Energy Ink

Two steps forward, three steps back in shale gas debate

Progressive regulatory steps made amid widespread concern

September 18, 2011

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It’s always struck me as odd that descriptions of the oil and gas industry tend to lump all operators in together, these days more often than not under the heading of environmental laggards. This is strange, as we rarely describe other industries this way.

We distinguish Ford from Chrysler, for example. Why not Exxon from BP, or Encana from Chesapeake? Canada from the U.S.? Each company has markedly different approaches to health, safety and the environment, just as both countries police the industry with varying degrees of success. It seems misleading, then, to say all shale drillers are nefarious, although the tendency is understandable (See former Chevron vice-chairman Peter Robertson’s comments here).

I encountered the inclination during a recent half-hour spot on Sean Holman’s Public Eye Radio program in Victoria, B.C. Richard Garrett, an advocate with the Wyoming Outdoor Council, provided some thoughtful feedback on the state’s experience with public disclosure of chemicals used by drillers. It was an engaging interview, but it failed to address, in full, the differences both within and between states’ regulatory systems.

Michael Binnion, president and chief executive of Questerre Energy Corp., whose firm has been stymied by fierce opposition in Quebec, has been a vocal critic of allegations made against the shale industry. He put it to me this way, using the open-air pits used by companies to store hazardous drilling byproducts as an example:

There’s a lot more inconsistency in regulation in America. Just as one example, I think it’s only in the last two years that New Mexico requires people to line their pits, so for some period of time they were holding their frac water in unlined pits. You can see that’s a faulty process.

He went on:

In Canada we’ve got a lot more consistency. With Saskatchewan, Alberta and B.C. right next to each other, for the most part there’s a lot of demand for regulations to be the same or similar, because you’ve got rig crews moving between provinces and you don’t want the rules to dramatically change from province to province.

We’ve seen some progressive regulatory steps here in the last month related to the prickly issue of disclosure. Perhaps sensing the issue could get away from them, the Canadian Association of Petroleum Producers issued a new series of “guiding principles” for hydraulic fracturing, one of which requires drillers to voluntarily disclose the contents of additives used in the process. The B.C. government has indicated it will follow suit. It will be interesting to watch reaction to these measures unfold. Hopefully the finer points aren’t lost in the wash.

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