NEW YORK (THE WALL STREET JOURNAL via Dow Jones), Dec. 21, 2009
When energy companies began preparations to drill for natural gas in upstate New York last year, the local Sierra Club quickly organized against them.
The group's New York chapter demanded studies on the environmental risks, pushed for stricter regulations and called for a statewide ban on most gas drilling. The drilling hasn't begun as the state works to develop regulations.
It would have been a typical story of environmentalists battling industry, except for one thing: The national Sierra Club is one of natural gas's biggest boosters.
Carl Pope, the Sierra Club's executive director, has traveled the country promoting natural gas's environmental benefits, sometimes alongside Aubrey McClendon, chief executive of Chesapeake Energy Corp., one of the biggest U.S. gas companies by production.
The national group's pro-gas stance has angered on-the-ground environmentalists in several states who say their concerns are being marginalized.
"It makes us look like the extremists that the industry wants to call us anyway," said Beth Little, a board member of the Sierra Club's West Virginia chapter, which is more skeptical about drilling than the national organization.
The rift in the Sierra Club, one of the country's oldest and most prominent conservation groups, highlights deep divisions in the broader environmental community over natural gas. And pressure from local activists is forcing some major environmental groups to revisit their positions on drilling.
Some activists, such as Mr. Pope, believe increased drilling -- with appropriate safeguards -- is the best way to wean the U.S. off coal, which they see as the greater environmental threat.
Others, many of them in areas affected by drilling, see potential risks -- air pollution, increased water use and soil and water contamination -- as too high.
"It's been an at-times rancorous debate in the environmental community," said Bruce Baizel, an attorney for Earthworks, a national environmental group focused on energy issues.
That debate will likely grow more heated following Exxon Mobil Corp.'s announcement last week that it is buying XTO Energy Inc. The deal will make Exxon, already a significant target of environmentalists, into the country's biggest natural-gas producer.
The industry has made the environmental benefits of gas a centerpiece of an $80 million lobbying effort that aims to promote increased use of gas to generate electricity and fuel cars and trucks. Burning natural gas releases about half as much carbon dioxide as burning coal to produce the same amount of energy and also emits far fewer smog-causing gases such as nitrogen oxide.
National groups such as the Sierra Club, the Environmental Defense Fund and the Natural Resources Defense Council have backed natural gas as a so-called bridge fuel that can help the country move away from coal and oil without waiting for renewable sources of energy, such as wind and solar power, to catch up.
The support of environmental groups has helped the industry win key backers in Congress, where a bipartisan "Congressional Natural Gas Caucus" formed this year.
But local opposition presents a challenge to the coalition. Grassroots groups have sprung up across the country to raise environmental concerns, particularly about the alleged risk of drinking-water contamination from hydraulic fracturing, a process in which large volumes of chemical-laced water are injected down wells to release gas trapped in underground rock formations.
Companies say that their drilling practices, including hydraulic fracturing, are safe, and that existing regulations are sufficient. There have been few independent studies to assess how widespread problems are.
"There are legitimate questions, and they can be answered legitimately," said Mr. McClendon, Chesapeake's CEO. "I feel we're on the right side of history here."
The pressure from local environmentalists appears to be having an impact. The Natural Resources Defense Council is now pushing for stricter regulation of drilling, the Environmental Defense Fund is working with companies to encourage them to adopt stronger environmental safeguards, and the Sierra Club has formed a task force to draft a policy on hydraulic fracturing.
James Marston, director of the Environmental Defense Fund's energy program, said the pros and cons of increased natural-gas use have turned out to be "more complicated than some of the early reports" indicated.
Concern appears to be growing in Congress, too, about the environmental impact of drilling. A House bill to regulate hydraulic fracturing has drawn 49 co-sponsors, and a companion bill has been introduced in the Senate.
Exxon is sufficiently concerned about the legislation that its merger agreement with XTO allows the company to back out of the deal if Congress makes hydraulic fracturing illegal or "commercially impracticable."
The grassroots opposition the industry faces was on display here on a recent Tuesday afternoon, when more than 50 people filled the community room of the public library in this town of 2,500 just outside of Syracuse, N.Y. As local environmental leaders talked about the thousands of acres of local land that had been leased for drilling, Syracuse resident Larry Paul shook his head.
"I don't trust the industry," Mr. Paul said after the meeting. "This is a disaster waiting to happen."
Still, Mr. Pope, of the national Sierra Club, said many of the same people who complain about drilling are using oil, gas and coal produced elsewhere -- often at a greater environmental cost.
"Will the 20% of the membership that happens to live in places where drilling is happening be unhappy?" he asked. "I'm sure that's true."
Copyright (c) 2009 Dow Jones & Company, Inc.
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