Shale Gas Reports to Energy Secretary Chu

A cross-section of experts advising the Obama administration on how to proceed with shale gas have said producers need to chill out so that the public warms up. As such, it is demanding more monitoring and greater transparency.

The moves would not just satisfy a segment that has grave concerns, says the advisory committee that convened 3 months ago and reports to the U.S. Department of Energy Secretary Steven Chu. But it would also ensure that the natural gas industry is able to explore for resources without the intense ridicule from those who say its drilling techniques are harmful to the environment and to drinking water supplies.

“We’re issuing a call for industry action, but we are not leaving it to industry alone,” says the group’s chair, John Deutch who is also an MIT professor. Critics of the report say that the chairman — and others on the committee — have inherent conflicts of interest because of their financial ties to the oil and gas sector.

The position of the White House is that shale gas is the most viable option to an over-reliance on coal. Natural gas releases about half the emissions as coal. It’s also plentiful: The U.S. Energy Information Administration is saying that 10 years ago shale-gas accounted for 2 percent of natural gas production and today it is 30 percent. That will grow to 45 percent by 2035.

To retrieve the shale-gas from the rocks where it is embedded, producers pump a concoction of water, sand and chemicals deep underground. Communities around the country are protesting, saying that the resulting dirty water is getting into the drinking supplies — something the industry says is unlikely given that the shale gas is a mile beneath the surface.

Natural gas producers must measure the chemicals they are using to drill for shale gas, as well as reduce its water consumption and account for what is used after it is removed from the site, the report says. It adds that the members don’t see any valid economic reason for drillers not to reveal the chemicals they are using. And, further, the paper says that producers must monitor such air emissions as those involving ozone precursors and greenhouse gases like methane.

Words Inadequate

The report is silent on whether any future regulation would come at the federal or state level or whether the fracking process would fall under the rules set by the existing Safe Drinking Water Act. Some states, for instance, require drillers to disclose at least some of the chemicals that they are employing.

For its part, the oil and gas industry says that state rules are working just fine and that industry is in full compliance with those now on the books. Beyond that, it sees no reason to divulge its proprietary trading practices or to spend huge sums to comply with onerous laws. Still, it is pleased with the report’s balanced tone.

“The report stands in stark contrast to the strident, hysterical demands for moratoria on hydraulic fracturing,” says Barry Russell, head of the Independent Petroleum Association of America. Communities must recognize that this resource can be extracted safely and subsequently used to power American homes and business for the next century, he adds.

But words are not enough. The message from the advisory committee is that the promises must be supported by actions, and fully translucent ones. Indeed, some drillers are coming under federal scrutiny — from the U.S. Securities and Exchange Commission. It recently subpoenaed a few companies to discuss whether they had fairly represented their potential liabilities to investors.

Meanwhile, those eastern states with access to the Marcellus Shale Formation are exploring the possibility of recycling the wastewater. But at least Pennsylvania has found that treatment facilities can’t remove all the yuck before it is discharged. Until that process can be commercialized, states may require more openness.

“In 90 days, without any scientific study the panel concluded that fracking can be done safely, with better regulations,” says Joe Levine, co-founder for Citizens for Water Foundation. “Fracking cannot be made safe by regulations — it is intrinsically contaminating,” adding that their findings are “only consistent with the science reported by the industry and not independent scientific study.”

Between the lines, Secretary Chu’s task force is saying that it is supporting the most stringent state laws in existence. And while it stops short of calling for new federal guidelines, the message implies that its members would favor such laws if they resulted in bettering monitoring and greater transparency.

Expect some resistance from industry. But if the general public warms to shale-gas, producers will come around and make the enactment of new safeguards more probable.

EnergyBiz.com