Frequently Asked Questions
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Frequently Asked Questions

The presence of vast quantities of oil and natural gas in formations with low permeability, including deep shale, has been known for decades.

It is now economically feasible to recover this shale oil and gas because of a combination of sophisticated horizontal drilling technology and improvements in a proven well stimulation method known as hydraulic fracturing.

In recent years, the rapid development of oil and gas extraction from these resources has generated questions about the impact on safety, the environment and public health. We publically report on our use and management of hydraulic fracturing in our Corporate Sustainability reports and are committed to addressing environmental and social considerations throughout the project life cycle.

Addressing the Issues

Here are some of the most commonly asked questions about shale oil and gas production, including the ways that our operations affect the environment.


Environment

Q: Is hydraulic fracturing safe?
A: The American Petroleum Institute estimates hydraulic fracturing has been safely deployed in more than one million wells in every oil and gas producing region in the U.S. since the late 1940s.

We have demonstrated that well-planned and properly executed hydraulic fracturing of wells is safe for the environment and the general public. As with most activities, we work to continually improve. There may be some risks associated with hydraulic fracturing but a combination of regulations, advanced technology and our own rigorous internal standards ensures that we operate safely.


Comprehensive federal and state laws address nearly every aspect of exploration and production: well design, water use, waste management and disposal, air emissions, surface impacts, health, safety, location, spacing, and operation. State regulation is specifically tailored to local geology and hydrology.

The industry adopts rigorous internal standards and best practices. For example, the American Petroleum Institute (API) has a program of standards that has been widely adopted and is accredited by the American National Standards Institute (ANSI). These standards serve as guidance for oil and gas operations.

Q: What measures does Hess take to ensure minimal impact to the environment?
A:
To unlock shale oil and gas resources located up to two miles below the surface, Hess uses the latest technology, rigorous operational procedures and practical solutions that protect water quality, minimize our surface footprint and reduce waste. Sound drilling and completion practices — at every step of development and production — are essential as we work to ensure minimal environmental impact.

We are committed to preserving water quality through the responsible drilling practices of wells and appropriate sourcing, storage and disposal of water used in the drilling process. Throughout production, we strive to retain the most efficient above-ground footprint and once a site is no longer productive we ensure that the wells are properly plugged and the site is remediated to meet regulatory and/or landowner requirements.

Additionally we adopt numerous protective measures at our well sites. These measures can include liners under well pads, rubber composite mats under rigs, storage tanks with secondary containment measures, and barriers to control and direct any potential runoff at the site in the event of overflow during heavy rain.

Q: What steps are taken to protect drinking water?
A:
We work closely with federal, state, and local regulators to comply with the standards that govern the oil and gas industry. We also conduct baseline surface water and ground quality monitoring within a minimum 2,500 foot radius of each well site.

In the Bakken formation, the state of North Dakota regulates an established network of monitoring wells.

Our wells are designed to protect the water supply and nearby ecosystems. Our wells have multiple physical barriers that provide approximately 10 inches of steel casing and cement protection to isolate hydrocarbons from groundwater. Drinking or fresh water aquifers are typically found up to 1,000 feet below the surface, whereas the oil and gas bearing reservoirs are typically located 6,000 feet to 10,000 feet below the surface.

Q: How does Hess minimize water use in its operations?
A:
We seek to minimize the use of fresh water for hydraulic fracturing through alternative water sources.
We have installed closed-loop fluid containment systems at all of our shale oil and gas operations in the U.S., reducing the need for waste water storage pits and giving us the ability to contain water until it is safely treated and disposed of at a permitted facility.

Q: What is the concern over the chemicals in fracturing fluid and what is the industry doing about this concern?
A:
While additives used in the hydraulic fracturing process typically constitute less than 0.5 percent of fracturing fluid, manufacturers of chemical additives historically have not disclosed specific, proprietary formulas under patent protection. This lack of transparency understandably created concern about the volume and type of chemicals used in this process.

To ensure that communities where we operate have full access to information about our business and the material we use at each of our sites, we disclose information on the FracFocus website which is run by the Groundwater Protection Council. We voluntarily disclosed to FracFocus before many states made the practice mandatory. Additionally, we do not use diesel fuel in any of our hydraulic fracturing fluid.

For more information on additives typically found in hydraulic fracturing see the American Petroleum Institute website.

For more information about our commitment to transparent reporting and FracFocus, please refer to our most recent Sustainability Report.

Q: What steps does Hess take to protect air quality and reduce air emissions during production?
A:
We are committed to reducing emissions from our shale oil and gas operations by monitoring our air emissions and installing equipment that either reduces or eliminates air pollutants. We are working closely with state regulators to ensure that we install proper emissions controls at existing and new facilities and we are investing in infrastructure that will help us capture more gas and will lower the amount of gas we need to flare.

