SHALE SO­JOURN

Key lessons for In­dia from the heart of the shale gas revo­lu­tion in the US

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Shale gas has trans­formed the energy dy­nam­ics of the world, but it has also po­larised it.To some, it is a mir­a­cle source of energy that is good for cli­mate as well as for public health.To oth­ers, it is just another dirty fos­sil fuel that must be stopped.The bat­tle­ground for this de­bate is the US, which is go­ing through a shale gas revo­lu­tion.It has put the US, a ma­jor im­porter of gas not-so-long ago, on the verge of ex­port­ing it.The price of gas in the US is at a his­tor­i­cally low level. Ev­ery coun­try now wants to em­u­late the US. In­dia too has an­nounced a shale gas pol­icy.But what does shale gas de­vel­op­ment in In­dia en­tail? What would be the pros and cons? Should In­dia em­brace shale gas or ban it? CHAN­DRA BHUSHAN trav­els to the heart of the shale gas revo­lu­tion in the US to find an­swers. The pic­ture that emerges is not so black and white

Bhow Dick OONDOGGLE. THAT'S Martin ex­plained to me the shale gas revo­lu­tion in the United States of Amer­ica. Boon­dog­gle is a slang for an ac­tiv­ity that is waste­ful or point­less but gives the ap­pear­ance of hav­ing value. Martin, a 70 years old US Army vet­eran, works with Penn­syl­va­nia For­est Coali­tion that is rais­ing the aware­ness of peo­ple about the neg­a­tive im­pacts of shale gas drilling in forests. Martin was driv­ing me to Loy­al­sock State For­est, about 300 km from Pittsburgh, where shale gas is be­ing de­vel­oped on a mas­sive scale.

Penn­syl­va­nia’s history has been filled with nat­u­ral re­sources booms and busts. Tim­ber was the first re­source to be ex­tracted.It dev­as­tated the forests.The first large-scale coal mines of the US were opened in Penn­syl­va­nia.The first oil wells were drilled there.The US’ first nu­clear power plant opened there.The worst com­mer­cial nu­clear ac­ci­dent oc­curred in Penn­syl­va­nia in 1979. Dur­ing all these re­source booms, in­dus­try made money and then walked away. It is es­ti­mated that the state has more than 200,000 ex­hausted gas and oil wells which com­pa­nies have aban­doned with­out plug­ging. In be­tween these booms and busts, this largely agri­cul­tural state has strug­gled eco­nom­i­cally. Shale gas is the new­est nat­u­ral re­source that the state has put its eyes on.

Penn­syl­va­nia is at the heart of the shale gas de­vel­op­ment in the US. It sits above three for­ma­tions of shale, named Mar­cel­lus, Devo­nian and Utica, which con­tain some of the world’s largest shale gas re­serves. The cur­rent proven re­serve is es­ti­mated to be 44 tril­lion cu­bic feet (tcf ), which is sim­i­lar to nat­u­ral gas re­serves in In­dia. But un­like In­dia, ev­ery year Penn­syl­va­nia’s re­serves are be­ing re­vised up­wardly.

It was in the late 1990s that tech­niques to eco­nom­i­cally ex­tract the gas from shale for­ma­tions were de­vel­oped. In mid-2000, the po­lit­i­cal es­tab­lish­ment in Penn­syl­va­nia saw shale gas as a way to gen­er­ate em­ploy­ment and boost lo­cal economies, and em­braced gas drilling like a mod­ern gold rush.The re­sults have been star­tling.

From 2005 till March 2014, per­mits were is­sued to drill 13,793 wells and 7,618 wells have been drilled. Pro­duc­tion of shale gas has soared from 1 bil­lion cu­bic feet in 2008 to 4.0 tcf in 2014.To give an idea of the scale, In­dia’s to­tal nat­u­ral gas out­put in 2013-14 was less than one-third of Penn­syl­va­nia’s and one-tenth of US shale gas pro­duc­tion.

Shale gas de­vel­op­ment in Penn­syl­va­nia started in state forests as the state gov­ern­ment opened huge public forest­land for it. Forests in Penn­syl­va­nia are also split es­tates in which the sub-sur­face min­eral rights are vested with pri­vate in­di­vid­u­als or com­pa­nies, while the sur­face rights are vested with the state.In these es--

tates, the gov­ern­ment can do noth­ing to stop shale gas drilling. As a re­sult, of the 890,000 hectares (ha) of state forests,n early 280,000 ha have been made avail­able for frack­ing and leases have been is­sued on 156,000 ha. Most of these are pri­vate leases. In the re­main­ing, how­ever, the state is mak­ing a lot of money as lease rent, taxes and roy­alty. But this money is com­ing at a huge eco­log­i­cal cost.

As Martin and I moved from one part of the Loy­al­sock State For­est to another, I saw how un­planned shale gas de­vel­op­ment was frag­ment­ing the for­est and dam­ag­ing the ecol­ogy. It re­sem­bled the Wild West. There is no plan and hardly any co­or­di­na­tion be­tween agen­cies. Com­pa­nies have drilled wher­ever it suited them. Each has sep­a­rate roads and pipe­lines to carry wa­ter and shale gas even in the same area. In­stead of trans­port­ing gas through pipe­lines in a pre­de­fined di­rec­tion—for in­stance, along the roads—gas is be­ing trans­ported in mul­ti­ple di­rec­tions. Such an ex­ten­sive frag­men­ta­tion could have dev­as­tat­ing im­pli­ca­tions for the for­est’s ecol­ogy, but I didn’t get a sense if peo­ple cared.And I un­der­stood why.

