In Aguust 2014, Mexico’s President Enrique Peña Nieto signed into law an energy reform bill that opens up the country’s sizeable oil and gas industry to private and foreign investment for the first time in 75 years. The new legislation permits the use of fracking, after a majority of senators rejected a clause that would have prohibited the controversial technique.
Fracking involves drilling to great depths and blasting a mixture of water, chemicals and sand against solid rock, to form fissures through which oil and gas can be extracted. While high-volume fracking has been around since the 1970s, the more modern technique of using horizontal drilling to access unconventional gas reserves dates back less than a decade. As such, the long-term impacts are still largely unknown.
According to the US Energy Information Administration (EIA), Mexico ranks in the top 10 countries worldwide in terms of the size of its recoverable shale oil and gas reserves. Mexican state-owned oil giant Petróleos Mexicanos (Pemex) estimates that Mexico’s shale formation holds the equivalent of 60m barrels of oil - more than the country has pumped out using conventional means since the turn of the century. Natural gas is thought to be especially plentiful and cross-border pipelines are already being developed.
Many companies maintain fracking is a safe form of energy extraction. However, environmentalists are quick to point to a less than perfect scorecard for the US industry, where fracking first took off.
Fracking: an economic boom?
One example of the impacts of fracking in the US is the Eagle Ford Shale region (known as the Burgos Basin in Mexico). This enormous oil and gas field stretches more than 600km across Texas and is believed to extend hundreds of kilometres into Mexico. Since 2008, more than 8,000 wells have been sunk on the Texan side of the shale patch, compared with just 25 in Mexico.
Terrence Henry, a reporter with State Impact Texas, says the fracking boom in Texas “has brought jobs, money and more energy security to Texas and the country”. However, he also counters that “it [has] also damaged roads, increased traffic and accidents, strained local governments and caused housing prices to skyrocket in parts of the state”. Residents in some areas have also been exposed to atmospheric pollutants such as nitrogen oxides and volatile organic compounds, which can lead to health problems.
The New York Times reported earlier this year that despite experiencing one of the greatest oil booms the country has ever seen, Texas remains an “incongruous mix of cascading wealth and crushing hardship”. Of the billions of tax dollars claimed from the oil and gas industry every year, very little is used to fund social services. This helps explain why Texas has one of the highest rates of poverty in the country.
Environmental costs of fracking
In 2011, the United States Environmental Protection Agency (EPA) estimated that 70bn to 140bn gallons of water are used to fracture 35,000 wells in the US each year. That is as much water as 2-4m people would use. In the US, the logistics of moving that much fresh water has proven problematic, affecting air quality and accelerating road surface degradation.
The Marcellus Shale patch is the largest source of natural gas in the US. A study by San José State University and environmental consultants Downstream Strategies reports that the vast amounts of water used, the majority of which come from rivers and streams, are cause for concern and “could have huge repercussions in water-poor states”. The study found that more than 90% of water pumped underground remains there, permanently removing it from the water cycle.
This is bad news for Mexico, as some of the areas identified as prime spots for fracking are among the most arid in the country. In 2012, Mexico experienced the worst drought on record, with 18 of the country’s 32 states affected. In the northern border state of Chihuahua, which officials say is ripe for fracking, 350,000 cattle starved to death, as lack of water meant no grass for the animals to eat.
So far, Mexican energy officials have said they will worry about the issue of water later. They are primarily intent on assessing the scale and viability of the shale reserves, but there is talk of potentially bringing in a pipeline of water from the sea or from wetter coastal regions.
Another risk associated with fracking comes from the chemicals used to help blast holes in the underground rock formations. Many chemicals used for fracking are known to be harmful to humans and to wildlife. A recent study by researchers at the University of Missouri found that the fracking process involves the use of endocrine-disrupting chemicals (EDCs), which interfere with the body’s hormones and have been linked to cancer, birth defects and infertility.
Scientist William Stringfellow, of the Lawrence Berkley National Laboratory in California, recently reviewed 250 chemicals commonly used in fracking. He found that 10% of the compounds are toxic to mammals or aquatic life. However, for one-third of the substances, very little is known about their toxicity to humans or animals. Stringfellow says even the less-hazardous materials need to be treated before being released into the environment.
While chemicals only make up a small proportion of fracking fluids, the enormous quantities of water used mean that tonnes of chemicals are correspondingly also needed. Some communities in the US have struggled to find out which chemicals are being used at particular fracking sites, as companies are often reluctant to divulge these details. Fracking fluids that remain underground have the potential to contaminate groundwater for years to come.
