Energy Exchange

University At Buffalo’s Shale Resources And Society Institute’s ‘Environmental Impacts During Shale Gas Drilling’ Report

By Scott Anderson / Published: May 16, 2012

The University at Buffalo’s Shale Resources and Society Institute issued a report yesterday, “Environmental Impacts During Shale Gas Drilling: Causes, Impacts and Remedies,” which offers a quantitative data review of Pennsylvania’s regulation of natural gas development in the Marcellus Shale. The press release notes that I was a reviewer for the report.

While I was a reviewer, this does not mean that all of my suggestions were taken or that I agree with all of the report’s opinions and conclusions.

Does the report have strengths? Absolutely. Unfortunately, it is hard to find understandable, comprehensive data describing natural gas industry environmental violations and the responses taken by enforcement agencies. The University at Buffalo has done a great service by bringing such information to light for the period studied (2008 through August 2011).

At the same time, several of the opinions and conclusions in the report are questionable. These include: 

  • The idea that a violation isn’t an “environmental” concern if it is a violation of “paperwork” or “preventative” regulations and didn’t result in immediate, actual harm to the environment.
     
  • Characterizing the rate of environmental violations (narrowly defined) as “low” in the first eight months of 2011 when, even using a narrow definition of environmental violation, violations were found at 26.5% of the wells drilled.
     
  • The suggestion that the present regulatory program is effective because the incidence of “environmental violations” (narrowly defined) declined from 58.2% of wells in 2008 to 26.5% of wells in 2011.

In sum, there’s a lot of good information to be gleaned from the study, but caution should be exercised with regards to some of the conclusions.

Posted in Natural Gas / Read 5 Responses

Ohio Senate Passes Major Energy Legislation: All Eyes On The Ohio House To Restore Provisions On Chemical Disclosure

By Matt Watson / Published: May 16, 2012

Yesterday the Ohio Senate passed Senate Bill 315, major energy legislation that addresses a wide range of issues – including provisions relating to transparency in oil and gas operations.  Unfortunately, the version that passed falls short of Governor Kasich’s ambitious call for broad chemical disclosure.

In the introduced version of the bill put forward by Governor Kasich and sponsored by Chairwoman Shannon Jones, companies would have been required to publicly disclose all chemicals used throughout the entire lifecycle of oil and gas wells – the so-called “spud to plug” approach to chemical reporting.

This comprehensive approach to chemical reporting stands in contrast to other state policies that merely require disclosure of those chemicals used in the hydraulic fracturing process.  It reflects an understanding that a wide range of dangerous chemicals are used in drilling, stimulating, operating and closing wells, and regulators and the public need to know what’s being used in order to evaluate risks and put strong standards in place that protect communities and the environment.  Governor Kasich deserves a lot of credit for advancing this idea in the original version of the bill.

Unfortunately, in the face of intense industry opposition the version of SB315 that passed yesterday eliminates much of the reporting that would have been required under the Governor’s original proposal. 

The version of the bill that passed yesterday still has requirements for reporting the chemicals used in stimulating a well (which includes hydraulic fracturing).  It also has requirements for reporting chemicals used for drilling the surface interval of a well.  And it’s worth noting that the bill language for these provisions – while still needing improvements – is stronger than what was in the introduced version of the bill.

But the requirements for disclosing chemicals used for drilling beyond the surface interval were dropped – as were most of the requirements for disclosing chemicals used to service and operate the well.  So, it’s now up to the Ohio House of Representatives to restore these important provisions.  There’s a lot of nasty stuff that goes down a well during drilling and production.  In fact, it tends to be the case that companies use increasingly dangerous chemicals the deeper they go in the drilling process.  So, limiting disclosure of drilling fluids to just what’s used in the surface interval doesn’t make sense.

In addition to restoring the full “spud to plug” approach to the chemical reporting, the House also needs to add bill language ensuring that Ohio citizens can challenge any trade secret claims that companies may make to conceal the identity of chemicals.  That’s just a basic necessity for policing the system and giving the public a reasonable level of confidence that companies are playing on the up and up.

