OIL AND GAS: New shale development standards draw industry and enviro buy-in

By Ellen M. Gilmer
E&E News
March 21, 2013

A team of energy companies and conservation groups has launched a new set of safety standards for Appalachian shale development to be bolstered by voluntary evaluations of production practices.

Two years in the making, the Pittsburgh-based Center for Sustainable Shale Development (CSSD) will dole out a seal of approval for oil and gas companies that meet performance standards designed by interests as varied as Chevron Corp., the Heinz Endowments and the Environmental Defense Fund.

Before the center’s launch yesterday, backers touted the team’s diverse buy-in and its certification process as factors setting the effort apart from numerous past attempts to establish best practices for operators drilling into the natural gas-rich Marcellus and Utica shale formations.

“It begins to set a benchmark for people to be able to hold companies accountable to the rhetoric they often espouse, which is that they’re responsible developers,” said Mark Brownstein, chief counsel of EDF’s energy program. “This is a way to demonstrate that you are in fact a responsible developer.”

Many past efforts to foster production standards have fallen flat thanks to a portfolio of ideas that were either divisive or watered down. Add the fact that most lacked accountability controls, and the standards often devolved to mere suggestions.

To avoid that fate, the new CSSD will have to attract broad industry participation, and it is not yet clear whether that will happen. Some oil and gas companies declined to join the group during its formation, but EQT Corp.’s Andrew Place noted yesterday that the group has had “encouraging conversations” with other operators who may buy in.

The center’s founding industry members are Chevron, EQT Corp., Consol Energy Inc. and Shell North America. On the conservation side are EDF, the Pennsylvania Environmental Council, PennFuture, the Clean Air Task Force and the Group Against Smog and Pollution. Rounding out the group are the William Penn Foundation and the Heinz Endowments, which has funded environmental efforts before.

The center’s board is made up of heavy-hitters: Former Treasury Secretary Paul O’Neill is at the helm, along with former U.S. EPA chief Christine Todd Whitman, outgoing Carnegie Mellon University President Jared Cohon and former Lawrence Livermore National Laboratory Associate Director Jane Long.

Following LEED’s lead

Oil and gas policy experts in Pennsylvania have praised the effort. Former Department of Conservation and Natural Resources chief John Quigley called it a “giant step forward.” And gubernatorial hopeful and former Department of Environmental Protection chief John Hanger, who was instrumental in the early phases of the group, said its creation puts pressure on other oil and gas companies to seek certification.

That’s the idea, founding members said during a press conference yesterday. Clean Air Task Force advocacy chief Conrad Schneider said he hopes the CSSD certification will catch on in the same way the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) building standards did over the past decade. The center envisions local governments, landowners and eventually even natural gas consumers beginning to show a preference for operators that are CSSD-approved.

Companies can apply to be certified later this year and will have to cover part of the cost for the center to hire an independent inspector to check for compliance. The 15 initial performance standards touch on water protection, air quality and climate protection. The group lays out specifics for some standards, while others remain vague as the team continues to look for consensus.

The standards call for zero discharge of shale wastewater into the environment — a policy already largely adhered to in Pennsylvania — and recycling of 90 percent of wastewater generated during shale development, a tick above Marcellus recycle rates last year. They also rehash other familiar ideas by calling for a phaseout of wastewater pits and disclosure of chemicals used during hydraulic fracturing.

Interestingly, the standards call for eventual consideration of a process to disclose the fluids used in the entire drilling process, not just during fracking. That concept was introduced in Ohio last year by Republican Gov. John Kasich but was yanked from legislation when industry said it would be too cumbersome.

The standards’ air components have received some criticism from industry sources outside the new partnership. A standard that calls for lower emissions of volatile organic compounds and other pollutants, for example, is weaker than requirements imposed by Pennsylvania’s recently updated General Permit 5.

CSSD acknowledged during the announcement that its air standards fell short of Pennsylvania’s new general permit but said the issue would be addressed during the evolution of the “living document.”

Cultivating public trust

Outside companies jumped on such overlap as a weakness that they say demonstrates existing regulation is already sufficient.

The Marcellus Shale Coalition, representing most of the region’s unconventional drillers, said current rules in Pennsylvania were adequate. And Range Resources Corp., a top driller in Pennsylvania, added that CSSD’s goals were admirable but that the standards do not bring anything new to the table.

“We applaud the intention, but this really demonstrates how rapidly the technology has evolved and is a testament to the work that industry, regulators and NGOs have already achieved,” said spokesman Matt Pitzarella in an email. “There are now more than half of a dozen related efforts all aimed towards the same goal of maximizing the benefits of increased natural gas usage and that is a very good thing.”

CSSD founders have flatly dismissed such claims. They maintain that the standards are stronger and more specific than current law and will minimize environmental risk. Shell, one of the partners, says it is already starting to blend the standards into its practices.

Paul Goodfellow, of Shell, said complying with the standards would help oil and gas companies earn the trust of the public, which has often been skeptical of the quick pace of development in the region.

That public trust will depend on how broadly the standards catch on. Place, of EQT, said it’s all about recruitment now.

“Keeping this a small group that was nimble that could get us to the finish line was critical,” he said of the formation of CSSD. “The next effort is to bring many other producers to the table.”