Energy Exchange

State Of The Union Address: A Mixed Bag On Natural Gas

In President Obama’s State of the Union address last night, he laid out his plans for the expanded role that natural gas will play in the future. The President stated:

“We have a supply of natural gas that can last America nearly one hundred years, and my Administration will take every possible action to safely develop this energy. Experts believe this will support more than 600,000 jobs by the end of the decade. And I’m requiring all companies that drill for gas on public lands to disclose the chemicals they use.”

I am pleased to see a commitment to the full disclosure of hydraulic fracturing chemicals, but this is only the first step in getting the rules right for natural gas. As we discussed back in November, EDF President Fred Krupp sat on the Shale Gas Subcommittee of the Secretary of Energy Advisory Board (Subcommittee), which provided strong recommendations for strengthening environmental management in the shale gas industry and developing this abundant energy source in ways that safeguard public health and the environment. 

I would have liked to have seen the President speak directly to implementing the Subcommittee’s recommendations, beginning with the Department of the Interior (DOI). Simply committing to the disclosure of hydraulic fracturing chemicals isn’t enough. The recommendations included strict requirements for everything from well construction and the reduction or elimination of methane venting to groundwater protection to methane leakage and emissions flares, among others.  These recommendations are ready to be implemented, and DOI has an opportunity to demonstrate best practice in its leasing and oversight of unconventional natural gas development on federal lands.

The jury is out on whether states will embrace the Subcommittee’s recommendations and it will take a concerted effort on the part of organizations like EDF and concerned citizens to demand swift action to improve the quality and effectiveness of state regulations.  Implementation of the Subcommittee’s recommendations at the state level is a good place to start and some states are beginning to take a lead role.  For example, on the issue of disclosure, Colorado recently set the bar for requiring the full disclosure of all chemicals used in hydraulic fracturing by making this information available on a searchable database. On the other hand, states like New York have proposed weaker requirements, asking companies to disclose only half of the proposed additive products instead of the chemicals actually used in the hydraulic fracturing treatment. For these reasons, it is crucial that the DOI disclosure requirements set a leading example that will influence states to do better.  The DOI should start with Colorado, but can do even better.

Last night, the President demonstrated his commitment to domestic energy production through natural gas development and said that “America will develop this resource without putting the health and safety of our citizens at risk.” The federal government and the states have a shared responsibility to ensure that our air, land and water are safe wherever hydraulically fractured wells are drilled.

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Colorado Sets The Bar On Hydraulic Fracturing Chemical Disclosure

Big news out of Denver this morning

Source: WLF

After weeks of intense wrangling between industry and environmental representatives, the Colorado Oil and Gas Conservation Commission (COGCC) adopted a hydraulic fracturing fluid chemical disclosure rule that, in many ways, serves as a model for the nation.

It’s been a learning process these last couple of years – as EDF has worked to get disclosure policies adopted in the states.  With their own disclosure rules, Wyoming, Arkansas, Texas and Montana have all made important contributions to the debate.  And in Colorado, we’re finally seeing things start to coalesce.

Colorado’s Rule 205A settles key questions about what kinds of information the public expects to see and how the information should be presented, including:

Requirements for Searchable Database

Picking up on a recommendation from the shale gas subcommittee of the U.S. Secretary of Energy Advisory Board (a panel on which EDF President Fred Krupp served), the Colorado rule requires chemical information to be made available on a website that allows people to search and sort data by company, chemical ingredient, geographic area and other criteria.

This is a big step that will allow land owners, neighbors, regulators and policymakers to focus and refine their questions and research about hydraulic fracturing.

We’re also fans of the fact that the rule requires operators to post their disclosures on Frac Focus, which must be made searchable by January 1, 2013.  If Frac Focus doesn’t have these upgrades in place by then (or isn’t clearly on a path to do so), the rule requires the COGCC to build its own searchable database.

The creators of Frac Focus – the Ground Water Protection Council (GWPC) and the Interstate Oil and Gas Compact Commission (IOGCC) – are already talking about searchability, and the Colorado rule provides a clear signal that the states want to see it happen and happen soon.

(The Texas disclosure rule, which was also adopted today, uses Frac Focus as the disclosure platform, but doesn’t require searchability.  In adopting the rule, the Texas Railroad Commission agreed that Frac Focus should be made searchable and said it would work with GWPC and IOGCC to make those upgrades).

Full Disclosure of Chemical Ingredients

Colorado also set a national standard by requiring disclosure of the identities and concentrations of all chemical ingredients, not just those that have been determined to be “hazardous” according to Occupational Safety and Health Administration (OSHA) regulations.  Other states have taken the step of requiring disclosure of the identities of all chemicals, but Colorado is the first to require disclosure of both chemical identities and concentrations for all chemicals.

