U.S. firms should reveal more on shale drilling: Chevron

WASHINGTON Thu Jun 2, 2011 9:00am EDT

Chevron North America Exploration and Production Company President Gary Luquette testifies at a House Natural Resources Committee on Capitol Hill in Washington, February 25, 2009. REUTERS/Jonathan Ernst

Chevron North America Exploration and Production Company President Gary Luquette testifies at a House Natural Resources Committee on Capitol Hill in Washington, February 25, 2009.

Credit: Reuters/Jonathan Ernst

WASHINGTON (Reuters) - Natural gas drillers are doing too little to inform the public about the chemicals used in hydraulic fracturing, a practice essential for tapping the United States' shale gas reserves, a Chevron executive told a federal panel on Wednesday.

Advances in hydraulic fracturing, or fracking, have led to a boom in shale gas drilling, but the expansion of shale gas development has led to concerns about potential water contamination.

While companies have begun releasing some details about the chemicals they use when drilling wells, firms have raised concerns about possibly revealing trade secrets.

Gary Luquette, president of North America exploration and production for Chevron, said it was time for industry to stop dragging its feet on disclosure.

"We have used this 'intellectual property' issue as a convenient excuse to move slow," Luquette told a federal panel set up by the Obama administration to offer recommendations on improving the safety of hydraulic fracturing.

"I personally believe there is space in the middle between protecting the IP and giving the public the information they desire," he said.

Landowners near shale gas developments have blamed fracking, which involves injecting water, sand and chemicals into rock formations to obtain oil and gas, for fouling water supplies.

Aubrey McClendon, chief executive of Chesapeake Energy Corp, disputed the notion that companies had been slow to reveal information about their fracking fluids.

"I think we're going very, very quickly," he said, pointing out that Chesapeake had begun releasing details about the wells it drills on a central website, fracfocus.org.

A blowout at a Chesapeake Energy natural gas well spewed thousands of gallons of fracking fluids in northeastern Pennsylvania in late April.

EVERYTHING'S LOCAL?

At its first public meeting, the federal natural gas panel also weighed the need for a new industry group focused on developing best practices for shale gas drillers.

Industry representatives at the meeting stressed that any standards developed for natural gas drilling should be implemented by state regulators to address local needs and be responsive to rapidly changing techniques.

Environmental groups at the meeting said fracking, which is mostly exempt from U.S. Environmental Protection Agency oversight, should be regulated at the federal level.

But drillers argue that fracking is safe, and that onerous federal regulations would hurt natural gas output.

The panel, which includes Daniel Yergin, chairman of IHS Cambridge Energy Research Associates, is slated to report what immediate steps are needed to improve public and environmental safety of fracking within 90 days of beginning its work.

Within six months it will also develop advice for the government on practices for shale extraction to ensure public health.

Green groups complained that the composition of the panel seemed biased toward industry interests.

"The Obama administration says it's concerned about ethics and lack of conflicts of interest, but now we're spending ... taxpayer dollars to create an industry-dominated panel," said Dusty Horwitt, of the Environmental Working Group.

Horwitt said six out of seven panel members had financial ties to the oil and gas industry and he called for the panel's chair John Deutch to step down. Deutch, a professor at MIT, has served on the board of directors for Schlumberger Ltd, a top oil services company involved in fracking.

(Editing by Lisa Shumaker and Dale Hudson)

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