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Title
Sustainability lessons from shale development in the United States for Mexico and other
emerging unconventional oil and gas developers
Permalink
https://escholarship.org/uc/item/97n5w4kn
Authors
Castro-Alvarez, F
Marsters, P
Ponce de León Barido, D
et al.
Publication Date
2018-02-01
DOI
10.1016/j.rser.2017.08.082
Peer reviewed
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Contents lists available at ScienceDirect
Renewable and Sustainable Energy Reviews
journal homepage: www.elsevier.com/locate/rser
Sustainability lessons from shale development in the United States
for Mexico and other emerging unconventional oil and gas developers
Fernando Castro-Alvarez
a,b,
⁎
, Peter Marsters
b,c
, Diego Ponce de León Barido
b,c
,
Daniel M. Kammen
b,c
a
University of California Berkeley, School of Law, 94720, USA
b
Renewable and Appropriate Energy Laboratory, University of California Berkeley, 94720, USA
c
University of California Berkeley, Energy and Resources Group, 94720, USA
ARTICLE INFO
Keywords:
Hydraulic fracturing
Mexico
Shale development
Hydrocarbons
Oil
Gas
ABSTRACT
Mexico's recent energy reform (2013) has provided the foundations for increased private participation in
attempts to offset or reverse the country's continued decline in fossil fuel production. This country is currently
on path to becoming a net energy importer by 2020. Conversely, in 2015, and for the first time in over 20 years,
the United States (US) became a net oil exporter to Mexico. One of the strategies being pursued by Mexico to
prevent an impending supply–demand energy imbalance is the development of shale resources using horizontal
drilling and hydraulic fracturing techniques. Hence, an evaluation of the inherent risks associated with
hydraulic fracturing is crucial for Mexico's energy planning and decision-making process. This paper draws
lessons from the recent ‘shale boom’ in the US, and it analyzes and summarizes the environmental, social,
economic, and community impacts that Mexico should be aware of as its nascent shale industry develops. The
analysis seeks to inform mainly Mexican policy makers, but also academics, nongovernmental organizations,
and the public in general, about the main concerns regarding hydraulic fracturing activities, and the importance
of regulatory enforcement and community engagement in advancing sustainability. Furthermore, using the US
as a case study, we argue that development of unconventional oil and gas resources in Mexico could lead to a
short-term boom rather than to a dependable and sustainable long-term energy supply. Our analysis concludes
with a set of recommendations for Mexico, featuring best practices that could be used to attenuate and address
some of the impacts likely to emerge from shale oil and gas development.
1. Introduction
With the advent of hydraulic fracturing (fracking), the use of
natural gas has increased considerably. As a result of the ‘shale boom’
in the United States (US), and the development of new fracking
technology, other countries such as China, the United Kingdom,
Turkey, Argentina, and Mexico are all evaluating the potential for
exploitation of their indigenous shale resources [1–4] In 2013, the US
became the largest producer of natural gas, which has led to some of
the cheapest natural gas and oil in over two decades [5]. It is estimated
that by 2020 the US will be producing 4.8 thousand barrels per day
(4.8 mb/day), which will continue to support the growth of fossil fuel
supply from regions not part of the Organization of Petroleum
Exporting Countries (OPEC) [6]. While shale exploitation can provide
some short-term localized economic benefits for resource-endowed
nations, evidence from the US suggests these might be accompanied by
a variety of environmental, social, and community-related problems
[7]. Hence, the objectives of this paper are to shed light on the impacts
of hydraulic fracturing, and to provide recommendations for best
practices for consideration by Mexican policy makers as they endeavor
to succesfully regulate this industry. We summarize the literature that
explores these impacts and the best practices adopted in the US for
their mitigation, while evaluating this information in the context of
Mexico's desire to exploit its own shale resources.
In the US, the advent of hydraulic fracturing combined with horizontal
drilling has changed the oil and gas industry dramatically [7]. Since 2008,
the US has increased its production of oil and natural gas by almost 85
billion m
3
/year, and crude oil by over 3 million barrels/day [10].There
are indications the US has received short-term localized economic benefits
in areas of shale development. Communities sited near shale operations
have experienced increases in employment, salaries, and per capita
income during the initial stages of such operations [9].However,the
economic instability associated with price volatility and the panoply of
environmental, social, and community impacts that emerge due to shale
http://dx.doi.org/10.1016/j.rser.2017.08.082
Received 29 April 2016; Received in revised form 12 June 2017; Accepted 22 August 2017
⁎
Corresponding author at: University of California Berkeley, School of Law, 94720, USA.