As I saw more shale gas pads, I also grew am­biva­lent to­wards shale. At ev­ery site a few hectares of for­est area was clear-cut and on a con­crete pad 6-12 wells were pro­duc­ing gas silently. No pol­lu­tion was vis­i­ble. A tank was col­lect­ing waste­water com­ing out of the wells.The sites looked much neater and cleaner than the con­ven­tional oil and gas wells I had seen in In­dia.

To a citizen of Penn­syl­va­nia an in­di­vid­ual shale gas site may not give any im­pres­sion of neg­a­tive en­vi­ron­men­tal im­pact. On top of it, shale drilling has bought down the prices of nat­u­ral gas to his­tor­i­cally low lev­els (see ‘Revo­lu­tion’). This is why I found that even Dick had no prob­lems with shale gas, only with the hap­haz­ard man­ner in which it was be­ing done.

But I soon re­alised that shale gas is dif­fer­ent. When Martin showed me the aerial shots of the for­est area, it struck me that a large num­ber of shale gas pads had been gouged in a very small area. This is in stark con­trast with con­ven­tional gas ex­trac­tion.

Shale con­ven­tional gas

Shale gas is less con­cen­trated than con­ven­tional de­posits.It is trapped in low per­me­abil­ity rocks that im­pede its flow, re­quir­ing more in­va­sive drilling and pro­duc­tion ac­tiv­i­ties. Whereas on­shore con­ven­tional fields might re­quire less than one well per 10 square kilo­me­tres (km2), shale fields might need more than 10.In ad­di­tion to the smaller re­cov­er­able hy­dro­car­bon con­tent per unit of land, shale gas de­vel­op­ment tends to ex­tend across a much larger ge­o­graphic area, thereby af­fect­ing a larger pop­u­la­tion. Mar­cel­lus Shale in the US, for ex­am­ple, cov­ers more than 250,000 km2, which is about 10 times the Hu­go­ton Nat­u­ral Gas Area in Kansas, the coun­try’s largest con­ven­tional gas-pro­duc­ing zone.

Another dif­fer­ence be­tween shale gas and con­ven­tional gas is hy­draulic frac­tur­ing or frack­ing. In this wa­ter mixed with chem­i­cals is pumped into the ground to cre­ate cracks in shale rock to re­lease the gas (see ‘abc of shale gas’, p28). While some of the con­ven­tional wells are also fracked to in­crease out­put, all shale wells must be fracked to re­lease gas. This means shale gas pro­duc­tion re­quires lots of wa­ter and chem­i­cals and, there­fore, gen­er­ates a lot more waste. Shale gas, there­fore, has a sub­stan­tially higher en­vi­ron­men­tal im­pact than con­ven­tional gas.

Wa­ter, waste and more

Com­pared to con­ven­tional gas, shale gas re­quires 2,000 to 10,000 times more wa­ter. A sin­gle shale well may re­quire a few thou­sands cu­bic me­tres (m3) to 20,000 m3 of wa­ter. Across the US, about 170 mil­lion m3 of wa­ter was used an­nu­ally to hy­drauli­cally frac­ture 25,00030,000 new wells. This is equiv­a­lent to pro­vid­ing 100 litres of wa­ter ev­ery day to about 4.5 mil­lion peo­ple. The vast ma­jor­ity of wa­ter used was fresh; only about 5 per cent was re­use of waste­water. In some of the coun­ties in the US, an­nual hy­draulic frac­tur­ing wa­ter use even ex­ceeded 50 per cent of the coun­ties’ to­tal wa­ter use. In wa­ter-scarce ar­eas, in­clud­ing shale gas basins like Cau­very and Damodar in In­dia, shale gas ex­trac­tion can have se­ri­ous en­vi­ron­men­tal and so­cial im­pacts. Wa­ter is the sin­gle most im­por­tant fac­tor for shale gas de­vel­op­ment any­where.

Frack­ing can pol­lute ground­wa­ter as well as rivers and streams. In the US, leaks and spills of chem­i­cals from frack­ing sites have been widely re­ported. More than 1,000 com­plaints of drink­ing wa­ter con­tam­i­na­tion due to frack­ing have been doc­u­mented.

A study by re­searchers at Duke Univer­sity found that the prox­im­ity of drink­ing wa­ter wells to frack--

"Wa­ter con­tam­i­na­tion with shale gas is an en­gi­neer­ing prob­lem and not a fore­gone con­clu­sion" -Scott Perry, Deputy sec­re­tary, Depart­ment of En­vi­ron­ment Pro­tec­tion, Penn­syl­va­nia

ing wells in­creases the risk of con­tam­i­na­tion of wa­ter with meth­ane in Penn­syl­va­nia. Faulty well casing was found to be the main cause. Well casing is the larger di­am­e­ter pipe that is in­serted in the bore­hole and kept in place with ce­ment. Be­cause of the high-pres­sure in­jec­tion, shale gas is more likely to have prob­lems with struc­tural in­tegrity than a con­ven­tional well. Data from Penn­syl­va­nia shows that a shale well is six times more likely to have casing fail­ure than a con­ven­tional well.

I asked Scott Perry, deputy sec­re­tary, Of­fice of Oil and Gas Man­age­ment at the Depart­ment of En­vi­ron­ment Pro­tec­tion, Penn­syl­va­nia, in Pittsburgh about ground­wa­ter con­tam­i­na­tion. Scott’s ex­pla­na­tion was that most con­tam­i­na­tion is be­cause of leak­ages in the tem­po­rary waste pits. Be­sides, many shal­low gas lay­ers ex­ist above Mar­cel­lus; in case of poorly se­cured wells, meth­ane from these lay­ers can get into the ground wa­ter. Scott also be­lieved that fail­ure of casing is not a cer­tainty, it can be fixed with bet­ter de­sign and im­ple­men­ta­tion.

