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Thursday, February 7, 2013

Resources for the Future releases must-read report on shale gas risks

Resources for the Future’s Center for Energy Economics and Policy (CEEP) has released the results of a survey of 256 shale gas experts (yours truly included) from government agencies, industry, academia, and nongovernmental organizationsto identify the priority environmental risks related to shale gas development—those for which the experts believe government regulation and/or voluntary industry practices are currently inadequate to protect the public or the environment.

Pathways to Dialogue: What the Experts Say about the Environmental Risks of Shale Gas Development found a high degree of consensus among experts about the specific risks to mitigate on 12 risk pathways:

  • 7 involve potential risks to surface water,
  • 2 involve potential risks to air quality,
  • 2 involve potential risks to groundwater, and
  • 1 is related to habitat disruption.

 RFF, p. 17

The report is a rich resource and a must-read.

These “pathways to dialogue” can provide industry leaders, policymakers, and the public with a firm starting place for further dialogue in balancing the benefits and risks of shale gas development.

Wednesday, February 6, 2013

EPA: oil/gas production/transmission is No. 2 emitter of greenhouse gases

In its second-annual accounting of greenhouse gas emissions from stationary sources, the U.S. EPA has released 2011 data that shows that natural gas and oil production is the second-biggest source of U.S. greenhouse gas emissions.

Methane emissions from drilling, including fracking, and leaks from transmission pipes totaled 225 million metric tons of carbon-dioxide equivalents in 2011, EPA said, second only to power plants, which emitted about 10 times that amount – over 2,200 million metric tons.

As I wrote here, industry leaders and the investment community alike say – and are demanding - that methane emissions from shale gas development must - and can - be addressed. In April of this year, the U.S. EPA issued new rules requiring capture of methane emissions from gas well completions by 2015 and flaring of methane from new gas wells in the interim.

For more on the EPA report, see here.

EPA’s report makes clear the necessity of cleaning up natural gas’ methane act immediately – and tackling the much greater challenge of slashing emmisions from power plants.  There is no more urgent work.

Tuesday, February 5, 2013

Investors press oil/gas companies to reduce, report risks from fracking operations

Investors have called on 9 leading oil and gas companies to disclose information about the ways they are managing and measuring the risks associated with hydraulic fracturing and shale gas transmission.

Shareholders have filed resolutions with Cabot Oil and Gas, Chevron, Exxon Mobil, EOG Resources, ONEOK, Pioneer Natural Resources, Spectra Energy, Range Resources and Ultra Petroleum.  The shareholder resolutions call for quantifiable progress on environmental risks, fugitive methane emissions and other community impacts.

These actions show increasing investor focus on responsible gas production.  How will the companies they own respond?

Feb. 6 UPDATE: There has already been response by one company.  Cabot Oil and Gas has announced a new policy prohibiting the use of diesel and BTEX in fracking fluids in Cabot wells.  The shareholder resolution filed by the company's shareholders was withdrawn.  

Bravo, responsible investors, and bravo, Cabot.

AMD for fracking is a good idea - but a band aid, not a cure

This article in Forbes provides an excellent overview of the the idea of using aid mine drainage - water polluted from mining operations - in place of fresh water for hydraulic fracturing in Pennsylvania.  It is, on its face, a good idea, and PA DEP is to be commended for pursuing it

But- and there is almost always a but -   I do take issue with the last sentence of the article:

We need to encourage all beneficial strategies for correcting the mistakes of the past.

It's important to understand the limits of this good idea, and not (a bit blithely) overstate the case.  Using AMD for fracking does not "correct" anything.  As I wrote here, it does not actually clean anything up. 

The official estimate of Pennsylvania’s AMD flow is 300 million gallons a day. Every day. Forever. Over 4000 miles of streams in the state are biologically "dead" as a result.  Diverting a smallish amount of AMD-polluted water, well-by-well, is far different than cleaning up a massive, pervasive statewide problem. It avoids basic questions of poor statewide water quality and consumptive use of precious water resources. 

At best, it treats a symptom. It is not a cure.   

Monday, February 4, 2013

Global risk manager issues full recommended practices for shale gas extraction

Last October, I blogged about Det Norske Veritas (DNV), a global provider of risk management services, creating an initial Recommended Practice for the life cycle of shale gas extraction, based on risk management principles.  At the time, only a summary of the RP was available.

The full 59-page Recommended Practice is now available. It is extraordinary - a painstakingly thorough, detailed, and comprehensive prescription for all aspects of shale gas development.  It is replete with detailed recommendations and requirements to minimize risk from shale gas operations. For example, the environmental section calls for these measures - spelled out in detail in the RP:

  • an Environmental Impact Assessment to be completed in advance of development - and independently and professionally reviewed - with the results provided to stakeholders;
  • employment of Best Available Techniques (BAT) and Best Available Practices (BAP) in preventing, minimizing, and mitigating adverse environmental impacts - evaluated and justified on a case-by-case basis;
  • a reduction in the use of chemicals as much as is reasonably feasible, with full disclosure of chemical use;
  • avoiding the use of impoundments for storage of fracturing fluids, flowback, or produced water; 
  • reduction of greenhouse gas and other air pollutant emissions - and light and noise pollution - as much as is reasonably feasible;
  • the completion of an environmental baseline study prior to commencement of activities and monitoring program to at a minimum include ground and surface water, air quality, and noise;
  • comprehensive reporting; and
  • a post operations survey by an independent third party to document environmental conditions and inform the implementation of any additional remediation measures that may be called for.

DNV says that this highly useful document can serve many functions: 
  • defining best practice risk management
  • providing a basis for subcontracting
  • as a contract reference, providing descriptions/specifications for the risk management process
  • a reference for independent assessment and verification
  • a reference for communication with stakeholders
  • a reference for development of shale gas-specific regulations.

The DNV Recommended Practice is a must-read for operators and their contractors, regulators, NGOs, stakeholders, and the public.  

DRBC to review 2 NEPA natgas pipeline projects

The Philadelphia Inquirer reported last Friday that the Delaware River Basin Commission has decided, at the request of over 50 environmental organizations – and in a reversal of a December, 2012 decision - to review two completed natural-gas-pipeline projects in Northeastern Pennsylvania.

Both projects - interstate lines built in Pike and Wayne Counties by Columbia Gas Transmission and Tennessee Gas Pipeline Co. - have been completed, but their sponsors would need to apply for permits.

The Inquirer story noted that four pipeline projects had been built in the basin since 2011 and seven were planned, with the potential for six more.

The rules of the DRBC specifically exclude natural gas pipeline projects from commission review; however, both projects went through a public recreation area - the Delaware State Forest - that had been incorporated into the DRBC's comprehensive plan. That is one of the exceptions in DRBC rules that triggers a review.

This is an important development. As I wrote here, pipeline projects have the potential, if poorly executed, to cause big erosion and sedimentation problems that needlessly threaten waterways.  They also cause significant habitat fragmentation, and emissions from compressor stations are a significant source of air pollution.  Indeed, The Nature Conservancy has found that the cumulative impacts  from pipeline development in Pennsylvania will likely exceed the impact from well pads and roads. 

With the very real prospect of tens of thousands of miles of new pipelines – intra- as well as inter-state – being built in Pennsylvania in the coming decades, the DRBC (and other regulatory bodies) should, in my view, broaden their oversight to include careful review of all pipeline projects.