E-mail address: fcastroa@berkeley.edu (F. Castro-Alvarez).
Renewable and Sustainable Energy Reviews xxx (xxxx) xxx–xxx
1364-0321/ © 2017 Elsevier Ltd. All rights reserved.
Please cite this article as: Castro Alvarez, F., Renewable and Sustainable Energy Reviews (2017), http://dx.doi.org/10.1016/j.rser.2017.08.082
development, complicate decision-making processes over whether un-
conventional oil and gas resources should be developed fully. Massive
land clearing, water consumption, waste management issues, community
impacts, and emissions of greenhouse gases and volatile organic com-
pounds (VOCs) are only some of the many concerns that surround the
exploitation of unconventional resources [10].
The rapid rise in drilling activity together with the adoption of new
drilling methods in the US has meant that regulations have been slow
to catch up [11]. Consequently, controversy arose over whether the
existing oil and gas regulatory structure was sufficiently robust to avoid
severe environmental impacts and to protect public health [12].In
effect, the existing rules and regulations were insufficient for these
purposes. However, the Federal Government largely avoided the
problem and it was left to the states to fill the regulatory gap, which
has resulted in the implementation of different regulatory approaches
for hydraulic fracturing across the US [13].
In the US, industry and operators have compiled considerable
information regarding hydraulic fracturing processes, but they have
usually been unwilling to disclose it given trade-secret concerns and the
competitive benefits they derive from such practices [14]. Recently,
academics, nongovernmental organizations (NGOs), and the govern-
ment have all begun developing research to address the information
asymmetry that exists between developers and the public.
1.1. Brief history of hydrocarbon development in Mexico
Mexico began intensive development of its hydrocarbon resources
in 1904 [15] . At the turn of the 20th century, foreign oil companies,
mainly from the United Kingdom and the US, commenced significant
operations that led to Mexico becoming the second-largest oil producer
in the world by the 1920s [16]. In 1938, President Lazaro Cardenas
expropriated all the assets of the foreign oil companies operating in
Mexico at the time. This action was prompted by constant threats from
these foreign companies to leave the country and take their capital if
the government forced them to sign a collective agreement with the
“Petroleum Workers Union of Mexico,” which, among other things,
demanded fair working conditions for the employees of the foreign
companies [17]. The rationale advanced by the government was that
oil, as an energy source, belonged to “all Mexicans,” and as such,
government entities alone should exploit them for the sole purpose of
benefiting the country [18]. Nevertheless, “Petroleos Mexicanos”
(PEMEX), continued to engage in service contracts with some US oil
companies until a 1958 regulatory law implementing Article 27 of the
Mexican constitution definitively banned the practice [16].
During the 1980s, PEMEX consolidated and became one of the
main contributors to Mexico's public finances, providing around 30%
of the Federal Government's total income [19]. This was achieved
largely because of the discovery in 1979 of Cantarell, the world's third
largest oilfi
eld at the time (just behind the Ghawar and Burgan oilfields
of
Saudi Arabia and Kuwait). This newfound bounty came with
promises of jobs, technological development, commitment to indus-
trialization, and sustainable city building. Above all, Lopez Portillo
(and his team of experts) stressed that this windfall of wealth would be
reinvested in Mexico to guarantee a future “beyond oil.” However, it
took just 24 years for Cantarell to reach peak oil status. By 2004,
Mexico's largest oilfield had reached its maximum rate of petroleum
extraction, after which it entered a state of terminal decline [20,21].
Since its peak in 2004, Mexico's total oil production has declined by
27%. In 2014, Mexico produced an average of 2.8 million barrels/d of
petroleum and other liquids, crude oil accounted for 2.4 million barrels
(87% of the total output), with the remainder attributable to lease
condensate, natural gas liquids, and refinery processing gain. Notably,
crude oil production in 2014 was at its lowest level since 1986 and it
has continued to decline [22]. This is evidenced by the fact that during
2015 the US became a net exporter of oil to Mexico, a situation that had
not happened for over 20 years [23].
