Gaps in Natural Gas Panel's Report

Mark Green
Posted August 19, 2011

Good news and not-as-good news in last week's draft report of the Energy Department's special subcommittee that has been studying natural gas and hydraulic fracturing.

The good: The subcommittee acknowledged the bright future of natural gas. Thanks to fracking, its economic and energy potential is becoming clearer, even as experts recalculate the size of America's gas reserves. Already, natural gas development is creating tens of thousands of jobs in Pennsylvania, Texas, North Dakota and other states.

Also good: The panel noted the environmental benefits of clean-burning natural gas and the savings to consumers, realized in lower home-heating and electrical costs. And it identified areas - already known to the oil and natural gas industry - that must be addressed in the future, including creating better relationships with communities where gas wells are being drilled.

The not-as-good: The subcommittee didn't appear to recognize that robust state regulatory regimes already are in place, and that industry has worked hard developing programs to address operational and other issues, such as protecting the environment - raising concern that time and effort may be wasted if Washington retraces steps already taken by the states and industry.

That's a critical point. It's pretty hard to know where you're going if you don't understand where you are. API Upstream Director Erik Milito talked to reporters this week:

"You cannot move forward with effective recommendations without first acknowledging the good work that has already been done. Otherwise, we are left with ambiguity as to who, what and how we need to move forward."

Though ongoing initiatives got short shrift from the subcommittee, here's what Milito was talking about:

• Oil and gas producing states have effective regulatory systems in place to manage their resources. These reflect the unique climate, geology, hydrology, topography and other factors in each state - all of which argue against Washington's inclination toward one-size-fits-all regulatory schemes. Milito said the fact states have revised and improved their regulatory systems proves responsiveness to public concerns and advances in technology.
• STRONGER - a non-profit organization supported by industry that helps states refine their approaches to oil and natural gas regulation.
• FracFocus - the online registry where people and communities can get information about the hydraulic fracturing fluids being used in local wells.
• API best practices and standards, developed with its members, that cover water management, surface mitigation, site remediation and reclamation, well casing and cementing and other issues associated with hydraulic fracturing.

Combined, these establish the current state of natural gas development, via hydraulic fracturing and horizontal drilling. API's comments on the subcommittee's draft report don't indicate industry's unwillingness to see improvements in regulations, enforcement and best practices and standards. Rather, industry is saying here's what works, here's what has been learned. Let's go forward in a cost-effective, environmentally effective way - without duplicating what's already been done. Back to Milito:

"We are left with the question, what are we actually trying to accomplish here? To eliminate this confusion, we simply urge the subcommittee to acknowledge the programs ... that already exist and to demonstrate what gaps truly need to be addressed. We have to know where the gaps are to improve without repeating and duplicating (past) efforts."

Another factor is an industry that wants to better inform and listen to communities. "We as an industry know we have to do a better job," Milito said. It's the way you talk when you're committed to responsible development.