On Wednesday, January 23, Mark Boling, President of V+ Development Solutions, a division of Southwestern Energy Company, kicked off the spring line-up of our 2012-2013 Policy Workshop Webinar Series on Emerging Issues in Shale Gas Development with a presentation on “Balancing Environmental, Social and Economic Impacts of Shale Gas Development Activities.”
In his presentation, Mr. Boling provided both a defense for continued shale gas development and an acknowledgment that the gas industry needs to do a better job, on the whole, of acknowledging and addressing legitimate environmental concerns. Toward this end, he discussed Southwestern’s efforts to: (1) study the rate of methane leakage from shale gas wells in collaboration with the Environmental Defense Fund (EDF) and others (their final report is due out soon); (2) work with EDF to develop and promote a model regulatory framework for states to ensure proper well integrity; (3) develop improved well cementing technology with the University of Houston and CSI Technologies; (4) with help from The Nature Conservancy, train employees and contractors to reduce erosion and sedimentation impacts from project sites; and (5) develop new tracer technology with Rice University to help detect hydraulic fracturing fluids if they migrate into groundwater.
You can watch Mr. Boling’s full presentation below, in which he further discusses Southwestern’s views on the shale gas debate and the company’s vision of environmental responsibility and regulation.
In listening to Mr. Boling’s presentation and his responses during the subsequent Q&A, three things struck me as particularly important issues for regulatory discussions:
(1) “A Level Playing Field” – Mr. Boling noted that Southwestern strongly supports adoption of the model regulatory framework that it has developed with EDF. But he also stressed the need for a level playing field, suggesting that even companies interested in doing “the right thing” may hesitate to implement best environmental practices if doing so makes them less competitive. Companies may not always seek the lowest denominator – Mr. Boling noted that many implement best practices that go beyond regulatory minimums – but without effective regulatory safeguards, economic pressures will make it difficult if not impossible to address environmental concerns fully, even with good actors.
(2) “Straight Talk” About Regulations – In discussing what he sees as a need to “refocus the debate,” Mr. Boling recommended that his industry spend less time trying to minimize public concerns and more time communicating about the real risks involved in shale gas development and what the industry is doing to mitigate these risks. For example, during the Q&A, Mr. Boling noted that he has split with those in his industry who argue that “green completions,” which help reduce or eliminate air pollutant emissions from new shale gas wells, are too costly. New regulations adopted by the U.S. Environmental Protection Agency (EPA) last year will require green completions of all new hydraulically fractured wells by the year 2015, though Southwestern has begun this process early by participating in EPA’s Natural Gas STAR Program. Mr. Boling noted that a few years ago, green completions cost his company $20,000 more per well than simply venting pollutants to the air, but these costs have since fallen significantly, and now green completions are often profitable investments because they capture natural gas that can be sold rather than wasted. Notably, these economic benefits are purely private and do not take into account the additional public benefits that arise from reduced air and climate pollution.
Companies such as Southwestern deserve credit for leading environmentally through the Natural Gas STAR Program and other such initiatives. Southwestern’s experience also reinforces the observation that the costs of regulatory compliance are often much less than originally anticipated as new technologies and solutions develop or become cheaper to implement over time (see, e.g., here, here, and here).
(3) Politics and Science – Mr. Boling lamented what he sees as too much politics in shale gas regulation and not enough regulation based on sound science and risk assessments. The goal of science-based (or scientifically informed) regulation is a good one, and it is true that some parties on both sides of the shale gas debate have stretched the science too far in support of their agendas. As more research is published – including studies involving Southwestern – these data will hopefully contribute to an improved public understanding of shale gas’ environmental risks and impacts as well as its potential benefits.
But it is also true that science cannot, on its own, determine the best regulatory approach when faced with uncertainty or questions of socially acceptable levels of risk. Decisions about whether to move forward with resource development or to wait for science (and policy) to catch up to practice are inherently political, and thus politics will continue to play a role in determining how shale gas fits into the future energy mix.
In the context of climate change, for example, it is indisputable, scientifically, that burning fossil fuels, including shale gas, contributes to a warming planet. Yet there is a debate as to whether shale gas will exacerbate this warming in the long run or instead help reduce the total warming by helping transition us away from coal and, eventually, to carbon-free energy. Ultimately, the outcome of political decisions about energy investments and environmental risks will determine whether the former or the latter is true. Sound science, including climate science, must be a key component of these decisions, but resource outcomes and policies are rarely pure questions of scientific fact. Politics will play a role.
Next Time in Emerging Issues in Shale Gas Development
The Emerging Issues in Shale Gas Development webinar series will continue on Tuesday, February 12, from 2-3pm EST with a presentation by Jeffrey Logan from the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) on “The Role of Natural Gas in U.S. Electric Power Futures.” Mr. Logan will present research from a report he recently co-authored through the Joint Institute for Strategic Energy Analysis, an initiative between NREL, the University of Colorado-Boulder, the Colorado School of Mines, Colorado State, M.I.T., and Stanford.
To register for this webinar, please click here. As always, the webinar will be free and open to the public, but registration is required to participate.