1.2. Current state of shale development in Mexico
The decline in hydrocarbon production has spurred support for the
development of Mexico's unconventional resources as a means of
reversing the situation. In 2011, the US Energy Information
Administration reported that Mexico has the second-largest shale gas
potential in Latin America and the fourth largest globally. With
technically recoverable shale resources estimated at 545 tcf of natural
gas, and 13.1 billion barrels of oil and condensate, Mexico's unconven-
tional resources are potentially larger than its proven conventional
reserves [24].
According to a public information petition made to PEMEX in
2014, at least 924 wells have been fractured hydraulically in Mexico
since 2003 [25]. These wells are in the states of Coahuila (47 wells),
Nuevo León (182 wells), Puebla (233 wells), Tabasco (13 wells),
Tamaulipas (100 wells), and Veracruz (349 wells). However, the
“Proyecto Aceite Terciario del Golfo: Primera Revisión y
Recomendaciones” document (prepared in 2010 by the Mexican
Ministry of Energy and National Hydrocarbons Commission) stated
that 1323 wells have been fractured hydraulically in the specific areas
of “Paleocanal” and “Chicontepec” in Veracruz and northern Puebla
[26]. This inconsistency highlights the urgency for transparency in
information, while illustrating the pressing need for a comprehensive
regulatory framework aimed at protecting the local communities and
the environment.
2. Lessons from hydraulic fracturing operations in the US
In this section, we provide a review of the literature and an analysis
of the panoply of impacts associated with hydraulic fracturing in the
US. Land impacts, atmospheric impacts, water impacts, community
impacts, public health concerns, crime considerations, waste manage-
ment, and administrative and environmental violations are evaluated.
2.1. Land impacts and issues
Oil and gas drilling activities require extensive use of land [27].
Hence, the primary major environmental impact of unconventional oil
and gas development is associated with the requirement for land. This
is estimated to be roughly 30,000 m
2
per well pad, including roads and
associated infrastructure (i.e., equivalent to about seven football fields
placed together) [28].
Hydraulic fracturing sites often intrude into forested land, agricul-
tural land, and grassland [29]. Deforestation associated with this
intrusion has been found to cause loss of habitat for animals and
plants, and to increase the impacts of climate change because of
associated land use changes [29].
The total infrastructure requirements are a function of the number
of well pads and the size of the overall development; thus, the total
impact is determined by the total number of well pads in a play [30].In
addition to direct impacts related to land clearance, there might also be
indirect effects on ecosystems near the affected area due to the “edge
effect” [31]. This edge effect relates to an ecosystem reducing its spatial
“buffer zone” as a shale development encroaches.
Apart from issues associated with land clearance, spills of toxic oil
and gas hydraulic fracturing fluids can have severe environmental
impacts in neighboring areas. Adams [32] focused on simulating a spill
of hydraulic fracturing fluid in an experimental forest. This study found
the forest experienced significant mortality: “Two years after fluid
application, 56% of the trees within the fluid application area were
dead.”
In lieu of permanent infrastructure, many operators dig pits in the
ground, line them with plastic or vinyl sheets, and use them to store
water both before and after the hydraulic fracturing activity [33]. These
pits can leak and subsequently kill aquatic life [34]. In addition to the
massive volumes of fluids stored on site, chemicals and other additives
F. Castro-Alvarez et al.
Renewable and Sustainable Energy Reviews xxx (xxxx) xxx–xxx
2
involved in the hydraulic fracturing process also need to be stored and
transported safely [31].
Long-term infrastructure (usually large metal tanks with volumes of
up to several hundred barrels) generally needs to be installed to collect
the water coproduced with the oil and gas [35]. It is important to note,
however, that in extreme events such as flooding this long-term
infrastructure has been shown to fail, resulting in spills of hydraulic
fracturing fluid and hydrocarbons. This was demonstrated by the 2013
floods in Colorado, which resulted in the spill of an estimated 162 m
3
of
hydrocarbons and produced water [36].
