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Monday, December 30, 2013
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The Fractured State of Shale Gas Development Regulation

By Guest Author, Eric Ellman, Comm. Dir., Yale Climate and Energy Institute
 
Five years into a prolonged recession the economic benefits of shale gas development are compelling.  American shale gas reserves have buoyed the U.S. economy, reduced reliance on foreign oil and helped reduce greenhouse gas emissions. In 2012 alone shale gas and tight oil put $74BB into state and federal coffers and created 2.1 million jobs.(1) A broad-based shift from coal to natural gas has had the unforeseen effect of allowing the United States to reduce its CO2 emissions to Kyoto Protocol levels without even being party to the convention.(2)
 
At the local level, however, the potential negatives associated with development are less clear.  Lacking that clarity, and without federal or state regulations to control the many adverse local impacts ranging from depleted groundwater to contamination, deteriorated roads and rising crime,(3) communities have responded the only way they know how, by passing moratoriums on development of the resource.  And because local ability to use police and zoning laws originates with the State, there is a constant fear that courts will preempt the local action, allowing development to proceed and disregarding local concerns.
 
[The recent] 12th annual Land Use and Sustainable Development conference at Pace Law School included a YCEI-sponsored panel discussion developed with Yale Center for Law and Environmental Policy (YCELP) students and staff.  YCELP identified 36 potential local impacts from gas shale development identified by communities around the nation not addressed by higher levels of government.  The list and the workshop were intended to help communities develop planning and regulatory practices that protect them while allowing safe development of what could be a critical bridge fuel that lets the world meet its energy needs while minimizing atmospheric build-up of carbon dioxide.
 
At a pre-panel workshop to discuss that challenge, conference organizer Professor John Nolon suggested an ideal outcome: a model ordinance that financially strapped communities could use as the basis for safe and reasonable regulation, protecting them from impacts that are beyond the scope of state and federal regulations.
 
“A model ordinance would have made my job a lot easier,” responded panelist Stephen Ross, County Attorney from Santa Fe, New Mexico, where residents had urged a moratorium to prohibit fracking in the scenic Galisteo Basis.  Now the framework for drilling in Santa Fe County is established, and both residents and drillers know what to expect.  For some, the new law is effectively the same as a ban:  The company whose plans to drill had prompted passage of the Santa Fe Land and Gas Amendment to the Santa Fe County Land Development Code chose to explore for oil and gas elsewhere. For others the law may create new opportunities.
 
Santa Fe was enjoying the benefit of a strong economy at the time of their skirmish over hydrocarbons.  That’s not the case in New York towns that could be the scene of a land rush if and when the state lifts its fracking moratorium.  “Many local governments have limited professional staff, few resources”, was a common refrain among participants.  Consequently, it’s easy to imagine small communities embracing fracking when they see it’s near-term benefits.  While it’s not a universal refrain, Dan Raimi, a researcher with Duke University’s Energy Initiative quotes a local official telling him, “I wish we had a well on every road because the roads are so much better.”
 
That echoes the experience of Joe Greenberg, co-founder with Todd Mitchell of Alta Resources, one of the first companies to find the sweet spots of key shales including the Marcellus and applied good engineering and hydraulic fracturing to develop them.  In Joe’s experience, it’s communities that don’t stand to benefit where opposition is strongest.  Those likely to benefit from the resource, and those in states like Oklahoma and Texas where drilling is part of life’s fabric, are least likely to have objections and most likely to have an efficient and centralized regulatory structure.
 
Others are less sanguine.  Cornell Professor Susan Christopherson cited her survey showing that 67% of New York residents had low to no confidence that New York State officials will protect the economic and social stability of their communities.(4)  Kate Hudson, Watershed Manager for River Keeper, a non-profit dedicated to safeguarding the Hudson River and its tributaries, is concerned about the nation’s distribution network for gas shale products.  Albany, New York has already become a major transshipment center for trains carrying North Dakota’s Bakken oil to refineries on the Eastern Seaboard.  Last December the Stenna Primorsk, an oil tanker carrying about the same 12,000,000 gallons of crude as the Exxon Valdez, ran aground en route to its destination of New Brunswick, Canada.  Thanks to the double-hull design that became a requirement after the Valdez spill, no oil escaped.  But, says Hudson, the accident revealed that despite the surge in tanker traffic no emergency management plan for responding to such an event on the Hudson currently exists.(5)
 
Panelist Jim Saiers, a Yale University hydrologist and expert on fracking offered the opinion that the most frequently vocalized concerns about water quality impacts from hydraulic fracturing can be addressed by appropriate regulations such as those conference organizers envision.  A bigger question, he suggested, relates to the potential escape of methane, an even more powerful greenhouse gas than CO2, during the drilling and production process.
 
A recent study published in the Proceedings of the National Academy of Sciences summarizing data from 12,700 atmospheric samples collected over the United States in 2007-08 found methane levels 1.5 times higher than previously assumed by the EPA.(6)  Levels over Texas and Oklahoma were up to 2.7 times higher with livestock and the oil and gas industry identified as primary contributors. Five years later, however, a joint study by the Environmental Defense Fund and the University of Texas indicates that companies following proposed new EPA “green completion” strategies reduce methane escape from natural gas wells by up to 99%.(7) 
 
Successful reduction of fugitive methane – critical to capitalizing on natural gas’s potential to satisfy energy demands with minimum contributions to greenhouse warming – is an example of how good regulations can reconcile the needs of the nation with local concerns.  With climate change an issue for every community, a comprehensive model ordinance to help regulate gas shale development might include measures to assure compliance with methane management too.
 
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1.     America’s Unexpected Jobs Boom.  Daniel Yergin.  http://features.blogs.fortune.cnn.com/2013/09/05/energy-us-jobs/
 
2.     Rise in U.S. gas production fuels unexpected plunge in emissions. http://online.wsj.com/news/articles/SB10001424127887324763404578430751849503848.
 
3.     Controlling the local impacts of hydrofracking. Facilitated Discussion Outline. Yale Center for Law and Environmental Policy
 
4.     Confronting an uncertain future.  How US communities are responding to shale gas and oil development.  Susan Christopherson and Ned Righter.  National Agricultural and Rural Development Policy Center Brief 18, November 2013
 
5.     Kate Hudson, personal communication
 
6.     Emissions of methane in US exceed estimates study finds.  Michael Wines.  New York Times. November 11, 2013.
 
7.     Study delivers good, bad news on climate impacting methane gas. Lisa Song and Jim Harris.  Center for Public Integrity.  September 13, 2013.
Posted in: Environmental Law & GovernanceEnergy & Climate

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