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Why Shale Gas Needs Better Regulation

by Michael Levi
July 18, 2011

I’ve been pretty consistent in defending shale gas from some of its most vocal opponents. But that doesn’t mean I think that the shale gas industry is all roses. In a new essay for The New Republic, I observe that the industry is increasingly losing public confidence, not only to its own harm but also to the detriment of the public interest. Why? As I put it in the article, “The problem with the attacks on shale gas isn’t that the gas producers need our sympathy; it’s that we’re in need of their product.”

What, then, to do? Industry has increasingly been waking up to public antagonism, but its response has focused mainly on p.r. Talk, however, is cheap. I argue in the piece that if industry want to recapture the high ground, it’s going to need to embrace some unpleasant regulation:

“Many of the attacks have been unfair—but their impact is real. The burden now falls on the shale industry to restore the public’s confidence. Rather than denying or bemoaning their woes, shale gas producers should be calling for firm but sensible oversight of their activities, both at the state and the federal level.”

I go on at some length to describe what a sensible mix of federal and state regulation might look like. I’m skeptical that the federal government can do a great job in an industry that varies greatly from state to state, so I call for a mix of federal minimum standards and robust state implementation, along with federal capacity building for state and local authorities. My recommendations focus on well casing and wastewater disposal; in retrospect, I’d have added air quality near drilling sites to my list of areas for concern.

Industry is obviously diverse: there are good guys and not so good ones. I know that some people in the business (usually the good ones) will use that to defend themselves against criticism. But the reality is that public opinion lumps them together; the only way to bring the bad guys up to scratch is to make good behavior mandatory.

In any case, please do take a look at the essay, and let me know what you think.

P.S. If you haven’t seen the New York Times public editor’s excoriation of the paper’s recent shale gas reporting, take a look: the critique is fair yet devastating. Then, if you want your head to explode, read the article editors’ response. Apparently, some at the Times believe that there’s no such thing as an energy expert who hasn’t been captured by industry or its opponents. Worse, if there indeed are people who don’t buy either side’s hype, it does a “disservice” to readers (their words, not mine) to present those peoples’ views. Amazing.

Post a Comment 2 Comments

  • Posted by Jack Rivkin

    The industry is its own worst enemy. In general, it wants no additional regulation and is fighting it through attacks on the messengers and becoming a “good citizen.” The ANGA has replaced Altria as a big supporter of NPR. There is limited acknowledgement of some of the substantial risks of the current approaches much less the approaches that will be required to release the full reserves from some of these formations. Two points:1) If there is really no risk to the New York City and other watersheds as the ANGA and the Marcellus Coalition state, there should be no problem putting up a $50 Billion bond to cover the cost of a new system to produce the Billion gallons of water a day that New York City now gets with limited treatment, if, or more likely when, it becomes apparent the water is being affected. 2) Let’s recognize that gas is still a carbon-based fuel. The argument that it produces less carbon than coal is specious in the context of the CO2 problem we are confronting. I could go on but probably best to save it for my own blog.

  • Posted by William Blanchard

    You don’t have to use water to Frack, and this method gets the well into production faster with much less methane emissions and truck traffic. Proven extensively in Canada, and building this year in the US:

    http://www.gasfrac.com/presentations/GASFRACInvestorPresentationJune2011.pdf

    I own some, so am not unbiased, but I’m excited about the problems the company addresses and the opportunities production of both Oil and Nat Gas bring to our country in terms of employment and reduced energy dependence and improved air quality over coal.

    Totally agree with the casing regulation piece of the article. Stop whining and get on with it!

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