For more information on our approach to air quality and our emissions policy, please refer to our Sustainability Report.

Q: Is Hess a safe operator?
A:
We are committed to delivering continuous improvement in our safety performance and protecting the health and safety of our workforce, our partners, the community and the environment. Our aim is to continue to improve our safety performance year over year through rigorous implementation of our policies, procedures and management systems.

For more information on our safety performance, please refer to our Sustainability Report.

Drilling

Q: What are shale oil and gas formations and how are hydrocarbons extracted from them?
A:
Crude oil and natural gas formations are deep deposits of subsurface sedimentary rock containing oil and gas. The Energy Information Administration estimates that U.S. shale formations have more than 1,744 trillion cubic feet of technically recoverable natural gas. It takes one trillion cubic feet of natural gas to heat 15 million homes for a year.

Natural oil and gas trapped in shale were once too difficult and expensive to extract, but recent advances in drilling technology and changes in economic conditions have combined to make it commercially viable to develop this natural resource. Extracting oil and natural gas from dense shale formations requires a combination of horizontal drilling technology and a process known as hydraulic fracturing, a method of well stimulation that has been used on more than a million wells in the United States since 1949.

Water is mixed with sand, lubricants and other additives and injected into the well under extreme pressure to fracture the shale, a type of sedimentary rock. These small fractures allow hydrocarbons to flow more freely.

Once the hydraulic fracturing process is completed, approximately 10 to 20 percent of the water that has been pumped into the well is returned to the surface to be re-used in another well, or treated to separate hydrocarbons and disposed of at permitted disposal facilities.

Q: What is horizontal drilling and what are its benefits?
A:
Shale oil and gas wells are typically drilled vertically to approximately 6,000 feet to 10,000 feet before branching out horizontally another 5,000 feet to 10,000 feet or more to reach the targeted gas and oil-bearing shale formations deep below the surface.

This method allows access to the oil and gas producing zones while minimizing the number of surface locations compared to conventional oil and gas operations. Because each horizontal well allows access to a larger rock volume than a vertical well, fewer wells are required, resulting in as much as a 90 percent reduction in overall surface presence compared to traditional or conventional well spacing.

Where possible, we drill multiple wells on a single well pad site to reduce costs and minimize surface impacts such as overall land usage, access roads and pipelines that otherwise would be needed to service individual well pad sites.

Q: Who regulates the energy industry in the United States?
A:
We work closely with federal, state, and local regulators to comply with the standards that govern the oil and gas industry. More information is available from the  American Petroleum Institute, which provides detailed information on the regulations on its website.  

Q: What shale oil and gas projects does Hess have in the U.S.?
A:
We have made a significant commitment to responsible shale energy development and production in the U.S. We have invested $6.8 billion in our U.S. shale energy business since 2009 and have operations in North Dakota, Texas and Ohio. Our commitment is helping to create jobs, drive economic growth and generate significant tax revenues for states and local communities.

Economic Development

Q: How will shale energy production and development benefit the U.S. economy?
A:
In 2010 shale oil and gas contributed more than $76 billion to the Gross Domestic Product of the U.S. That figure is expected to increase to $118 billion by 2015 and will triple to $231 billion in 2035.

In 2010 shale oil and gas production contributed $18.6 billion in federal, state and local government tax and royalty revenues. By 2035 royalty payments are projected to more than triple to approximately $57 billion.

On a cumulative basis, the shale industry is set to generate more than $933 billion in federal, state, and local tax and royalty revenues during the next 25 years.

Energy Security

Q: How will shale oil and gas production in the United States contribute to energy security?
A:
According to the National Petroleum Council, at least 70% of natural gas development in the future will come from hydraulically fractured wells.. The Council predicts that without hydraulic fracturing, the U.S. would lose 45 percent of its domestic natural gas production and 17 percent of oil production within five years.

The International Energy Agency has predicted that U.S. oil output will surpass that of Saudi Arabia and Russia by 2017, reaching levels high enough to make the U.S. nearly energy independent.

Reasonably priced and accessible energy supplies are essential to economic growth and prosperity. Advancements in shale oil and gas development have fundamentally changed the economics of electricity generation and production of shale oil has made countries such as the U.S. more energy self-sufficient.

It is less expensive to produce and buy energy locally than to import natural gas from out of state or overseas. This means that many energy-intensive manufacturing companies (such as plastics and chemicals) can remain in or return to the U.S., creating more jobs, contributing to higher incomes and a better economic future for local communities.