Energy Exchange

I wrote last month that Texas House Energy Committee Chairman Jim Keffer, sponsor of a measure that would require oil and gas drillers to tell the public what chemicals are added to hydraulic fracturing fluid, said “the world is watching” to see how Texas handles the issue. There has been a lot to see. The House approved a disclosure bill “on second reading” yesterday afternoon and may vote later today to send the measure to the Senate. Meanwhile, the Senate Natural Resources Committee held a hearing this morning on a nearly identical bill, SB 1930, filed just a few days ago by Senator Jane Nelson.

Despite predictions in many quarters that Texas would never pass a bill requiring frac chemical disclosure, passage is a real possibility. The current version of the bill leaves several things to be desired, and at this point EDF is withholding support. But EDF, Sierra Club, Environment Texas and a number of other environmental advocates agree that this is landmark legislation even in its current form.

The legislation is not the “plug-and-play” model for other jurisdictions that I had hoped for, but it is landmark legislation nonetheless.

Three things in particular are worth noting:

First, virtually the entire oil and gas industry in Texas has come to recognize that voluntary disclosure efforts will never be enough to resolve this issue – regulation is required. All of the major industry associations now support mandatory disclosure, as do a long list of individual companies. In contrast, until recent weeks – and even days – only a handful of companies were on record supporting meaningful disclosure requirements. EDF applauds this development, and we especially applaud those who came out in support of mandatory disclosure early in the process. The early supporters are listed below.

The second thing notable about the legislation is that industry and Texas public officials have recognized that disclosure cannot be limited to chemicals currently known to be hazardous in the workplace – all chemicals used in frac fluid additives must be subject to disclosure, not just chemicals required by the Occupational Safety and Health Administration (OSHA) to be listed on Material Safety Data Sheets (MSDS). The failure to include non-MSDS chemicals is one of the major limitations of the voluntary chemical registry recently launched by the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission.

Third, the Texas bill authorizes landowners to challenge trade secret claims. At the beginning of the session, this didn’t seem to be in the cards.

It is not at all certain that Texas will end up with good disclosure rules. The bill might not pass or rules implementing the legislation could turn out to be weak. And some aspects of this legislation will prove troublesome even under the best of circumstances. But can what has happened in Texas help other jurisdictions get their rules right? Absolutely.

Here are the companies that deserve special applause for breaking ranks with their peers and expressing early support: Apache, Anadarko Petroleum, BG Group, El Paso, Encana Natural Gas, EXCO, Linn Energy, Petrohawk Energy, Pioneer Resources, Range Petroleum, Southwestern Energy, and Talisman Energy. A letter this group wrote to Chairman Keffer on May 6th is well worth reading.

The iconic image of shale gas development is the flaming faucet featured in Josh Fox’s recent movie, Gasland.  Inquiring minds want to know: “how does methane get into a water faucet, and is hydraulic fracturing of shale to blame?”  A Duke University study released this week sheds light on these important questions.

The study, performed by three researchers affiliated with Duke University’s Biology Department and Nicholas School of the Environment, examined 60 drinking water wells in northeastern Pennsylvania and southern New York, the northern tier of the geological formation known as the Marcellus Shale, ground zero for aggressive shale gas development in the eastern United States.  And sure enough, methane concentrations were detected in 51 of the 60 wells, with substantially higher concentrations of methane found in drinking water wells closest to active natural gas production sites.  While there are numerous instances of methane migrating into drinking water supplies through naturally occurring fissures, even in the absence of gas drilling, this study makes a pretty compelling case that natural gas production can create a problem where none ever existed, or certainly make an existing problem worse.

But, on the question of whether hydraulic fracturing is to blame, the evidence is less compelling.  Indeed, the fact that methane was found in water wells, but the chemicals used to fracture the shale were not, suggests that fracturing may have had nothing to do with the unwanted migration.  The culprit, it would seem, are not fissures created by the fracturing of the shale, but rather poor well construction – specifically, failures in the cement casing surrounding a well – which enable the natural gas to migrate into the water table as it moves its way up the well to the surface.  The authors have noted that “leaky casings” are the most likely cause of problems.

Poor well construction is a problem that can occur anywhere, whether production is aided by hydraulic fracturing or not.  For all of the attention Gasland’s flaming faucet has brought to the hydraulic fracturing debate, this study points our attention to the role that better well construction and design practices can play in reducing the very real problem of methane contamination of well water.