The European Union (EU) recommends that fracking should not be allowed near areas where water is used for drinking, because of the potential for contamination. Waste water needs to be treated for reuse or disposed of safely, both of which are expensive. Fracking also has the potential to affect air quality, because of the flow back of hazardous materials after fracking has occurred. Some volatile organic substances may become airborne, meaning they can be inhaled or absorbed through the skin, while hazardous underground materials may be pushed to the surface.
In several US states, an increased number of earthquakes seems to correspond with the deep injection of waste water into disposal wells after fracking has taken place. As one of the most seismically active countries in the world, this may be a worrying prospect for some communities in Mexico.
One environmental advantage that fracking proponents point to is that natural gas is “clean burning” at the point of combustion, which means it emits approximately half the carbon dioxide of fossil fuels such as coal. However, researchers point to the potential for methane (a more potent greenhouse gas than carbon dioxide) to be released as fugitive emissions during the drilling, production and transportation of natural gas. Therefore a life-cycle approach is a more appropriate way to estimate the amount of methane released during the fracking process. Better estimates are still needed in this area.
A 2014 EU report states: “To extract the same amount of [shale] gas as in the conventional process, more wells are drilled over a wider area, generally increasing the environmental footprint.” However, the report’s authors state that shale gas could provide climate benefits if extraction replaces more carbon-intensive fossils fuels, without displacing investments in the renewable sector.
However, a growing body of experts and advocates, including former NASA scientist James Hansen, dubbed the “father of global warming”, have called for an urgent phase-out of fossil fuels. As conventional forms of oil and gas are depleted, coal and shale reserves represent the largest stores of fossil fuel carbon. Even Volker Beckers, ex-head of one of the Big Six energy companies in the UK, says that our current energy system is “reaching its natural end”.
Faced with the twin challenges of lowering carbon emissions and ensuring adequate freshwater supplies, it seems fracking does little to advance either cause. While the global energy sector as a whole uses staggering amounts of water, equal to about 15% of all water withdrawn worldwide, the International Energy Agency says that more emphasis on energy efficiency, wind and solar power would “contribute to a low-carbon energy future without intensifying water demands significantly”.
An uncertain future for fracking in Mexico
Mexico does not have a good track record in terms of the environmental and social impacts of its extractive industries. With even less regulation than in the US, compounded by widespread corruption, many communities close to proposed fracking sites are understandably nervous about how drilling for shale oil and gas may affect their lives.
A vocal group of politicians and civil society groups have called for a moratorium or outright ban on fracking. The Mexican Alliance Against Fracking, a coalition of environmental and human rights groups, presented a 10,000-strong petition to the senate in July 2014, while at the same time tens of thousands of people took to the streets in Mexico City. Ultimately, legislators were not persuaded to prohibit the controversial technique.
“One cannot affect the viability of the planet in the name of economic development”, says Chihuahua Senator Javier Corral, of the right-wing National Action Party. “[Fracking] will have devastating consequences in the state of Chihuahua, from the intensive use of water and its contamination, and from methane emissions that produce 21 times more greenhouse gases than carbon dioxide.”
“Debate on whether energy reforms in Mexico are worthwhile should not be limited to the potential threat to national sovereignty by opening the oil sector to private capital”, Dolia Estevez wrote for Forbes in June 2014, “but should also include whether increased productivity could ultimately be a self-defeating achievement when weighed against the environmental hazards.”
Mexico currently lacks much of the infrastructure required for fracking, while huge amounts of water would be hard to come by in the drought-stricken northern regions. Perhaps the Mexican government hopes to lure companies drilling in the Texas shale patch across the Rio Grande, but a question mark remains as to whether US companies will in fact be eager to send crews across the border.
It is hard to ignore the large swathes of lawlessness currently found in the north of Mexico. No doubt company executives will be aware that Mexico’s shale reserves overlap with the turf of the Zetas and Gulf drug cartels. Pemex already experiences theft and siphoning from its oil pipelines on a grand scale. Between January and September 2014, the state-owned company estimates it lost $1.15bn to illegal oil tapping. Journalist James Bargent wrote in Insight Crime: “Fuel theft in Mexico has evolved from a small time criminal activity carried out by robbery rings and corrupt Pemex distributors to a sophisticated operation linked to Mexico’s main criminal groups.”
Since the 1990s, the Mexican government has increasingly militarised the country in order to protect key economic interests, namely the mining, gas and oil industries. This has resulted in a high death toll among civilians, deepened insecurity in the country and led to bouts of civil unrest. In this climate, the safety of workers is also a very real issue, as steel-mining giant Arcelor Mittal found in 2014 when one of its executives was killed in a suspected hit by cartel members in Michoacán state.
Shale oil and gas reserves in Mexico represent a vast, largely untapped, source of potential wealth. What remains unclear is whether the Mexican government is able to handle the task of ensuring that local populations, workers and the environment are not jeopardised by the consequences of a future “fracking boom”.