Geologists believe drillers can tap North Georgia natural gas without fracking

Geologists believe drillers can tap North Georgia natural gas without fracking

Region may have larger deposits than projected; local environmentalists push for new regulations on controversial technique

December 27th, 2016 by Tyler Jett in Local Regional News

Cows stand near a capped oil well on a farm in rural Whitfield County on Friday, Dec. 16, 2016, near Dalton, Ga. Buckeye Exploration, a company out of Oklahoma, drilled the 5,100 foot test well in 2011.

Photo by Doug Strickland /Times Free Press.

“What we have is a stone-age law and we're trying to bring it into the 21st Century.”
Joe Cook

DALTON, Ga. — Local environmentalists hope to push fracking regulations through the Georgia capitol next year.

But as they do that, another issue remains unknown: How much natural gas actually sits a mile below the ground in Northwest Georgia? And can anyone take advantage?

Because while fracking is controversial, with scientists linking the hydraulic fracturing practice to earthquakes and contaminated water, places like Whitfield and Floyd counties are in an interesting position. Drillers and geologists believe they can tap gas there without implementing the practice at all.

When drillers frack, they rush water and sand and chemicals into a rock formation, called shale. The natural gas sits inside the shale. The fracking cocktail pops the rock open, holds it open and allows the driller to suck the natural gas to the surface.

U.S. shale production

U.S. shale production, billion cubic feet per day

October 2006: 4.1

October 2007: 5.8

October 2008: 8.2

October 2009: 11.2

October 2010: 17.2

October 2011: 24.3

October 2012: 29.6

October 2013: 32.3

October 2014: 38.6

October 2015: 41.4

October 2016: 43.1

Source: U.S. Energy Information Administration

A cow stands near a capped oil well on a farm in rural Whitfield County on Friday, Dec. 16, 2016, near Dalton, Ga. Buckeye Exploration, a company out of Oklahoma, drilled the 5,100 foot test well in 2011.

A cow stands near a capped oil well...

Photo by Doug Strickland /Times Free Press.

North Georgia, however, sits on the Conasauga Shale, a formation that runs from Alabama, through the Peach State and into Southeast Tennessee. And unlike in other shale formations, geologists don't think drillers have to frack here.

The reason? Hundreds of millions of years of plate tectonics. Rock formations shifted into each other, collided and broke each other open. Nature's little fight left the region with a potentially big business — if someone can figure out how to extract the gas.

So far, though, no luck. Economic forces are to blame. For one, oil prices have been cheap these last couple of years, leaving people in the energy business with little incentive to explore an unknown area like North Georgia. But also, the few people who have tried to make money off the Conasauga Shale have not been successful.

Still, the gas sits down there. Bill Thomas, a geologist who surveyed a narrow band of the Conasauga Shale in Alabama, once projected that this particular swath could supply the country's energy needs for 20 years.

Now, he believes his projection was wrong. There might actually be 20 percent more natural gas there than he first believed.

"There's oil to be found," said Jerry Spalvieri, who found "moderate" success when he drilled a test well in Whitfield County in 2010. "It hasn't been found yet. There's nothing to say how much is there. There's also nothing to say there's not a lot there."

Water concerns

Environmentalists aren't so sure drilling here would run smoothly.

Joe Cook, advocacy and communication coordinator for the Coosa River Basin Initiative in Rome, said home owners have raised concerns to him in recent years as drillers offer money for mineral rights on their land. The rights would give companies the ability to drill on people's property.

So far, no company has asked to frack in Georgia, according to the state's Environmental Protection Division, though Spalvieri received a permit to drill two wells in Whitfield County.

Cook worries that drillers will start fracking here, eventually. And he is pushing for updated regulations. Right now, he said, state environmental officials rely on the Georgia Oil and Gas Deep Drilling Act. The law was passed in 1975, before drillers perfected fracking technology.

"What we have is a stone-age law," Cook said, "and we're trying to bring it into the 21st Century."

The primary concerns with fracking deal with water, in one way or the other. When drillers frack, they rush water and chemicals into the shale. But what happens next?

Some environmentalists argue that the chemicals can seep into drinking water. Infamously, in the documentary "Gasland," a homeowner near a fracking operation struck a match under his faucet. The water, apparently contaminated, caught fire.

But drillers says their fracking operations don't harm the drinking water. The shale that they break open is thousands of feet below drinking water, meaning the chemicals stay far away. In 2015, the U.S. Environmental Protection Agency released a report saying the fracking industry has not caused "widespread harm" to drinking water, though drillers need to maintain safeguards — like properly cementing wells and treating wastewater discharge.

Earthquakes are another concern. They, too, are caused by water. In Oklahoma, for example, drillers discharge fracking water into the Arbuckle, an ancient mountain range deep under ground. However, this practice has made the land unstable, said Todd Halihan, a geology professor at Oklahoma State University.

Scientists believe the problem can come from one of two issues: the amount of water that goes into the Arbuckle, or how hard the drillers pump that water down into the formation. Either way, the practice has boosted earthquakes. Before 2009, Halihan said, the state experienced one to two earthquakes per year above a magnitude of 3.0.

In 2015 alone, he said, people in the state saw 907 of those kind of earthquakes.

After the state passed regulations about how much water drillers could discharge into the Arbuckle in May, according to the Associated Press, the amount of earthquakes above magnitude 3.0 dropped — but only slightly, from 2.3 quakes per day to 1.3. Even then, Halihan said the state lived through a magnitude 5.8 earthquake in September, the largest one recorded in Oklahoma history.

