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Thursday, December 18, 2014

New York bans fracking

Yesterday, New York Governor Andrew Cuomo announced that he would ban hydraulic fracturing in New York State because of concerns over health risks.

The New York State Department of Health's report on its review of fracking is here. And here's an annotated version of the same report from StateImpactPA.

Here in Pennsylvania, the New York report should add great weight to the already self-evident case for tougher, more comprehensive regulation - and for the urgent study of the the many unanswered questions about the public health, environmental, and socioeconomic impacts of unconventional oil and gas development.

Wednesday, December 17, 2014

Researchers: more study on fracking biocides needed

The subject of the use of chemicals in hydraulic fracturing has led to misleading headlines, and calls for vastly improved disclosure, for comprehensive reporting, for closing existing loopholes on chemical use, and for caution and more study. Now, a study on one class of fracking chemicals - biocides - underscore the need for caution and further study.

Biocides are chemicals that are added to hydraulic fracturing fluid to kill bacteria that can corrode well casings, reduce efficiency of oil and gas extraction, and produce (highly toxic) hydrogen sulfide gas. University researchers haves completed "the most comprehensive review to date of the environmental fate and toxicity of the biocides most commonly used in hydraulic fracturing fluids" and found that they are "largely unknown."

Biocides in Hydraulic Fracturing Fluids: A Critical Review of Their Usage, Mobility, Degradation, and Toxicity was published in the journal Environmental Science & Technology. According to a University of Colorado press release, the review of "more than 200 research papers, studies, and other literature" found that:

  • [L]ittle is known about what happens to these biocides if they are accidentally spilled on agricultural soil, enter surface or groundwater, or are exposed to the high temperature and pressure conditions in well boreholes...
  • None of the 16 major biocides used in hydraulic fracturing are specific to the oil and natural gas industry. All of them are used in other industrial processes and/or commercial products...
  • Of the 16 major biocides used in fracking, nine have been reported to have chronic toxicity effects (such as developmental, reproductive, mutagenic, carcinogenic, or neurological effects). Of the seven that have not shown any evidence of chronic toxicity, three may transform into intermediate products with toxic potential.
  • Based on currently available data, surface spills appear to be the most likely cause for environmental contamination by fracking fluids...
  • If inadvertently released into the environment, some biocides will primarily contaminate water and will thus be more mobile but also break down faster. Others will stick to soil and be less mobile and thus take longer to break down.
  • Many biocides degrade naturally in the environment, but some may transform into more toxic or persistent compounds.
  • Hardly anything is known about transformation, sorption and transport of fracking chemicals once injected into these deep formations, which have high temperature, pressure, salt and organic matter concentrations. Consequently, little is known about the type and toxicity of the compounds that return to the surface with produced/flowback water. More research is critically needed to understand these processes.
  • Several biocide alternatives exist but are rarely used because of higher costs and high energy demands or potential formation of toxic disinfection byproducts such as chloroform.
  • Environmental and human health risks associated with the use and disposal of hydraulic fracturing fluids are not well understood due to lack of research.
Additional research is surely needed.  As is a drive to waterless, chemical-free fracking. Industry innovation can get us there; for example, according  to this publicity piece (caveat emptor), new technologies are being developed to replace water and chemicals for enhanced oil recovery from existing wells.  That innovation can be driven by better accounting and coupled with next-gen regulations to get us there faster. 

Friday, December 12, 2014

Report: oil and gas industry has a long way to go on disclosure to investors

As regular readers of this blog know, the need for better disclosure of the chemicals used and risks associated with hydraulic fracturing is a frequent topic. Disclosure serves the public interest - and the industry's social license to operate

Demands for thorough disclosure by investors is a movement that merits close watching, if for no other reason than the weak industry response to it, according to a report issued last year.  Has it gotten any better since?

According to a just-released analysis, there's been some dramatic improvements at some companies, but the oil and gas industry as a whole has a long way to go.