Treat­ment and safe dis­posal of waste­water is also a ma­jor chal­lenge. Be­tween 10 and 50 per cent of the frac­tur­ing fluid pumped in the wells re­turns as flow­back over a pe­riod of time. Then there is some amount of highly pol­luted mois­ture that comes out with the gas. These ef­flu­ents con­tain chem­i­cals used in frack­ing and met­als, min­er­als and hy­dro­car­bons leached from the reser­voir rock.In some reser­voirs ra­dioac­tive min­er­als are also re­leased. Such waste has to be dis­posed of in ra­dioac­tive waste fa­cil­i­ties. In Mar­cel­lus wells in Penn­syl­va­nia, the flow­back wa­ter is so pol­luted that it has salt con­tents and chem­i­cal oxy­gen de­mand lev­els nearly 100 times the stan­dard for treated in­dus­trial ef­flu­ent in In­dia.

Cur­rently, waste­water from shale wells is ei­ther be­ing pumped in deep in­jec­tion wells or treated in ded­i­cated plants.But deep in­jec­tion wells are now be­ing linked to the in­creased fre­quency of earth­quakes. One hy­poth­e­sis is that the waste­water lubri­cates fault lines, caus­ing them to slip.

Big fight in Penn­syl­va­nia

Af­ter my visit to Loy­al­sock State For­est, I went to see frack­ing in the coun­try­side. In Washington county, which has close to 1,000 op­er­at­ing wells, I saw frack­ing tak­ing place ev­ery­where, even next to peo­ple’s houses.

In McMur­ray, I met Raina Rip­pel and Jill Kriesky, both work­ing for South West En­vi­ron­men­tal Health Pro­ject (swehp). The pro­ject is mon­i­tor­ing pol­lu­tion and peo­ple’s health near the wells in Washington county. Its data shows big spikes in air pol­lu­tants like volatile or­ganic com­pounds, PM 2.5 and formalde­hyde, many times the stan­dards, around the well sites at night. These pol­lu­tants have been linked with can­cer. Rip­pel’s the­ory is that the spike is be­cause of in­ver­sion which is com­mon in nights in Washington county.As most wells are lo­cated in the val­ley, pol­lu­tants get ac­cu­mu­lated in the night.

swehp is find­ing that those liv­ing next to frack­ing sites are more likely to have res­pi­ra­tory, neu­ro­log­i­cal and stress-re­lated dis­or­ders. Peo­ple in the county have started go­ing to courts on health is­sues. How­ever, to hush up the mat­ter com­pa­nies are do­ing out-of-court set­tle­ment with peo­ple on the con­di­tion that they do not dis­close health is­sues to any­one.

Kriesky says the res­pi­ra­tory ill­nesses can be linked to the el­e­vated lev­els of air pol­lu­tion, but neu­ro­log­i­cal and anx­i­ety-re­lated dis­or­ders could be be­cause of many fac­tors, in­clud­ing fights within the com­mu­nity over shale gas de­vel­op­ment.

Shale gas has di­vided com­mu­ni­ties in ru­ral Penn­syl­va­nia. A sec­tion of the com­mu­nity—landown­ers and peo­ple with min­eral rights in split es­tates—has ben­e­fit­ted from the shale gas boom. Com­pa­nies in Penn­syl­va­nia pay $1,000-4,000 per acre (0.4 hectare) to landown­ers for get­ting the right to drill. Landown­ers also get 10-12 per cent of the value of gas pro­duc­tion mi­nus the ex­penses as roy­alty. This has made many landown­ers mil­lion­aires.

"There is a clear link­age be­tween frack­ing and ill health of the peo­ple liv­ing nearby"

- Reina Rip­pel, South West En­vi­ron­men­tal Health

Pro­ject, McMur­ray

Then there are those liv­ing next to the well sites that ei­ther don’t have gas re­serves un­der their land or have only the sur­face right of the land. These peo­ple have not ben­e­fit­ted. On top of it, a law passed by the Penn­syl­va­nia gov­ern­ment called Act 13 gives the in­dus­try the power to ac­quire pri­vate prop­erty for drilling.The in­dus­try does not even have to no­tify any town gov­ern­ment of leases it has ac­quired or how it wants to use the leased land. This has made peo­ple with as­sets quite vul­ner­a­ble.

Act 13 also gave the in­dus­try an in­stru­ment for arm twist­ing lo­cal bod­ies to re­vise their laws to al­low frack­ing any­where. It is called im­pact fee, which is charged on ev­ery well drilled. Be­tween 2011 and 2013 the im­pact fee brought in $630 mil­lion to Penn­syl­va­nia. Sixty per cent of this rev­enue goes to coun­ties and mu­nic­i­pal­i­ties host­ing wells. In 2013, Washington county got $6.1 mil­lion as its share. These are big amounts for lo­cal author­i­ties. Most can­not af­ford to refuse the money.

How­ever, a few lo­cal bod­ies and cit­i­zens sued Penn­syl­va­nia state for over­rid­ing the rights of the lo­cal bod­ies to write zon­ing laws and de­bar oil and gas drilling if it did not fit the land use pat­tern. I met two of the lit­i­gants, Dave Ball and Brian Copolla.

Ball has been the elected of­fi­cial from the Peters town­ship since 2006. His is a residential town­ship of 25,000 peo­ple who do not want frack­ing. So far no com­pany has pro­posed frack­ing there, but peo­ple are ap­pre­hen­sive be­cause the town­ship is sur­rounded by shale de­vel­op­ment. Copolla was the elected of­fi­cial from the Robin­son town­ship. It was the first town in Penn­syl­va­nia which al­lowed frack­ing in 2007.Within three years a ma­jor spill hap­pened. Soil and many drink­ing wa­ter wells were con­tam­i­nated. Copolla then de­cided to stop frack­ing and be­came a pe­ti­tioner in the Act 13 case.

