Natural gas forum brings environmentalists and industry together

Environmentalists and oil company executives sparred over the risks of water contamination from drilling and whether an industry-backed chemical disclosure system is sufficiently transparent during a Senate forum on Thursday.

Sen. Mary Landrieu, D-La., pressed both sides for evidence of a “specific incidence” of water contamination tied to natural gas production.

“I keep hearing from the environmental groups that there are many examples of contamination of groundwater, and I keep hearing from the industry…that they don’t know of a single incident,” Landrieu said during the Senate Energy and Natural Resources Committee panel discussion. Instead of “generalities,” Landrieu pleaded for “one site in the United States where drinking water has been contaminated.”

The director of the Sierra Club’s Beyond Natural Gas Campaign, Deb Nardone, emphasized methane contamination in water wells in Dimock, Pa.

Amy Mall, a senior policy analyst with the Natural Resources Defense Council, cited a recent report of damage to more than 150 water supplies in Pennsylvania. “There’s no doubt that water has been contaminated by natural gas production, as documented by regulators in Pennsylvania, Ohio (and) Colorado,” Mall said.

But Sen. Jim Risch, R-Idaho, disputed the accounts. “You can’t find any reliable scientific studies that have shown this is contamination,” he said.

There is a long-running dispute over possible water contamination from the hydraulic fracturing process used to stimulate oil and gas production at wells or the full range of related drilling activities. Hydraulic fracturing is a well stimulation technique that involves pumping water, sand and chemicals underground to open the pores of rock to release trapped hydrocarbons.

Halliburton senior vice president Marc Edwards drew a distinction between contamination from the hydraulic fracturing chemicals themselves and underground methane.

And Mark Brownstein, an associate vice president of the Environmental Defense Fund, stressed that while the chances of water contamination from fracturing itself is “remote,” there are bigger environmental risks from poorly constructed and designed wells. For instance, methane can leak out of wells with insufficient barriers, possibly contaminating underground aquifers.

Thursday’s discussion was the third in a series of Senate roundtables on natural gas, coming as hydraulic fracturing has empowered a surge in production of the fossil fuel and the Obama administration weighs whether to broadly allow exports of it.

Sen. Ron Wyden, D-Ore., who heads the Senate Energy and Natural Resources Committee, said Thursday’s session was meant to dig into four key areas surrounding gas production: disclosure of chemicals used at wells, ways to limit methane emissions, the management of water resources and reducing the flaring of natural gas.

He noted that in Texas, oil producers are flaring less than 1 percent of the natural gas they produce — but energy companies in the Lone Star State are able to capitalize on decades-old infrastructure around traditional drill sites. By contrast, a similar network of pipelines and infrastructure has not yet developed in North Dakota and Montana, where oil companies are using hydraulic fracturing to pull oil (and any accompanying natural gas) from the Bakken Formation.

Senators scrutinized the industry-backed system FracFocus, which more states _ and now the federal government _ are moving to embrace as a way for companies to disclose information about the chemicals they use at drilling sites. Federal regulators at the Interior Department’s Bureau of Land Management just proposed a plan to tighten standards for drilling on public lands that would allow companies to disclose the chemicals they pump underground via FracFocus — a decision that has angered environmentalists who see major flaws in the registry.

Nardone, with the Sierra Club, said there were questions about how long FracFocus might retain data, given that it is a non-public entity. Mall noted that since it’s not a government website, it doesn’t abide by the same public records requirements, and “companies can choose what they claim to be trade secrets.”

FracFocus is set to get an update as early as next week, including new improvements that aim to make data easier to download and aggregate.

While Wyden did not endorse FracFocus, he twice called it a “constructive effort.”

And Sen. John Hoeven, R-N.D., stressed the need for transparency to help build “a comfort level” on drilling and hydraulic fracturing.

Charles Davidson, CEO of Noble Energy, underscored the importance of disclosure to building public trust.

But Halliburton’s Edwards said protection for proprietary information is key. He noted that Halliburton has developed frac fluids sourced from the food industry, but “without trade secret protection, Halliburton would not have invested in that innovation.”

Industry representatives repeatedly argued that state-based regulations are better than a broad federal approach to drilling mandates.

“State regulators are extremely knowledgable about the geologies within their borders, the challenges of local energy development, the progress of oilfield technology and the needs of their state citizens,” Edwards said. “Their local knowledge gives them an accurate understanding of environmental risks. They tailor their regulations to local conditions, and, over time, have benefited their state’s economy and protected the environment, while allowing oilfield technology to constantly evolve.”

Sen. Lisa Murkowski, R-Alaska, said regulations and best practices should be tailored to different geologies and regional considerations around the country.

“These are unique characteristics which make uniform regulations difficult,” Murkowski said. “If you have a one-size-fits-all (approach), maybe that is not best practices.”

Participants in Thursday’s roundtable included:

  • XTO Energy Inc. – Jack Williams, President
  • Noble Energy, Inc. – Charles Davidson, Chairman/CEO
  • Anadarko – Clay Bretches, Vice President, Exploration and Production Services and Minerals
  • EQT Corporation – David Porges, Chairman/President/CEO
  • Environmental Defense Fund – Mark Brownstein, Associate Vice President & Chief Counsel, US Climate and Energy Program
  • Natural Resources Defense Council – Amy Mall, Senior Policy Analyst, Land and Wildlife Program
  • Sierra Club – Deb Nardone, Director, Beyond Natural Gas Campaign
  • Texas Railroad Commission – Barry Smitherman, Chairman
  • Baker Hughes – Alan Crain, Senior Vice President/Chief Legal and Governance Officer
  • Halliburton – Marc Edwards, Senior Vice President of Completion and Production
  • West Virginia Environmental Council – Don Garvin, Legislative Coordinator, and member, Board of Directors for STRONGER (State Review of Oil & Natural Gas Environmental Regulations), Inc.
  • Stan Belieu, Representing the Interstate Oil and Gas Compact Commission, Deputy Director, Nebraska Oil and Gas Conservation Commission/President, Ground Water Protection Council
  • U.S. Department of the Interior – Tim Spisak, Deputy Assistant Director of Minerals and Realty Management, Bureau of Land Management