The UK Parliament has recently published a report from its House of Commons Energy and Climate Change Committee that examined the gas shale resources in the country and the use of hydraulic fracturing to extract the resource. The report is heavy with research and discussion of all the issues involved in developing gas shale resources. Members of the committee even traveled to the United States to meet with political, scientific and industry sources in order to gain the broadest spectrum of opinions on the various critical issues that need to be considered before reaching a conclusion on the environmental issues associated with gas shales.
An assessment of the report by analysts at the government research firm, Washington Analysis, concluded that "this research-intensive report could serve as a barometer for the US Environmental Protection Agency's (EPA) eventual study on the subject." They go on to point out that the EPA study is still in its "scoping" phase suggesting to the analysts that it will not be completed before 2013, thereby preventing Congress from acting to possibly restrict the use of hydraulic fracturing. While that assessment should be considered good news for the natural gas industry, we would offer several cautions about accepting that view.
First, the EPA has said it will provide a preliminary report before the end of 2012. The EPA acknowledges that some of its research studies will not be completed by the date of its preliminary report, so the final report will not be completed until 2014. When one reads the initial proposal for the study, the EPA says it is designed to answer two overarching questions. Those are: Can hydraulic fracturing impact drinking water resources? And, what are the conditions associated with the potential impacts on drinking water resources due to hydraulic fracturing activities? It seems to us that the first question can never be completely dismissed as there will always be the potential for contamination, although the possibility is extremely low.
Second, the EPA study is not the only one underway. Earlier this month, President Obama appointed a seven-member panel to examine and develop recommendations to better regulate hydraulic fracturing to assure it is done safely. The panel is headed by John Deutch, a professor at Massachusetts Institute of Technology and a former head of the Central Intelligence Agency, and includes six other high-profile individuals. The panel is to complete its work in 90 days, or by the end of summer, a year before the EPA preliminary study will be reported. There are two issues to consider about this action. First, it may reflect the White House's concern about the time necessary for the EPA study and the growing public concern about gas shale drilling. It may also reflect reaction to the recent Duke University and Cornell University studies about the dangerous aspects of hydraulic fracturing and gas shale drilling, even though these studies are being widely debunked by energy experts.
Now that the government will have two bites at the apple, a cynic may conclude that the panel might recommend minimal actions by the federal government while proclaiming the overall safety of gas shale extraction. That would enable the Obama administration to claim it has addressed the safety concerns of gas shale while then pushing for federal regulation of the drilling/completion process for gas shale wells. That would then form the basis for the EPA to complete its study with the aim of further bolstering its regulation of the fossil fuels industry. The defense will be that an expert panel had previously examined the gas shale safety issue and recommended the federal government take certain actions. This may explain why both ExxonMobil and Chevron, who have recently committed significant corporate assets to developing gas shale resources, have started advertising campaigns to educate the public about the safety of hydraulic fracturing. They may be signaling their concern about potential restrictions on extracting gas shale resources.
Exhibit 3. Exxon Ad Described As Misleading
While it has not received much general media attention so far, ProPublica, the investigative reporting web site and a major antagonist to gas shale resource exploitation and use of hydraulic fracturing, challenged the well schematic used by ExxonMobil in its newspaper advertisement campaign. The ad (Exhibit 3) implies that all Marcellus wells are cased with multiple pipes and cement from the surface to their termination. The point of the ad is to show that these wells are fully protected with multiple lines of defense against possibly leaking natural gas into aquifers. In response to ProPublica's questioning whether it was correct that horizontal wells are fully lined with multiple casing strings, an ExxonMobil spokeswoman admitted that the drawing was not accurate. That point will be used by opponents of hydraulic fracturing to undercut in the public's mind the integrity of the company's safety claims. The National Resources Defense Council wrote about this issue in a letter to the editor of The Washington Post where the ad had appeared.
Third, comments from the House of Commons report about their meeting with EPA officials give a view of its concerns about the use of hydraulic fracturing and which may form the thrust of the agency's review. The report stated: "We heard during our visit to the US, that the US Environmental Protection Agency (EPA) believed that—from evidence it had gathered so far—that ‘if hydraulic fractures combine with pre-existing faults of fractures that lead to [drinking water] aquifers or directly extend into aquifers, injection could lead to the contamination of drinking water supplies by fracturing fluid, natural gas, and/or natural occurring substances.'" The EPA's concern is similar to those we have heard for years from geologists and petroleum engineers involved in drilling gas shale wells in the Marcellus formation because of the significant faulting and undulating rock formations. While this may be a concern, to date there do not appear to be any examples of this occurring.
We hope Congress, the EPA and the Obama hydraulic fracturing panel pay attention to the key conclusions from the UK Parliament study. The House of Commons report stated:
"113. We conclude that hydraulic fracturing itself does not pose a direct risk to water aquifers, provided that the well-casing is intact before this commences. Rather, any risks that do arise are related to the integrity of the well, and are no different to issues encountered when exploring for hydrocarbons in conventional geological formations. We recommend that the Health and Safety Executive test the integrity of wells before allowing the licensing of drilling activity.
"114. We recommend that the Environment Agency should insist that all companies involved in hydraulic fracturing should declare the type, concentration and volume of all chemicals they are using.
"115. We recommend that before the Environment Agency permits any chemicals to be used in hydraulic fracturing fluid, they must ensure that they have the capabilities to monitor for, and potentially detect, these chemicals in local water supplies."
Their conclusion is supported by all previous studies conducted of hydraulic fracturing activity. The committee's recommendations are certainly ones the energy industry is comfortable complying with and the public should be happy to accept, also. Our concern about the politicians in Washington and the various states where hydraulic fracturing has become an emotional and political issue is that the critics may have another undisclosed agenda; one that clearly did not underlie the UK House of Commons committee report. Our review of the facts and the science surrounding hydraulic fracturing supports the Parliament's conclusions. In our opinion, only an unspoken agenda can produce a bad outcome from the EPA and Presidential studies. That possibility explains our concern.
G. Allen Brooks works as the Managing Director at PPHB LP. Reprinted with permission of PPHB.
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