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Researcher Warns Fear Could Hurt Shale Gas Industry

A researcher with the Center for Strategic and International Studies (CSIS) cautioned the U.S. Secretary of Energy Advisory Board's (SEAB) Natural Gas Subcommittee that regulation and enforcement of shale gas was of paramount importance if the industry's full potential is to become a reality.

"I think areas of the country are going to be taken off the table because of noncompliance because of fear," Frank Verrastro, senior vice president and director of the CSIS' Energy and National Security Program, told the SEAB on Tuesday. "I think it's not dissimilar from deepwater production. If they don't get this right, where do they turn? I think some of the responsible companies have already picked up on this, but if you don't raise the bar, I don't see how this can move forward. We have to get serious about it."

Committee Chairman John Deutch questioned whether Verrastro's analogy was a good one, since newly created deepwater regulations "were in response to an accident. Also, with offshore you are only dealing with one regulator."

But Deutch did agree with Verrastro's assertion that companies should fully disclose the chemical makeup of the fluids used for hydraulic fracturing (fracking), even if they are designated as "green chemicals." Verrsatro said the CSIS had found that some companies had absolutely refused to disclose any information on these chemicals, stating that they were company secrets.

"A great chef isn't great because of the ingredients," Deutch said. "These green chemicals are all coming from a well known array. You may have to make an allowance for this but the bar should be fairly high. It's not a deal breaker."

Verrastro said the CSIS believes that some companies "probably need to be pushed" on the issue of fracking fluid disclosure, but he added that fracking itself was not so much a problem compared to well design. He added that the industry and the public had different ideas of what encompassed fracking.

"The industry considers what happens 6,000 to 7,000 feet below the surface [to be fracking]," Verrastro said. "The public considers the whole drilling [operation] to be fracking, including going down through the aquifers. If we're going to realize the full promise of shale, regulation is essential."

Asked by a SEAB panel member if there was anything that could be done to bring down the shrillness of the debate over shale gas, Verrastro said the industry was divided into several camps.

"There is one group that believes leadership counts," Verrastro said, but added that a second group "believes that with a Republican House [of Representatives] no legislation is going to be forced down their throat. There's also an East-West divide. In Texas it's a sign of manhood to have a well in your backyard. In Bradford [County, PA] they haven't seen this type of development. It's not the same. We need to find out what's important in these communities. Some companies recognize that and others don't."

Verrastro added that the development of shale gas would mean the industrialization of many rural areas, but water would probably remain the biggest concern years into the future.

"It strikes me that as companies drill in these regions that they will have a sense of the geology but also of the hydrology," Verrastro said. "That insight ought to be shared. Trucking huge amounts of water from elsewhere may make economic sense in some regions, but in other regions it might not."

SEAB is scheduled to meet again at 10 a.m. on July 13 to meet with shale gas stakeholders and experts. The committee was formed in April by the Obama administration and tasked with making recommendations over fracking within 90 days (see Shale Daily, April 4).

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