The federal government should begin a major effort to measure greenhouse gas emissions tied to the nation's booming natural gas industry, a Department of Energy advisory panel said today in a series of proposals on air and water quality issues.
The seven-member advisory panel under Energy Secretary Steven Chu released its first report outlining steps that regulators and companies drilling in vast U.S. shale gas reservoirs should take to avoid significant environmental damage and assuage public concern.
"There are serious environmental impacts underlying these concerns and these adverse environmental impacts need to be prevented, reduced and, where possible, eliminated as soon as possible," says the report. "Absent effective control, public opposition will grow, thus putting continued production at risk."
The expanded use of drilling technology to extract resources trapped in tight formations 8,000 feet underground has opened the door to trillions of cubic feet of new natural gas reserves. Tens of thousands of gas wells are expected to be drilled in the coming decade, according to energy industry and U.S. government estimates, and much of that gas will be delivered to electric utilities as a cleaner substitute for burning coal.
But increasingly in the past couple of years, those expectations have been tempered. There is growing concern that the rapid expansion of drilling in the Northeast and even in traditional oil- and gas-producing states such as Texas and Colorado has far outpaced regulatory oversight. In the wake of the BP PLC Macondo oil spill in the Gulf of Mexico last year, a rising tide of public push-back against the gas industry, resulting in a temporary moratorium on exploration in New York, prompted the White House to get involved.
"My view is that shale gas development has outpaced the ability to ensure its safety," said Fred Krupp, a member of the Energy Advisory Board subcommittee that issued the 40-page report and president of the Environmental Defense Fund. "The report sketches out a path forward. That has the potential, if implemented, to rebuild the public's trust."
The panel is led by former CIA Director John Deutch and includes some of Chu's top outside advisers, including Daniel Yergin, chairman of IHS Cambridge Energy Research Associates, and former Clinton White House energy officials.
A more exact measure of carbon footprint wanted
While Krupp is a presence for environmental groups, the panel has come under fire from some for being too heavily weighted toward gas industry interests. For his part, Deutch sits on the board of Cheniere Energy, which owns liquefied natural gas import terminals on the Gulf Coast, and used to sit on the board of oil services giant Schlumberger.
In interviews, Krupp, Deutch and other panel members said the 90-day review yielded consensus on the need to dramatically increase information that regulators and the public have about the use of chemicals, water use, toxic waste disposal and air emissions.
"There needs to be more ways to track progress," Deutch said. "We need to make it more environmentally benign over time; that's how we're going to get to success."
Air emissions tied to gas development are getting more attention as drilling gets closer to urban centers and as an accumulation of industrial-sized gas projects dots rural landscapes. Smog-forming emissions are a result, but so are greenhouse gases.
The DOE panel recommended "a thorough assessment of the greenhouse gas footprint for cradle-to-grave use of natural gas."
A widely distributed study out of Cornell University suggested gas could be just as dirty as coal when the energy-intensive process of extraction is included. When burned, gas produces about half of the carbon emissions of coal. Still, the process of drilling for oil and gas releases into the atmosphere methane, which is a potent greenhouse gas. Technologies exist to slash methane emissions, said the panel.
The DOE panel found too little analysis and data on the potential global warming impact of a long-term gas boom in the United States, and it called on industry and government to work together on a comprehensive study.
DOE and U.S. EPA stepped in this year to help avert a looming impasse on the question of how much and how fast America's shale gas resources should be developed. Negative media reports from rural communities in northeastern Pennsylvania, New York City's opposition to drilling through its major aquifer, and air quality issues in Texas put the gas industry on the defensive.
A rush to invest and drill
Top producers Chesapeake Energy and Exxon Mobil Corp., along with hundreds of big and small oil and gas producers, are pouring billions of dollars into developing North American shale formations. Meanwhile, demand for natural gas is going up. EPA enforcement of the Clean Air Act is pushing the oldest and dirtiest coal-fired power plants out of the nation's power fleet.
Chu appointed the Energy Advisory Board subcommittee on natural gas in May after President Obama tapped Chu to make short-term recommendations that can quickly address safety and environmental concerns about extracting shale gas. DOE was to do a speedy analysis that could ease public concern and start the industry down a more sustainable path as it tries to develop the 800 trillion cubic feet of technically recoverable gas in the shale.
The nation's massive shale and tight gas reservoirs are spread across the Northeast; in the upper Midwest; under Texas, Louisiana, Oklahoma and Arkansas; and north into the Rocky Mountain region.
Members of Chu's advisory panel emphasized that they reached consensus on major issues, particularly the need for the industry to be as transparent as possible and to adopt best practices. But the members came from different perspectives.
"I've been a petroleum engineer for 40 years," said member Stephen Holditch, who heads up the Department of Petroleum Engineering at Texas A&M University. "What I tried to get across is that best practices change with geographical area. The best practices in south Texas are different than Wyoming."
Data collection is critical, Holditch said. "You can't fix anything until you measure it," he said. "If there's an issue, the industry will fix it. But you don't know until you make the measurements."
Industry groups started reacting yesterday to rumors about what would be released today. America's Natural Gas Alliance, which advocates for expanded use of gas across the economy and for more state regulatory control, said it was pleased the panel would recommend a "multi-stakeholder process" to work with state regulators.
Call for public disclosure of 'fracking' chemicals
The panel's recommendations included public disclosure of chemicals during the hydraulic fracturing process, which is widely called "fracking." That's when gas companies blast a concoction of water, sand and chemicals underground to split shale rock and release natural gas. Critics say they're concerned the high-pressure injections could allow toxic chemicals into the clean water supply.
The DOE panel aligned with industry claims that the risk that fracking fluids could contaminate groundwater is remote. But the panel also found "there is no economic or technical reason to prevent public disclosure" of the chemicals. The benefit of addressing public concern about the composition of the fracking fluids "outweighs the restriction on company action, the cost of reporting, and any intellectual property value of proprietary chemicals."
Industry groups have fought public disclosure in Washington and in gas-producing states, citing trade secrets.
The panel stopped short of calling for a sweeping federal rule, but recommended that "regulatory entities" immediately write rules to require full disclosure of hydraulic fracturing chemicals on public and private lands. State and federal agencies would be part of that.
It called for the creation of a national database of all public information about shale gas development. And it recommended that state and federal governments help fund data collection by nonprofits such as the Ground Water Protection Council and an independent multi-state gas regulation peer-review board.
The panel said companies should measure and publicly report the use and disposal of water during the drilling process, and it urged companies to start sharing information on best practices in building and maintaining wells.
In interviews, panel members said the national debate about gas should focus on the full process of extracting gas, not focus exclusively on "fracking."
"Bread-and-butter drilling needs to be done right," said Susan Tierney, a former assistant secretary of Energy and a member of multiple environmental boards and of the National Petroleum Council.