The US exploration and production industry must hold itself up to the highest environmental standards -- even going beyond what is required by regulators -- to gain the public confidence that's needed to exploit highly prospective oil and gas plays such as the Marcellus Shale, a Range Resources executive said in San Francisco Tuesday.
"We can no longer just say 'Tell me what the rules are, I'll do that.' ... You've got to do things above and beyond the way it used to be. Eventually regulation will pull itself up to that level and we'll raise the bar," said Range Senior Vice President Ray Walker.
Speaking to investment analysts at the Independent Petroleum Association of America's Oil and Gas Investment Symposium, Walker said the E&P industry needs to listen to the concerns of the public, especially in regions of the country that have had little recent history of oil and gas development, such as the Marcellus Shale in the US Northeast.
"Pennsylvania is the prime example and Marcellus is ground zero for all of this," he said.
Walker said many in Pennsylvania are apprehensive about gas development coming into their area, particularly in light of some incidents of groundwater contamination that were the resulting of an operator's faulty well construction.
"I don't know if we'll ever fix what happened in the state. The scars are probably there forever. But what I think that you're seeing now is there is a proliferation of best practices going across the whole industry," he said.
Walker pointed to efforts of industry groups such as the National Petroleum Council, the Ground Water Protection Council, America's Natural Gas Alliance and the Marcellus Shale Coalition to engage the public in a wide-ranging discussion of the all of the implications of natural gas drilling in their community.
"There're a lot of credible groups out there. I think industry on a whole has recognized that we've got to build credibility with the public. And for industry to be internally focused and to say 'this is the right answer,' and to try to get everybody to go along with that, we know that's not going to work," he said.
"We're looking at efforts to bring in diverse stakeholders, regulatory agencies, [non-governmental organizations], environmentalist groups, conservation groups," Walker said.
He added that too often the dialog becomes a debate pitting the most extreme elements of the environmental and industry communities against one another.
"We tend to let our focus be on the fringe elements of the argument on both sides and they are certainly the vocal people," he said.
"There are people on our side of the business that are on the fringe and they want free rein to do whatever they want to do because 'it's always been done this way and I don't have to answer to those people because they're ridiculous,' " Walker added.
"Unfortunately, the press talks to people on the fringe because that's the story, that's what makes the 'Gasland' movie," he said. "Most people are reasonable if you just show them that you're willing to talk to them, 90% of us will agree on 90% of what we're talking about."
He said Range Resources is taking a leading role in promoting environmental stewardship as it develops is properties in the Marcellus Shale play.
Walker added that the company has pioneered efforts to recycle the water used in hydraulic fracturing operations and has worked to institute stronger well construction standards. In addition, Range was "the first company to fully disclose all the ingredients used in frack jobs," he said.
Since Range began publishing on its web site the chemicals used in its hydraulic fracturing fluids other operators have followed suit and made voluntary disclosures.
In addition, the FracFocus web site was established, creating a repository where E&P companies can post their fracking fluid ingredients. Several producing states also have promulgated rules requiring some level of frack fluid disclosure.
"So the real question over the next short amount of time -- six months to a year -- is are we going to get behind one of these efforts, whether it's ANGA's effort or National Petroleum Council's efforts, whichever one it's going to be, and start addressing best practices?" Walker said.
"There's a lot of that education that will take place and right now I think we will hit that and begin to move the needle. I think that we intend to stay plugged into this because what we have learned is that it will impact your bottom line in a big way." he said.
