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Understand the geology, design the engineering
The first step is to understand the resource, its location, its relationship to surrounding rocks, vertical distance from the water table (aquifers), and other factors.
Once the necessary inormation is at hand, an engineering solution is designed for fracking at a specific site. That will include drilling the well, casing the well to isolate it from surrounding rock and aquifers, designing fracking fluid that will deliver best results for the target rock formation, and for the resource contained within it. That work will also include designing methods for collecting and disposing of waste water.
For all of this work, the company will be working with the local council on resource consents and other approvals (e.g. for hazardous substances, health & safety), conditions of operation, monitoring and reporting on compliance, and on risk management plans for every step of the operation. The goal is to design and implement a fracking operation that is safe and effective, and monitored to ensure that is the case.
Pump a fluid under pressure to open up fissures in gas-bearing rock
The key input to fracking is the fracking fluid – typically 98-99% water and sand.
The remaining 1-2% are additives to achieve various objectives: to make the fluid slippery for ease of pumping; thicker to hold the sand in suspension while fissures in the rock are being opened under pressure; to prevent fluid leaking too quickly through the reservoir; and to then thin the fluid to ease evacuation from the reservoir once fracking is completed. More on chemical additives here
Avoid loss of fracking fluid and gas
A well is drilled and lined with steel casing. That steel casing is held in place with cement, and is installed as a succession of tubular sections, each section screwed into the next. Each section of steel casing is typically 40m-45m long.
For the first 500 metres of a well, the casing may entail three concentric casings of steel, each held in place with its own casing of cement, to eliminate as much as possible any risk of contamination of the water table.
The fracking fluid is then pumped under pressure down to the desired depth, being contained by the well casing until it reaches the target depth, i.e. the depth of the reservoir rock. At that depth, the casing sections are either perforated, or the casing comes to an end.
The fluids are maintained under pressure for a short period of time (minutes) determined by the design engineer. That pressure opens up fissures in the target rock stratum, extending from a few metres to several hundred metres into the rock surrounding the well, but not into non-target rock. When the pressure is released some of the fracking fluid is driven by high pressure in the reservoir back up the well and is collected at the surface. These fluids are then disposed of or treated in an approved way.
Much of any fracking fluid remaining in the reservoir after the initial clean-up will be returned to the surface via the well, as the well produces natural gas or CSG. This is recovered and disposed of in the same way.
A small amount of the fracking fluid will stay underground (as does some 20–30% of the gas). This residual amount is not recoverable, mainly because at low concentrations, the effect of surface tension increases, which increases friction between the rock structure and the gas. In the same way, no matter how hard a sponge full of water is squeezed, there is always a little water that remains in the sponge.

Fracking affects only the target rock formation. Click on National Energy Board Canada and click on the image for a larger view.

Read about fracking issues in the US here. Click on the image on that page for a readable view of the fracking graphic. Fracking technology has evolved over time, with important advances made in environmental management.