In terms of restoration (equipment removal and reseeding of the
area around a well to allow vegetation to grow back), the time
requirements and specific processes of reclamation are highly depen-
dent on the particular conditions of the well and the environmental
qualities of the area [31]. It is worth noting that because development
is ongoing, large-scale restoration efforts do not yet exist; hence, details
about the effectiveness of restoration remain vague.
2.2. Atmospheric impacts and issues
The main atmospheric impacts associated with hydraulic fracturing
activities are related to the emissions of both greenhouse gases
(primarily methane) that contribute to climate change and VOCs that
affect air quality. It is worth noting that a compounding effect is caused
by the high demands for energy associated with transportation and
electricity related to the extraction of shale oil and gas, which result in
increased local and greenhouse gas emissions [37].
The net impact of greenhouse gas emissions from hydraulic
fracturing activities is a subject of great debate that focuses on two
main issues: the emissions of greenhouse gases derived from electricity
production and the magnitude of methane leakage [38]. Methane
emissions can come from direct releases during venting or from
unintended leaks [31]. A study conducted in the Denver–Julesburg
Basin (Colorado, US) found that natural gas producers lose an average
of 4% of the gas to the atmosphere, not including further losses
attributable to the pipeline and distribution system [39].
These emissions could possibly outweigh any carbon reduction
benefits derived from using natural gas to replace other fossil fuels such
as coal and oil for electricity generation [38]. Tables 1 and 2, provided
by US Environmental Protection Agency (EPA), show estimates of total
annual methane emissions from oil and gas production.
During certain well operations (mainly completions, maintenance,
and some emergencies), natural gas might be burned when it cannot be
safely, profitably, or practically exploited [42]. These flaring practices,
which are usually a consequence of a lack of access for transportation
infrastructure, cause considerable emissions that are the product of
wasted resources [51]. The exact scale and composition of emissions
from flaring vary with gas type (sour or sweet), wind speed, and flaring
equipment [43].
Localized emissions can also have significant impacts on the
community and public health. These are mainly associated with
VOCs, which are toxic precursors to ozone and include benzene,
toluene, ethylbenzene, xylenes, BTEX, and n-hexane [44]. To provide
an idea of the magnitude of the impacts related to the emission of
VOCs, we introduce the results of a study by Macey, Breech, and
Chernaik [45] . Their work analyzed the impacts on air quality specific
to the development of unconventional oil and gas in the states of
Wyoming, Arkansas, and Pennsylvania (US). They found that 16 of 35
grab samples and 14 of 41 passive samples had concentrations of VOCs
that exceeded the Agency for Toxic Substances and Disease Registry
(ATSDR) and/or EPA Integrated Risk Information System (IRIS)
threshold levels (see Table
3). The chemicals that most commonly
exceeded these threshold levels were hydrogen sulfide, formaldehyde,
and benzene. Background levels of these chemicals are 0.15, 0.25, and
0.15 μg/m
3
for hydrogen sulfide, formaldehyde, and benzene, respec-
tively. The samples that surpassed the health-based risk threshold
levels were 90–66,000 times the background levels for hydrogen
sulfide, 30–240 times the background levels for formaldehyde, and
35–770,000 times the background levels for benzene.
A recent study by Loomis and Haefele [46], translated the impacts
of air pollution associated with hydraulic fracturing operations into
dollar terms using data from Colorado, where about one third of the
state population lives on one of three major shale plays. They found
that the economic cost of the impact of VOCs ranges from $353 to $509
per ton emitted. Apart from VOCs, hydraulic fracturing operations are
also associated with emissions of nitrogen oxides (NOx), sulfur oxide
(SOx) and particulate matter with diameters of 2.5 µm (PM
2.5
). Loomis
and Haefele [46] found that the economic costs of NOx, SOx, and PM
2.5
emissions are $353–$821, $1058–$6343, and $1293–$19,825 (all in
2015 dollars) per ton emitted, respectively. These significant costs are
borne by those communities sited nearest the unconventional oil and
gas developments, regardless of whether they receive any quantifiable
benefit from the hydraulic fracturing operations.
Table 1
US methane emissions (Tg CO
2
Eq.), (US EPA [40]).
