30 Aug 2012

New sensible efforts are raising the bar for safer, more transparent hydraulic fracturing

Written by Jim Pierobon

The ‘voices’ in the moderate center that have been drowned out in the increasingly inflammatory debate over the hydraulic fracturing of shale natural gas are getting a growing cadre of credible allies. And with them may come a sensible way to prudently capitalize on the enormous deposits of shale gas throughout parts of the U.S. and the world.

A Sensible Center is Emerging for Safer Fracking

Major shale natural gas formations in the U.S. CREDIT: U.S. Energy Information Administration

The funding of research by the philanthropic arm of New York Mayor Michael Bloomberg and the foundation created by the pioneer of fracking — George P. Mitchell of what used to be Mitchell Energy & Development near Houston —  along with efforts the Environmental Defense Fund (EDF), a new institute for gas drilling excellence, more inputs from the Marcellus Shale Coalition and other possible collaborations collectively hold the potential to significantly raise the bar on fracking and earn public confidence along the way.

With the $6 million it is receiving from the Bloomberg philanthropies and the $400,000 from the Cynthia and George Mitchell Foundation, EDF could catalyze what a federal agency or any state would find very difficult to pull off by itself, regardless of who is Governor or President: safer, more accountable and more transparent drilling, water and waste water management and measurable reductions in methane emissions.

“We are pleased that Mayor Bloomberg recognizes the many benefits natural gas brings to our country,” said Dan Whitten, Vice President, Communications for America’s Natural Gas Alliance.

“The recommendations that the mayor has laid out are all steps our industry has worked vigorously to implement, including water use and management innovations, air emissions reductions, and the disclosure of the chemicals we use,” Whitten asserted.

EDF is to help secure strong rules in 15 states — including Pennsylvania, New York, Ohio, West Virginia and Texas — that account for 85 percent of the gas reserves accessible through fracking. The effort is being led by EDF Senior Policy Analyst Scott Anderson and will focus on:

1. improving the transparency of fracking operations and chemicals deployed;

2. improving regulations that increase the integrity of wells to be drilled;

3. reducing methane emissions;

4. improving water and waste water management; and

5. minimizing impacts on local land from the roads, drilling pads and pipelines that need to be built.

The other states are: Arkansas, Colorado, Louisiana, Michigan, Montana, New Mexico, North Carolina, North Dakota, Oklahoma and Wyoming.

Possible New Player: Institute for Gas Drilling Excellence in the Marcellus Shale Formation

No public information was available as I wrote this. What is widely understood by a handful of industry pros is that a  new “Institute for Gas Drilling Excellence” (IGDE), or similar namesake, will launch soon for the Marcellus Shale formation. It would be the first type of regional center of excellence called for by the National Petroleum Council in 2011. Such centers of excellence also were recommended in 2011 by Secretary of Energy Steven Chu’s Advisory Board.

John Hanger, former Pennsylvania environmental secretary and member of the the state’s Public Utility Commission, is said to be leading a the center focusing on the Marcellus Shale formation which encompasses much of Pennsylvania and New York, virtually all of West Virginia, the eastern third of Ohio and far western Maryland.

In an interview, Hanger would only confirm that there is an effort is underway among a “very diverse group” of stakeholders. It won’t be controlled by industry nor environmental activists. It will focus on evaluating the performance of companies and will seek to establish an organization similar to what LEED is for green buildings certifications. LEED stands for Leadership in Energy and Environmental Design. Read more about it here.

Other players in the mix are 55 major investment organizations and institutional investors with nearly $1 trillion in assets under management. They have united to support “best practices” for the fracking of shale gas. Leading the charge are Boston Common Asset Management (“Boston Common”), the Investor Environmental Health Network (“IEHN”) and the Interfaith Center on Corporate Responsibility (“ICCR”).

According to people familiar with how IEHN is proceeding with its allies, this effort has developed about a dozen distinct objectives backed by best practices and performance indicators.

“We’re encouraging a corporate race to the top in adopting best practices,” said IEHN Executive Director Rich Liroff. ” The best-practices guide backed by major investors offers both currently achievable goals, such as minimizing fresh water use, and more aspirational goals, such as virtually eliminating toxic chemicals from fracturing operations.”

Liroff said an investor guide produced by IEHN and the Interfaith Center cites practices that are already used by 17 companies.  “Many companies will save money and lower risks; providing business, environmental, and community benefits,” he said.

Several additional companies are said to be willing to commit to the best practices. If they cannot demonstrate they are achieving the required performance metrics, they are supposed to explain why not.

Earlier this week, the Marcellus Shale Coalition released a “Recommended Practice” for pre-drill water supply surveys. This is the third in a series of recommended practices, all aimed at reinforcing the the Coalition’s Guiding Principles to “continuously improve our practices and seek transparency in our operations.”

Together these efforts constitute sustainable momentum that industry laggards will find it increasingly difficult to ignore. Let’s hope the leaders making this happen can build on their successes thus far.

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