Coal’s Hidden Cost in the Billions

A study ordered by Congress says the burning of fossil fuels costs the U.S. $120 billion annually and declares coal the biggest single source of such external expenses. But the damages are likely to be even higher.

The study conducted by the National Academy of Sciences set out to measure the costs not incorporated into the market price of a kilowatt-hour or a gallon of gasoline or diesel. The main budget item: excess mortality. According to the authors, 20,000 people die prematurely every year due to health complications brought on by criteria air pollutants that are released in the process of burning fossil fuels. These toxins include soot particles, which cause lung cancer; nitrogen oxides, which contribute to smog; and sulfur dioxide, the main culprit behind acid rain. While these hidden public health costs are caused almost equally by coal and oil, their single biggest source is coal burning, according to the study.

The findings add support to the efforts of regulators and environmentalists who are pushing for stricter regulations of power plant emissions at a time when representatives of the Obama administration and the E.P.A. are debating how to move forward on the issues. However, critics of the status quo say that the estimates that were not incorporated in the study are even more noteworthy than the enormous price tag researcher from the National Academy of Sciences put on the hidden costs of fossil fuels. These include, aside from the environmental damage of global warming or the damages from burning oil for trains, ships, and planes, the damages from current solid waste management practices in the power industry.

Evidence shows that there has been a dramatic increase in coal waste products that are discarded in waterways or stored in ways that endanger human health. In many cases, such disposal or storage is not regulated or existing regulations are not enforced. Consequently, the hidden cost of power production from coal is likely to be significantly higher than the NAS estimate, critics argue. And thus far it is unclear when the Obama administration will push for additional regulation to curb the increase in harmful pollution.

The production of coal waste such as fly ash and other toxic byproducts of generating electricity from coal, in particular, has increased over the past two decades. To some extend this is the result of an increasing demand for electricity in the U.S. However, improvements in air pollution controls have contributed to this trend even more. Contaminants and waste products that used spew through the power plants’ smokestacks are now captured with greater frequency in solid form. As a result, American coal fired power plants produced 45 percent more combustion waste last year than in 1990, some 130 million tons in total. That’s enough to fill a train of box cars stretching from the District of Columbia to Australia.

While some of this waste product is used for construction fill and other “beneficial uses”, the majority is deposited in 1300 storage sites across the country, most of them unregulated and unmonitored. These dumps, which hold huge piles of this solid waste in 46 states, can reach up to 1500 acres. Frequently, they contain heavy metals such as arsenic, lead, mercury and selenium, all of which the EPA considers a threat to water supply and human health. Different studies have shown that substances leaching from storage sites can cause cancer and birth defects, according to the New York Times.

Yet currently these disposal sites are not subject to federal regulation. Tyson Slocum, an expert in environmental regulation and energy policy with the consumer rights organization Public Citizen in Washington whom I spoke with a few weeks ago, says, “The way we deal with coal combustion products is a big loophole in the country’s waste management system.” He explains that in the absence of federal policy, the states have set requirements, which vary significantly. Alabama, for example, does not regulate the waste product at all, except through nationally mandated water discharge permits. In Texas no groundwater monitoring or engineering requirements exist for utilities that dump coal ash on site.

According to Slocum, these differences in regulation are as much as the result of the varying regional influence of the coal industry as they are the product of tight state budgets. “Many states simply do not have the financial resources to pay the personnel costs necessary to regulate and monitor these waste sites.”

axelgerdau

Hydraulic Fracturing Revisted…

This blog entry is a specific reply to a previous blog entry about hydraulic fracturing.

I believe the oil and gas industry’s greatest challenge going forth is educating the public and attempting to right the past wrongs of the industry. We shall see if they ever achieve that end but the use of diesel fuels by BJ Services and Halliburton after voluntarily agreeing not to use diesel fuel is a perfect example of the poor choices that have plagued the oil and gas industry in terms of public perception. These actions are very near-sighted and could ultimately cost the industry the ability to produce oil and gas domestically (see no offshore oil production from Florida because of spills in places like California 40 years ago and the inability to obtain leases in ANWR).

The EPA has already performed a study on hydraulic fracturing for contamination. It was performed in 2004 and the result was no evidence of contamination could be found though it was for coalbed methane reservoirs and not all tight gas reservoirs. In addition, field data was not a priority as it was “a fact-finding effort based primarily on existing literature”. However, we are doing it all over again because of questionable injection fluids used by the previously mentioned companies. So not only are these companies endangering a vast resource and a very large revenue stream for them but they are using tax dollars to re-perform a study that was performed a mere 6 years ago.