In the very be­gin­ning of our meet­ing, both of them made it clear that they are not against frack­ing. They op­pose it where it in­fringes on the rights of the peo­ple. It was in this con­text that Ball, Copolla and seven other mu­nic­i­pal­i­ties sued Penn­syl­va­nia state be­cause Act 13 vi­o­lated the “due process rights” of the lo­cal bod­ies.Due process rights means not to harm one’s neigh­bours due to one’s ac­tiv­i­ties. Lo­cal bod­ies have used these rights to zone their ar­eas into dis­tinct land uses— residential, com­mer­cial and in­dus­trial.

The case went up to the Supreme Court of Penn­syl­va­nia.The court struck down pro­vi­sions that al­lowed oil and gas de­vel­op­ment in all zon­ing ar­eas. The shale gas in­dus­try is now say­ing that it is not an in­dus­try and hence does not have to be re­stricted to the in­dus­trial zone; it can come any­where. Most im­por­tantly ,since only about 50 per cent of Penn­syl­va­nia has some sort of zon­ing, the re­main­ing 50 per cent is open for ex­ploita­tion. So, though Ball, Copolla and co---

plain­tiffs won a ma­jor con­sti­tu­tional bat­tle, the shale gas de­vel­op­ment in Penn­syl­va­nia con­tin­ues un­abated.

But that is not the case with Penn­syl­va­nia’s neigh­bour, New York.

Mora­to­rium in New York

I went to Ithaca to meet aca­demi­cians, ac­tivists and politi­cians who had used ev­ery trick in the book to stop shale gas ex­ploita­tion in their state.

New York state has a history of drilling for con­ven­tional oil and gas.But some­how a lot of New York cit­i­zens op­pose shale drilling. To un­der­stand this, I met Karen Edel­stein from Frac Tracker Al­liance. It is an in­for­mal al­liance that pro­motes trans­parency and in­for­ma­tion dis­clo­sure around oil and gas in­dus­try. Ac­cord­ing to Edel­stein, peo­ple are op­posed to shale gas be­cause of pol­lu­tion; many have op­posed it due to cli­mate change. Those who are op­posed are in big cities like New York, Ithaca and Syra­cuse that have less shale gas po­ten­tial.New York is es­pe­cially wor­ried be­cause its source of wa­ter is 130 km away in ar­eas with shale gas po­ten­tial. New York­ers have pro­tected this wa­ter­shed for a long time, even by pay­ing landown­ers to con­serve the wa­ter­shed.

Coun­ties close to Penn­syl­va­nia, how­ever, sup­port frack­ing. These are agri­cul­tural com­mu­ni­ties and landown­ers here can get as much as $12,000 per hectare by leas­ing land for gas drilling. These peo­ple are very an­gry about the mora­to­rium in the state on shale gas drilling. So an­gry, in fact, that 15 towns have threat- ened to se­cede from New York and join neigh­bour­ing Penn­syl­va­nia where frack­ing is al­lowed.

About seven years ago, the in­dus­try went around New York state telling peo­ple that frack­ing for shale gas was sim­i­lar to con­ven­tional gas. It started leas­ing land and mak­ing up­front pay­ments.The state assem­bly and se­nate passed laws that paved the way for frack­ing. An in­nocu­ous piece of leg­is­la­tion called Land Spac­ing Bill stip­u­lated how much should be the spac­ing be­tween shale gas wells. This de facto al­lowed frack­ing. Mem­bers of the state assem­bly like Bar­bara Lifton ,a Demo­crat from 125 Assem­bly dis­trict that in­cludes Ithaca, also voted for the bill. But lately, Lifton has be­come one of the most vo­cal crit­ics of shale gas. I met Lifton to un­der­stand why she changed her po­si­tion.

Lifton has been serv­ing her con­stituency for 12 years. She has seen the en­tire episode up-close. Ac­cord­ing to her, the in­dus­try didn’t lobby; it silently con­vinced ev­ery­one that shale gas is no dif­fer­ent than con­ven­tional gas. So, there was no de­bate when the bill was passed. Then peo­ple, in­clud­ing aca­demi­cians from Cor­nell Univer­sity, started talk­ing about var­i­ous prob­lems with frack­ing. Sto­ries of pol­lu­tion and wa­ter prob­lems from Penn­syl­va­nia started com­ing in. And by De­cem­ber 2014 re-elected gover­nor An­drew Cuomo banned frack­ing in New York state.

Cuomo did this by re­leas­ing the find­ings of the six-year re­view by the state Depart­ment of En­vi­ron­ment Con­ser­va­tion, in­clud­ing the study from

"Due process and en­vi­ron­men­tal rights are part of our Con­sti­tu­tion. No one can deny these rights to us" - Dave Ball (left) and Brian Copolla, Lit­i­gants against Act 13 of Penn­syl­va­nia

the Depart­ment of Health. Both the de­part­ments have come to the con­clu­sion that po­ten­tial ad­verse im­pacts of frack­ing are “wide­spread” and the prospects for frack­ing in New York are “un­cer­tain at best”, and the eco­nomic ben­e­fits are “far lower than orig­i­nally fore­casted”.

The statu­tory ban has made peo­ple like Tony In­graf­fea very happy. In­graf­fea has taught at Cor­nell Univer­sity in the School of Civil and En­vi­ron­men­tal En­gi­neer­ing and is cur­rently an emer­i­tus at Cor­nell. He is an ex­pert in frac­ture me­chan­ics. His re­search has been used by ac­tivist groups like New York­ers Against Frack­ing and politi­cians like Lifton to op­pose frack­ing.

I met In­graf­fea at Lifton’s of­fice and over lunch he ex­plained to me the in­tri­ca­cies of the un­con­ven­tional gas and oil in­dus­try and the rea­sons for his op­po­si­tion. In­graf­fea be­lieves shale gas is the last at­tempt by the fos­sil fuel in­dus­try to keep its hold on the energy sec­tor.

