US gas giant Chesapeake Energy Corporation (CHK - Free Report) is planning to develop a 100% green mixture of fluids for fracturing oil and gas formations underground. In line with this move, it is experimenting with hydraulic-fracturing fluids prepared entirely from eco-friendly materials in wells.
According to management, the current frac fluid formulations frequently contain risky components like hydrochloric acid or diesel fuel. Environmentalists believe that these components create a threat to water supplies.
Chesapeake is analyzing numerous environment friendly methods in several shale formations. The details of these shale formations have not been disclosed. The company is apprehensive of the fact that drilling a well costs about $4 million to $6 million. Meanwhile, if an untested frac system is pushed down a well it would damage the reservoir, resulting in wastage of resources.
Therefore, Chesapeake is testing the green fracking fluids to curtail threats from surface leak of drilling sites close to lakes, creeks and rivers. It would also help in reducing workers’ contact with potentially dangerous substances.
Chesapeake is not the only company, which is working on means of providing more environment friendly fluids. The world’s largest fracking company Halliburton Co. (HAL - Free Report) also offers CleanStim. This is effective in suppressing the growth of subterranean bacteria that can create a thick slime and hinder oil and gas flow.
Another process developed by Halliburton uses ultraviolet light that destroys bacteria in the fracking fluid, combining the technology with a recycling process called CleanWave that uses an electrical charge to detach contaminants and clean the water.
The efforts by Chesapeake will go a long way in helping the company to grow in the rising environment friendly surroundings.
Chesapeake carries a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. Longer term, we maintain our Neutral recommendation.