Activity 1990 2005 2008 2009 2010 2011 2012
Production Field Operations (Potential) 35 29 30 30 30 31 32
- Pneumatic device venting 10899999
- Tank venting 5444456
- Combustion & process upsets 2222222
- Misc. venting & fugitives 17 14 15 15 15 15 15
- Wellhead fugitives 0.5 0.4 0.5 0.5 0.5 0.5 0.5
- Production Voluntary Reductions 0 −0.8 −2 −1 −1 −1 −1
Production Field Operations (Net) 35 28 28 29 29 30 31
Crude Oil Transportation 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Refining 0.4 0.4 0.4 0.4 0.4 0.4 0.4
Total 36 29 29 29 30 31 32
Table 2
EPA Inventory Values (US EPA [41]).
Activity Emission
Factor
Unit
Hydraulic Fracturing Completions and
Workovers that vent
41 Mg/comp or
workover
Flared Hydraulic Fracturing
Completions and Workovers
5 Mg/comp or
workover
Hydraulic Fracturing Completions and
Workovers with reduced emission
completions
3 Mg/comp or
workover
Hydraulic Fracturing Completions and
Workovers with reduced emission
completions that flare
6 Mg/comp or
workover
Mg: Miligrams.
Emisssion factor: Emission factors listed in this table are for potential emissions.
Comp or workover: Completions or workovers.
F. Castro-Alvarez et al.
Renewable and Sustainable Energy Reviews xxx (xxxx) xxx–xxx
3
2.3. Water impacts and issues
The total volume of water used for hydraulic fracturing has also
been at the center of much controversy because it has considerable
impact on local communities in relation to its sourcing and transporta-
tion [47]. It has been estimated that a typical fractured well will
consume an average of 6 million gallons of pressurized water [48]. The
sourcing of water leads to reductions in its availability for other local
requirements. A study by the EPA found that approximately 35,000
fractured wells across the US required around 70–140 billion gallons of
water per year, which is approximately equivalent to the total amount
of water used annually to support 40–80 cities with a population of
50,000 inhabitants [48].
One of the primary vehicles for potential societal harm from
hydraulic fracturing is through water contamination [49]. This is
because, even after hydraulic fracturing activities have ceased, large
volumes of water contaminated with toxic and hazardous materials
must be managed [50]. If these produced waters were to enter an
aquifer in sufficient concentrations, it would render the aquifer unsafe
for further use [51]. Regarding the chemical composition of these
produced waters, Engle et al. [52] concluded that while the exact
composition might vary, they will include most of the chemical
constituents that were introduced into the well, except those consumed
during the process (e.g., acids and some polymers). They will also
contain proppants and potentially radionuclides that would have to be
filtered out [52,66]. Table 4, from Hayes [53] , presents the concentra-
tions of constituents present in the flowback water of a well in
Pennsylvania (US), within two weeks of it being fractured.
Regarding subsurface aquifer contamination, evidence suggests
faulty well construction is the most likely cause of contamination.
Darrah et al. [54] analyzed methane contamination within ground-
water using noble gas isotopes. They concluded that cases of contam-
ination were most likely due to poor cementing measures in the
annulus of the well. Their study also suggested that migration from
deep shales was unlikely. Sloppy cement jobs, seismic activity, or
simply poor quality cement were all cited as possible causes of
groundwater contamination. On the other hand, surface contamination
is generally caused by spills, leaks, and accidental releases. Vidic et al.
[55] and Vengosh et al. [56] found little evidence of shallow-water
chemical contamination; strong evidence of methane contamination;
some evidence of deepwater–shallow-water aquifer mixing; and sig-
nificant issues regarding produced water management and accidental
spills [31].
2.4. Community impacts
The visual and audible impacts of oil and gas extraction are among
the most common complaints communities have regarding such
development [57]. As with most impacts regarding shale development,
they vary depending on the local conditions. Table 5, obtained from the
US Bureau of Reclamation [58], presents the ranges of impacts from
different noise sources including oil and gas development.
In addition, as evidenced in Table 6, many shale developments
cause considerable increases in traffi
c with associated consequences.
Increased
levels of traffic exacerbate the risk of traffic accidents and
augment local air pollution emissions, while also burdening the local
community with additional wear of infrastructure. Moreover a study by
Muehlenbachs and Krupnick [59] showed that for every well drilled in
Pennsylvania (US), the number of fatal accidents in the studied county
increased by 0.6% and the number of heavy truck accidents increased
by 2%.