Un­der­es­ti­mated cli­mate im­pact

Re­search by In­graf­fea and his col­leagues in­di­cates that shale gas has far worse cli­mate im­pacts than what has been as­sumed. Shale gas is known to have higher green­house gas (ghg) emis­sions than con­ven­tional. But in the US, shale gas is be­ing pro­moted as a sub­sti­tute to coal; as a “bridge fuel” to cleaner energy source till al­ter­na­tives like wind and so­lar scaled up. How­ever, a ma­jor de­bate has started on the cli­mate per­for­mance of shale gas v coal.The cen­tral point of this con­tro­versy is how much meth­ane is emit­ted dur­ing the life cy­cle of the shale gas and what is the global warm­ing po­ten­tial (gwp) of meth­ane.

Meth­ane is a more po­tent green­house gas than CO2, but has a lower half-life. gwp of meth­ane, com­pared to CO2, av­er­aged over 100 years, is 25.Av­er­aged over 20 years, it rises to 72. Re­cent stud­ies, how­ever, peg the 20 years ’gwp of meth­ane at 105.

It is es­ti­mated that at a gwp of 105, if three per cent of shale gas pro­duc­tion is emit­ted dur­ing its jour­ney from well to burner, then shale gas losses all its ghg emis­sions ad­van­tage over coal (see ‘Shale gas v coal’).

New stud­ies, in­clud­ing those by In­graf­fea and his col­leagues, are in­creas­ingly find­ing ev­i­dence of large emis­sions of meth­ane from drilling sites. In­graf­fea es­ti­mates that 3.6 per cent to 7.9 per cent of the to­tal gas out­put of a shale gas well is lost through fugi­tive meth­ane emis­sions. This would mean that “com­pared to coal, the foot­print of shale gas is at least 20 per cent greater and per­haps more than twice as great on the 20-year hori­zon”.

Stud­ies in the US are also pro­ject­ing that Shale gas may also stymie the growth of the re­new­able energy sec­tor for decades, thereby fur­ther jeop­ar­dis­ing the fight against cli­mate change.

Un­cer­tain and spec­u­la­tive

Other rea­sons also turn peo­ple like In­graf­fea against shale gas. Shale gas re­serves are dif­fi­cult to es­ti­mate. Most ex­perts be­lieve that the es­ti­mates put out by the US shale in­dus­try are spec­u­la­tive. In 70-80 per cent wells they drill, they are find­ing far less gas than es­ti­mated. A ma­jor­ity of wells are also de­plet­ing very fast; 70 per cent of the to­tal gas is pro­duced in the first two years.It is es­ti­mated that the in­dus­try in the US has to drill 5,000 to 10,000 wells ev­ery year just to main­tain the ex­ist­ing pro­duc­tion. These are the rea­sons most US shale gas com­pa­nies are not prof­itable.

Shale gas com­pa­nies in the US are sur­viv­ing on junk bonds and in­vest­ments from over­seas. It is es­ti­mated that com­pa­nies as­so­ci­ated with the oil and gas sec­tor now ac­count for close to 20 per cent of all high­yield (junk) bonds of the US. Com­pa­nies have leased lots of land and are show­ing the “value” of gas un­der­ground as an as­set. These com­pa­nies are selling shares to com­pa­nies in China, In­dia and Ja­pan. They are us­ing part of this money to buy more acreage and the cy­cle con­tin­ues.

By the time I left Ithaca, I was con­vinced that shale gas in the US is bad for en­vi­ron­ment; bad for fight against cli­mate change and will make it im­pos­si­ble for the US to start tran­si­tion­ing to­wards a low-car­bon econ­omy. As the US is the key for an am­bi­tious goal ac­tion on cli­mate change, slack on its part means other coun­tries too would re­frain from tak­ing am­bi­tious ac­tion.

But New York does not de­cide the fate of the US;

"Over the 1020 years' time frame shale gas is worse than coal in terms of cli­mate im­pacts"

, Emer­i­tus, Cor­nell Univer­sity

Washington does. So, my last stop was Washington to un­der­stand its poli­cies and the pol­i­tics.

Washington pol­i­tics

For Washington, shale gas is a re­al­ity. Even for the most diehard en­vi­ron­men­tal­ist it is a fait ac­com­pli.The key is­sues in the minds of most are prices, sus­tain­abil­ity of sup­ply and, most im­por­tantly, en­vi­ron­ment reg­u­la­tions. A big de­bate is rag­ing on who should reg­u­late what, and what should be reg­u­lated with­out harm­ing the in­dus­try.

The oil and gas sec­tor in the US en­joys many ex­emp­tions un­der fed­eral laws. For in­stance, haz­ardous wastes from the sec­tor are not con­sid­ered haz­ardous un­der fed­eral laws and frack­ing has been ex­cluded from the def­i­ni­tion of dis­posal wells, ex­cept if they use diesel. This has been termed the Hal­libur­ton loop­hole be­cause for­mer vice-pres­i­dent Dick Cheney who used to head Hal­libur­ton, the largest tech­nol­ogy and ser­vice provider to the shale gas in­dus­try, pushed this ex­emp­tion. So, no fed­eral per­mit is re­quired to drill shale wells. Shale gas is largely reg­u­lated by the state En­vi­ron­ment Pro­tec­tion Agen­cies (epas). But state epas are not equipped to deal with the scale and pace of de­vel­op­ment. They are now catch­ing up.

