Can CO2 Save Oil Fracking?
Some words invade our newspapers, televisions, and conversations to inspire strong opinion without a great deal of knowledge on the subject matter itself. Fracking represents one such word: a tangled weave of policy, energy, profit, and environmentalism tied up in just eight letters. If you don't know much about fracking but hold an opinion that can be summarized as good or bad, know that even experienced chemical engineers struggle with the exact science. While the particular details of fracking remain far beyond the scope of an article on commodity investment advice, two particular facts need be known to understand the subject's gravity. First, the United States produces about half a million barrels of oil per day thanks to shale oil fracking, turning us into the world's leading producer of petroleum and driving gas costs down by nearly half. Second, each fracking well requires about a million gallons of fresh water to operate (about half the total water contained in Chicago's Shedd Aquarium) which cannot be recycled. Both facts have led to a belief that fracking will soon go the way of the dodo: if not due to environmental regulation than due to over-abundance of supply on the market. Both facts remain true, but both facts, as well as the price of oil itself, are challenged by the invention of ultra-cold CO2 fracking.
Elements, Molecules, and Matter
Almost all carbon dioxide on planet Earth exists in gaseous form, the infamous greenhouse gas produced by SUVs and cattle alike. Remove Earth about five billion miles further out from the sun, however, and our gaseous CO2 drops to about -200 degrees (in either Farenheit or Celsius -- at that temperature it's basically the same) and turns into a liquid state. Intense cooling can turn gaseous CO2 into a form of matter that's referred to as a supercritical liquid, meaning that it can act with the properties of either a gas or liquid. As such, an injection of supercool CO2 into shale crust will apply the same pressure to force it to the surface as an injection of fresh water. As the CO2 warms, its molecules expand and push the shale oil from within the rocky crust to within the suction field so that it may be pulled up to the surface and turned into everything from jet engine fuel to Vasoline. Some CO2 remains trapped beneath the crust and will stay there for millions of years until it dissolves into the rock; the CO2 that does return to the surface can be quickly cleaned of debris merely by allowing it to warm and evaporate back into gas. This effectively kills two birds with one stone, minimizing the need for fresh water sluicing while negating any type of cleanup of the transport medium. As such, it's not hyperbole to say that liquid CO2 may not just save fracking, but may become the industry standard for fracking.
Research and Development
Saying that CO2 can replace water in fracking procedures represents a far easier task than putting it into action and watching your profits soar from investing in oil. CO2 fracking remains very much a work in progress. Major companies have began to sink huge sums of money into research on CO2 fracking: GE alone pledged ten billion dollars (a sum greater than the budget of 14 states and 50 nations) to water-neutral fracking projects. Even so, a variety of obstacles stand in the way of CO2 becoming the status quo of fracking. First and foremost, in many parts of the country water remains inexpensive enough that there's much less of a demand for substitutions. Even in drought-parched regions like western Texas, for instance, the massive Ogallala Aquifer supplies abundant fresh water to fracking as well as some two million persons living from Odessa to Rapid City. Second, cooling CO2 to negative 200 degrees requires vast amounts of energy and technical skill while risking a loss of valuable fluid in the event of even a hairline crack in the pipeline or transport. As profit margins become slimmer and slimmer in the face of water-usage fracking, however, the downsides to CO2 fracking become significantly less of a barrier. Companies like GE (trading for $26.80 on the NYSE) who have the resources to invest in large-scale expansion will reap profits, while smaller companies like the original CO2 innovator FracMaster can go belly-up without the capital needed to refit fracking drills to utilize CO2.
Markets, Madness, and Money
Is it wise to invest in a commodity technology that may not pay dividends for another five years? The answer to that question is yes, provided that the technology comes at a time when the commodity in question has reached ten-year lows. Oil hasn't been as cheap as it is today since 2005, back when Saddam Hussein was still alive and the world eagerly waited on the last Harry Potter book. Traditional fracking alone can't rescue the price of oil because foreign oil has put the squeeze on domestic crude, with several dozen American companies going bankrupt after failling to compete with the sudden glut of new supply. Where CO2 can rescue fracking, and by extension oil writ large, comes down to policy rather than money. States like New York, California, and Delaware have banned fracking altogether, which is admittedly not the biggest deal when few of those states actually have oil reserves but rather an indication of public sentiment turning against the practice. CO2 fracking carries fewer environmental hazards and less waste, making it appealing for the companies who pursue the new technology. It's a good idea to invest in companies like GE (with their particular stock price having quadrupled since 2009) and a good idea to get into oil to ride out a new fracking boom.