As shale gas development has boomed over the past decade and public concern about its safety has swelled, both regulatory agencies and operating companies have accelerated their efforts to improve environmental safety.
This month’s column is only a small sampling of the evolution of best practices, voluntary compliance, self-certification and regulation.
One noteworthy trend is government incorporation of best practices and self-compliance techniques into government regulations.
Best practices are not new. In fact, the American Petroleum Institute (API) has been developing standards for safe and efficient oil and natural gas operations since 1924 – and their standards cover hundreds of upstream to downstream technologies and procedures.
Two state-based organizations are leading the effort to improve the environmental safety of oil and gas development through voluntary disclosure of hydraulic fracturing fluid chemicals, using FracFocus, and a new initiative to improve state regulation, States First.
- The Interstate Oil and Gas Compact Commission (IOGCC), an association of thegovernors of oil producing states, chartered in 1935 to regulate the oil and natural gas idustry.
- The Ground Water Protection Council (GWPC), an association of state ground water regulatory agencies, was chartered in 1983 to ensure use of best practices and fair but effective ground water protection laws.
FracFocus, a joint effort of the IOGCC and GWPC, provides the public access to reported chemicals used for hydraulic fracturing, and provides objective information on hydraulic fracturing, the chemicals used and the means by which groundwater is protected.
The FracFocus website, launched in 2011, includes over 50,000 registered well sites.
Twelve states now use FracFocus as a means of official state chemical disclosure, and seven other states are in the process of rulemaking to adopt the site – thus, best practices become regulations.
The first phase of the IOGCC States First initiative will focus on increasing state oil and gas regulatory coordination, including:
- Establishing underground injection control guidelines.
- Developing state inspector certification classes.
- Expanding the Risk Based Data Management System (RBDMS).
RBDMS is used by 23 oil and gas regulatory programs, for managing and analyzing oil and gas program data, and water resources management. The web-based system provides information about well locations, permitting and production to industry owners and the public.
Under the States First initiative, RBDMS will be integrated with FracFocus.
In the area of self-certification, the Center for Sustainable Shale Development is developing a voluntary system for third-party certification of compliance with rigorous performance standards.
The Center is a collaboration of environmental organizations, philanthropic organizations and energy companies in the Appalachian basin. Initially the organization has established 15 performance standards in the areas of air emissions and groundwater protection.
The procedures for third party auditing are being developed.
Natural Gas STAR is another voluntary program in which companies that commit to adopt proven, cost-effective technologies that reduce methane emissions are recognized by the Environmental Protection Agency (EPA).
Recommended technologies cover all sectors of the industry, from exploration and production through gathering, processing, transmissions and distribution of natural gas.
One technology, reduced-emissions completions, or green-completions, captures oil and natural gas that is co-produced with the fluids flowing back after hydraulic fracturing, significantly reducing gas flaring.
This technology is cost-effective in many reservoirs, but is complex and evidently expensive to implement in low-pressure reservoirs.
Reduced-emissions completions are another example of a voluntary activity that is now required by regulation – Wyoming and Colorado already require green completions, and the EPA issued air regulations in 2012 that require reduced-emissions completion by 2015.
As evidence of the growing trend for best practices to be adopted as regulations, API reports that 200 of its standards are cited in state regulations and 100 are cited in federal regulations.
The Bureau of Land Management’s (BLM) plan to regulate hydraulic fracturing on federal lands is an example of the influence of industry best practices on regulation. In fact, BLM praised the sophisticated and effective oversight of state regulators and sought consistency with API standards.
The initial (2012) draft of BLM’s proposed hydraulic fracturing rules included a requirement to submit a cement bond log before hydraulic fracturing, and required publication of hydraulic-fracturing fluid chemistry.
After thousands of comments were submitted, BLM revised its proposed rules to ones that more closely mirror – industry would say needlessly duplicate – industry best practices.
The revised draft rules allow an expanded set of cement evaluation tools for demonstrating well bore integrity for “type wells,” or wells that exemplify many wells in an area. Other wells would be subject to monitoring of cementing operations.
The revised rules are generally consistent with the API technical report on “Cement Sheath Evaluation,” which observes that a cement bond log is only one of several evaluation tools that should be used in connection with other well and cement data to evaluate zonal isolation.
In addition, the BLM draft rules also would use FracFocus, the industry standard for disclosure of chemicals used in hydraulic fracturing.
But this is not the end of the story. The comment period for the proposed rules ended Aug. 25, and BLM has reported that it received over one million comments, enough to require months of analysis and probably lead to additional modifications in the draft rule.
It should be noted that government adoption of some industry best practices does not address industry concerns about some other regulations that complicate or conflict with industry best practices.
The major industry and state complaint is the imposition of an additional layer of federal regulations on top of state regulations.
API commented that the BLM “… proposed rule on hydraulic fracturing would impose an added regulatory layer that would be costly and provide little or no environmental or safety benefit.”