In Georgia, Cook is pushing for a number of regulations. If a driller plans to frack, he believes residents in the community should receive notice at least 30 days in advance, giving them a chance to share concerns. Companies should also have to monitor the nearby drinking water to make sure chemicals aren't seeping in.

In addition, he said, companies should be required to disclose all chemicals they are going to use to break open the rock.

Gil Rogers, director of the Southern Environmental Law Center's Atlanta office, believes companies also should have to disclose what time they will frack, as well as how often they will do so. He said people in rural communities will be unhappy with a rush of trucks down their narrow roads, as well as lights at night, ruining the view of the clear sky.

State Rep. John Meadows, R-Calhoun, told a reporter with Community Newspaper Holdings, Inc., last month that he has asked legislative counsel to write some potential regulations to go to the state Capitol after the new session begins Jan. 9. But Meadows, who did not return calls or an email seeking comment, does not plan to sponsor that type of bill, Cook said.

He believes Meadows, chairman of the state House's Rules Committee, will be too busy to sponsor the bill. So Cook is looking for someone else to champion the legislation.

"I suspect we will have a sponsor from Northwest Georgia here soon," he said. "We just don't know who it's going to be."

What's out there

Thomas, the geologist in Alabama, said fracking on the Conasauga Shale would actually accomplish the opposite of what the drilling practice is intended to do.

When drillers frack, they hope to break open the rock and free the natural gas. But because the Conasauga Shale is naturally fractured, trying to break it open only serves to move the rock around, potentially trapping some of that gas, making a driller's job more difficult.

Thomas wonders if that's what happened in St. Clair County, Ala., where some drillers struck out during a six-year experiment. From 2005-10, two companies extracted about 130 million cubic feet of natural gas that it could sell from the region, according to the state's oil and gas board.

That figure sounds like a lot, and it is sometimes difficult to put natural gas production in context. But by comparison, drillers on the lucrative Barnett Shale in Texas pump out 25 times as much natural gas every day as what dillers in Alabama found over six years, according to the U.S. Energy Information Administration.

Still, Thomas believes plenty of gas is down there. When he sampled a swath of the Conasauga Shale from Gadsden, Ala., to just north of Tuscaloosa, he estimated that area held 625 trillion cubic feet of gas. That's about 4.8 million times as much gas as what the drillers have found.

The trick is actually finding the gas.

"Fracking might actually have decreased the flow as opposed to increasing it," Thomas said.

Around the same time people stopped drilling in Alabama, Spalvieri explored Northwest Georgia. In October 2010, after securing about 7,000 acres in mineral rights, Spalvieri ran a test well off Brown Road NE in Whitfield County. He drilled 5,100 feet under the ground, without fracking.

Spalvieri, the president of Buckeye Exploration in Oklahoma, did not provide specifics about the test's results to the Times Free Press, but he said he found "moderate success." Another test in another area of Whitfield County in April 2011 was not as rich. Spalvieri stopped exploring the area soon after.

But he is still interested, just not right now. When the price of oil dropped a couple years ago, Spalvieri decided it was not the proper time to push an unknown area. Natural gas isn't a lucrative prospect when oil is cheap.

Still, he has seen Thomas' projections. And he is intrigued.

"There's so much that hasn't been drilled or proven or disproven," he said. "We're barely scratching the surface."

Nobody has drilled the Conasauga Shale north of Georgia, either. Renée Victoria Hoyos, executive director of the Tennessee Clean Water Network, said the shale is deep and expensive to explore. Unless the price of oil rises, she doesn't think anyone will start drilling.

Market forces

Mike Mallen, an environmental lawyer at Miller & Martin, said he heard often from companies trying to buy mineral rights in Southeast Tennessee about five years ago. Then, the noise stopped.

"The industry went to sleep," he said. "It has a very, very fast trajectory. The economies of competing fuels put it to bed."

The price of oil dropped a lot. In June 2014, according to the Energy Information Administration, a barrel of oil cost $112. By January 2015, the cost had dropped to $48. By January of this year, the price was down to $31.

The plummet, according to an analysis by Vox.com, is simply a product of supply and demand. From 2010-14, economies across the globe bounced back from the recession. Demand for oil increased. Meanwhile, oil producers were providing about the same amount as before. Countries' stockpiles of reserves dropped. The price skyrocketed.

Then, supply caught up with demand. Iraq and Libya started producing more. Plus, natural gas from the United States' established shale formations — like the Barnett Shale and the Marcellus Shale in the Northeast — were pumping out more and more.

In October 2013, according to the information administration, U.S. shale formations produced 32.6 billion cubic feet of gas per day. In October 2014, the number was up to 38.6 billion cubic feet. In October 2015, 41.4 billion cubic feet.

The rise from the U.S. helped drive oil prices down.

But since January of this year, those prices have actually increased. In October, according to the information administration, oil cost $49.52 per barrel. Still, that's half the cost countries were paying in the summer of 2014.

"With gas prices being what they are," Cook said, "it's highly unlikely we will see much activity [with natural gas drilling in Georgia], if any."

The prices may change, though. Driven by Saudi Arabia, members of OPEC agreed last month to cut down on oil supply. The cost of a barrel of oil will rise, though analysts disagree on just how dramatic the impact will be.

Kelgo Matsubara, CFO of the Japanese firm Mitsui & Co., told Bloomberg the cost will rise to about $60 per barrel. That could prompt a driller like Spalvieri to look for a profit in Northwest Georgia.

Then again, the other U.S. producers might pump out more natural gas as a result. And that could bring the price of OPEC's oil back down. And that could keep someone like Spalvieri away for a while longer, maybe forever.

Contact staff writer Tyler Jett at 423-757-6476 or tjett@timesfreepress.com. Follow him on Twitter @LetsJett.