The ‘Golden Age of Gas,’ Extremism and Reason

Mark Green
Posted May 30, 2012

The International Energy Agency’s new report on natural gas makes a number of important points, especially about unconventional gas produced through hydraulic fracturing or fracking. IEA Chief Economist Fatih Birol summed up the report for Reuters:

“Unconventional gas will fracture the status quo and will be a complete game changer with major geopolitical implications.”

But … While IEA’s “Golden Rules for a Golden Age of Gas” talks glowingly of natural gas’ potential, it links that potential to allaying “social and environmental concerns associated with its extraction.” IEA:

“Governments need to devise appropriate regulatory regimes, based on sound science and high-quality data, with sufficient compliance staff and guaranteed public access to information. Although there is a range of other factors that will affect the development of unconventional gas resources, varying between different countries, our judgement is that there is a critical link between the way that governments and industry respond to these social and environmental challenges and the prospects for unconventional gas production.”

So, IEA’s premise is that governments and industry need to respond to the challenges of development with transparency and appropriate regulations based on sound science and high-quality data. So how are we doing in the U.S.? EPA Administrator Lisa Jackson, in an interview last fall:

"The vast majority of oil and gas production is regulated at the state level. There are issues of whether or not the federal government can add to protection and also peace of mind for citizens by looking at large issues like air pollution impacts, which can be regional. ... So it's not to say that there isn't a federal role, but you can't start to talk about a federal role without acknowledging the very strong state role. We have no data right now that lead us to believe one way or the other that there needs to be specific federal regulation of the fracking process."

More Jackson, a few days later:

“States are stepping up and doing a good job. It doesn't have to be EPA that regulates the 10,000 wells that might go in."

So, the next question is, what about state regulators? Do they think a federal regulatory layer is needed? No. They’re confident they can handle it – a point a group of them made during a congressional hearing last fall. Oklahoma Corporation Commission Chairman Dana Murphy:

"My fundamental point would be to encourage that the states are the appropriate bodies to regulate the oil and gas drilling industry. Protection of water and the environment and the beneficial development of the nation's resources of oil and gas are not mutually exclusive goals. Oklahoma is proof of that."

And Pennsylvania Department of Environmental Protection Secretary Michael Krancer:

“Simply put, because of our long history of oil and gas development and comprehensive regulatory structure, Pennsylvania does not need federal intervention to ensure an appropriate balance between resource development and environmental protection is struck.”

The reality is industry and state regulators are working together every day to improve safety, performance and environmental protection. Industry-developed standards have helped guide state regulators who, with help of STRONGER, have developed effective regulatory programs tailored to their state’s specific needs. The FracFocus online chemical disclosure registry has data from more than 15,000 wells that’s accessible to the public.

All of which undercut a myth – that industry wants no natural gas regulation or as little as possible, as Time magazine’s Ecocentric Blog argued this week. Similarly, in a post about the economics of shale gas development, the Washington Post’s Wonkblog suggested industry support for “unrestrained fracking.”

The real debate over natural gas is between proponents of effective, efficient, state-centered regulation and natural gas deniers – those who deny its environmental benefits, its job-creating ability and, as Birol said earlier, its game-changing nature as an energy source.

A Wall Street Journal editorial details the Sierra Club’s new campaign to block responsible development, jobs and reliable energy by depicting the natural gas industry and development as “dirty” and “dangerous.” The Journal (subscription required):

“… the goal is to shut the industry down, not merely to impose higher safety standards.”

The Sierra Club isn’t alone. Earthworks’ Jennifer Krill last year:

“Every dollar spent on new natural gas wells, pipelines, processing and infrastructure does not bring us closer to wind, solar, and energy efficiency.”

Gasland Director Josh Fox:

“What’s really happening here is not a battle between natural gas and coal. What’s happening here is a battle between another dirty fossil fuel and renewable energy.”

Again, the thing to note in the natural gas discussion is who’s being reasonable and who’s being extreme. API Director of Upstream and Industry Operations Erik Milito on the IEA report:

“The shale revolution is changing the face of American energy development, adding billions in state and federal revenue and reducing our trade deficit.  … The release of this draft report offers an opportunity for global conversation on the best ways to continue responsible and efficient development of energy from shale.”