Shell Invites Tougher Regulation on Fracking
Marvin Odum, the president of Shell Oil, made a revealing and insightful observation at the "Shell 2011 Energy Summit" last week in Houston.
"You are only as good as the worst operator in your industry," he said.
Odlum was talking about hydraulic fracturing, the controversial technology involved in shale gas drilling.
Shell says that it wants strong regulation of hydraulic fracturing, often referred to as hydrofracking or fracking.
To head off the criticism and clean up the highly-fragmented natural gas drilling industry, the company says it will monitor its own wells carefully and disclose the chemicals it uses in its fracking fluids.
The goal, it appears, is to engage with critics and demonstrate to them that when well managed, fracking has benefits that far outweigh any harm.
"There is no doubt in my mind that (fracking) can be done in the right way," Odum said. He says the way to demonstrate that is to engage with critics and regulators. "The industry has completely missed the boat on not being more transparent," he said.
Still, the shale gas industry in the United States remains fragmented, including many “mom-and-pop operators, “ as well as big public companies, such as Chesapeake Energy and Encana. As a result, there are wide disparities in how gas drillers operate, monitor their wells and engage with local communities.
"We have to take steps to drive the industry as a whole to the right level," Odum says.
Shell and Odum have come to recognize that in order to succeed, particularly in sensitive geographies, they need to win over the hearts and minds of people in the communities where they want to operate.
The proof of Shell's intentions will come when it releases a set of principles for fracking regulation, which it intends to do in a few months.
Odum and Russ Ford, an executive vice president who oversees gas exploration and production, say that the company will support disclosure of fracking fluids, baseline testing and then monitoring of water supplies during drilling operations, and the control and monitoring of so-called fugitive emissions such as methane, a potent greenhouse gas.
Shell will also set a goal of 100 percent recycling of all water used in fracking, and when it can't meet that goal, it will explain why.
Source: Greenbiz.com