I blogged last week about the implications of the findings of a paper by Professor Robert Howarth and colleagues at Cornell University.  The paper compares the carbon footprints of natural gas and coal and concludes that – because of methane leakage – natural gas contributes to global warming as much as coal, or even more, when assessed on a life-cycle basis.  While I have questions about the emissions estimates in the paper, it has brought attention to an important fact.

Namely, that we need better data to accurately characterize air pollution from natural gas development and determine with confidence the associated health and climate implications. 

Media coverage over the past week was extensive.  A Washington Post editorial hit the bull’s eye.  Unfortunately, not all the coverage has been 100% accurate – perhaps owing to the technical nature of the issue and the paucity of solid data about methane emissions associated with natural gas systems.

In particular, I want to clarify a reference in a New York Times column to Environmental Defense Fund “estimates of methane gas emissions that are 75 percent lower than Howarth’s.”

Though we appreciate Joe Nocera’s consideration of our work, the statement in the Times’ column is misleading in two ways.  First, the estimates EDF relies on are not our own, but rather taken from the Environmental Protection Agency (EPA), which  just finalized its 2009 inventory of greenhouse gas emissions.   From EPA’s inventory, we estimate that at least 2.2% of gross natural gas produced in the U.S. is released to the atmosphere.   This estimate is highly uncertain, as evidenced by EPA’s recent revision that doubled its estimates from as recently as last year. 

Second, Professor Howarth’s paper uses a different metric:  how much methane is leaked as a percent of the total methane produced over the life of an unconventional gas well.  The paper reports this value to be 3.6% and 7.9% as the low- and high-end estimates.  Assuming these different metrics can be directly compared, EDF’s estimate of the methane leak rate is 39% lower than Professor Howarth’s paper’s low-end estimate and 72% lower than the high-end estimate.  It is unfortunate that the Times’ column only made the comparison with the paper’s high-end estimate.

The only way we can gain confidence about the climate benefits of natural gas relative to other fuels is by obtaining more accurate data about the amount of methane released during the production and distribution of natural gas.  And as I have said before, this is something the natural gas industry – which claims to provide the “low-carbon” fossil fuel – should support.

You may have seen the many articles that came out this week on a new peer-reviewed paper in the Journal of Climatic Change by Professor Bob Howarth and others at Cornell.  The paper compares the carbon footprints of natural gas and coal and concludes that natural gas contributes to global warming as much as coal, or even more, when assessed on a life-cycle basis.

Though we have questions about Professor Howarth’s paper’s emissions estimates, it nevertheless highlights the critical importance of obtaining and sharing better data so that we can accurately characterize air pollution from natural gas development — including the short-term climate impacts of methane.  Because of methane’s powerful heat-trapping ability during its roughly decade-long atmospheric residence time, or life span, reducing methane emissions from production increases the chances of meeting critical climate targets, such as limiting global warming to a two degree Celsius temperature increase. 

Professor Howarth’s research should also help focus attention on the methane leakage issue.  EDF has been concerned for some time that methane leakage in the natural gas development process could significantly diminish its inherent low-carbon advantage relative to other fossil fuels.  There is consensus that a methane leak rate during production, processing, and transportation of 5% (of total gas production) is the approximate break-even point at which natural gas and coal used to generate electricity have similar climate impacts on a 20-year time horizon.  Examining the warming potential of natural gas over a 20-year timeframe is important, rather than the customary 100-year timeframe, given the need to reduce global warming in coming decades.  What we don’t fully know is whether the leakage rate today is lower than that break-even point, though the Environmental Protection Agency’s (EPA) most recent assessment estimates the leakage to be between 2 to 3%.    

Bottom line: We need better data on methane leakage from natural gas production and transport.  The natural gas industry, which touts itself as providing the “low-carbon” fossil fuel, should drop its lawsuits against EPA to require disclosure of its global warming pollution and take aggressive steps to both curb the loss of its product into the atmosphere and maximize the greenhouse gas benefits of natural gas.  Numerous cost effective opportunities exist to capture leaking gas and turn it into increased fuel sales.  And less natural gas leakage will mean healthier air for communities, since raw natural gas contains both cancer-causing and smog-forming pollutants.  

If the industry wants people to trust that natural gas is a clean alternative, it would do well to spend less time fighting pollution disclosure requirements and more time addressing environmental and public health concerns.  EDF is eager to work cooperatively with the natural gas industry to accomplish this.