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API Offers New Industry 'Community Standard' to Counter Frack Flak

In the face of a deluge of national and state studies related to hydraulic fracturing (fracking), the American Petroleum Institute (API) has established a new "community standard" to encourage sustained interaction between oil/natural gas operators and the communities in which they do business over the full lifecycle of drilling projects.

The new standard was highlighted recently at the LDC Gas Midcontinent Forum in Chicago by Rayola Dougher, an API senior economic advisor. By the latest count there are up to 48 different national studies on fracking, and another 202 ongoing in 34 states, Dougher told the industry audience.

Dougher said that API setting a community standard for the industry is in keeping with its charter dating back to 1919 when Congress encouraged the oil/gas industry to establish a standard-setting organization. API was created as a result.

While current industry and government policymakers are aware of the shale revolution driving the United States to become the world's dominant oil and gas producer in coming years, Dougher said part of the community standard is to make sure mass U.S. consumer audiences understand the societal benefits of this dramatic shift.

"For example, the average household today is saving about $1,200 a year from lower natural gas prices," said Dougher, adding that creation of good-paying jobs is another benefit. "Jobs is another big headline; we've had more than 2 million jobs that are directly related to hydraulic fracturing through 2012, and another million or so are expected to be added by 2020.

"We have this tremendous economic opportunity [from shale], and at the same time we have to be able to protect the environment. A lot of the work API does today is just trying to keep pace with the advances in technology being used. We have experts from around the world that are part of this process."

As a result, API has some 65 standards established on fracking, ranging from well design to the reclamation of wells at the end of their productive lives, said Dougher, noting that the institute is accredited by national and international standards organizations.

In this context, API this summer issued new guidelines for operating in the community, she said. "It is designed to align oil/gas operations with the values of communities, encouraging more sustained dialogue by both sides through every phase of a project," Dougher said. "It is designed to make sure we address everything -- health, safety and the environment."

The guidelines are a blueprint for proactive stakeholder interaction, meaning any group or entity with an interest in the community that can affect, or be affected by, the oil/gas work, she noted. There are specific suggestions for the industry's dealing with landowners, who are particularly important stakeholders in the oil/gas development process.

There is emphasis on the "exit" phase of a project's lifecycle urging proactive community dialogue for stepped up interaction and a series of community meetings that can help assure what Dougher called "a smooth transition" from a working oil/gas project to a fully recovered site.

"It is not a simple process because you start initially from a position of a lot of misunderstanding, and operators are facing the tough task of opening true, two-way, transparent dialogues," Dougher said. "Trust is the goal, and trust you have to earn through your performance."

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