Carbon policies may limit shale gas production growth, expert warns

Policies to restrict carbon emissions potentially could inhibit significant production growth from US shale gas formations, an expert warned.

“Fugitive emissions are the biggest issue, and if they are considered too high, it could reverse the potential gains,” said Alan Krupnik, senior fellow and director of the Center for Energy Economics and Policy at Resources for the Future.

His remarks came during a Nov. 28 RFF seminar, “The Future of Fuel: Toward the Next Decade of US Energy Policy,” as panelists considered possible impacts for nuclear, coal-fired, and renewable power, and energy efficiency in addition to oil and gas.

Krupnik said for natural gas, most of the regulation still occurs at the state level, where it can vary significantly. “Several are playing catch-up, even states like Texas where gas has been produced for a long time,” he said. “They generally rely on command-and-control requirements, such as specifying how far a well has to be from a river or stream. Local governments are also crying foul and challenging states’ authority to site wells.”

Another panelist, Frank A. Verrastro, a senior vice-president specializing in energy and geopolitics at the Center for Strategic & International Studies, said pressure to move more oil and gas regulation to the federal level comes as the US tries to move from an atmosphere of scarce supplies and rising demand to one of ample supplies and falling demand.

“There’s a lot of overlap among the fuel groups. Environmental concerns are large,” he observed. “The real dilemma is how we reconcile this large resource base with those concerns…. Unconventional and ultradeepwater resources are expensive to discover and produce. Regulations should be effective, but not overly burdensome. We should seek a balance.”

Areas of uncertainty

Verrastro said despite the apparent abundance of tight oil and gas onshore with multilayered formations and significant ultradeepwater crude oil resources offshore, the US outlook still is far from certain. “Will these resources be produced more efficiently as they are developed? If not, we could blow through them quickly,” he said. “Will the necessary investments be there? Can the Bakken shale success story be replicated over and over?”

The situation is aggravated by major policy questions, he continued. “Government policymakers’ priorities change,” Verrastro said. “Sometimes climate is at the top, sometimes economics, and sometimes energy. That’s what makes it so hard for them to be consistent.”

Krupnik said just how widespread unconventional oil and gas sweet spots are is another big question. “If you start looking at the data, you see how choppy it is. Even a small movement can change these wells’ productivity,” he said. “There’s also a tension as productive sweet spots are drained and producers move to less productive sweet spots.”

He also cautioned against over-optimism about other countries being able to replicate US unconventional production successes. “We need to temper our optimism about international potential,” Krupnik said. “A typical unconventional well in China now is being drilled for $12 million, compared with $1-3 million in the US.”

Verrastro suggested that concerns likely will not destroy the resources’ potential, however. “We’re finding this resource base, and the productivity of these wells, is incredible,” he said.

Other participants at the seminar included RFF President Philip R. Sharp; Michael Schaal, from the US Energy Information Administration; Douglas Arent, from the National Renewable Energy Laboratories; Richard Meserve, president of the Carnegie Institution for Science; Jeffrey R. Holmstead, a partner in Bracewell & Juliani’s Washington office; and Karen Palmer, a senior fellow and research director at RFF.

Contact Nick Snow at

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

BHI: US oil rig count rises for first time in 30 weeks

07/02/2015 A sudden 12-unit jump in oil-directed rigs during the abbreviated week ended July 2 represented their first rise since Dec. 5, 2014, and helped lif...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

Shell makes FID on Appomattox deepwater development in Gulf of Mexico

07/01/2015 Royal Dutch Shell PLC has taken a final investment decision (FID) on the Appomattox deepwater development, authorizing construction and installatio...
White Papers

Definitive Guide to Cybersecurity for the Oil & Gas Industry

In the Oil and Gas industry, there is no single adversary and no single threat to the information tech...

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by
Available Webcasts

Better Data, Better Analytics, Better Decisions

When Tue, Oct 27, 2015

The Oil & Gas industry has large amounts of data stored in multiple systems which are purpose built for certain tasks. However, good decisions require insights based upon the data in all of these systems. These systems in turn do not talk to each other. So the process of analyzing data, gaining insights, and making decisions is a slow one and often a flawed one. Good decisions require accurate analytics and accurate analytics require superior/sustainable data quality and governance. This webinar focuses on:

  • The importance of data quality and governance
  • How technological advances are making data quality and governance sustainable in order to get the accurate analytics to make solid decisions.

Please join us for this webcast sponsored by Seven Lakes Technologies and Noah Consulting.


Operating a Sustainable Oil & Gas Supply Chain in North America

When Tue, Oct 20, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.


On Demand

Leveraging technology to improve safety & reliability

Tue, Sep 22, 2015

Attend this informative webinar to learn more about how to leverage technology to meet the new OSHA standards and protect your employees from the hazards of arc flash explosions.


The Resilient Oilfield in the Internet of Things World

Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected