31 May 2012

Shale gas ‘golden rules’ from the IEA – will enough of the industry engage? And how?

Written by Jim Pierobon

Lest there be any doubt, the call for understandable rules, regulations and disclosure requirements for the hydraulic fracturing of unconventional natural gas (aka fracking) from shale deposits deep underground is gaining steam not just in the U.S. but throughout much of the industrialized world.

Now comes the International Energy Agency with its “Golden Rules for a Golden Age of Gas.” These are offered as principles (below, quoting directly) to enable governments, industry and myriad stakeholders to address the environmental and social impacts of fracking in ways that can help grow the safe production of natural gas:

CREDIT: International Energy Agency

1. Measure, disclose & engage
2. Watch where you drill
3. Isolate well & prevent leaks
4. Treat water responsibly
5. Eliminate venting, minimize flaring and other emissions
6. Be ready to think big
7. Ensure a consistently high level of environmental performance.

The IEA aspires for the adoption of these rules to provide a “social license to operate”, paving the way for a “golden age of gas.”

“If the social and environmental impacts are not addressed properly, there is a very real possibility that public opposition to drilling for shale gas and other types of unconventional gas will halt the unconventional gas revolution in its tracks,” said IEA Executive Director Maria van der Hoeven. “The industry must win public confidence by demonstrating exemplary performance; governments must ensure that appropriate policies and regulatory regimes are in place.”

Fatish Birol, the report’s chief author, asserted “If this new industry is to prosper, it needs to earn and maintain its social license to operate.”

These are easy words to put on paper. Even an agreement by G8 leaders to “review. . . potential best practices natural gas development” at their recent Summit in Camp David, MD adds some weight to the IEA’s declaration. But this very decentralized industry with wildcatters flooding the newly discovered shale gas deposits around the world have some analysts and experts scratching their heads.

A few questions best practice advocates need to address from the stated golden rules include and certainly not limited to:

  • How should the golden rules be developed, vetted and offered for adoption by industry?
  • Disclose what, how quickly and to whom?
  • What steps exactly are needed to isolate and prevent leaks?
  • What constitutes “responsible” water management”?
  • What do they mean by “think big?”

The last question almost sounds like a branding exercise from the Apple / iPhone5 marketing brainstorm which had prodded its target markets to ‘think different.’ One has to ask: do they expect to be taken seriously with such proclamations?

Content for the report was organized by IEA staffers and vetted in a high-level workshop hosted by the Polish Ministry of Economy and the Mexican Ministry of Energy in Warsaw in early March. Several governmental, bilateral and non-profit organizations were invited to participate as were five oil and gas giants. Curiously, two individuals work at Schlumberger. See list below.

If representatives of these organizations are selected to draft, vet and press for compliance of anything resembling genuine best practices, they will need personnel and ground rules that have forged similar initiatives in the past. The fact that this is an international effort makes it all the more difficult.

Perhaps one country or another – U.S., Australia, China or the United Kingdom – could move quickly to set an example. Maybe a country NOT participating in the preparation of the report such as Canada could seize the initiative.

Government and Non-Governmental

National Energy Council of Indonesia, Saleh Abdurrahman

World Economic Forum, Roberto Bocca

National Petroleum Council (U.S.), Clay Bretches

University of Manchester (U.K.), John Broderick

Environmental Defense Fund (U.S.), Mark Brownstein

U.S. Environmental Protection Agency, Carey Bylin

U.S. State Department, Robert Cekuta

Queensland Water Commission, (Australia), Randall Cox)

Clean Air Task Force (U.S.), Armond Cohen

 

Oil and Natural Gas Producers

BP China, Xavier Chen

Enel, Marco Arcelli

ExxonMobil, Tristan Aspray

Schlumberger, Kamel Bennaceur

Schlumberger, John Corben

Total, Bruno Courme

 

 

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