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Industry, environmental group working on shale gas drilling rules

Michael Giberson's picture
Center for Energy Commerce, Rawls College of Business, Texas Tech University

Dr. Michael Giberson is an instructor with the Center for Energy Commerce in the Rawls College of Business at Texas Tech University. Formerly, he was an economist with Potomac Economics, Ltd., a...

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  • Nov 3, 2010

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The Environmental Defense Fund’s Scott Anderson and Southwestern Energy EVP Mark Boling have been working together on proposed environmental rules to govern the use of hydraulic fracturing, a key technique in the development of shale gas resources.

The Houston Chronicle reports:

Energy companies and environmental groups have more often been adversaries than allies when it comes to hydraulic fracturing, the drilling technique used to unlock natural gas from shale rock nationwide.

But a handful of gas producers and environmental advocates are striving to change that dynamic by collaborating on a plan to step up the safety and regulation of hydraulic fracturing.

Now regulated at the state level, the technique involves injecting fluids deep underground and at high pressure to break up shale rock and produce natural gas.

In New York, Pennsylvania and other states with promising shale formations, the industry has faced off with environmentalists who worry that natural gas or the liquids known as “fracking fluids” can contaminate nearby groundwater supplies.

When a segment of the industry joins in political purpose with groups that have traditionally been opposed to industry, the savvy political economist suspects a “Bootlegger and Baptist” coalition in the making.  Maybe it is an effort to raise rival’s costs or otherwise advance the interests of one segment of the industry at the expense of the rest.

In this case I don’t think so.  The focus is primarily on technical issues involved in drilling and well integrity issues.  It is a relatively easy topic for the industry to work on, since the environmental risks are already minimal when wells are well done.  Companies that expect to do good work on their own wells don’t want to see the industry’s reputation spoiled by sloppier operators.

Yes, regulation to ensure a certain level of operating standards would raise the costs of low-budget operators more than the rest of the industry.  But the overall impact of developing reasonable regulations may be a reduced likelihood of burdensome regulations in the future and any reduction in generalized environmental concerns surrounding shale gas will likely expand the industry’s access to undeveloped resources.  Consumers will benefit from this strange-bedfellows coalition.

See also, this E&ETV video interview on fracking issues with EDF’s Scott Anderson:

EDF's Scott Anderson interviewed for E&ETV

EDF’s Scott Anderson interviewed for E&ETV

And don’t miss the National Geographic spread on shale gas development in Pennsylvania.

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