With President Obama’s support of shale gas development – encouraging exports while preserving regulatory exemptions – the momentum of an onshore drilling bonanza is growing from a regional to a national story.
High volume hydraulic fracturing as a means to extract oil and gas from shale was discovered and refined in Texas and recently adapted to tap shale basins in Pennsylvania, Ohio, Illinois, Oklahoma, Alabama, Colorado, Arkansas, North Dakota and other places. Drilling is pending in New York and California, both of which sit over world class shale reserves now accessible through fracking. The trend will likely accelerate as Obama encourages plans to use fracking to turn U.S. shale reserves into a global commodity – a move that will raise prices, increase markets and encourage more exploration. At the same time, his EPA has shown a disinclination to interfere with a patchwork of state regulations, some stronger than others, to oversee the industry, or to advocate the repeal of industry exemptions – enacted under Ronald Regan and George W. Bush -- from hazardous waste laws and the Safe Drinking Water Act.
Safeguards to protect the environment and public health are becoming an issue as petroleum development – once carried out mostly in geographically remote areas away from public view – spreads along massive mantels of shale extending under larger population centers.
As recently reported by Mike Soraghan of Energy Wire, drilling increased 40 percent while spills, blowouts and other mishaps rose 17 percent from 2010 to 2012 in states where comparable data was available. While arriving at these numbers, Soraghan ran into a problem encountered by many journalists seeking to quantify impacts of petroleum production – a scarcity of records and documentation due to lack of standards and enforcement. He reported:
There are no national figures on oil and gas spills or enforcement. But where state records are available, they show agencies pursue fines against oil and gas producers in only a small minority of spill cases. The Wyoming Department of Environmental Quality pursued water quality fines against 10 producers in 2012, records show, as it recorded 204 oil and gas production spills. In Texas, the leading producer of oil and gas, regulators sought enforcement for 2 percent of the 55,000 violations identified by drilling inspectors in the last fiscal year. In Pennsylvania, the heart of the Marcellus Shale gas drilling boom, 2012 records show state regulators levied fines in 13 percent of the cases where inspectors found violations. And in New Mexico, oil and gas regulators haven't issued fines in years.
Some spills are reported and some spills go unreported. There are also unknown numbers that get reported but not in a way that is easily accessible. State agencies rely on industry reports to compile spill data. These files tend to be decentralized and many lack searchable data bases. Through my own research in writing Under the Surface, I found that companies are routinely cited for failing to file reports. It’s something regulators often characterize as minor “paperwork” violations, but it really cuts to the heart of the public disclosure controversy.
In Texas, officials promote a "compliance-based" approach, Soraghan reports. “Commission inspectors place a premium on helping drillers get back into compliance with the rules rather than hitting them with fines.” It’s a regulatory style that regulators defend over a more aggressive "rules-based system," which, they say, will make drilling no safer or more environmentally friendly. Oklahoma has a similar approach. When an inspector followed up on a spill of 300,000 gallons of oil and wastewater into pastureland, he logged this: "Reinspected spill area. Found spill has been cleaned up. Looks OK. Please close incident. No further action anticipated."
States such as California, which sit over relatively unexplored reserves, are still waking up to local, regional and global implications of oil and gas development in the shale era. The Monterey Shale extends under some 1,750 square miles of California. Fracking is suddenly a hot topic in the state with an identity historically tied to both resource extraction and environmental protection. (While many shale gas plays are booming, there is controversy over the yet-to-be-proven viability of the Monterey, as seen in this AAPG critique.)
This week I’ll be at a conference at UCLA dedicated to improving the public knowledge base on the science and policy of shale gas development, and its social ramifications. It’s a pressing topic as the nation experiences a drilling boom that has gone from offshore to onshore, with a proportionate increase in stakeholder involvement. The conference, sponsored by the Union of Concerned Scientists, will divide 90 or so participants, including scientists, journalists, academics, lawyers, economists, elected officials, regulators, planners, industry people and others with various backgrounds in shale gas development into three working groups: The state of the Science, the Regulatory Landscape, and Community Engagement. (You can read about participants, programs, and agendas here.) The assignment is to use “expertise and perspectives on the current landscape, including major gaps, barriers and solutions, for an informed approach to decision making on fracking.” We will present our recommendations in a public session on July 25.
It’s a broad and ambitious undertaking, but I expect one theme will recur as it has throughout this discussion: the effectiveness and merits of a regulatory system that relies heavily on voluntary disclosure and self-policing by the industry, and an abiding culture in state regulatory bodies. The industry is exempt from federal regulations that require a cradle to grave accounting of hazardous chemicals used to extract gas from wells. With no national baseline for handling toxic waste through the Resource Conservation and Recovery Act, industry has sought to ease public concerns and criticism by teaming with non-profit groups, such as the Center for Sustainable Shale Gas Development and the Environmental Defense Fund, to develop “best practices,” including waste disclosure protocols. It’s an approach that has engendered skepticism in those who believe it serves more as PR cover than an effective right-to-know tool.
At the conference Wednesday and Thursday, I’ll chair the group looking at community engagement issues. If I can bring anything to the table at the start, it’s an appreciation for the scope and diversity of stakeholders and their varying and often conflicting takes on information and mis-information.
Often, the conversation is framed in the context of those for or against shale development, along with testimony from winners and losers. In an attempt to frame this more comprehensively, I offer these these reference points. In a sense, issues begin with gas companies, investors, and speculators competing to capitalize on U.S. shale resources, and they end with energy consumers and ratepayers in residential and manufacturing sectors, nationally and globally, sensitive to price. Caught in the middle is a mind-numbing collection of public and private interests: Property owners who want to lease or don’t want to lease their land, residents and business owners who will shoulder costs or reap benefits of development; residents in the larger region affected by development; local governments, state, and regional entities dealing with community impact issues; federal agencies representing interests including stewardship of public lands, natural resources, and matters of energy, economics and climate; environmental activists and their lobbies; industry advocates and their lobbies; unions, workers and contractors concerned about job creation and occupational risks…
On and on.
The demands for information from each group will vary, and they are complicated by varying value sets, ideology and interpretations. There are stakeholders sympathetic to industry’s position that regulations threaten national independence, free-enterprise, and jobs. And there are those who see regulation (without exemptions) as an essential public safeguard for an industry that extracts wealth from other people’s land using large volumes of hazardous chemicals.
Organizers of the conference in LA on Wednesday and Thursday have done a remarkable job in bringing a healthy array of informed and relevant stakeholders to the table, representing public and private groups and the fourth estate. It’s going to be a busy week. I will report results.