Last Tuesday, January 16th, the NC Economic Developers’ Association hosted a luncheon in Raleigh and heard a presentation on fracking from DENR staff. Attendees were all levels of economic development professionals or associated fields. The talk was a brief overview of the geological history of the Triassic Basins and how carbon deposits formed there, a quick tutorial of the fracking process, some technical information on assessment of the gas resources in the Deep River Triassic Basin, and an outline of the legislative process to shale gas development.
The presentation was informative, but what was really telling was the conversation before hand and the questions and discussion afterwards. A couple of conversations before the presentation centered on the question of water resources, and at least a couple individuals there had no idea that the fracking process uses an average of 5 million gallons per frack. They do understand that water is vital to economic development, for the full range of industry and business in a community/region. The other conversation centered on the volume of the shale beds in North Carolina and how that compares to the other shale plays that are getting so much attention in places like Pennsylvania and Ohio. It is important to note that the geology of our Traissic Basins is not analogous to that of the Marcellus or Utica Shale of the Appalachian Basin, not only in the broken and fractured nature of our formations, but also in the narrow extent of the formation.
An editorial from the Sanford Herald cited by NC Oil and Gas calls attention to the low unemployment figures in North Dakota, but the nature of the shale gas there is vastly different than what we have. It is important to keep in mind that the oil boom in North Dakota has been so rapid that the oil industry has siphoned off almost all the professionals in other fields: electricians, geologists, engineers. So, examining the volume of resource in NC, the DENR study (section 5) estimated that the drilling work would come and go within 7 years. Perhaps most telling, in contrast to the situation in North Dakota (since that was cited), the economic impacts of fracking as stated in the shale gas study estimates the following in job development:
…drilling activities in the Sanford sub‐basin would sustain an average of 387 jobs per annum over the seven‐year time period. This figure includes all direct, indirect and induced jobs and is an annual average calculated from the total effects in Table 5‐3.
Folks at my table half joked that what we have here in North Carolina is the “rainy day reserve.” It was not spelled out during the presentation, but an attendee observed that the amount of gas in the Deep River Basin is roughly equivalent to the amount of gas that this state would use over 4 to 5 years. Note that this calculation on the volume of gas is a calculation of gas in the shale based on the porosity of the rock, the geochemistry of the rock, and the dimensions of the rock formation; it is not necessarily the calculation of what is economically extractable. That fact notwithstanding, the estimate of the volume of gas is conservative at this point.
Another attendee asked if sand from the nearby sandhills was sufficient to use in fracking, and speculation is that it is not a suitable sand, so fracking developers won’t be bringing investments to other state resources. The same participant heard the job figures cited above and asked what kind of profits to the state are we talking about (unanswerable question right now), noting that it is not worth anyone’s time to direct resources to accommodate an industry that is going to come and go so quickly unless they bring in a whole lot of profit. The public comments section to the DENR shale gas study (see note #61 in the DENR study, pages 473-474) reflect a similar question of worth developing an industry for unknown benefits and investments over such a short time.