The potential pathways to exposure to the chemicals involved in
hydraulic fracturing are numerous and they include drinking water,
skin contact, soil and food, and the atmosphere [60]. The nature of the
damage and the risk to health are largely dependent on the concentra-
Table 3
ATSDR minimal risk levels and EPA IRIS cancer risk levels for chemicals of concern (units: μg/m
3
) (Macey, Breech, and Chernaik [45]).
Chemical ATSDR MRLs Iris Cancer Risk Levels
Acute Intermediate Chronic 1/1000,000 1/100,000 1/10,000
Benzene 29 20 10 0.45 4.5 45
1,2 butadiene x x x 0.03 0.3 3
Ethylbenzene 21700 8680 260 x x x
Formaldehyde 49 37 10 0.08 0.8 8
N-hexane x x 2115 x x x
Hydrogen sulfide 98 28 x x x x
Toluene 3750 x 300 x x x
Xylenes 8680 2604 217 x x x
Table 4
Chemical composition of flowback water.
Parameter Range Median Units
pH 4.9–6.8 6.2 No Units
Acidity <5–473 NC mg/L
Total Alkalinity 26.1–121 85.2 mg/L
Hardness as CaCO3 630–95,000 34,000 mg/L
Total Suspended Solids 17–1150 209 mg/L
Turbidity 10.5–1090 233 NTU
Chloride 1670–
181,000
78,100 mg/L
Total Dissolved Solids 3010–
261,000
1,20,000 mg/L
Specific Conductance 6800
710,000
2,56,000 micromhos/cm
Total Kjeldahl Nitrogen 5.6–261 116 mg/L
Ammonia Nitrogen 3.7–359 124.5 mg/L
Nitrate-Nitrite < 0.1–0.92 NC mg/L
Nitrite as N < 2.5–77.4 NC mg/L
Nitrate as N < 0.5 - < 5 NC mg/L
Biochemical Oxygen Demand 2.8–2070 39.8 mg/L
Chemical Oxygen Demand 228–21,900 8530 mg/L
Total Organic Carbon (TOC) 1.2–509 38.7 mg/L
Dissolved Organic Carbon 5–695 43 mg/L
Oil & Grease (HEM) < 4.6–103 NC mg/L
Cyanide, Total < 10 NC ug/L
Amenable Cyanide < 0.01 NC mg/L
Bromide 15.8–1600 704 mg/L
Fluoride < 0.05 - < 50 NC mg/L
Total Sulfide < 3.0–3.2 NC mg/L
Sulfite (2) 7.2
–73.6 13.8 mg/L
Sulfate <10–89.3 NC mg/L
Total Phosphorus < 0.1–2.2 NC mg/L
Total Recoverable Phenolics < 0.01–0.31 NC mg/L
Sulfite 7.2–73.6 13.8 mg/L
Methylene Blue Active Sub-
stances (MBAS)
< 0.05–4.6 NC mg/L
Samples were collected from 17 locations.
NC - indicates the median concentration was not calculated due to undetected results.
mg/L : Miligrams per liter.
NTU: Nephelometric Turbidity Units.
F. Castro-Alvarez et al.
Renewable and Sustainable Energy Reviews xxx (xxxx) xxx–xxx
4
![Table 6 Number of truck trips per Well (NYSDEC 2011 [31]).](/figures/table-6-number-of-truck-trips-per-well-nysdec-2011-31-269hjp7z.webp)
![Table 5 Noise ranges according to the US Bureau of reclamation [58].](/figures/table-5-noise-ranges-according-to-the-us-bureau-of-3aeo3vc6.webp)
![Table 3 ATSDR minimal risk levels and EPA IRIS cancer risk levels for chemicals of concern (units: μg/m3) (Macey, Breech, and Chernaik [45]).](/figures/table-3-atsdr-minimal-risk-levels-and-epa-iris-cancer-risk-3arb606f.webp)
![Table 1 US methane emissions (Tg CO2 Eq.), (US EPA [40]).](/figures/table-1-us-methane-emissions-tg-co2-eq-us-epa-40-2m8m635n.webp)
![Table 2 EPA Inventory Values (US EPA [41]).](/figures/table-2-epa-inventory-values-us-epa-41-2cpv7m5u.webp)