By John Kemp
LONDON, March 13 (Reuters) - Environmentalists and the energy industry appear to be edging towards a consensus that would permit a big expansion in hydraulic fracturing for oil and gas in exchange for stricter rules on engineering procedures such as well casing and cementing.
In a thoughtful article in the “Wall Street Journal”, Russell Gold explains how energy officials and some environmental campaigners are converging on the view that poor well construction, rather than fracking itself, has been responsible for recorded instances of groundwater contamination (“Faulty Wells, Not Fracking, Blamed for Water Pollution”, March 12).
The distinction is crucial. If the pollution is associated with faulty construction, then it can be solved with better industry practices and tougher regulations. If contamination is inherent in the fracturing process, it is hard to see how any amount of regulation and better design can make it safe.
“The groundwater pollution incidents that have come to light to date have all been caused by well construction problems,” according to Scott Anderson, a senior policy adviser with the Environmental Defense Fund, a campaigning and litigation group, quoted in the Journal.
Pinning responsibility on poor well design and construction, rather than fracturing, suggests that fracked wells are no more dangerous than conventional ones. It suggests fracking can be made safer through relatively simple improvements, rather than banning the technology outright.
Crucially, it could make fracking politically acceptable, buying the industry a much-needed “social license to operate” and opening the way for politicians to endorse the practice. The result could eventually be a big expansion in fracking across new areas of the United States and in Europe.
Few politicians are comfortable embracing fracking openly. U.S. President Barack Obama prefers to talk about “gas from shale” and never mentions the f-word directly. France has banned the practice. Bulgaria and other jurisdictions have imposed a moratorium pending further studies.
But the technique’s potential to unlock vast quantities of natural gas and eventually crude oil from tight rock formations is simply too important to give up. Mastering the technology is also essential to implement future carbon capture and storage projects that involve pumping carbon dioxide underground.
For politicians in the United States and Western Europe, fracking is a miraculous technology that promises abundant affordable energy, reduced dependence on oil and gas supplies from the unstable Middle East, and a way to cut carbon emissions painlessly by substituting cleaner-burning natural gas for dirty coal.
For environmentalists, fracking promises a reduction in emissions and increased availability of cheap gas as a back-up fuel to intermittent power generation from wind and solar.
For industry, fracking promises international oil companies, and a host of smaller and more innovative independents, access to new resources in stable countries with welcoming operating environments, avoiding the problems with resource nationalism that have hampered expansion in the major conventional oil and gas producing countries like Saudi Arabia, Libya and Russia.
For consumers, fracking promises cheap gas and gasoline. It is truly a win-win-win-win technology. But only if it can be exploited in a safe and acceptable manner.
It is a vital part of what the International Energy Agency (IEA) has called a “golden age of gas.” Policymakers and environmentalists hope natural gas, much of it from fracking, can provide a bridge fuel to a low-carbon future. No wonder that there is so much interest in trying to resolve outstanding health and safety concerns.
It is virtually unthinkable that the United States and most other countries could turn their back on fracking now (parts of Europe may be an exception).
The Obama administration has already made plentiful domestic gas supplies a central plank of its “all of the above” strategy for energy security. Banning or heavily restricting fracking would imply surging natural gas prices and a return to the peak gas and peak oil alarmism in the middle of the last decade.
Not even environmental groups can afford to come out openly opposing fracking because they do not want to be blamed for another surge in energy costs. Right now the mantra is that energy must be both clean and affordable.
So there is an immense amount of activity going on in the background to find a way to make fracking more acceptable.
The first step is to define the concerns properly (and narrowly).
On the technical front, the Energy Institute at the University of Texas has published a 414-page report calling for “Fact-based regulation for environmental protection in shale gas development” which sets out to define the various environmental concerns quite precisely and dispel myths.
On the legal and safety side, the EU has commissioned a detailed survey of the regulatory and legal regime governing fracking in member states.
The second step is to craft appropriate regulations which respond (or at least appear to respond) to those concerns.
The IEA is working on a set of “golden rules” for the golden age of gas. The U.S. National Petroleum Council’s 2011 report on “Prudent development: realising the potential of North America’s abundant natural gas and oil resources” called for an approach based on sharing industry best practices.
In Pennsylvania, New York and Ohio, state regulators have or are about to adopt new standards on well construction. As part of a settlement with the state of Pennsylvania after an early gas leak into groundwater, Chesapeake Energy agreed to change how it built wells in the state, according to the Wall Street Journal article, to make leaks less likely in future.
It is all about what diplomats call “optics”.
Industry working groups, regulators meeting under the auspices of the IEA, and researchers at universities and from lobbying groups are all groping towards a new consensus on how to allow fracking to be done in a safe manner that maintains public confidence while securing energy supplies.
If regulators and the industry can pin down a specific set of concerns, and convince voters that they have addressed them through new regulations, fracking can be allowed to continue, and even spread to areas currently considered off-limits.