Disclosing the Facts 2014 is a joint effort of As You Sow, Boston Common Asset Management, Green Century Capital Management, and The Investor Environmental Health Network. Using publicly available information that the companies provide on their websites or in financial statements or other reports linked from their websites, the report benchmarks the public disclosures of 30 oil and gas companies on 35 key performance indicators and assesses five areas of environmental, social, and governance metrics:
  1. toxic chemicals; 
  2. water and waste management; 
  3. air emissions; 
  4. community impacts; and 
  5. management accountability, emphasizing quantitative disclosure
The findings for 2014:
As was the case with the 2013 scorecard, the results of this year’s scorecard demonstrate a widespread industry trend of underperformance in disclosing key performance metrics. Across the board, companies are failing to provide investors and the public with sufficient quantitative information to adequately understand and compare the risks and opportunities these companies present regarding their shale play operations.
Although industry-wide performance continues to lag investor expectations, several companies have significantly improved their disclosures over the past year. This change is consistent with continued close investor, public, and regulatory scrutiny of hydraulic fracturing activities as well as broader patterns of innovation within the industry, where companies deploy better practices and other companies follow in what we hope is a race to the top for best performance. Investors plan to continue pressing companies to adopt effective practices for managing the risks and impacts, and thus capturing the full value, of their hydraulic fracturing operations.
Companies should report data associated with their operational impacts using quantitative metrics, on a play-by-play basis, in order for investors to be able to rigorously assess company practices...
The report's conclusion is - or at least should be - self-evident: 
We believe companies implementing current best practices in operations and providing thoroughly transparent information about these efforts will: enhance the likelihood of securing and maintaining their social license to operate; reduce regulatory and reputational risks; reduce liabilities associated with poor performance, spills, contamination, and lawsuits; and thereby increase their access to capital.

Wednesday, December 10, 2014

Studies identify big targets for methane emissions reductions

Two new studies focus on big targets for substantially reducing methane emissions resulting from oil and gas drilling.

The first is a study of methane emissions from abandoned wells in Pennsylvania – a draft of which I blogged about here. The now-completed study has been published in the Proceedings of the National Academy of Sciences.

Direct measurements of methane emissions from abandoned oil and gas wells in Pennsylvania finds significant methane emissions from 19 wells studied.  Scaling those results suggests that abandoned wells may account for between four and seven percent of methane emissions in Pennsylvania. 

More importantly, when the results are scaled up further to the estimated 3 million abandoned wells nationally, as lead researcher Mary Kang of Stanford University writes,  “the cumulative emissions from abandoned wells may be significantly larger than the cumulative leakage associated with oil and gas production, which has a shorter lifetime of operation.”

The paper calls for additional research to quantify these emissions nationally.  And while we’re at it, these wells must be systematically found and plugged.  

The second study, Methane Emissions from Process Equipment at Natural Gas Production Sites in the United States: Pneumatic Controllers, was published in the Environmental Science and Technology journal. It was funded by the Environmental Defense Fund, which is doing superb work on the methane issue, along with ten oil and gas producers. 

According to this report, the study:
says two parts of the production process should be targeted for reduced methane emissions. Researchers…concluded that pneumatic devices and liquid unloadings pose the most risk to fugitive methane. And just a small percentage of each device tested account for the bulk of emissions.
More about the study, which supports the regulatory action of states like Colorado - and the case for strong, simple, and cost-effective Federal methane emissions regulations - here.

The two reports identify big targets for reducing methane emissions beyond EPA's green completion requirements that go into effect next year. Will regulators hit those targets?

Thursday, December 4, 2014

Researchers predict shale gas bubble - UPDATED

A team of petroleum engineers at the University of Texas at Austin has found that, contrary to Federal government estimates, Marcellus Shale production could peak in just five years, plateau, and then tail off quickly.

The results were reported in the journal Nature, and summarized by StateImpactPA:
shale gas production among the big four plays, including the Marcellus, is expected to level out in 2020. The EIA forecasts a shale gas plateau in 2040…
Bursting shale bubble predictions are not new. But the article may be the first to compare the government’s analysis of data with academic results.
“What we found surprising is that the best academic estimates that are being done today are more pessimistic than the best information used by the U.S. government,” said Rich Monastersky, an editor for Nature.
The news could put policy makers in a bind when it comes to making decisions on everything from projected state revenue to Philadelphia’s plans to become the East coast “energy hub.”
The bottom line?
“What this article shows is there’s a considerable amount of uncertainty in how much natural gas will be produced in the future in U.S. shale formations,” said Monastersky.

Dec. 16, 2014 update: The authors of the study have responded in a letter to Nature that the article "provides a very misleading view of this important subject."