I met Alan Krup­nick, who works at Re­sources for the Fu­ture’s Cen­ter for Energy and Cli­mate Eco­nom­ics. Krup­nick has worked ex­ten­sively on shale gas reg­u­la­tions at the state level. His work doc­u­ments huge vari­a­tions in reg­u­la­tions from state to state. For in­stance, some al­low treated wastes to be dis­charged into sur­face wa­ter, some al­low eva­po­ra­tion pits, and some al­low waste­water to be used for “land treat­ments” such as ice and dust con­trol or road sta­bil­i­sa­tion.In gen­eral, states like North Dakota and Wy­oming have re­laxed reg­u­la­tions whereas states like New York and Colorado have strict reg­u­la­tions. Penn­syl­va­nia and Texas fall in be­tween.

Krup­nick’s study also found lots of gaps in the reg­u­la­tion such as han­dling of toxic wastes, clos­ing down wells and recla­ma­tion of well pad ar­eas. For ex­am­ple, the cur­rent bond for the clo­sure is just $10,000 per well, whereas the cost can be at least $100,000. This is a big in­cen­tive for com­pa­nies to run away with­out proper clo­sure. Krup­nick be­lieves frack­ing can be done safely and risks can be re­duced through ap­pro­pri­ate reg­u­la­tions.

What is an ap­pro­pri­ate reg­u­la­tion is some­thing that the US En­vi­ron­men­tal Pro­tec­tion Agency (usepa) has started look­ing at care­fully.

usepa is not happy with the Hal­libur­ton loop­hole, which cur­tailed its pow­ers to act against the in- dus­try. It is now us­ing ex­ist­ing reg­u­la­tions and di­rec­tions from Congress to go around the loop­hole and put in place na­tion­wide reg­u­la­tions. For in­stance, it is us­ing New Source Per­for­mance Stan­dards (nsps) and Na­tional Emis­sion Stan­dards for Haz­ardous Air Pol­lu­tants (ne­shap) , both un­der the Clean Air Act, to con­trol emis­sions of volatile air pol­lu­tants.

I was hosted by Anna Phillips, pro­gramme man­ager for usepa of­fice of in­ter­na­tional and tribal af­fairs. Phillips had in­vited her col­leagues to brief me on the ini­tia­tives they are tak­ing to re­duce pol­lu­tion from shale gas oper­a­tions.

Bruce Moore, who works at the Of­fice of Air and Ra­di­a­tion, briefed me about the air pol­lu­tion norms. Moore ex­plained to me the re­quire­ment un­der the law to re­view nsps and ne­shap ev­ery eight years to de­ter­mine if tech­nol­ogy ad­vances war­rant up­dat­ing the stan­dards. usepa has used this re­view as an op­por­tu­nity to tighten norms for shale wells. Un­der the new rule, from Jan­uary 1, 2015, op­er­a­tors of new as well as ex­ist­ing wells are re­quired to in­stall equip­ments to cap­ture gas and con­den­sate that come up with flow­back.

Although the tar­gets of the rule are volatile or­ganic com­pounds and haz­ardous air pol­lu­tants, pow­er­ful green­house gas meth­ane will also be cap­tured, thereby re­duc­ing cli­mate im­pacts.

usepa is also pre­par­ing to re­lease the re­sults of a ma­jor study on the im­pacts of frack­ing on drink­ing wa­ter re­sources. This, it is do­ing at the be­hest of Congress.The fi­nal re­port is likely to be used to pre­pare new fed­eral reg­u­la­tions.

How­ever, the most con­tentious is­sue is the dis­clo­sure and reg­u­la­tion of chem­i­cals used in frack­ing.

"It is a cal­lous and reck­less in­dus­try that de­stroys wa­ter and af­fects the health of peo­ple. My assem­bly com­pletely sup­ports my po­si­tion"

As­sem­bly­woman, New York State

Spotlight on frack­ing chem­i­cals

It is es­ti­mated that more than 90 per cent of the frack fluid is wa­ter and the other 10 per cent is a mix of chem­i­cals, ad­di­tives and sand. Ac­cord­ing to a 2011 con­gres­sional re­port, frack flu­ids con­tained 29 chem­i­cals that are known or pos­si­ble hu­man car­cino­gens, reg­u­lated un­der the Safe Drink­ing Wa­ter Act, or listed as haz­ardous air pol­lu­tants un­der the Clean Air Act. Highly toxic ben­zene, toluene, xy­lene, and ethyl­ben­zene are also used. How­ever, all this in­for­ma­tion is guessti­mate. No one knows, other than the in­dus­try, what ex­actly is the com­po­si­tion of frack fluid.And this is again be­cause of a le­gal loop­hole.

The fed­eral Safe Drink­ing Wa­ter Act au­tho­rises states to reg­u­late un­der­ground fluid in­jec­tion.In 2005, how­ever, Congress amended the Act to ex­clude frac­tur­ing flu­ids. This has meant that com­pa­nies are not re­quired to dis­close what chem­i­cals they are pump­ing un­der­ground.To over­come this, many states have in­tro­duced leg­is­la­tion on dis­clo­sure. How­ever, the level of de­tails to be dis­closed varies sig­nif­i­cantly. Not all states re­quire dis­clo­sure of all chem­i­cals. Hardly any state reg­u­lates chem­i­cals be­yond mere dis­clo­sure.

There has been a per­sis­tent de­mand from en­vi­ron­men­tal groups for a fed­eral law to reg­u­late frack­ing chem­i­cals.But the in­dus­try is re­luc­tant. I was cu­ri­ous to know why.

I met Chris Benscher, man­ager of gov­ern­ment af­fairs at Hal­libur­ton, which has 70 per cent of the US shale gas ser­vice mar­ket share. As Benscher pointed out to me, Hal­libur­ton fracks a well ev­ery two min­utes.

