1 May 2012

Shale gas producers’ first stabs at ‘standards’ & ‘practices': how much do they reduce accident risk?

Written by aspowell

That’s at least one question on this blogger’s mind. One cannot help but note the absence of “best practices” because, well, they aren’t, at least not yet.

Can they be?

I, for one, am willing to believe the industry CAN produce bonafide best practices. But there needs to be sufficient input from from a variety of informed stakeholders, including experienced hands in the industry, current or former regulators, a few well-intentioned landowners, perhaps a few highly-qualified academics and level-headed non-governmental organizations such as the Environmental Defense Fund.

Anadarko Petroleum, a leader of the Appalachian Shale Recommended Practices Group, pledges "Open Communication" with stakeholders on its web site.

A group calling itself the “Appalachian Shale Recommended Practices Group,” led by Anadarko Petroleum, this week issued “Recommended Standards and Practices” as a “framework for protecting workers, the environment and the communities in which we operate.”

A careful reading of the eight pages of “General Principles for Operators” followed by the “Responsible Standards and Practices” is chock-full of aspirations and good intentions. Even relying on “guidance documents” from the American Petroleum Institute, they fall far short of accountability.

Operators are to “encourage”, “emphasize,” “strive,” to do what  any reasonably qualified oil and gas driller should do to minimize the impacts of its operations. There appears to be no discernible and objective and/or quantifiable standard that under-funded or less-experienced operators could be held to account for.

On “Site Section Selection and Assessment,” operators “should consider…” and “should conduct…” themselves in manners that are unlikely to earn the trust the industry needs to realize the potential of America’s natural gas resources.

On “Site Design and Construction,” here too operators “should consider…”, “should use…” and “should prepare…”as reasonably practical”…. Where are the robust standards the industry and its stakeholders can point to, with confidence, that acknowledge the risks and work measurably to mitigate them?

Judge for yourself here.

The Appalachian Practices Group is comprised of: Anadarko Petroleum Corporation, Cabot Oil & Gas Corporation, Chesapeake Energy Corporation, Chevron, EQT Corporation, Seneca Resources Corporation, Shell Oil Company, Southwestern Energy Company, Talisman Energy Inc.,  WPX Energy, Inc. and XTO Energy Inc.. XTO was recently acquired by ExxonMobil.

The Marcellus Shale Coalition doesn’t even go this far, issuing to date only Guiding Principles. The Principles “strive to …are committed to…continuously improve…and “seek transparency”. One cannot help but ask: Where does the buck stop? Is this mostly a PR stunt?

On one point America’s Natural Gas  Alliance, which represents independent oil and gas drillers,  and the Marcellus Shale Coalition, whose members drill mostly in Pennsylvania, agree. Both issued supportive statements today following up the nominal efforts thus far to address the compelling need for best practices that will help protect and sustain the hydraulic fracturing for natural gas.

Regina Hopper, ANGA’s president and chief executive officer, acknowledged in a statement the “importance of public engagement and working with diverse stakeholders.”

Kathryn Klaber, president of the Marcellus Shale Coalition, said “Transparent operating standards are critical to the long-term growth and sustainability of our industry throughout Appalachia.”

Klaber asserted the Coalition “will continue to collaborate with all stakeholders — regulators, non-governmental agencies, academic institutions, and others — to raise the collective bar on behalf of future generations.” But she did not identify the non-industry groups the Coalition has been collaborating with, or what collaboration actually involves.

Thus far, the industry’s actions fall short of their words.

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