more than one million barrels of oil left.[26]
  • The Hunton Play contains oil and natural gas and covers 29,000 square miles. This play has yielded 150-200 million barrels, or about 4 percent, of the oil produced from the Illinois Basin. Further development is limited by the quality remaining in the reservoirs. The two largest fields in this play are expected to have 22 million barrels of oil.[26]
  • The Silurian Reef Play includes oil and carbonate reserves and covers 35,000 square miles. The fields in this play contain less than 5 million barrels of oil, although the largest two fields have an estimated 29.8 million barrels. This play is very mature and there is little chance of finding new fossil fuel resources.[26]
  • The Middle and Upper Ordivician Carbonate Play has produce oil and some natural gas. This play also has limited future development.[26]
  • The Rough Creek Graben Play is still considered to be hypothetical and requires more exploration.[26]
  • The Pre-Middle Ordovician Play is another hypothetical play. There has been some testing of this play and some hydrocarbons were recovered, but nothing with commercial potential.[26]

Conventional plays

  • The New Albany Shale Gas Play is a hypothetical play. The New Albany Shale formation is 350 million years old, and could lead to the production of 300 billion barrels of oil. This play is generating much attention because of the possible reserves it holds.[2][26]

Coalbed gas play

  • In the Central Basin Play some gas has been found in abandoned coal mines, and other shallow locations, but no major drilling has occurred. The reserves in this play are considered to be moderate to poor. More infrastructure is needed before more development of this area can occur.[26]

Departments, agencies and organizations

  • The Illinois Department of Natural Resources (IDNR) is responsible for managing Illinois' natural, cultural and recreational resources for current and future generations and educating the public about these resources. Marc Miller is the current Director of the IDNR. The IDNR is the main responsible party for enforcing the 2013 Hydraulic Fracturing Regulatory Act. The IDNR also oversees 12 offices, complexes or museums.[27][28][29]
  • The Office of Oil and Gas Resource Management regulates all permitting, drilling, operating and reclamation of oil and gas wells in Illinois. This office is also responsible for enforcing the Illinois Oil and Gas Act. Through these responsibilities the office oversees the cleanup of abandoned well sites, which are funded by the Landowner Grant Program, and the regulation of fluids that are injected under the ground through the UIC program.[30]
  • The Office of Mines and Minerals is another office under IDNR. This office is responsible for the state Abandoned Mines Land Reclamation program. It also oversees oil and gas permitting, mine safety and mine blasting.[31]
  • The Illinois State Geological Survey (ISGS) provides information on the environment, public safety and the economic vitality of the state. The ISGS is part of the Prairie Research Institute at the University of Illinois Urbana-Champaign.[32]
  • The Illinois State Water Survey (ISWS) is responsible for researching and disseminating information about water the effects citizen's quality of life, environment and economic development. The ISWS is part of the Prairie Research Institute at the University of Illinois Urbana-Champaign.[33]
  • The Office of the Illinois State Fire Marshal is responsible for ensuring compliance with state laws regarding storage tanks, pressure valves and fire protection systems.[34]

Laws and regulations

In 2013 Illinois passed the Hydraulic Fracturing Regulatory Act, called the most strict fracking regulation in the nation. This law gives the state much of the responsibility for overseeing fracking, although it does however designate some approval authority to local municipalities. See Illinois Hydraulic Fracturing Regulatory Act for more.[35]