As readers of our blog posts on fracturing fluid disclosure know, just because a chemical hasn’t been identified as “hazardous” under OSHA Hazard Communication rules, it doesn’t necessarily mean the chemical isn’t dangerous.  OSHA regulations require that chemicals be identified as hazardous when studies show they could be dangerous in a workplace setting.  These regulations don’t look at the question of whether a chemical might be dangerous if exposure occurs through an environmental pathway.  Moreover, a chemical might be dangerous in both a workplace setting and through environmental exposure – but if the studies haven’t been done yet, OSHA regulations don’t require you to list it as hazardous.

According to industry, at least half of the chemicals used in hydraulic fracturing fluids don’t fall under these OSHA Hazard Communication rules.  And toxicological data on many, if not most, of these chemicals is very thin.  So requiring full disclosure of hydraulic fracturing chemicals is a critical first step toward building up our understanding of the risks they may present.

The Colorado disclosure rule isn’t perfect, but it’s darn good.  And with the provisions for searchability and full chemical disclosure, it has set a national standard on two key issues.

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Making Do Under TSCA: EPA To Require Reporting Of Health Data By Makers Of Chemicals Used In Hydraulic Fracturing

This commentary was originally posted by Richard Denison, Ph.D., Senior Scientist, on the EDF Chemicals & Nanomaterials Blog.

Last August, Earthjustice, Environmental Defense Fund (EDF) and over one hundred other groups recently filed a petition under the Toxic Substances Control Act (TSCA)  calling on the Environmental Protection Agency (EPA) to require manufacturers and processors of chemicals used in oil and gas exploration and production (E&P chemicals) – including those used in hydraulic fracturing fluids – both to conduct testing and submit to EPA health and environmental data they already have on hand.  The aim of the petition was to ensure EPA obtains better information on the identity, production, use and health/environmental effects of these chemicals in order to evaluate their health and environmental risks.  Late last month, EPA announced its decision. 

EPA Decision on the Petition

In November, EPA partially granted the petition.  It granted the petitioners’ request that EPA develop rules requiring makers of chemicals used in hydraulic fracturing fluids to submit existing information to EPA identifying the chemicals, their intended uses, quantities produced and health or environmental exposure to or effects of the chemicals.

While this is a positive step forward, EPA denied two other aspects of our petition. EPA rejected the request to issue a rule requiring testing of these chemicals to fill data gaps because the agency lacks sufficient information to make the potential risk or high-exposure findings it is required to make under TSCA to justify a test rule.  (The high evidentiary burden EPA must meet to require testing is of course a serious limitation of TSCA and a major reason why TSCA reform is so badly needed.)  It also limited the scope of the reporting rules only to chemicals used in hydraulic fracturing, and did not include other E&P chemicals, such as those used in drilling muds, or fluids.

An Important Clarification

It is important to note that the actions called for under the TSCA petition are different from the disclosure efforts EDF and others have been pushing for on a state-by-state basis, in three respects.  First, the reporting rules will apply to manufacturers and processors of the chemicals themselves, whereas the disclosure initiatives focus on oil and gas drillers to publically disclose chemicals they add to hydraulic fracturing fluid.  Second, the EPA rules are intended to provide EPA with information sufficient to understand the potential risks of the subject chemicals at an aggregate, national level, whereas the disclosure initiatives are aimed at a local, even well-by-well scale.  Third, the EPA rules encompass information beyond just the identity of the subject chemicals to include other information about their production, use and potential health/environmental effects.  While much of the information reported to EPA under the rules can and should be made public, increasing disclosure per se is not the primary focus of our petition nor of the rules.

Next Steps

EPA’s decision is in sum welcome as an advancement of efforts to identify and reduce environmental and public health impacts from oil and gas exploration and production.  EPA plans to solicit input on the design and scope of reporting requirements as well as the process by which information is “aggregated and disclosed to maximize transparency and public understanding.”  Through these processes, EDF, Earthjustice and other petitioners can argue for EPA to make enhancements “to ensure that the health and environmental risks posed by E&P chemicals are fully understood,” as we stated in the TSCA petition.

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EPA’s Pavillion, WY Groundwater Contamination Study A Wake-Up Call

Today’s release of a draft US Environmental Protection Agency study on groundwater contamination around natural gas wells in Pavillion, Wyoming, should be a wake-up call to anyone who thinks public anxiety about shale gas development is overblown and unjustified. 

Based on the draft report, it seems pretty clear that hydraulic fracturing fluids, and other contaminants associated with natural gas production, found their way into Pavilion’s groundwater.  And it is not hard to see why.  The report reads like a primer on what NOT to do when developing unconventional gas.  It’s all here: poor cement quality, cement not injected to the proper depth to isolate the well from the groundwater, fracturing activity taking place in close proximity to the water table (in itself a questionable practice, but in this case, particularly egregious given the lack of cap rock between the zone of fracture and the groundwater), soil contamination around waste water pits indicating spills at the surface that migrated to groundwater and lack of clarity about what went down the well because of incomplete disclosure of the chemicals used in the fracturing process.

