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fluid situation

Question for the shale industry: do you want to frack or not?

A US industry-environmental coalition says it has established a gold standard for safety and transparency in shale gas drilling, which has triggered public protests on both sides of the Atlantic. Bad actors will be shunned, the group suggests, when communities insist on its seal of approval before green lighting a drilling project. The coalition, comprised of top-tier players including Chevron, Shell, the Environmental Defense Fund and the Clean Air Task Force, has understood a basic calculus—the right to produce shale gas and oil is far more valuable than any perceived reward for sticking to your guns.

Only, it hasn’t. While the initiative, announced Mar. 21, goes some distance toward easing worries about hydraulic fracturing (or “fracking,” as it’s commonly known), the method used to drill shale gas and oil, it misses what should be the key point: transparency. If this were oncology, we would be hearing the terrific news that part of the tumor was removed, and an admonition to ignore the rest.

The initiative demonstrates again both the industry’s continued inability to fully confront the main challenges of fracking, and the environmental sector’s amateurism. The plan shows that neither group has truly come to grips with the stakes of failure: that the widely expected energy, economic and geopolitical revolution could be seriously stunted.

Ignore the noise and look around you

The first thing to do is to disregard ideologically driven extremists on both sides. That would include, for the environmentalists, the Sierra Club, which after the coalition announcement railed yet again against “our continued reliance on dirty, dangerous fossil fuels.” For the industry, it would be the American Petroleum Institute, the industry’s leading lobbying group, which suggested that it can take care of standards-setting, and does not require outsiders’ help.

Next, take a look around the world. On April 4, Romanians protested fracking plans by Chevron. The parliament in Spain’s Cantabria region expects to vote April 8 to suspend fracking. Opposition continues in the UK, not to mention around the US.

In other words, the shale drilling industry is under serious fire. People worry about groundwater, earthquakes, air pollution and a general feeling of unease. If they wish to realize shale’s potential, as we heard in a March 25 speech by Maria Van der Hoeven, director of the International Energy Agency, drillers must address “legitimate public concerns [about] environmental and social impacts” of their activities.

This is not news to the industry. When you meet an oilman over a beer, he will tell you that a few bad eggs are spoiling everything, and that federal action is the only way to break the industry’s penchant for standing shoulder to shoulder regardless of the merits of the fight. That’s right—notwithstanding the full-throated industry protest of regulation from Washington, the major players actually hope for federal regulation that would force best practices. It’s just that they resist saying so publicly for fear of the censure of their peers.

Almost transparent doesn’t work

When you are secretive, you create distrust. In the case of the fracking, suspicion arises from the industry’s reluctance to fully disclose what it is putting down the well in the form of drilling and fracking fluids—specifically, whether these concoctions contain toxins that could poison groundwater. The industry’s reasoning in only partial disclosure is defense of its trade secrets. Since an oil service company’s bottom line depends in part on fractional formulaic differences in the products it uses and sells, keeping these secrets means protecting its seed corn, in some cases perhaps hiding that its ingredients aren’t all that special.

So what you get is almost full disclosure at websites like fracfocus.org, which the industry routinely cites as its answer to calls for transparency. In the case of the new coalition announced last month, when there is an issue of trade secrecy, its Performance Standard No. 7 pledges to disclose the family name of a chemical. But Deborah Gordon of the Carnegie Endowment, a former chemical engineer at Chevron, says that is not sufficient—chemicals within the same family can have very different qualities. For instance, two aldehydes are used in fracking—acetaldehyde (a corrosion inhibitor that is listed as a probable carcinogen) and glutaraldehyde (a biocide that is regarded as not carcinogenic.) “Beyond carcinogenicity, aldehydes are just one example that there can be very different properties and acute health impacts from chemicals within the same chemical class,” Gordon told me.

I spoke with Andrew Place, who is an officer at a drilling company called EQT and leads the coalition. Place said that when a trade-protected additive is considered toxic, its ingredients, and not just its family name, will be disclosed on the coalition’s website. But this requirement–that toxic ingredients be listed even if they are a trade secret–has so far not been published anywhere as far as I can tell. On March 31, Place said he would check back with the rest of the coalition to make sure he understands the trade-secret provision correctly. As of Friday, April 5—Place was unable to confirm his reading of the rules.

In fracking, trade secrets create suspicions

Meanwhile, moderate environmentalists have too easily bought into the almost-transparent block. Matt Watson, who works on the issue for the Environmental Defense Fund, noted that companies already disclose fracking fluid ingredients that are “nasty.” He said that a high bar should be raised to prevent abuse of the trade secrets claim, but that “we recognize the validity of protecting legitimate trade secrets.” 

But even with that caveat, Watson misses the point. It is this: Is it more valuable to be able to frack, or maintain a trade secret in drilling fluids? Unless there is full disclosure, a segment of the public is going to remain suspicious, even if there is nothing in the fluid to be suspicious about.

My impression is that some of the coalition’s leadership knows where it should go. But until they are prepared to take the steps necessary to get there, part of the tumor remains.

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