Gas Drillers Have Work To Do To Address Environmental Concerns

WASHINGTON (Dow Jones Newswires), Aug. 11, 2011

Regulators should require the oil and gas industry to disclose the contents of the fluid used in a drilling technique that has helped unlock vast reserves of U.S. energy resources, a panel convened by the U.S. Energy Department recommended Thursday.

The Natural Gas Subcommittee, in a report issued Thursday morning, also said the industry has to expend effort to fully address environmental concerns related to the drilling technique, known as hydraulic fracturing, and other aspects of the drilling process, including wastewater management and well design.

Energy Secretary Steven Chu convened the subcommittee to identify ways to improve the safety of gas drilling. Neither the panel nor the Energy Department have regulatory authority over the industry, but the recommendations come as operators face increasing scrutiny from the media and environmental groups along with the prospect of tighter regulation from states and other federal agencies, including the Environmental Protection Agency.

The panel noted that a recent boom in gas drilling that has quickly transformed the U.S. into a production giant has brought economic benefits and "enhanced national security," but added that "the growth has also brought questions about whether both current and future production can be done in an environmentally sound fashion that meets the needs of public trust."

The EPA is conducting its own study on the impact of hydraulic fracturing on drinking water, while planning to regulate air emissions from gas operations and the use of diesel fuel in the fracturing process. New York is moving toward allowing more drilling to tap what are thought to be considerable reserves within its borders, but regulators are still evaluating the environmental consequences.

The Energy Department panel recommended more research into possible methane leakage from gas wells--a problem that, according to Pennsylvania regulators, has tainted water supplies in dozens of homes. It said operators should develop best practices for well design and regulators should inspect wells at crucial points during the drilling process.

In addition, the panel said regulators should "immediately develop rules to require disclosure of all chemicals used in hydraulic fracturing fluids," addressing a longstanding complaint from environmentalists who say that without that information, they cannot hold companies accountable for potential contamination. The panel said there should be an exception for information that was "genuinely proprietary."

Federal agencies should make a joint effort to evaluate the emissions of heat-trapping greenhouse gases from natural gas drilling as part of a look at the "life-cycle use of natural gas as compared to other fuels," the panel said.

Proponents of natural gas have long argued that gas is cleaner-burning than oil or coal, but recent research has suggested that extracting the gas may release more greenhouse gases than previously thought, raising questions about whether it is an effective way to mitigate climate change.

Environmental groups have questioned the panel's objectivity, saying that some of its seven members have been paid to do research for the oil and gas industry. The industry, meanwhile, has griped that it has no direct representatives in the panel. The members include academics, consultants, and the president of an environmental advocacy group.

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