Finally, the bill should be amended to begin the process of assessing and reporting the chemical composition of waste streams from oil and gas operations.  Without an adequate picture of the chemical makeup of wastewater and other wastes that come from oil and gas operations, it is difficult to impossible to determine whether various methods of waste handling and disposal are protective of human health and the environment.

EDF was pleased to offer our support for the “spud to plug” concept embodied in the introduced version of the bill, but SB315 needs to be strengthened to earn our support going forward.

Transparency is just one small part of all that must to be done to ensure oil and gas operations are safe for communities and the environment, but it’s a critical piece of the puzzle that lays a foundation for developing protective rules and rebuilding the public trust.  So EDF looks forward to working with our partners, leaders in the General Assembly and the Governor to make sure the final version of SB315 lives up to its full promise and sets Ohio on the right path for protecting communities and environment.

Posted in Natural Gas / Read 1 Response

ANGA’s New Texas Report Serves Up A Heaping Helping Of ‘Number Salad’

By / Published: April 26, 2012

The American Natural Gas Association (ANGA) released a paper in March titled “Texas Natural Gas: Fuel for Growth,” to a lot of press, and rightly so.  The paper correctly cites several benefits of using and producing natural gas in Texas: it is produced in-state, has water use and air-quality benefits when compared to coal and helps to fund state and local governments through taxes. 

Unfortunately, the paper also makes some claims that are difficult to take seriously; perhaps the first warning sign should be that while the paper was presented as an economic analysis, the authors have no economic credentials.  Dr. Michael J. Economides, a chemical and biomolecular professor at the University of Houston, and petroleum engineering consultant Philip E. Lewis spend little time worrying about the details in this report, serving up a heaping helping of “number salad.”

For instance, the $7.7 billion “loss” is calculated by projecting the potential use of gas in Texas, if it had followed the national trend, against the actual use.  But in looking at the data, it’s not clear that the Texas fuel mix ever tracked the national fuel mix.  Even more importantly, looking at the authors’ own slides, Texas uses 20% more natural gas in its fuel mix than the nation.  If anything, the national fuel mix is following the trend set long ago by Texas —adding more natural gas and wind, while decreasing coal output.

What might shock the authors is that natural gas consumption in the electric power sector has increased by around 5,000 one thousand cubic feet of gas (MCF) since 2006, 800 MCF in transportation and nearly 10,000 MCF in the industrial sector. 

There are so many misleading statistics and inaccuracies that we could practically write a report on the report, but instead I’ll just focus on one aspect that stands out in particular. 

When it comes to comparing natural gas to coal power, the authors are quick to cite the many local benefits of using natural gas energy produced in Texas: it’s cleaner than coal and creates local jobs and a local tax base.  Wind energy has largely produced the same benefits: local wind power has brought jobs and a growing tax base and population to rural Texas counties that “had seen consistent, significant population losses since 1950.”  On top of the economic development benefits, where natural gas beats coal in reducing pollution, wind energy beats both by reducing pollution basically to zero.  But when it comes to discussing any of these benefits from wind energy in the report, the silence is deafening. 

Natural gas is reshaping our energy landscape.  And, done right—with the proper, mandatory environmental safeguards in place and reduced methane leakage rates—compared to coal plants, natural gas power plants offer other distinct air quality benefits.  It emits less greenhouse gases than coal when combusted and avoids mercury and other dangerous air pollutants that come from coal.

However, the same – and more – can be said about wind energy and Texas’ potential clean energy resources, including solar and geothermal power, among others.  Rather than pitting our local clean energy resources against each other as this report does, we should seek to expand and diversify our clean energy mix, reaping health, environmental, economic and security benefits.