My favorite issue is who is ultimately responsible IF contamination is occurring. The reservoirs are from 3,000 feet to over 9,000 feet below the surface in the Marcellus shale (average depths are 5,000-8,000 feet), other shales like the Haynesville can be even deeper. There is no fresh water aquifer that is close to that. There is also very little chance the fracture propagates from 5,000 feet to 200 feet to reach the fresh water wells. I spoke with a Baker Hughes employee who estimates the fractures in the tight formations propagate a couple hundred feet or more but nothing approaching 1 mile. So how is the contaminated fluid reaching the fresh water aquifers?

I believe it is poor well completion techniques. For environmental as well as economic reasons, a well is “cased” with thick steel and then cement is used outside the steel to eliminate the chance that fluids traveling up and down the wellbore will enter the subsurface in an undesired location. It is possible if not probable that the leaking that is occurring is due to completion techniques rather than fracturing itself. If that is the case, who is legally responsible for the leak? Is it the well completion company (Baker Hughes, Schlumberger, etc.), the operator (ExxonMobil, Shell, etc.), or the fracturing company (Halliburton, Schlumberger, etc.)? The completion company and fracture company need not be the same on any given well.

As the previous blog mentioned, the “recipes” for the fracturing fluids are proprietary. As a result, no one really knows what types of fluids are being injected. The previous blog stated

“Although not knowing precisely what makes up the mixture means nothing to the reservoir, it means a lot to those concerned with the potential environmental impacts.”

I disagree with the first point. True, the rocks themselves have no feelings or senses of course but the fluids injected are absolutely relevant to production. They can alter rock characteristics and fluid flow in the reservoir. As a result, the “recipe” is important from a production standpoint. However, the value of importance is up for debate because we do not know what any “recipe” is/was and therefore cannot develop best practices. The fracturing companies themselves might be performing those studies but the fracturing company is not the producing company. There is a real problem here from a public welfare as well as optimum recovery standpoint that needs to be addressed.

I do not believe the fracturing itself is causing contamination but I am very disappointed that my oil and gas brethren continue to unnecessarily risk public ire to make a few dollars today while ignoring tomorrow. I am very saddened the government is forced to use more tax dollars on an already studied topic. I personally think the answer should be disclosure and/or regulation of the fluids themselves and nothing more. Of course given the oil industry’s history, there is obviously doubt about whether they will actually obey such a regulation. The actions of so few can have very large consequences for so many.

Environmental Concerns Cause Grief for Shale Gas Production

Although ultimately supportive, my friends in the oil and gas industry couldn’t help but to throw in a snide remark about how I was joining the enemy or “the other side” when I told them I was quitting my reservoir engineering job to pursue a master’s degree in environmental engineering. This is because the oil and gas industry feels threatened by the goals of the environmentally friendly. Yes, environmental teams are in place within the companies to comply with the various environmental regulations that come with the work of the industry, but it must be difficult for oil companies to get excited about protecting the environment when it too often gets in the way of meeting their end goal…making money.

I say all of this as a preface to the main topic of this post: environmental regulation of shale gas production. According to a recent Scientific American article I read, the EPA is tackling rising concerns that hydraulic fracturing otherwise known as “fracing” of shale gas reservoirs can lead to drinking water contamination causing negative environmental and health impacts. Currently the specific chemicals and their amounts used for fracing is unreported, as it is more of a trial and error process much like cooking without a recipe, where the fracing fluid is concocted with a pinch of “this” and a pinch of “that” to fit the unique needs of the job at hand. Although not knowing precisely what makes up the mixture means nothing to the reservoir, it means a lot to those concerned with the potential environmental impacts.

Most shale gas reservoirs are referred to as tight gas reservoirs, which means the permeability of the rock is too low for the hydrocarbons to flow freely, thus, fracing is needed. A mixture of water, sand, and various chemicals at very high pressure are injected into the rock formation to create fractures or channels in the rock to allow for easier transport of the gas into the wellbore. See a video on fracing here.

Shale gas production has been referred to as “a game changer” for the oil and gas industry, believed to yield a substantial natural gas supply for upwards of 100 years. However, with the EPA’s investigation, the industry will face some challenges, making this perfect picture a little less rosy. If the EPA’s study were to find proof that fracing techniques have indeed contaminated drinking water supplies at dangerous levels, new policy could be put in place that requires fracing service companies to reduce the amounts of certain chemicals they inject into the reservoir as well as report the specific amount of chemicals used,  causing what might be a drastic change in the way shale gas drilling is implemented. This of course could hurt the profits of the oil and gas industry, making Big Oil very upset.

So, being a former employee of the oil and gas industry with a great appreciation for this type of work, I understand the frustration of those involved, but as a proponent of clean energy technologies, I feel what the EPA is doing is necessary as well as a good thing.