With promises that American stores of natural gas are plentiful, the focus now is on “responsible development.”
To bring some clarity to the disarray presented by industry groups clashing with environmentalists and state reports competing with potential nationwide regulations, President Obama requested a report on shale gas production as part of the Secretary of Energy’s Advisory Board. The 90-day report was presented Tuesday morning to the US Senate Committee on Energy and Natural Resources.
Four writers of the seven subcommittee members who wrote the report testified at the hearing, including Chairman of the IHS Cambridge Energy Research Associates Dr. Daniel Yergin. While the group recommended some federal oversight of safety standards and best practices, and outlined 20 recommendations for the hydraulic fracturing, or “fracking,” industry, the witnesses generally expressed opposition to federal regulation of fracking, suggesting state level oversight and industry self-regulation was, in nearly all cases, preferable.
In her opening address, Ranking Members of the Committee, Senator Lisa Murkowski (R-AK) reflected the mood of the subcommittee testimony by emphasizing that any conclusions of the report could help “ensure safe development” of the now-estimated abundant national resource, a step that would ultimately facilitate growth of an economically promising industry.
“Responsibly developing all our resources is of paramount importance to us,” Murkowski said.
“These resources are already benefiting our nation by diversifying our energy jobs,” she added. “America should allow for this kind of ingenuity in the private sector.”
Yergin emphasized the lucrative opportunities available in fracking, noting that state and local governments would reap generous revenue from development.
As Dr. Stephen Holditch, the Samuel Roberts Noble Chair and Professor of Petroleum Engineering at Texas A&M University, said a the opening of his testimony: “shale gas is for real.”
“The US has a real opportunity to develop its unconventional gas resources,” Holditch said. “But shale gas development must be done correctly. We realize there are real issues with air quality and community impact.”
Coordinating Regulatory Efforts
In his testimony Yergin said the report recommended a government-funded oversight group, composed of industry-insiders, as well as local, state and federal regulators, that would help states share best practices and collaborate on appropriate safety measures.
Yergin also recommended several million dollars in federal funding for more R&D on possible water and air contamination from shale gas extraction. He and Holditch emphasized that a lack of hard data had limited their report and would also limit future oversight.
Multiple witnesses noted that various bodies were looking into fracking and safety and were potentially overlapping each other in research work. In addition to the 90-day report, the US EPA and the Bureau of Land Management (BLM) are each conducting their own study into fracking.
Witnesses also warned that federal regulation could unduly burden the already heavily state-regulated fracking industry and could potentially slow the economic growth of the industry.
“The issues in each state are different,” said witness Kathleen McGinty, Senior Vice President and Managing Director of Strategic Growth for Weston Solutions. “Geologic differences make a world of difference in terms of ensuring water and air safety issues.”
Yergin emphasized that fracking has been happening already for decades and in that time states have taken the lead in regulation.
“I come out very impressed by the extent and seriousness of the states,” he said. The problem with regulating from the federal government: there is a danger, he said “of a superstructure on top of a superstructure.”
Sources Of Contamination
Chairman of the Committee Senator Jeff Bingaman (D-NM) repeatedly mentioned the issue of escaped methane as one of the primary concerns with fracking and one that he thought would not differ much from site to site and thereby would be regulated best at the national level.
McGinty agreed that if there was a hole in a fracking well, methane could easily escape and travel through old oil and gas wells to contaminate drinking water and release large quantities of greenhouse gas emissions into the air.
But she was adamant that federal oversight was not necessarily required.
“The most important step that can be taken is good well construction,” said Dr. Mark D. Zoback, Benjamin M. Page Professor in Department of Geophysics at Stanford University. “A well that is improperly cased and cemented has the possibility of leaking gas whether or not it is fracked.” He emphasized that multiple layers of casing and cement were necessary to ensure safe wells.
But it was important, he said, not to confuse the issues. “Hydraulic fracturing has become a bumper sticker for everything we have to watch out for,” Zobach said.
Holditch said that one of the biggest concerns of the environmental community, that of chemicals in fracking water, was completely overblown.
Only 0.5% of the fracking water is chemicals, he said, and most of those chemicals are the same ones found in detergents and home cleaning products.
“These chemicals,” he said, are “not all that dangerous on their own. But we recommended that the industry should measure volume and composition of what’s being pumped into the ground.”
The information, Holditch said, could only be helpful and would be an important step in building public trust.
McGinty emphasized that oversight was not “once and done” now that the report was published. The industry will require constant and updated safety measures going forward, she said.
“Our conclusion is to say those [health and environmental] impacts could be managed,” McGinty said at the start of her testimony. “That doesn’t mean they are managed.”