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Tuesday, September 4, 2012

Shell CEO calls for more shale gas regs, monitoring - and a carbon price


An interview with National Geographic by Shell CEO Peter Voser is a must-read. In it, Voser discusses the state of the shale gas universe, and particularly Pennsylvania, where there are 74 operators and “a very fragmented, competitive environment.”  

Voser says that last year, Shell publicly released its operating procedures, guidelines, and policies in order to  “lift overall operational standards” and to “give the regulators, which are mainly at state level, an idea of what global top world-class standards could look like, which they could actually use in setting the regulations.”

And Voser was very clear in calling for additional regulations on shale gas development, and for greatly-expanded monitoring - of water usage and groundwater contamination issues; of the chemicals that are used; and of methane emissions. Of the latter, Voser says: “The technology is out there. It’s about focusing on it, monitoring it, and actually investing in it.”

But the interview is also noteworthy because Voser voices support for the idea of setting a price on carbon emissions.  He called for governments to take a three-prong approach to energy:

·        focus on  energy efficiency;
·        set a price on carbon - “(W)e need a price for CO2. This will help us to invest, actually, much more in the longer term” - and
·        establish energy policies that set limits on carbon emissions without specifying preferred technologies; that allow industry, NGOs, and academia to work on solutions within that framework.

Voser’s prescriptions for energy policy flow in significant part from Shell’s analysis of the growing tensions among water, energy, and food production. He discusses the role of collaboration among industries, governments and NGOs, and the need for investment in innovation.

There is an obvious case to be made for government action on all of these fronts.  But governments typically lag behind the pace and scope of events.  There is thus perhaps an even stronger case for – and potential for - strong, collaborative, transparent leadership by individual companies.    


4 comments:

  1. Thanks for posting this John. I honestly don't understand when I always hear from folks saying "the gas industry is fighting new regulations".

    They're not. There's a bunch more in the pipeline right now waiting to come down from the Technical Board. This industry is not averse to regulations. Most are already operating well above them.

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  2. Mike,

    Thanks for reading.

    One problem is that the "industry" is, as Voser describes it, "fragmented" - 74 companies exploring in PA. Not all adhere to or aspire to the same standards. But it is also true that there are active, anti-regulatory campaigns in full swing around unconventional natural gas exploration. For example, the U.S./state chambers of commerce have launched a “Shale Works For US” campaign whose goal is to “ensure no hindrance or regulatory barriers” to natural gas drilling." See http://www.pennlive.com/midstate/index.ssf/2012/07/us_chamber_of_commerce_launche.html.

    There is an opportunity for real leadership in the industry that has yet to be fully seized.

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  3. I think what was probably meant by that was no UNREASONABLE regulatory barriers, and it's also probably more oriented towards stopping redundant federal regulations, which I agree with. If the recent spats between EPA and state DEP's are any indicator, its pretty clear that the states have a much better handle on the situation than the feds do.

    I wish Don would have given some additional context in that article. But, as you point out many times, talk is cheap. It's actions that we need, and right now MOST companies are going far above and beyond the regs as they are currently written.

    Are there be a few people trying to cut corners? Maybe. But even the most profit-focused companies have to see that though they might save a penny in the short term, paying a little bit more to do it right is a very wise investment.

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  4. "Reasonable" is obviously a very subjective term, and details are crucial. I think you and I have differing opinions on the strength of PA's regulations with the passage of Act 13. But I acknowledge that state-level work is being done. The Federal government should - I think must - provide the floor, and states should build upon that floor based on their unique circumstances.

    I completely agree with you that action is what is needed. As we've discussed previously, an independent analysis of companies that identifies which ones indeed go above and beyond would be of tremendous public benefit.

    And I wish that every company in the industry agreed with the last sentence in your comment. Doing things the right way is a smart investment.

    Thanks for commenting.

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