After taking almost a year to finalize voluntary performance standards to ensure shale gas resources are safely developed in the Appalachian Basin, the Center for Sustainable Shale Development (CSSD) began accepting applications from producers on Tuesday.
Established a year ago (see Shale Daily, March 25, 2013), CSSD brought together a group of energy companies, philanthropic foundations and environmental organizations, including the Environmental Defense Fund, the Heinz Endowments and the Clean Air Task Force.
Industry participants include EQT Corp., Royal Dutch Shell plc, Consol Energy Inc. and Chevron Corp., which are among the first expected to apply for a certification process that would require strict compliance with 15 voluntary performance standards that go beyond the minimum federal and state regulations in Ohio, West Virginia and Pennsylvania.
Regulators in those states worked alongside the industry participants and others to craft the standards, which deal with air and climate, and surface and groundwater requirements. In a conference call on Tuesday to announce that it was open for business, interim Executive Director Andrew Place said operators would pay $30,000 to $100,000 each to be certified under an independent third-party process that would find auditors from Bureau Veritas making visits to drilling sites, collecting data and evaluating conformance.
Place said the certification process would take anywhere from three to six months until a decision committee reviews the audit report and judges eligibility for certification. The center has already seen "a groundswell of interest from companies referring to the standards" across the basin, he said. He added that a number of producers and midstream companies are already in discussions with the center, but said he couldn't offer any names or how many companies had shown an interest in joining at this point.
Place, who also serves as the corporate director of energy and environmental policy at EQT, was joined by Susan Packard LeGros on the call, who was named as the center's executive director. She comes to CSSD from the Philadelphia-based law firm Stevens & Lee, where she focused on environmental, natural resources and regulatory issues. LeGros also served as a section chief at the U.S. Environmental Protection Agency (EPA). She fielded no questions from reporters.
It remains unclear what kind of impact the CSSD would have on the “responsible” development of the Appalachian Basin. At the time it was announced, some companies denied an offer to join, while executives of a few environmental groups in the region scoffed and said the effort would fail.
Heinz Endowments,which faced criticism for playing a major role in establishing the center, shook up its management team last year when it fired its environmental director and saw the departure of Robert Vagt as its president (see Shale Daily, Oct. 15, 2013). Vagt was named chairman of privately held Rice Energy Inc. earlier this month (see Shale Daily, Jan. 15).
Place said the initiative was attracting interest from across the country and overseas, where similar efforts are being considered. Meanwhile, Allegheny County, PA, Executive Rich Fitzgerald has said any company wishing to drill on county parkland would have to comply with the center's performance standards. Allegheny County is soon expected to approve a plan submitted by Range Resources Corp. to drill near a 1,180-acre park (see Shale Daily, Dec. 12, 2013).
"In my experience, as a governor and at the the EPA, when you can have voluntary proposals submitted to rigorous standards you can get farther than waiting for a regulatory agency's processes," said Christine Todd Whitman, a former governor of New Jersey, who also served as administrator of the EPA and who now sits on the CSSD board. "These performance standards are not meant to be a substitute for the regulatory process, but this serves as a good model for the collaborative process and a way to address complex issues facing the nation."
The center's performance standards would be updated regularly and eventually be expanded. The standards call for limitations on flaring, the use of green completion equipment, closed-loop drilling systems and advanced well casing designs, among other things.
The CSSD also announced Tuesday that the Benedum Foundation, which is focused on investments in West Virginia and Southwestern Pennsylvania, has joined the Heinz Endowments and the William Penn Foundation as a philanthropic participant.