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Friday, June 8, 2012

Words of wisdom

Can fracking be cleaned up?  The International Energy Agency says yes, but it will take tougher regulations. Best practices are not enough.  There is a fundamental role for government.  Read these words of wisdom from a leader in the natural gas industry: 

"It can't just be counting on companies to adopt best practices, because you'll only have a certain percentage of the well operators doing it," says Mark Boling, president of V+ Development Solutions, which is part of Southwestern Energy, a natural-gas producer. "You have to go the rest of the way and get regulations in place so that you have a level playing field and everyone is required to do the same thing."

I heard Mr. Boling speak at CERAWeek 2012 and was impressed with his candor. 

If we are to obtain all of the benefits of responsibly developed natural gas, we need companies in the gas industry to step up and lead, and we need government at all levels to perform its fundamental protective function.

Smart planning is a gas industry must

The good folks at FracTracker recently posted the map below of important natural heritage areas in Pennsylvania, created by the Pennsylvania Natural Heritage Program. 

These areas contain sensitive ecological resources - plants, vertebrates, invertebrates, natural communities and geologic features.   All but one of Pennsylvania’s 67 counties have completed inventories of these sensitive areas, and while more field work is needed to enhance the accuracy and completeness of the maps that the surveys yield, these maps are essential conservation planning tools.

They also tell a story – that Penn’s Woods is a special place.

Now consider this map:

Obviously, there’s quite a bit of overlap - even more when you consider the pipeline development that is happening and will continue to occur in southcentral and southeast Pennsylvania.  And therein is the challenge to responsible natural gas development in the Keystone State, which will soon become the Number 3 natural gas-producing state in the nation.

Last year, Governor Corbett’s Marcellus Shale Advisory Commission recognized the central importance to Pennsylvania of avoiding, minimizing, or mitigating the impacts of natural gas development on areas of high conservation value. As these two maps show, that is a tall order here.  

Smart, sensitive planning on landscape and watershed levels by drillers and pipeline companies is key.  And as IEA has pointed out, that kind of smart planning can lower overall development costs by as much as 5 percent.  Such planning should be required at both the Federal (for interstate pipelines) and state levels (for everything else).  But smart companies in the natural gas industry can lead the way right now – saving money while enhancing the industry’s social license to operate.  Some are beginning to do this vitally important work.  Every company in the industry must. 

Wednesday, June 6, 2012

Climates changed

An unmistakable sign of climate change showed up this week in the strangest place.

My mailbox.  

I received an unsolicited offer from an insurance company that told me how important it was for me to purchase hailstorm insurance.

Gimmick?  Think again:

Insured losses due to thunderstorms and tornadoes in the U.S. in 2011 dollars. Data and image from Property Claims Service, Munich Re.

The world experienced record-shattering weather extremes last year that caused more than $148 billion in economic losses, and $55 billion in insured losses globally - more than $30 billion of that in the U.S., where 14 severe weather events caused losses of more than $1 billion each, far more than in any previous year. 

And it’s going to get vastly worse.

A car pulverized by hail is the least of the insurance industy’s problem.  Businesses in virtually every sector of the economy are vulnerable.  A changed climate has changed the business climate.
Ceres, Oxfam America and Calvert Investments have released a new guide - “Physical Risks from Climate Change” - to prepare businesses and investors for facing and disclosing climate-related risks.

What are businesses and investors up against? As detailed by Ceres President Mindy Lubber:

For the agriculture and food and beverage sectors it means crop failures, loss of productive land and commodity price volatility. Drought will increase in some areas and severe flooding will rise in other places, while changing growing seasons and unpredictable pest and disease distribution will pose additional challenges.

For the insurance industry it means massive exposure to property damage and business losses from storms, wildfires, floods and droughts.

For the electric power and oil and gas sectors it means supply disruptions and disabled infrastructure.

The report also details risks in the apparel, mining and tourism sectors.

The largest uncontrolled chemistry experiment in history – the carbonization of our atmosphere – is creating huge economic risks that companies are under obligation to disclose.

