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Hydraulic Fracturing


Hydraulic fracturing, often referred to as “fracking,” is a technique used in the extraction of natural gas and oil from deep rock formations. The process involves injecting high-pressure fluid into a wellbore to create small fractures in the rock, allowing natural gas or oil to flow more freely. It is a controversial method due to environmental and health concerns.


The phonetic pronunciation of “Hydraulic Fracturing” is: haɪˌdrɔːlɪk ˈfræk.tʃər.ɪŋ.

Key Takeaways

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  1. Hydraulic Fracturing, also known as fracking, is a method used to extract natural gas and oil from deep within the Earth’s crust. This process involves drilling into the ground and injecting a high-pressure water mixture to fracture the rocks and release the trapped resources.
  2. While fracking has greatly boosted oil and gas production, it has also sparked controversies due to its potential environmental impacts. These concerns include water pollution, air quality degradation, and seismic disturbances linked to the fracturing process.
  3. Regulation and monitoring of hydraulic fracturing practices is a topic of ongoing debate. Industry supporters argue that fracking is safe and contributes to energy independence and economic growth, while detractors advocate for stricter regulations or a complete ban due to environmental and public health risks.



Hydraulic fracturing or “fracking” is an important term in business/finance, particularly related to the energy sector, because it refers to a process used to extract natural gas and oil from deep underground. This method involves injecting high-pressure fluid into a wellbore to create small fractures in deep rock formations, allowing natural gas or oil to flow more freely. The economic implications of hydraulic fracturing are significant as it has made previously inaccessible oil and gas deposits reachable, leading to increased production and supply. Consequently, it has the potential to impact energy prices, offer job opportunities, contribute to energy security, and boost economic growth. However, it’s also associated with environmental concerns like water contamination, earthquake risks, and gas leakages, which can lead to potential costs and liabilities for businesses.


Hydraulic fracturing, often referred to as “fracking,” is a technique employed primarily in the energy sector with the purpose of extracting natural resources, notably oil and natural gas, from deep-underground rock formations. The process involves drilling vertically or horizontally into the earth to reach rock layers holding these resources, then injecting a highly pressurized mix of water, sand, and various chemicals to create fractures in the rocks through which oil or gas can flow more freely. This technology has enabled us to reach and produce oil and gas reserves that would otherwise be uneconomical or impossible to extract using traditional drilling methods.The primary use of hydraulic fracturing is to increase the yield of oil and gas wells, thus making the extraction process more profitable and efficient. By creating man-made fractures in the source rock, the area of a reservoir that’s in contact with the wellbore is increased, which subsequently improves the flow of hydrocarbons. Hydraulic fracturing has revolutionized the energy industry, significantly boosting domestic oil and natural gas production and driving economic growth. Despite controversy and environmental concerns associated with the process, such as potential ground water contamination and seismic disturbances, hydraulic fracturing continues to be a key component in the global energy landscape.


1. Chesapeake Energy Corporation: Chesapeake Energy is one of the largest natural gas producers in the USA. The company uses hydraulic fracturing extensively in its operations. They have numerous wells across the country, many in the Marcellus and Utica shale formations that traverse several U.S. states where hydraulic fracturing is used to tap into the natural gas reserves. 2. Halliburton: Halliburton, a multinational corporation, is one of the world’s largest providers of products and services to the energy industry. The company has played a significant role in global implementation of hydraulic fracturing, helping other companies extract natural gas and oil from the earth.3. Cuadrilla Resources: This is a British energy company that has explored opportunities for shale gas in the UK using hydraulic fracturing. One of their notable projects was in Lancashire, where they applied hydraulic fracturing techniques despite significant public protest. They argued that this would result in a significant boost to the UK’s domestic gas production and support many jobs in the industry.

Frequently Asked Questions(FAQ)

What is hydraulic fracturing?

Hydraulic fracturing, often referred to as fracking, is a process used in the oil and gas industry to extract fossil fuels from deep underground. It involves injecting high-pressure fluid into a wellbore to create small fractures within deep-rock formations, through which natural gas, petroleum, and brine will flow more freely.

When was hydraulic fracturing first used?

Hydraulic fracturing was first used in the late 1940s to stimulate the flow of natural gas from the Hugoton field of Kansas.

Is hydraulic fracturing a safe process?

The safety of hydraulic fracturing is a subject of extensive debate. While the industry maintains that it is a safe and well-regulated process, environmentalists raise concerns about potential groundwater contamination, ecological disruption and releases of harmful air pollutants.

What are the potential environmental impacts of hydraulic fracturing?

Some potential environmental impacts include the contamination of groundwater with methane and harmful chemicals, the release of greenhouse gases, and the use of large amounts of water in areas experiencing water scarcity. It can also cause minor earth tremors.

What role does hydraulic fracturing play in the energy sector?

Hydraulic fracturing has been instrumental in boosting the production of natural gas and oil, particularly in the United States. It has allowed access to large volumes of oil and gas that were otherwise uneconomical to produce.

How is the water used in hydraulic fracturing treated?

After it is used, the water is often stored in open pits or tanks to be treated. This can consist of proprietary processes designed to remove the variety of added chemicals, or it could include filtration systems or evaporation techniques.

Do all countries use hydraulic fracturing?

No, not all countries use hydraulic fracturing. Some countries, like France and Bulgaria, have banned it due to environmental concerns. Others, like the United States and Canada, use it extensively.

What are the alternatives to hydraulic fracturing in the oil and gas extraction process?

Alternatives include conventional drilling techniques and renewable energy sources. The increasing efficiency and competitiveness of renewable energy technologies are providing robust alternatives to fossil fuel extraction processes like fracking.

What does the future look like for hydraulic fracturing?

The future of hydraulic fracturing is uncertain and will likely depend on a variety of factors, including regulatory changes, public sentiment, environmental implications, and advancements in renewable energy technologies.

Related Finance Terms

  • Horizontal Drilling
  • Fracking Fluid
  • Natural Gas Extraction
  • Shale Gas Production
  • Environmental Impact Assessment

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