State

  • The Illinois Hydraulic Fracturing Regulatory Act (2013), designates the IDNR as the department responsible for granting permits to use hydraulic fracturing or fracking to extract oil and gas. This law sets standards for most aspects of well site preparation, well drilling, hydraulic fracturing and reclamation. It also sets up permitting and reporting requirements, water, air, health and other environmental protections, water quality testing provisions, legislative oversight, taxes and criminal and civil penalties for violations of the law.[9] DocumentIcon.jpg See bill: Illinois General Assembly Illinois Hydraulic Fracturing Regulatory Act
  • The Illinois Environmental Protection Act creates state-wide rules to minimize environmental damage and encourages local governments to do likewise. This law assigns much of this responsibility to the IDNR and the Department of Commerce and Economic Opportunity and agencies under their direction. This act creates rules and permitting systems designed to prevent or limit air, water, noise, hazardous waste, atomic radiation, toxic chemical reporting, spill reporting, and creates a Right-To-Know program. This law creates rules regarding coal combustion by-product and waste. It finds air pollution to be "a menace to public health," limits certain activities to limit air pollution and creates an air pollution permit system. This law also creates Renewable Portfolio Standards (see Energy Policy in Illinois for more information).[36] DocumentIcon.jpg See bill: Illinois General Assembly Illinois Environmental Protection Act
  • The Illinois Oil and Gas Act creates and Oil and Gas Board to advise the Director of the IDNR on regulation affect the industry. This act gives the IDNR authority to write rules to prevent blowouts, regulate directional wells, the deepening of wells, the plugging of wells and collect annual well fees. This law also creates rules regarding oil and gas rights leasing and lease sales. This act also creates a permitting system for Underground Injection Wells, liquid oil field waste transportation systems and the Underground Resources Conservation Enforcement Fund.[37] DocumentIcon.jpg See bill: Illinois General Assembly Illinois Oil and Gas Act

Local

  • On March 18, 2014 citizens in Johnson County voted against a ban on fracking in that county.

Major companies and affected industries

  • Strata-X Energy Ltd. has two horizontal drilling permits from the IDNR. This permit is for a well in Clay County. The company has leased oil and gas exploration rights across 49,200 acres in the Illinois Basin.[5]

Major organizations

  • The Illinois Oil and Gas Association is a state interest group for oil and gas producers and those leasing land or receiving royalties from oil and gas activities. Organized in 1944 this organization provides information on crude oil prices, oil and gas regulations and has an insurance program.[38]
  • The Illinois Petroleum Resources Board was created in 1988 under the Illinois Petroleum Education and Marketing Act. This organization works to educate the public on oil and gas production, promote environmental best practices and support oil and gas research.[39]
  • The Southern Illinoisans Against Fracking Our Environment is SAFE is responsible for the Johnson County fracking referendum. SAFE's mission is to ban fracking until this method of extracting oil and gas presents no risks to the environment.[40]

Energy consumption

The following table shows the energy types that are used to heat homes in Illinois. Natural gas makes up almost 50 percent of home heating in that state followed by electricity, fuel, LPG, and other. Because of the way that utilities are regulated consumers shouldn't expect to see lower natural gas prices in their state until regulators goes through their next ratemaking cycle.[21]

See State Energy Rankings to compare all 50 states
See Energy policy in Illinois for information on the price of natural gas.
Consumption of Energy For Heating Homes in Illinois
Source Illinois 2011 USA Average 2011
Natural Gas 79.7% 49.5%
Fuel Oil 0.2% 6.5%
Electricity 14.6% 35.4%
Liquid Petroleum Gases (LPG) 4.1% 5%
Other/None 1.4% 3.6%

News items

This section displays the most recent stories in a Google news search for the term "Illinois+Fracking"

All stories may not be relevant to this page due to the nature of the search engine.