Also posted in Renewable Energy, Texas / Read 1 Response

Strong Clean Air Standards For Natural Gas Leaks A Trifecta For America

By Peter Zalzal / Published: April 18, 2012

Yesterday, the Environmental Protection Agency finalized important clean air measures to reduce harmful pollutants discharged from a variety of oil and natural gas activities.  Leaks, venting and flaring of natural gas from oil and gas activities contribute to ground-level ozone (“smog”), toxic air pollution such as benzene, and destabilizes the climate.  The limited federal standards that existed prior to these clean air measures covered only natural gas processing plants, and were most recently updated in part 13 years ago; other aspects of the air standards for the oil and gas industry are more than a quarter-century old.

These standards represent an important first step toward fulfilling the President’s commitment, in his State of the Union Address, to develop natural gas responsibly: “We have a supply of natural gas that can last America nearly 100 years.  (Applause.)  And my administration will take every possible action to safely develop this energy . . . . Because America will develop this resource without putting the health and safety of our citizens at risk.” (emphasis added) http://www.whitehouse.gov/the-press-office/2012/01/24/remarks-president-state-union-address

Likewise, at the President’s direction, Secretary of Energy, Steven Chu convened the Secretary of Energy Advisory Board (SEAB) Natural Gas Subcommittee, which included a diverse array of members with experience in the industry, government, and non-profit sectors.  The Subcommittee was tasked with identifying “immediate steps that can be taken to improve the safety and environmental performance of fracking and to develop, within six months, consensus recommended advice to the agencies on practices for shale extraction to ensure the protection of public health and the environment.” In its 90-day Report, the Subcommittee noted that it “supports adoption of emission standards for both new and existing sources for methane, air toxics, ozone-forming pollutants, and other major airborne contaminants resulting from natural gas exploration, production, transportation and distribution activities.”

Public health groups, including the American Lung Association, the American Thoracic Association, and others have support these common sense standards as these EPA clean air measures make important reductions in pollutants linked to asthma, cancer, and other illnesses.   In a recent letter to the President, these groups noted that “we see irrefutable evidence of serious damage to human health from air pollutants emitted during oil and natural gas production, including sulfur dioxide, nitrogen oxide, and volatile organic compounds (VOCs), including air toxics such as benzene and formaldehyde, as well as increasing levels of ozone and particulate matter.”  As a result, the groups urged that “[t]he standards must be strengthened to keep up with the expansions and the new technology in the oil and gas industry.”    

EPA’s clean air measures achieve these health protective reductions by, in many cases, plugging leaks across the system.  One of the key protections under these national emission standards is the requirement to perform a reduced emission completion or “green completion.”  This, along with other standards in the rule, will reduce ozone-forming volatile organic compounds by an estimated 190,000 to 290,000 tons; reduce hazardous air pollutants like benzene by an estimated 12,000 to 20.000 tons; and reduce methane, a potent climate forcer by an estimated 1.0 to 1.7 million short tons [about 19 to 33 million tons of CO2 equivalent]. This results in saving both a domestic energy resource and saving producers money.  In fact, EPA estimates that the combined rules will yield a cost savings of $11 to $19 million in 2015, because the value of natural gas and condensate that will be recovered and sold will offset costs.

These common sense clean air measures are a win-win-win for a healthier environment, for our economy and for our energy security.  While there are additional opportunities remain to encourage safe, clean development of natural gas, EPA’s clean air measures are an important first step along this path.

Posted in Natural Gas / Read 9 Responses

What Will It Take To Get Sustained Benefits From Natural Gas?

By Ramon Alvarez, Ph.D. / Published: April 10, 2012

Natural gas is reshaping our energy landscape. Though the potential energy security and economic benefits are compelling, the challenge is that natural gas comes with its own set of risks to public health and the environment, including exposure to toxic chemicals and waste products, faulty well construction and design, local and regional air quality issues and land use and community impacts.

There has also been much confusion about the impacts of increased natural gas use on the climate.  While natural gas burns cleaner than other fossil fuels when combusted, methane leakage from the production and transportation of natural gas has the potential to remove some or all of those benefits, depending on the leakage rate.  Methane is the main ingredient in natural gas and a greenhouse gas (GHG) pollutant many times more potent than carbon dioxide (CO2), the principal contributor to man-made climate change.

