CSIS: Public acceptance key to US unconventional gas development

Feb. 25, 2013
Public acceptance of unconventional natural gas development is a critical issue, and the ability to manage risks must be demonstrated, the Center for Strategic & International Studies said in a recent report.

Public acceptance of unconventional natural gas development is a critical issue, and the ability to manage risks must be demonstrated, the Center for Strategic & International Studies said in a recent report.

"The impacts, both positive and negative, felt by communities from increased production activity and fall into broad social, economic, and environmental categories," CSIS said in one of six "key messages" in the Feb. 13 report, "Realizing the Potential of US Unconventional Natural Gas."

The report also noted:

• The resource is enormous and readily available, but the industry and regulators are in the early stages of learning how to optimize its value.

• The availability of relatively affordable gas can generate jobs, spur economic growth, and support important manufacturing sectors.

• Several key US energy and environmental policies will drive gas consumption and, along with exports, can provide an important stabilizing element for gas development.

• Development risks can be managed now, but understanding them and evolving cost-effective management approaches is a long-term, continuous process.

• Technology innovation is a key to development, risk management, and demand.

• The resource is considerable, but so are the challenges surrounding its development, experts agreed at a Feb. 13 seminar where CSIS released the report.

About 2,000 tcf of gas, or a 100-year supply, is involved, but it could be as high as 3,000-4,000 tcf, said Clay Bretches, vice-president of exploration and production business services and minerals at Anadarko Petroleum Corp. "You can't just put a well out there, drill horizontally, and start producing," he noted. "You have to deal with many issues—both surface and subsurface."

The Houston independent producer drills 1,000 wells/year in the US and expects to reach 2,000/year in a few more years, Bretches continued. "We also see technologies growing and helping us produce gas safely and with less environmental impact," he said. "Our access to land, both privately and publicly, is inextricably linked to being able to perform in ways acceptable to communities."

US shale gas development could contribute significantly to switching much of the nation's transportation fleet from petroleum products to cleaner-burning gas, suggested Michael B. Hosford, general manager of unconventional resources at GE Oil & Gas.

CNG, LNG

Hosford cited the General Electric Co. unit's joint ventures with Chesapeake Energy Corp. to build more public CNG refueling stations, and Clean Energy Fuels to build a network of LNG refueling stations every 250 miles along major US highways for long-haul trucks running on LNG.

Development and wide-spread adoption of improved technology will be important as more producers convert rigs to run on gas instead of diesel fuel, Hosford said. "One company we work with uses aviation jet engines which can run on gas as well," he told the seminar's audience. "They're each the size of this table, not a truck."

Environmental Defense Fund Pres. Fred Krupp conceded that developing US shale gas provides obvious benefits, but added that debate about doing so has become contentious. "The jury is still out about whether gas will be developed in ways acceptable to communities, and whether its environmental benefits won't be undermined by fugitive emissions," he said.

The onshore unconventional oil and gas industry, unlike its offshore counterpart, is very fragmented, Krupp said. "We may have Anadarko and the 39 other top companies doing everything right, and still leaving half the communities exposed to risks," he said. "When [Ohio Gov. John Kasich (R)] puts out spud-to-plug disclosure rules, only to have the industry in that state try to gut them legislatively, that's discouraging."

Standards, practices

Bretches said producers have worked together to develop recommended standards and practices, such as 11 in the Appalachian region which saw theirs endorsed by the State Review of Oil & Natural Gas Environmental Regulations and the Interstate Oil & Gas Compact Commission. The Colorado Oil & Gas Association is developing a similar set of recommended procedures there, he added. Such industry leaders "know that bad actors tarnish the rest of us," he said.

Ten studies addressing all places where methane can be released along the US gas production, transmission, and distribution network are due in the next year, according to Krupp. "When you look at a 100-year timeframe, methane is 20 times more powerful in radiative forcing than carbon dioxide," he said. "Over 20 years, it's 72 times more powerful. No less than 3% of the methane produced should be allowed to escape.

"We're measuring production sites, pipelines, storage tanks and transmission facilities," Krupp continued. "The first of these studies should be subjected to peer review soon, but the early good news is we have the technology to control this."

Anadarko supports controlling methane emissions, Bretches said. "Measuring the releases is an important first step, and we're pleased to see it," he said.