Illinois Fracking News Feed

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See also

External links

References

  1. Illinois General Assembly, "Mining Act of 1874," accessed April 17, 2014
  2. 2.0 2.1 2.2 2.3 "Free Republic," "The New Albany Shale" October 24, 2013, accessed February 27, 2014
  3. 3.0 3.1 3.2 3.3 "Illinois Department of Employment Security," "The Fracking Industry and Its Potential Impact on the Illinois Economy," July 2013, accessed March 6, 2014
  4. "ThinkProgress," "Illinois Adopts Nation's Strictest Fracking Regulations," June 19, 2013, accessed March 6, 2014
  5. 5.0 5.1 Southern illinoisans Against Fracturing Our Environment, "Strata-X Receives Permit to Drill Second Horizontal Well," February 26, 2014
  6. One barrel of oil produces about 19 gallons of gas U.S. Energy Information Administration, "Frequently Asked Questions," May 30, 2013, accessed March 18, 2014
  7. Cite error: Invalid <ref> tag; no text was provided for refs named State_Profile
  8. Cite error: Invalid <ref> tag; no text was provided for refs named New_Republic
  9. 9.0 9.1 "Illinois State Assembly," "Hydraulic Fracturing Regulatory Act" accessed March 1, 2014
  10. Cite error: Invalid <ref> tag; no text was provided for refs named Heartland_study
  11. This study uses IMPLAN modeling, a type of economic analysis that uses data to predict future economic impacts based on models
  12. "Courier Press," "Leasing frenzy suggests two Illinois counties on verge of oil boom," February 18, 2012, accessed March 10, 2014
  13. "Chicago Tribune," "Environmentalists feel betrayed by proposed fracking rules," November 17, 2013, accessed March 6 2014
  14. 14.0 14.1 University of Oklahoma, "Hydraulic Fracturing and Water Resources," accessed March 15, 2014
  15. 15.0 15.1 15.2 Senate Committee on Energy and Natural Resources, "Written Testimony of Frances Beinecke," accessed March 2, 2014
  16. Stanford Law School Student Journals, "Local Government Fracking Regulations: A Colorado Case Study," January 2014
  17. The Wall Street Journal, "Talk About Natural Gas: Cow Belches Top Methane List," February 26, 2014
  18. 18.0 18.1 18.2 U.S. Geological Survey, "Man-Made Earthquakes Update," January 17, 2014, accessed March 10, 2014
  19. 19.0 19.1 National Geographic, "Scientists Warn of Quake Risk From Fracking Operations," May 2, 2014
  20. National Public Radio, "How Oil and Gas Disposal Wells Can Cause Earthquakes," accessed June 2, 2014
  21. 21.0 21.1 Stanford Law School Student Journals, "Local Government Fracking Regulations: A Colorado Case Study,"January 2014
  22. U.S. Environmental Protection Agency, "Natural Gas Extraction - Hydraulic Fracturing," accessed March 10, 2014
  23. "Chicago Tribune," "Environmentalists feel betrayed by proposed fracking rules," November 17, 2013, accessed March 6 2014
  24. U.S. Department of Health and Human Services, "Garfield County," March 13, 2008, accessed March 10, 2014
  25. Centers for Disease Control, "Review of Federal Hydraulic Fracturing Research," April 26, 2013, accessed March 10, 2014
  26. 26.0 26.1 26.2 26.3 26.4 26.5 26.6 26.7 26.8 26.9 "U.S. Geological Survey," "Illinois Basin Province," accessed March 1, 2014
  27. "Illinois Department of Natural Resources," "Mission Statement," accessed March 5, 2014
  28. "Illinois Department of Natural Resources," "Did You Know? DNR Facts and Figures," accessed March 5, 2014
  29. Cite error: Invalid <ref> tag; no text was provided for refs named Fracking_law
  30. "Illinois Department of Natural Resources," "Oil & Gas Resource Management," accessed March 5, 2014
  31. "Illinois Department of Natural Resources," "Did You Know? DNR Facts and Figures," accessed March 5, 2014
  32. "Illinois State Geological Survey," "About ISGS," accessed March 10 2014
  33. "Illinois State Water Survey,""About the Illinois State Water Survey," accessed March 10, 2014
  34. "Office of the Illinois State Fire Marshal," "Commercial," accessed March 10, 2014
  35. "ThinkProgress," "Illinois Adopts Nation's Strictest Fracking Regulations," June 19, 2013, accessed March 6, 2014
  36. "Illinois General Assembly," "Environmental Protection Act," accessed March 10, 2014
  37. "Illinois General Assembly," "Illinois Oil and Gas Act," accessed March 5, 2014
  38. "Illinois Oil and Gas Association," "Home," accessed March 10, 2014
  39. "Illinois Oil and Gas Association," "About Illinois Oil and Gas Association," accessed March 10, 2014
  40. "SAFE," "Mission," accessed March 5, 2014