Proceedings of the National Academy of Sciences (PNAS) Paper

EDF has teamed up with several respected scientists to find a better way to examine the climatic impacts of increased use of natural gas and compare it in place of other fossil fuels in a paper titled “Greater Focus Needed on Methane Leakage from Natural Gas Infrastructure” published yesterday in the Proceedings of the National Academy of Sciences (PNAS).  While methane absorbs more heat energy than CO2, making it a much more potent GHG, it also – luckily – has a shorter duration in the atmosphere.  The combination of these factors makes it difficult to compare methane emissions to other GHGs using conventional methods.

Instead, in the PNAS paper, we propose the use of an enhanced scientific method: Technology Warming Potentials (TWPs).  Specifically, this approach reveals the inherent climatic trade-offs of different policy and investment choices involving electricity and transportation.  It illustrates the importance of accounting for methane leakage across the value chain of natural gas (i.e. production, processing and delivery) when considering fuel-switching scenarios from gasoline, diesel fuel and coal to natural gas.  TWPs allow researchers, policy makers and business leaders to make fuel and technology choices while better accounting for their climate impacts.

PNAS Paper Key Findings

We illustrated the new approach by analyzing commonly discussed policy options.  Using the Environmental Protection Agency’s (EPA) best available estimated leakage rate of 2.1% of gas produced (through long-distance transmission pipelines but excluding local distribution pipelines), generating electricity from natural gas in new combined cycle power plants decreases our contribution to climate change, compared to new coal-fired plants.  This is true as long as methane leakage rates stay under 3.2%.

Natural gas powered cars, in contrast, do not reduce climate impacts unless leakage rates are reduced to 1.6% (compared to our estimate of current “well-to-wheels” leakage of 3.0%).  In heavy trucks, the reduction would need to be even more pronounced—converting a fleet of heavy duty trucks to natural gas damages the climate unless leakage is reduced below 1.0%.

The PNAS paper only provides illustrative calculations with EPA’s current estimate of the methane leakage rate and better data is needed to more accurately determine leak rates.  Measuring how much gas is lost to the atmosphere and where the leaks are occurring will help to further target leak reduction opportunities to ensure that natural gas will help mitigate climate change.  EDF is working to obtain extensive empirical data on methane released to the atmosphere across the natural gas supply chain, since the climatic bottom line of fuel switching scenarios involving natural gas is very sensitive to this parameter.

Not only is the data on methane leakage far from definitive, but climate impacts from leakage – and other key public health and environmental risks – could be reduced by strong standards and improved industry practices.  There are many practices and technologies already being used in states such as Colorado and Wyoming, and elsewhere by natural gas companies to reduce gas losses, which results in greater recovery and sale of natural gas, and thus increased economic gains. The return on the initial investment for many of these practices is sometimes as short as a few months and almost always less than two years.  In these tough economic times, it would seem wise to eliminate waste, save money and reduce environmental impact.

In sum, the paper’s results suggest that methane leakage rates matter: they can materially affect the relative climate impacts of natural gas over coal and oil.  While the paper does not draw hard and fast conclusions about the future implications of fuel switching, it does provide guidance in terms of the leak rates necessary for fuel switching to produce climate benefits at all points in time.

EDF Methane Leakage Model

We also released a new methane leakage model, based on the science described in the PNAS paper, which allows anyone to test a range of scenarios to quantify the climate benefits, or damages, of natural gas production and usage given specific methane leakage rates.  Users can vary the key system attributes independently to see how they affect net radiative forcing (the primary index used to quantify the effect of greenhouse gases [GHGs] on global temperatures) from U.S. emissions over time.  Visit http://www.edf.org/methaneleakage to plug in different variables and observe the outcome.

For more information, visit http://www.edf.org/methaneleakage.