Tuesday, June 5, 2012

Shale gas versus - and for - the hermit thrush

This piece by Patrick McShea, an educator at Carnegie Museum of Natural History, beautifully illustrates part of what is at stake in the shale gas boom – the challenge of obtaining the benefits of shale gas while preserving our natural heritage and environment.

Pennsylvania is now the number four gas producing state, and we may be in for seven more decades of drilling.  The cumulative impacts of this development are almost too large to comprehend.   The Nature Conservancy has provided a window onto this issue with an analysis of impacts based on a very conservative case of 60,000 wells drilled in Pennsylvania by 2030.  (There are estimates as high as 200,00o Marcellus wells, and that does not include exploration of other shale beds, which is already underway here.)  TNC estimated that the land disturbance associated with drilling those 60,o00 wells – plus up to 27,000 miles of new gathering lines and at least 1,700 miles of new transport lines that will be needed to connect those wells to market - are projected to damage and fragment 1.6 million acres of Pennsylvania forest – over 9 percent of the state’s forest cover.  These lands contain nearly 40 percent of Pennsylvania’s globally rare and threatened species and nearly 80 percent of the state’s most intact brook trout watersheds. The clearings and disturbances, TNC says, will disrupt forest ecosystems and threaten forest interior species. 

We have every reason to be very worried about the hermit thrush.

Clearly, we must connect the dots on the cumulative impacts of shale gas development and work to minimize them.   The Shale Gas Subcommittee of the Secretary of Energy’s Advisory Board, 55 major investment organizations,  and the International Energy Agency all have called for the gas industry – drillers and pipeline companies – to perform landscape-level and watershed-level planning (which, IEA points out, can save industry money) to minimize the industrialization of the landscape and the impact on the natural world.

Industry leaders are saying that they should embrace this kind of planning.

Now, we must get them to do it. The hermit thrush is depending on us.

But we’re not done here.

In focusing on the severe potential impacts of the shale gas boom on the hermit thrush, in its good intentions the article avoids the other elephant in the room – climate change.  Climate disruption is the single biggest long-term threat to our natural heritage – like songbirds.  It’s happening before our eyes in Pennsylvania.  We have a responsibility to look at the whole picture of the threat to the hermit thrush and its brethren, which is inconvenient to shale gas opponents who would ban fracking.

Natural gas is at once part of the problem – and part of the solution.  It provides the most readily-deployable large-scale tool to combat climate change, and to pave the way to a low-carbon future.

So, we must embrace shale gas and hold its development to the highest standards if we want to protect the hermit thrush.

It should not be shale gas versus the hermit thrush.  We must have both. And with responsible action by the industry, deep engagement with stakeholders, and with tough regulations on gas development, I believe we can.  

Whether or not we will is up to all of us.

Monday, June 4, 2012

Gas industry claims methane leakage is half of US EPA estimate

The American Petroleum Institute and America's Natural Gas Alliance has released a survey that claims that methane emissions from natural gas production are 50% below US Environmental Protection Agency estimates.

The survey focus on methane emissions from two sources: liquids unloading and venting, and re-fracking (as opposed to the initial fracking) of gas wells.  The findings on the latter subject result from survey data that indicates that the workover, or re-fracture, rate of wells is actually significantly lower than EPA has estimated.

The survey merits close reading.

More data and additional analysis on methane emissions is obviously needed. Because methane is 25 times more potent as a greenhouse gas than carbon dioxide, it is essential - and urgent - that methane emissions from gas production, transport, and distribution be driven as low as possible. In April, US EPA promulgated new regulations that require green completions/reduced emission completions at high pressure wells like shale gas wells by 2015 (87% of coal bed methane gas wells are low-pressure and are not covered).  2015 may not be soon enough.

The API/ANGA report says that the information contained in the survey would shift the gas industry from the US' largest source of methane emissions to the second largest - behind livestock production.  But second place is not good enough.  The industry is making strides, and can and must do better.  Action on methane emissions is being demanded by investors here and in Europe; industry leaders have voiced support for it as in their companies' economic interests.