FOCUS: UNCONVENTIONAL OIL & GAS: Much of industry awaits more details on new shale coalition

May 6, 2013
Reactions varied widely following formation of the Center for Sustainable Shale Development, which was set up by a coalition of environmental groups, foundations, and some oil companies to strengthen operating standards for natural gas shale formations in Pennsylvania and across the Appalachian basin.

Reactions varied widely following formation of the Center for Sustainable Shale Development, which was set up by a coalition of environmental groups, foundations, and some oil companies to strengthen operating standards for natural gas shale formations in Pennsylvania and across the Appalachian basin.

Coalition members are Royal Dutch Shell PLC, Chevron Corp., the Environmental Defense Fund, the Clean Air Task Force, EQT Corp., Consol Energy, and the Pennsylvania Environmental Council.

CSSD outlined 15 initial standards that primarily focus on water protection and air emissions. The group also plans to eventually provide an independent certification process to verify operator compliance (OGJ Online, Mar. 20, 2013).

The regional air and water standards apply to unconventional exploration, development, and gathering activities including site construction, drilling, hydraulic fracturing, and production.

Some industry observers question the standards, saying cost-conscious operators already use best practices in fracturing and other unconventional activities.

Several CSSD standards are a duplication of measures that state regulations already stipulate while operators already meet many CSSD's suggested practices to protect health and the environment.

Reactions vary

CSSD hosted a teleconference briefing from Pittsburgh that attracted much media attention.

Responses varied with the Washington Post calling CSSD "a heartening breakthrough in the war over fracturing." A Sierra Club spokeswoman called the coalition's plan "akin to slapping a Band-Aid on a gaping wound."

Mark Brownstein, EDF natural gas policy analyst, has said, "This is a big deal…. It's rare to see environmentalists and some of the nation's biggest energy companies working together to improve the safety of natural gas operations."

In an EDF blog posting, Brownstein calls the coalition "a step in the right direction to better protect the quality of life for people living among the gas fields."

He emphasized "the standards put forth by CSSD are no substitute for strong regulation and enforcement." CSSD has the opportunity to build an industry-environmentalist coalition "in favor of getting the rules right," he said.

The 15 CSSD standards are a beginning, Brownstein said. "We intend to expand and update these standards over time as new information improves our understanding of what is achievable in protecting ground water, air quality, and the climate."

CSSD has no legal force

OGJ contacted Jim Pardo, an oil and gas attorney who is a partner in the law firm of McDermott Will & Emery LLP in New York.

Noting the CSSD standards do not carry any legal force, Pardo said operators need to understand compliance with voluntary standards does not guarantee compliance with state or federal regulations.

He called the CSSD standards "consistent with existing best practices already recommended by groups like the American Petroleum Institute and the Marcellus Shale Coalition."

It's already to industry's advantage to continuously seek improved operating efficiencies, he said.

"The standards are very good from the standpoint of environmental protection, but again much of what they require already is covered by existing regulations or company practices," Pardo said. "This is not a knock on the CSSD—there is always value in publicly reaffirming and committing to standards that protect human health and the environment—but rather is a testament to the excellent work that regulators, industry, and nongovernmental organizations have invested over the years to ensure that natural gas resources are responsibly developed."