Posted July 9, 2014
Hydraulic fracturing is a proven, safe technique that has been used since 1949 in over one million wells right here in the U.S. As a result, America is now the number one producer of natural gas in the world, and by 2015, it is expected that we will take the top spot in crude oil production. Of course, with this success, come both benefits and challenges.
The benefits are clear: a lower trade deficit, millions of new jobs, higher government revenue, and a level of energy security that is changing the global landscape. A study by IHS estimated that, for the average U.S. household, the increase in disposable income resulting from energy developed with hydraulic fracturing totaled $1,200 in 2012 – a sum expected to grow to $3,500 in 2025.
The same report found that the full unconventional value chain supported over two million jobs in 2012 and is projected to support nearly 4 million jobs by 2025. These jobs are increasingly multiplying in areas of the country where oil and natural gas exploration doesn’t have the same history as Texas or Oklahoma. That’s why the industry’s continued heightened focus on community engagement is so important and that is why today API announced the publication of a first-of-its-kind industry standard for community engagement. These guidelines will provide a roadmap for oil and natural gas operators seeking to build lasting, successful relationships with local residents in areas of the country where energy development opportunities are open for the first time, thanks to advances in horizontal drilling and hydraulic fracturing. This standard will reflect best practices and proven models that have been developed by industry participants over decades of successfully building mutually-beneficial relationships with communities across the nation.
Dubbed ANSI/API Bulletin 100-3, API’s community engagement guidelines will serve as a gold standard for good neighbor policies that address community concerns, enhance the long-term benefits of local development, and ensure a two-way conversation regarding mutual goals for community growth. The standard provides a detailed list of steps that oil and natural companies can take to help local leaders and residents prepare for energy exploration, minimize interruption to the community, and manage resources.
The document is divided into the five phases of oil and natural gas development: entry, exploration, development, operations, and exit.
- During the entry phase, companies determine the potential for energy extraction in a given area. They are encouraged to introduce key personnel to local leaders, share information on safety commitments and operational goals, and set professional standards for local employees and contractors.
- In the next phase, during exploratory drilling, companies are encouraged to focus on transparency, open dialogue, and education, with recommendations for community meetings and discussions around training for job opportunities.
- In the development phase, as operations are expanded to match the potential of local resources, companies are urged to work with local emergency responders to prepare against any potential risks. They also are prompted to engage with local authorities, develop relationships with mineral owners, and promote best practices regarding safety and environmental protection.
- During the operations phase, industry presence declines, as existing wells continue to produce, while the land impacted by development and exploration is reclaimed and restored. Long-term standards for maintenance and traffic safety are recommended, as well as a public feedback mechanism that allows local residents to maintain two-way communication with company representatives.
- Finally, during the exit phase, companies may close or transfer ownership of local operations, sometimes after decades of successful production. Just as companies plan for their original entry, it is recommended that they engage with the community regarding plans for reclamation and restoration, and prepare stakeholders for the transition.
Each community is different, and the standards are not designed to be exhaustive, but rather to serve as a reference for developing a plan-of-action that matches the needs and concerns of a broad range of stakeholders -- from rural farmers to indigenous tribes.
And, as with all our standards on hydraulic fracturing, API’s Global Industry Services division will work hand-in-hand with industry participants to educate operators on the successful deployment of engagement strategies. The guidelines will be available free-of-charge on API’s website, and shared with regulators at every level of government.
ABOUT THE AUTHOR
Kyle Isakower is vice president of regulatory and economic policy at the American Petroleum Institute. With 26 years experience, he is the go-to guy for issues regarding energy and environmental policy and oversees the development of API standards and economic analyses. In his past lives, Kyle has worked on issues related to waste management and remediation, NAAQS and air toxics—and led efforts promote the industry's energy efficiency efforts. Transplanted to Washington from north Jersey over 20 years ago, he remains faithful to the New York Giants, and works diligently to ensure his wife and two children do so as well.