This draft report is Exhibit A on why stronger regulation and enforcement is necessary if the general public is EVER going to believe that shale gas development is a safe source of natural gas.  Indeed, the draft report says it best:

“Finally, this investigation supports recommendations made by the U.S. Department of Energy Panel (DOE 2011a, b) on the need for collection of baseline data, greater transparency on chemical composition of hydraulic fracturing fluids, and greater emphasis on well construction and integrity requirements and testing. As stated by the panel, implementation of these recommendations would decrease the likelihood of impact to ground water and increase public confidence in the technology.”

Having played a leading role in developing the DOE recommendations, we couldn’t agree more.   As this draft report makes clear, the time for action to improve regulation and enforcement is now.

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2011 World Energy Outlook Implications

By: Drew Nelson, EDF’s Clean Energy Project Manager

Source: IEA

Yesterday the International Energy Agency (IEA) released its 2011 World Energy Outlook.  The report models expected demand for energy in three scenarios: a business as usual scenario, an aggressive policy scenario to cut greenhouse gas emissions and a middle of the road scenario.  As a result of this analysis, the report lays out some pretty eye-catching conclusions.  The conclusion that will likely receive the most press attention is summed up by the head of the IEA, who states:

“[by] 2015 over 90% of the permissible energy sector emissions [to avoid dangerous climate change]… will already be locked in [due to investments in carbon-based energy sources].  By 2017, 100%. We can still act in time to preserve a plausible path to a sustainable energy future; but each year the necessary measures get progressively tougher and viciously more expensive.”

In other words, we only have five years to make investments in the energy sector that avoid locking us into a future of dangerous climate change.  Any delay will be more expensive than taking action today.  Some of the best scientists, economists, and business officials who drafted and provided comments on this report are clear – NOW is the time to make the urgent investments needed in clean technologies like wind and solar as well as smart-grid technologies to deliver that clean energy to consumers.

However, another conclusion of the report caught our eye here in EDF’s energy program.  For the scenarios that were modeled, natural gas was “the only fossil fuel for which demand rises in all three” scenarios.  This highlights the important role that natural gas will play as an energy source no matter how aggressive policy-makers are in reducing greenhouse gas emissions.  Natural gas use will grow because deposits of “unconventional” sources of gas, like shale gas, are being discovered and drilled in almost every part of the globe.  The report finds that the share of unconventional gas production in North America is projected to rise so that there will be more “unconventional” gas in North America than “conventional.” 

This has broad implications.  Increased shale gas means greater energy security and jobs, but also potential increased impacts in the backyards of some of our most populous states.  There are significant public concerns with shale gas drilling: water quality, air pollution, noise, wildlife impacts and increased traffic are some of the most common.  New data is also showing that current methane gas leakage rates are cutting into the previously accepted greenhouse gas benefits of natural gas.

Yet many oil and gas industry representatives, rather than working with the public, are dismissive of these concerns.  At an industry gathering last week one representative referred to critics of shale gas as an “insurgency.”  This comes on the heels of a gas company announcing that it has employed former military officials who specialize in “psychological operations” in order to help “convince” communities of the merits of shale gas.  Many companies continue to refuse disclosing the chemicals they are pumping into the earth.  These actions do not build trust or goodwill and could endanger further growth of shale gas.  The IEA report states that growth in output of natural gas will “depend on the gas industry dealing successfully with the environmental challenges: a golden age of gas will require golden standards for production.” 

At EDF we are working to develop those golden standards and ensure that shale gas is developed the right way in order to maximize the benefits of shale gas without sacrificing public health, environmental protection and safety.

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DOE Roadmap Toward Cleaner Natural Gas Development – Sign Reads “Still Under Construction”

Today the Department of Energy’s Shale Gas Production Subcommittee released a final report that follows up on its earlier recommendations for increased oversight and transparency, assesses their implementation to date and lays out a roadmap for improvement.  The report proposes a focused set of steps for strengthening environmental management in the shale gas industry and developing this abundant energy source in ways that safeguard public health and the environment.  

The report is a call to action, stating “Americans deserve assurance that the full economic, environmental and energy security benefits of shale gas development will be realized without sacrificing public health, environmental protection and safety” and the Subcommittee believes that these recommendations, if implemented, would make real progress toward meeting these goals.  Time is of the essence, though, as the ramifications of inaction pose more risk every day.  

While much more remains to be done to ensure shale gas development is safe for people and the environment,  important progress is currently underway on federal, state and local levels.  The EPA, for example, has proposed rules to reduce air pollution from oil and gas development activities that, while needing improvement, are a critical first step.  Likewise, we’ve seen that states can move very quickly to update their oil and gas rules when they have a mind to.  For example, in only the past eleven months Arkansas, Texas, Montana and Louisiana have adopted requirements mandating the disclosure of chemicals found in hydraulic fracturing fluid.  And Colorado, New York, New Mexico and North Dakota have recently proposed requirements relating to fracturing fluid chemical disclosure.  In Pennsylvania, West Virginia and Ohio, legislatures have passed, or are in the process of debating, more stringent regulations on the exploration and production of natural gas.  

EDF is actively engaged across the country to further the safety and environmental protection of our natural resources wherever the production of natural gas is occurring.  It’s a long, cross-country road trip on highways still under construction.  We’re prepared for the long haul.

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