Basic concepts of fracture mechanics are discussed to analyze their applicability in modeling fracture initiation and propagation during hydraulic fracturing and waterflooding. Recent advances in modeling fracture initiation and quasi-equilibrium growth are reviewed. Special attention is given to the role of the process zone in fracturing. Process zone observed in laboratory and field hydraulic fracture experiments may explain the discrepancies between simulated and measured net fracture pressures. Process zone is revealed to be the common critical element for proposed mechanisms used for calibrating hydraulic fracture models. Deterministic and probabilistic mechanisms in fracture phenomena are addressed. Scale and rate effects are discussed.