The observation was one of the few cautionary notes during the Bipartisan Policy Center's otherwise upbeat conference on the US shale gas boom's implications for the economy, trade, and geopolitics. That made it all the more dramatic.
During the July 25 conference's second panel, participants were discussing whether market opportunities would let the US export significant amounts of LNG. Then Kenneth B. Medlock, who is the energy and resource economics fellow at Rice University's James A. Baker III Institute for Public Policy, suggested public concerns about unconventional gas production's possible hazards could have a significant adverse impact.
"If you take shale gas out of the mix, the US would be an LNG importer and give opportunities for entry to foreign suppliers who would not have them otherwise," he warned.
Medlock's message was basic, but essential: Public perceptions matter, and the oil and gas industry will need to maintain an exceptionally good performance record to avoid being saddled with unduly restrictive regulations.
"Things like ‘Gasland,' whether they're true or not, are putting pressure on firms to be the best operator using the best practices," he said. "They affect public opinion, which can influence regulations."
It may not be fair, but there are growing indications that hydraulic fracturing opponents are gaining ground with arguments based more on fear than on facts. It even might lead some Democrats outside producing states to accept the argument in a cynical effort to attract votes in the 2014 and 2016 elections.
"Nothing is easy," former US Sec. of Energy Bill Richardson told a conference on North American energy potential hosted by Washington, DC, think tank NDN on July 24. "There are environmental dangers to shale gas development—it's called fracing—but we can do it if we're careful."
Wyden's proposal
It's not the case across the board. US Senate Energy and Natural Resources Committee Chairman Ronald L. Wyden (D-Ore.) acknowledged, in remarks at BPC's conference, that committee member John Hoeven (R-ND) and US Sec. of the Interior Sally Jewell both argue that states are best qualified to regulate fracing.
Then Wyden said he wanted to explore dividing fracing regulatory responsibilities between states, which would handle what happens underground, and the federal government, which would have responsibility for addressing above-ground issues.
"Standardized spill reporting doesn't have anything to do with geology, and everything to do with public confidence," he observed.
Many industry leaders acknowledge winning that confidence will be essential. Some have warned that a major tight oil or gas incident—along the lines of the Macondo deepwater well incident and spill—would be devastating. The overall fracing performance will have to be exceptional.
