Hydraulic fracturing (also know as fracking) creates fractures (or cracks) in rock or coal formations to aide the travel of oil or gas through rock pores to the production well. A mixture of water, proppants, and chemicals is pumped into the formation (rock or coal) to build pressure and eventually crack the formation holding the oil or gas. The process is explained in much more detail in the article on the following website.
Here is some good reporting on Hydraulic Fracturing in the US:
Hydraulic fracturing is a process used to complete many oil and gas wells, invented by oilfield services provider Halliburton in 1947. It involves the injection of high-pressure water, along with chemical additives, to stimulate fracturing of oil and gas source rock such as shale or coal seams and release oil and gas into the well for production. Ceramic particles known as “proppants” are also added to the fracturing fluid in order to prevent these fractures from collapsing once the workover on the well has been completed. In recent years, a number of environmental groups have raised major concerns over the effects of hydraulic fracturing on water quality, and recent scientific studies (see citation #1) have also suggested that hydraulic fracturing and the process of disposing The largest environmental challenge of hydraulic fracturing involves the disposal of “produced fluids,” wherein roughly half of the fracturing fluid returns to the surface along with the oil and gas payload and must be disposed. Other concerns include the energy and water intensity of the process (and therefore potentially low net energy of the produced oil and gas), the possibility of illegal dumping of produced fluids, and the release of harmful vapors from disposal ponds. Some industry observers have also raised concerns over the cost-effectiveness of hydraulic fracturing and have indicated that the wellhead prices being paid today for natural gas do not reflect the full cost of the advanced drilling and multi-stage hydraulic fracturing often necessary for natural gas production from alternative sources such as shale (see citation #2).
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