The business of natural gas production has been booming over the last decade thanks to recent technological improvements, namely horizontal drilling coupled with hydraulic fracturing (commonly referred to as fracking). This has given energy companies the ability to extract unconventional natural gas from previously impermeable shale rock formations.
Natural gas is inexpensive, burns cleaner than coal, and America’s previously untapped, abundant supply will reduce dependency on foreign oil. States welcome the natural gas industry for the revenues it provides (as have some landowners) and the jobs it brings. To be sure, citizens from across the country flock to these jobs
, while consumers appreciate the resulting lower utility bills.
But natural gas production is not without controversy, much of which centers around fracking and its potential impact on the environment. Increasingly, debates among the industry, politicians, environmental groups, landowners, and the public are playing out in legislatures and courts across the country.
Fracking: what it is and why it’s a big deal
Critics of the oil and natural gas industry contend that flowback can lead to ground and surface water contamination, and seek the full disclosure of chemicals used in fracking fluid mixtures. Natural gas companies consider these mixtures trade secrets and worry about losing their competitive advantage in the marketplace should this information be disclosed.
Other environmental concerns include the storage and recycling of flowback and wastewater from drilling operations, the leakage of methane — the main ingredient in natural gas
— from the supply chain into the atmosphere, and earthquakes related to fracking operations.
Industry & State Legislative Trends
As the industry matures and the natural gas boom continues in over thirty states, public scrutiny is increasing. Public officials and lawmakers have attempted to balance industry interests with those of the public as they undertake environmental impact studies and begin to implement guidelines and regulations. Clearly, the emerging trend is towards disclosure.
In 2011, the oil and natural gas industry responded to calls for transparency by creating FracFocus.org
, a website that tracks hydraulically fractured wells across the country. Energy companies can voluntarily disclose the chemicals used in the fracking process, with the exception of those that are proprietary.
At the same time, states have responded in various ways. For example, North Carolina and Illinois have followed in the footsteps of Wyoming, the first state that required the disclosure of fracking chemicals to state regulators. Currently, such information is not shared with the public, but there is ongoing litigation in several states seeking to overturn this. As part of regulations implemented in 2013, California now makes reporting chemicals on FracFocus.org mandatory.
Other states have been more cautious. In New York, a non-legislative moratorium
has been in place since 2008 while the state environmental and public health agencies complete an environmental impact review of fracking. Meanwhile, some municipalities
have issued bans on fracking, with litigation on the rise to challenge
And though the debate surrounding fracking’s environmental impact has been polarizing in many states, progress has occurred. Just last year, the Center for Sustainable Shale Development (CSSD)
formed in Pittsburgh, PA seeking to be a model for collaboration and compromise in developing natural gas production standards.
Trends at the Federal Level
Momentum has been building for more oversight of the natural gas industry at the federal level. In 2012, President Obama issued an executive order calling for a coordinated effort among the Department of Energy (DOE), Department of Interior (DOI), and the Environmental Protection Agency (EPA) to ensure the “responsible development
” of the country’s oil and natural gas resources.
As a result, DOI released proposed draft rules in 2013 that would require energy companies operating on federal lands to publicly disclose the chemicals used in fracking. EPA is seeking public commentary
until September 18, 2014 on its Advanced Notice of Proposed Rulemaking (ANOPR). It is asking for input on “the types of chemical information that could be reported and disclosed under [Section 8 of the Toxic Substances Control Act]
and approaches to obtain this information on chemicals and mixtures used in hydraulic fracturing activities, including non-regulatory approaches.”
Later this year, EPA will release a two-year study on fracking’s potential impact on drinking water. By January 2015, air emissions from oil tanks, compressors, and other equipment used in fracking operations will be regulated under the Clean Air Act
In the meantime, the U.S. Securities and Exchange Commission (SEC) has requested that energy companies disclose the chemicals used in fracking operations as well as efforts taken to reduce the environmental impact of fracking.
A Historical Research Perspective
The emerging trends toward disclosure, oversight, and litigation following this recent surge in unconventional natural gas production is similar to that of other major industrial developments
. One lesson to be learned from these industries is that disclosure can result in increased public trust in fracking operations and in natural gas production overall. Additionally, proactive risk management of existing or potential environmental issues by the natural gas industry in tandem with state and federal regulatory agencies can prevent costly future cleanups and restoration projects.
So far, contamination claims related to fracking have been hard to assess due to remaining knowledge gaps. The jury is still out on the true environmental impact of fracking, but historical research
can help answer fundamental questions such as what chemicals were in a watershed prior to the commencement of fracking operations or does a region have natural methane gas pollution
This blog was originally posted to Taylor & Hammel LLC Blog
on August 12. Click here
to view the original entry.