Unconventional oil and gas development is made economically feasible by horizontal drilling and hydraulic fracturing, and it can produce large volumes of wastewater that are injected into disposal wells. In the first part of this dissertation, we investigate the potential for fracturing fluid to migrate from the target formation to contaminate shallow drinking water aquifers. We present semianalytical calculations for capillary imbibition into shale, which can sequester up to 95% of the fracturing fluid, thus preventing migration to aquifers. Next, we present a numerical model of fracturing fluid migration, which is the first to combine injection and production, imbibition, and buoyancy. In the absence of a permeable pathway between the injection formation and the aquifer, no contamination occurs. In the presence of a permeable pathway, well suction and capillary imbibition significantly reduce the amount of fracturing fluid reaching the aquifer compared to scenarios that do not account for suction and imbibition. In part two, we present a new framework for modeling basin-scale injection-induced seismicity (IIS). The framework incorporates flow and geomechanics, the presence of fractures and faults, and the capability for hydraulic diffusivity to evolve with effective stress and earthquake history, which is modeled by the Mohr-Coulomb failure criteria. The model is implemented in the massively-parallel code PFLOTRAN, which is important to capture the large length scales (