The Obama administration is softening its approach to natural gas drilling. But in doing so, it is now trying to escape the political fallout from its most recent proposals on how to regulate hydraulic fracturing.
Public comment has just ended with respect to the administration’s proposed rules for fracking, which is applying the use of sand, water and chemicals to retrieve shale gas deposits held in rock formations deep underground. A million letters have been sent to the Department of Interior’s Bureau of Land Management, which oversees 600 million acres of federal and Indian properties.
“We accept new regulations all the time,” says Rock Zierman, of the California Independent Petroleum Association, in a phone interview. “We are Okay with new regulations as long as they are realistic and they are accomplishing something. But the federal government set up a system 30 years ago whereby it gave the states the power to regulate, and then it audits them.”
Democrats on the House Committee on Natural Resources, however, are taking a high-profile position in opposition to what they say are watered-down rules that allow natural gas producers to avoid publicly disclosing the chemicals they use to drill. They are also concerned that the industry has been able to win concessions from federal regulators, allowing it to self-police and to test only a single well for “fugitive” releases, especially methane that is the most potent of all greenhouse gases.
In a letter dated August 23 that was sent to Interior Secretary Sally Jewell, six lawmakers wrote that the federal agency needs to put people before profits, noting that the would-be rules — as they now stand — are not “transparent.” The department “should note the trends among the leading states that are strengthening their rules on hydraulic fracturing and follow suit.”
The White House is now giving climate change top billing. As such, it has come down hard on coal-fired power plants that are still using older technologies while also making it hard to build any new coal units.
Enter natural gas, which contains about half the greenhouse gases as coal: With the advent of new drilling techniques such as fracking, producers can now access those once hard-to-get unconventional natural gas deposits, called shale gas. But critics maintain that the process pollutes drinking water. They also say that the benefits of switching to natural gas from coal are reduced because of excessive methane releases.
Some history: In May 2012, the Obama administration proposed measures to require producers to disclose their fracking chemicals as well as stronger standards for well construction to limit fugitive releases and safer dispensing of the dirty water that flows to the surface after drilling. Just how these issues are ultimately resolved will have widespread implications.
Consider that shale gas in 2008 comprised about 11 percent of all natural gas production. But by 2010, that number jumped to 27 percent and by 2015, it will be 43 percent. That’s according to IHS Global Insight, which says that by 2035 shale gas will amount to 60 percent of all natural gas production.
Much of the debate has focused on whether the federal government should head the regulatory efforts or whether the states should continue to lead. To try and placate his environmental supporters, President Obama has said that the national regulators should have more authority, noting that federal drinking water laws give them that right.
Moreover, several environmental groups are pointing to an examination done last year by the National Oceanic and Atmospheric Administration and the University of Colorado. That review is showing that air samples in Colorado and Utah that are near fracking wells had a 4 percent methane leakage rate and that it could be much as 9 percent.
That research is coinciding with studies done by the Environmental Defense Fund and Princeton University showing that if methane emissions are greater than 3.2 percent then the benefits of switching from coal to natural gas are lost. All the parties will continue their research and their findings are expected in 2014.
The American Petroleum Institute, however, says that the states are doing a fine job and that additional federal laws would be overly burdensome. They are arguing that the revelation of the chemicals they use is tantamount to giving their competitors their trade secrets while also pointing to research by Stanford University that support the industry’s case that drilling is safe.
“When we go out there and do a site, we cordoned off the whole area,” says Scott Rotruck, vice president of Chesapeake Energy, who spoke earlier with this writer. “Nothing gets out.” The process is taking place a mile-and-a-half below the earth’s surface, he adds, noting that current methods typically capture 20 percent of the available shale-gas. “So, the opportunity for innovation is limitless,” if only they are allowed to drill.
Shale gas producers, for the moment, have the upper hand and are winning the energy race by default. But such momentum does not eliminate the need for them to conference with the environmental and citizen activists who have valid concerns. Making incremental concessions now will, in essence, potentially head off more cumbersome regulations later.