Also posted in Methane / Read 1 Response

Strong Standards Are Needed To Protect Human Health From Harmful Air Pollution Emitted From Oil And Gas Activities

By Ramon Alvarez, Ph.D. / Published: March 30, 2012

Update: Please note that the EPA is now due to finalize the national emission standards for oil and gas activities by Tuesday, April 17.

On April 3, 2012 the Environmental Protection Agency (EPA) is due to finalize national emission standards to limit some of the harmful air pollutants discharged from a variety of oil and gas activities.   As Environmental Defense Fund (EDF) has noted in past blogs, leaks, venting and flaring of natural gas from oil and gas activities contribute to ground-level ozone (“smog”) and toxic air pollution.  As proposed, EPA’s standards would reduce volatile organic compounds that contribute to smog by 25% and hazardous air pollutants by 30%, through the implementation of proven and highly cost-effective practices and technologies. 

Emissions from Oil and Gas Activities Linked to Unhealthy Levels of Ozone “Smog” Pollution

Extensive oil and gas development in parts of rural Wyoming and Utah, where little other industrial activity occurs, has led to dangerous ozone levels, higher than those recorded in some of the most heavily polluted cities. Last year, families in Wyoming’s Upper Green River Basin suffered over forty days in which ozone concentrations exceeded the current health standard.  In Utah’s Uintah basin, residents experienced twice this number of unhealthy ozone days, with one monitor located in Ouray recording forty exceedances alone.

In 2009 then Governor of Wyoming Dave Freudenthal requested EPA designate counties within the Upper Green River Basin as out of attainment with the current ozone health standard explaining the link between natural gas emissions and the serious ozone problems: 

“The State of Wyoming is also challenged by the need to reduce emissions from the natural gas industry which has not traditionally been regulated for ozone nonattainment problems….Therefore, the Wyoming Department of Environmental Quality (WDEQ) has already identified the sources that require controls such as drill rigs, pneumatic pumps, dehydration units and small heaters.”

EPA  in turn concluded “[t]he [Wyoming] AQD’s analysis provided with its recommendation shows that elevated ozone at the Boulder monitor is primarily due to local emissions from oil and gas development activities: drilling, production, storage, transport and treating of oil and natural gas.”

In Colorado and Texas, smog-forming emissions from the oil and gas industry have exceeded other major sources of pollution such as vehicles.   In 2008, the Colorado Department of Public Health and Environment concluded that the smog-forming emissions from oil and gas operations exceeded vehicle emissions for the entire state.  Similarly, a 2009 study found that summertime emissions of smog-forming pollutants from oil and gas sources in the Barnett Shale were roughly comparable to emissions from all of the motor vehicles in the Dallas Fort-Worth area.

Oil and Gas Activities Emit Benzene-A Known Carcinogen-and other Air Toxics

Venting, flaring and equipment leaks also emit hazardous air pollutants or air toxics, including hydrogen sulfide, formaldehyde and benzene into the environment.  Elevated levels of benzene have been detected near gas production sites in Texas and Colorado. In 2010 the Texas Commission on Environmental Quality (TCEQ) measured acute concentrations of benzene that exceeded the state’s health-based risk levels at two exploration and production sites in the Barnett Shale in Texas. Research based on air samples taken from oil and gas sites in the Piceance Basin in Colorado in 2008 determined that emissions from well completions, dehydration units, and condensate tanks posed an elevated cancer risk to nearby residents. Similarly, atmospheric measurements collected by researchers at the National Oceanic and Atmospheric Administration concluded that “oil and gas operations in the DJB (Denver-Julesburg Basin) could be the largest source of C6H6 (benzene) in Weld County.”

As oil and gas development continues to expand across the country, strong, national clean air standards are essential to protect public health.  EPA’s standards, which build on clean air measures already in place in states with extensive oil and gas activities, such as Colorado and Wyoming, are an important first step in strengthening clean air protections for human health and the environment.

Also posted in Climate, Washington, DC / Read 1 Response