Common Sense Solutions for U.S. Natural Gas

Cathryn Courtin
Authored by: Cathryn Courtin, Student Scholar, The Horinko Group

July 3, 2012

Few certainties exist in the growing debate on hydraulic fracturing (or fracking) that has been circling media, government, academic circles, and activist groups. A lack of empirical evidence has resulted in polarized, often opinion-driven discussions. However, stakeholders on both ends of the spectrum tend to agree on two points.

First, the access that hydraulic fracturing and horizontal drilling technologies have provided to shale and other unconventional gas reserves, once too expensive and difficult to extract, is and will continue to be transformative to U.S. and global energy markets. In 2010, this industry supported 600,000 jobs within the United States, contributed $76.9 billion to the gross domestic product (a figure expected to triple by 2035), and continues to reduce consumer costs of natural gas and electricity. Hydraulic fracturing and the related processes that have enabled this kind of economic growth are here to stay.

The next point of consensus is that a host of environmental and health issues associated with hydraulic fracturing must be better analyzed and addressed as natural gas development scales up. More than 11,400 wells are drilled each year, and from the initial phase of well construction to the end phase of waste disposal, there are unintended consequences to air, water, and climate. The pace at which the industry is growing has made it difficult for pragmatic regulation, permitting, and enforcement to keep up. Such oversight must be implemented in a streamlined, uniform manner, based on the strongest available science, while continuing to allow safe expansion of production of this important domestic resource.

The U.S. has begun to address this oversight challenge on a national level with EPA’s first set of federal regulations for air pollution associated with oil and gas drilling. Announced on April 17, the rule requires drilling companies to capture ozone- and smog-forming volatile organic compounds (VOCs), methane, a potent greenhouse gas, and cancer-causing chemicals like benzene.

The process to do this, known as a “reduced emission completion”, or “green completion,” is already in use by a number of industry leaders and required in Wyoming, Colorado, and two cities in Texas. EPA estimates that implementing green completions uniformly through gas drilling operations will reduce harmful emissions by 95%, reduce methane emissions by an amount equivalent to 19-33 million metric tons of CO2, and save industry $11 to $19 million each year from the capture and sale of otherwise wasted natural gas.

On June 19, the U.S. Senate Committee on Environment and Public Works held a hearing to review the new standards. Wyoming Department of Environmental Quality’s Director, Mr. John Corra, affirmed that in Wyoming, the rules have brought reductions in air pollution without hindering growth in gas production. He cited figures from Wyoming where air regulations were tightened in 2008. Since then, the number of wells has increased substantially, gas production has increased by 8.3%, and emissions of VOCs were reduced by 21% and nitrogen oxides by 17% from late 2009 through 2011.

EPA Assistant Administrator for the Office of Air and Radiation, Ms. Gina McCarthy, made clear in her testimony that EPA modeled the regulations on prior experiences and lessons learned from states and companies already employing green completions. EPA solicited further input from all stakeholders during a public comment period and three public hearings. In response to feedback, EPA made a number of changes to promote greater flexibility, including a two-year compliance period providing companies with additional time to implement necessary technology upgrades.

State officials and industry representatives in the hearing also emphasized the need for regulations to be tailored to varying geologic conditions, different well types, and other conditions unique to each state. Furthermore, Mr. William Allison, Director of the Air and Pollution Control Division of the Colorado Department of Public Health and the Environment, stressed the need for “continued and adequate Congressional funding to ensure that EPA and the states can effectively implement these important regulations.”

The hearing also addressed concerns regarding the science behind the regulations. Devon Energy’s environmental manager, Mr. Darren Smith, challenged EPA’s estimates of methane emissions from fracturing related processes, noting that EPA’s numbers were based on data from only three drilling companies and did not align with data that Devon and others have submitted. Smith’s primary concern, however, was not what these numbers meant as far as complying with the new standards, but that overestimates are contributing to flawed policy research.

Assistant Administrator McCarthy defended that EPA used the best available data in its estimates. However, as with many issues surrounding hydraulic fracturing, the data is insufficient. A new Environmental Defense Fund study in partnership with the University of Texas and industry is underway to gather additional empirical data and is expected to shed light on the discrepancies underlying the debate. A regulatory framework that enables and encourages the incorporation of new scientific data as it becomes available is another critical element to this evolving process.

Mr. Allison added that while there is bound to be uncertainty on any emission estimates, “regardless of what the right number is, we think that these controls have demonstrated effective reductions in air pollution,” and the new rules are “an important tool to complement the unprecedented success and growth of America’s oil and gas industry.”

While all parties involved in the hearing identified areas where the regulations could be improved, the Committee’s Chairman Senator Carper (D-DE) concluded the session by remarking on the hearing’s noticeable lack of disagreement. He noted that EPA had used a “fair measure” of common sense and done an excellent job in consulting with states and industry to inform these standards.

Where the technological know-how and sufficient data exist, there is a need for a similar collaborative push towards addressing other environmental issues tied to this rapidly expanding industry. As concerns grow daily over the disposal of wastewater from fracking operations, the potential contamination of groundwater and surface water, the depletion of groundwater supplies from large volume withdrawals, and seismic activity attributed to underground injection of wastewater, EPA must continue to work proactively with industry, state governments, and other stakeholders to ensure new policies and regulations are promulgated in a collaborative and adaptive manner, while continuously seeking out the best available data. The domestic economy, environment, and human health all stand to benefit.


Sources:

The Economic and Employment Contributions of Shale Gas in the United States. IHS Global Insight. (2011).

Oil and Natural Gas Air Pollution Standards.” U.S. Environmental Protection Agency.

Review of Recent Environmental Protection Agency Air Standards for Hydraulically Fractured Gas Wells and Oil and Natural Gas Storage: Hearing before Subcommittee on Clean Air and Nuclear Safety of the Committee on Environment and Public Works, U.S. Senate, 112th Cong. (2012).

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