Benscher en­tered the meet­ing room with a cham­pagne bot­tle, the sig­nif­i­cance of which he re­vealed later. He was forth­right about Hal­libur­ton’s po­si­tion on var­i­ous is­sues. Hal­libur­ton be­lieves in cli­mate change, Benscher ex­plained, but also be­lieves that fos­sil fu­els like shale gas are bridge fuel and tech­nol­ogy like car­bon cap­ture and se­ques­tra­tion are im­por­tant to ex­ploit fos­sil fu­els and save the cli­mate. On reg­u­lat­ing shale gas, Hal­libur­ton main­tains fed­eral gov­ern­ment is not the ap­pro­pri­ate level of gov­ern­ment; states look af­ter land and nat­u­ral re­sources, there­fore, they should reg­u­late it.

Benscher was most crit­i­cal of usepa try­ing to reg­u­late frack­ing chem­i­cals. He be­lieved that frack­ing chem­i­cals are pro­pri­etary prod­ucts dis­clo­sure of which would harm the in­dus­try. He pointed to the cham­pagne bot­tle and told me that it con­tains a pro­pri­etary frack­ing fluid, named CleanS­tim, made from food in­dus­try in­gre­di­ents. Hal­libur­ton ex­ec­u­tives are known to take a sip of this fluid in con­fer­ences to make the point that frack­ing flu­ids can be made non-toxic. When I asked Benscher about the ex­tent to which his “or­ganic” fluid was used by the in­dus­try, he de­clined to give ex­act fig­ures. How­ever, one ex­pert told me that “CleanS­tim is still in the bot­tle and not in the field”.

Hal­libur­ton’s po­si­tion on dis­clo­sure is, re­jected by many think tanks, en­vi­ron­men­tal groups and even mem­bers of the US Congress. usepa has in­di­cated that it will re­quire dis­clo­sure un­der the Toxic Sub­stances Con­trol Act.

At I was wind­ing up my trip, I went to meet Charles Ebinger, who works in the Energy Se­cu­rity and Cli­mate Ini­tia­tive at Brook­ings In­sti­tu­tion. Charles has spe­cial ex­per­tise in South Asia. “Have reg­u­la­tion and reg­u­la­tory in­sti­tu­tions in place be­fore the in­dus­try takes off. Don’t do the mis­takes we did.” This was his last ad­vice to me.

"We have a gas revo­lu­tion; we have not yet es­tab­lished if we have a sus­tain­able gas revo­lu­tion "

Brook­ings In­sti­tu­tion

Shale tempts In­dia

The world over, in­ter­est in nat­u­ral gas is grow­ing be­cause it is the clean­est burn­ing fos­sil fuel. The global con­sump­tion of nat­u­ral gas has in­creased by 30 per cent in the past 10 years. The In­ter­na­tional Energy Agency (iea) has even pre­dicted a golden age for nat­u­ral gas in which the global gas de­mand rises by more than 50 per cent be­tween 2010 and 2035,and nat­u­ral gas over­takes coal to be­come the sec­ond-largest pri­mary energy source af­ter oil.iea’s golden age for nat­u­ral gas is based on the as­sump­tion of un­lock­ing the world’s vast re­sources of shale gas.

Nat­u­ral gas is a scarce com­mod­ity in In­dia.The gap be­tween de­mand and sup­ply of nat­u­ral gas is about 40 per cent. On top of this, In­dia im­ports about 30 per cent of its nat­u­ral gas con­sump­tion at a very high price. In­dia will face a short­fall of more than 3.8 tcf of nat­u­ral gas by 2015-16, up from 3.2 tcf in 2013-14, ac­cord­ing to the petroleum min­istry. Short sup­ply and high prices of nat­u­ral gas have led to sig­nif­i­cant neg­a­tive en­vi­ron­men­tal and so­cial im­pacts in the coun­try.

In­dia is not able to pro­vide nat­u­ral gas for cook­ing to a large pro­por­tion of its pop­u­la­tion. Only about 12 per cent of its ru­ral house­holds and 65 per cent of the ur­ban house­holds use liq­ue­fied petroleum gas as a main source of cook­ing energy. In­door air pol­lu­tion from tra­di­tional cook­ing fu­els such as fire­wood is lead­ing to large-scale pre­ma­ture deaths and dis­eases.

In­dia is not able to sup­ply nat­u­ral gas to the ur­ban trans­port sec­tor ei­ther. Thir­teen of the world’s top 20 air pol­luted cities are in In­dia. Gas can play a big role in re­duc­ing ur­ban air pol­lu­tion. Gas power plants of the com­bined ca­pac­ity of 10,000 MW are idle due to gas short­age. Ad­e­quate sup­ply of gas to these plants can re­duce coal con­sump­tion in In­dia sig­nif­i­cantly, thereby re­duc­ing both lo­cal pol­lu­tion and car­bon emis­sions.

In­dia is, there­fore, look­ing for an af­ford­able and se­cure sup­ply of nat­u­ral gas.It is plan­ning to bring gas from Cen­tral Asia, the Gulf coun­tries as well as from the US.It is also look­ing to ex­plore shale gas.

Shale gas re­source in In­dia is not very high. The present tech­ni­cally re­cov­er­able shale gas re­source is about 100 tcf, spread over four on-land sed­i­men­tary basins, namely Cam­bay in Gu­jarat; Kr­ishna-Go­davari in Andhra Pradesh; Cau­very in Tamil Nadu; and Damodar basin in Jhark­hand and West Ben­gal. These re­sources are suf­fi­cient to meet In­dia’s gas de­mand at the cur­rent level for about 25 years. How­ever, In­dia has a vast sed­i­men­tary area and many more shale gas basins can be found.

So far the de­vel­op­ment of shale gas in In­dia is lim­ited to drilling of a few ex­ploratory wells in Jam­busar (Gu­jarat), Dur­ga­pur (West Ben­gal) and Hazarib­agh ( Jhark­hand). Ini­tial re­sults in­di­cate that shale gas basins in In­dia are also not as pro­lific as those in the

US. Be­sides, since In­dia does not have a good ser­vice sec­tor for the oil and gas in­dus­try as in the US, shale gas ex­trac­tion will be dif­fi­cult and more ex­pen­sive.

