The American Petroleum Institute (API) said many existing regulatory and industry efforts on hydraulic fracturing (fracking) were overlooked by the Secretary of Energy Advisory Board (SEAB) Natural Gas Subcommittee’s initial report on the practice, which was released last week.
API Upstream Director Erik Milito said during a conference call Wednesday that the subcommittee’s oversight was creating a climate of confusion as it moves forward.
“The report recognizes up front that shale gas development has enormous potential to provide economic and environmental benefits for the country,” Milito said. “[But] the report fails to recognize the strong regulations and industry programs that are already in place and effectively addressing environmental and other concerns.
“You cannot move forward with effective recommendations without first acknowledging the good work that has already been done. The report itself has a gap because it does not provide a gap analysis. We understand the need to continue to look at the regulations and the programs, make incremental improvements and fill gaps that might be there. The problem is they skipped the gap analysis and went right to improvements, which ignores a lot of the work that is already happening in those specific areas.”
The draft version of the subcommittee’s initial report, released last Thursday, encourages regulators and the industry to develop and enact a “best practices” strategy on fracking in order to allay public fears of the practice and for shale gas development to be ultimately successful (see Shale Daily, Aug. 12). Its recommendations include disclosing the contents of fracking fluids, measures to protect air and water quality and providing more information to the public.
The API plans to submit 10 pages of comments on the initial report.
Citing air emissions as an example, Milito said the API took issue with the subcommittee’s suggestion that inadequate regulations were either in place or under consideration by the states or the U.S. Environmental Protection Agency (EPA).
“The report goes to great lengths to call for more standards for air emissions and more programs for their measurement,” Milito said. “Yet emissions have been regulated and efforts are under way by the EPA to revise the regulations related to emissions from production sources, as well as to collect data on emissions from natural gas development.”
He added that the report “erroneously states that a recent proposal by the EPA to revise its emissions regulations does not, with one exception, address many types of sources in the natural gas sector. In fact, the EPA proposal seeks to reduce [volatile organic compound] emissions from the natural gas sector from compressors, pneumatic controllers, storage tanks and processing plants,” (see Shale Daily, July 29).
The subcommittee’s recommendation that diesel engines should be replaced with natural gas or electricity to power field equipment at drilling sites also raised the API’s ire.
“We believe there is room for the use of natural gas engines in natural gas and oil operations,” Milito said. “However, it’s not something that could be done universally. Diesel engines have been undergoing significant changes in their own regulation. We see legitimate logistical, operational and economic considerations that have to be thought out before you create a push for this change as soon as you can.
“We would like to see a better analysis of what’s in place. It’s nothing that we completely oppose, but the subcommittee just made a blanket, universal statement that all of these engines and all of this power has to move away from diesel, when in fact we have pretty clean burning engines.”
On the issue of building the public’s faith in fracking, Milito said, “I think that is a separate issue. I don’t know that a subcommittee is something that can go out and instill public confidence in an activity that is happening in 35 states across the country. We as an industry understand that we need to do a better job. For us it is less in [public relations] than it is in actually working with local communities that are being impacted to make sure we are addressing their concerns.”
Milito said the makeup of the seven-member subcommittee was to blame for the report’s shortcomings.
“This oversight may be attributable, at least in part, to the lack of someone on the committee with extensive knowledge and direct experience in oil and gas exploration and production operations, including the use of hydraulic fracturing. There remains a need for someone with a background as the committee continues its work.”
Two members of the subcommittee are Stephen Holditch, head of the department of petroleum engineering at Texas A&M University and Mark Zoback, professor of geophysics at Stanford University.
When challenged as to why the API believed Holditch and Zoback weren’t adequate representatives of the gas industry, Milito replied, “There’s nothing wrong with Professor Holditch or Professor Zoback. These are strong minds and they bring a lot to the table. We just think it would have been important to have somebody who is actually in the field and has been in the field in the past two years and understands what is happening on a daily basis.”
He added, “The environmental community has a representative on the subcommittee; the oil and gas industry does not.”
Energy Secretary Steven Chu formed the subcommittee in May following a policy speech by President Obama calling for both increased development and scrutiny of natural gas (see Shale Daily, May 9; April 4; March 31). The subcommittee will spend the next three months developing a timeline for federal and state regulatory agencies to implement its recommendations (see Shale Daily, Aug. 17).
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