Nick Snow
Washington Editor
As the Atlantic Council (AC) released its report on environmental issues and regulatory challenges surrounding development of European unconventional natural gas resources at a July 12 briefing, it became apparent that there were nearly as many similarities with the US as there were differences.
"The European media have been very thorough," said John R. Lyman, director of the Washington, DC-based international relations organization.
"Every fear that's been raised in the US has been reported there. That creates a tremendous job for industry and governments to report the facts to the public," he said.
While there are broad European Union oil and gas directives, the ultimate development of unconventional gas resources will be left to each country because of unique characteristics from geology to revenue and royalties policies, he said, adding, "That dialogue is just starting."
Lyman predicted, however, that subsurface production issues will be solved more quickly than surface environmental and social impact questions.
"Well integrity will be the key," he said, adding, "Companies, as much as governments, will have to have processes in place to make certain the work is done properly."
Surface and social impacts aren't confined to the wellhead, observed Michael E. Moore, vice-president of business development and external affairs at Blue Source Energy.
"They begin when resources are evaluated and records searched at the courthouse," Moore said, adding, "Typically, the first person who shows up isn't necessarily a gas producer but an aggregator who assembles packages of prospects."
Regulations in place
Up to 30 years of activity can follow, and "any company that comes in needs to fully understand what's involved, and how to address each issue," Moore said. Even areas that don't have extensive oil and gas production experience may already have permitting and impact oversight regulations in place, he said.
"Whether it's harmonized is another matter," Moore said.
Producers should be prepared to fully explain production processes, suggested Mark K. Boling, executive vice-president, general counsel, and secretary at Southwestern Energy Co.
With hydraulic fracturing, "we're not talking about mini-earthquakes," Boling said, adding, "The pressure is about equal to dropping a gallon of milk on the floor. We're dealing with microfractures and low, precise pressures."
Because they have been at it longer, US producers and regulators should be ready to share what they've learned with Europeans, the report emphasized. Additionally, European nations are aware of environmental concerns that have been raised in the US, and are seeking guidance in developing appropriate procedures and regulations, it said.
"What we do in Europe and the US to make practices and regulations will be felt worldwide," AC's Lyman said, adding, "There are tremendous potential tight gas resources in China, for example."
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