In 2013, In­dia fi­nalised its pol­icy for ex­plo­ration and ex­ploita­tion of shale gas.The pol­icy has adopted a cau­tion­ary ap­proach and has al­lowed only na­tional oil com­pa­nies to carry out ex­plo­ration and ex­ploita­tion; pri­vate com­pa­nies are not al­lowed. But this could change very quickly as has hap­pened in the US.

What should In­dia do?

With higher pop­u­la­tion den­sity, lower per capita wa­ter re­sources and higher pro­por­tion of arable and for­est land, the im­pacts of frack­ing on the ecosys­tems and com­mu­ni­ties in In­dia would be higher than in the US.But the ques­tion is how high.

It is ob­vi­ous that shale gas is more dam­ag­ing than con­ven­tional gas, but is it more dam­ag­ing than coal? From my travel in the US and fa­mil­iar­ity with coal min­ing prac­tices in In­dia, I would pre­fer shale gas any day to coal. Shale gas de­vel­op­ment has lower im­pacts on the lo­cal en­vi­ron­ment com­pared to coal mines, in­clud­ing im­pacts on wa­ter and es­pe­cially on the lo­cal com­mu­nity.The only rider is that we should not do the mis­takes that the US has done like not putting in place strin­gent en­vi­ron­men­tal norms and prac­tices.

I also be­lieve that shale gas is not a so­lu­tion for cli­mate change.It is not a “bridge fuel” be­tween coal and re­new­able energy.On cli­mate change the world needs to take ac­tion in the next 20-30 years and meth­ane is hugely dam­ag­ing to cli­mate over a 20year pe­riod. So, should In­dia go for shale gas?

I could take a moral high ground and say that In­dia should not go for shale gas. But, con­sid­er­ing the scarcity of gas and ben­e­fits it can pro­vide to vast sec­tions of the pop­u­la­tion, in­clud­ing the health of women and im­proved air qual­ity in cities, this would be a hyp­o­crit­i­cal po­si­tion, es­pe­cially in light of the large-scale shale gas use in the US and po­ten­tially in China, Aus­tralia and other coun­tries that have more re­spon­si­bil­ity to­wards cli­mate change. I, there­fore, think that In­dia should go ahead with shale gas de­vel­op­ment but cau­tiously.

In­dia should be clear why it wants to de­velop shale gas. In­dia should do it to meet its es­sen­tial gas de­mand, but not por­tray it as a so­lu­tion to cli­mate change as the US is do­ing. In­dia, there­fore, needs to strike a bal­ance be­tween its lo­cal im­per­a­tives and its re­spon­si­bil­ity to­wards global en­vi­ron­men­tal chal­lenges.

At the global level, In­dia should work with other coun­tries to set na­tional and global goals for re­new­able energy and energy ef­fi­ciency so that we do not lose fo­cus on cli­mate change.

At the lo­cal and na­tional level, we should put the fol­low­ing en­vi­ron­men­tal and so­cial safe­guards with­out any com­pro­mise:

Un­der­take a de­tailed in­ves­ti­ga­tion of basins to un­der­stand is­sues like wa­ter re­quire­ments; qual­ity and quan­tity of waste­water gen­er­a­tion; char­ac­ter­is­tics of wastes and air emis­sions. This in­for­ma­tion should be out in the public do­main for tak­ing a demo­cratic de­ci­sion.

The ex­ist­ing en­vi­ron­men­tal rules and reg­u­la­tions on nat­u­ral gas are not suit­able for shale gas. In­dia should draft new strin­gent rules and reg­u­la­tions cov­er­ing the life cy­cle of shale gas de­vel­op­ment. This should in­clude re­quire­ments for a de­tailed en­vi­ron­men­tal im­pact as­sess­ment, strin­gent wa­ter use and pol­lu­tion con­trol stan­dards, stan­dards for air pol­lu­tion (in­clud­ing meth­ane) and safe dis­posal of wastes.

Have a “no-go” pol­icy for shale gas de­vel­op­ment in ar­eas with high eco­log­i­cal value, im­por­tant wa­ter­shed or ar­eas with wa­ter stress.

Put in place a highly ad­vanced waste man­age­ment in­fra­struc­ture to deal with toxic and po­ten­tially ra­dioac­tive wastes. Till we de­velop these, we should put a mora­to­rium on shale gas de­vel­op­ment.

Con­sent of the com­mu­nity, reg­u­lar con­sul­ta­tion with them and in­for­ma­tion dis­clo­sure are very im­por­tant, so is shar­ing ben­e­fits with them.

The ques­tion is not whether In­dia should go ahead with shale ex­ploita­tion but how and where. In­dia will have to rein­vent its reg­u­la­tory regime.

T H G LI OF EC Y: S TE R U O C

Army vet­eran Dick Martin maps shale gas wells in the forests of Penn­syl­va­nia to raise aware­ness of

their ill ef­fects

A typ­i­cal shale pad in Loy­al­sock State For­est in Penn­syl­va­nia looks sim­i­lar to a con­ven­tional gas well but has a big­ger eco­log­i­cal foot­print

Boards put up by shale gas com­pa­nies to mark their ter­ri­tory. Un­der Act 13 of Penn­syl­va­nia com­pa­nies can ac­quire any land for drilling

Anti-frack­ing protests in New York led to a mora­to­rium on shale gas drilling in the state

Close to 80 per cent of all house­holds in In­dia use tra­di­tional cook­ing fu­els such as fire­wood. This is lead­ing to largescale pre­ma­ture deaths and dis­eases

Coal min­ing in In­dia has dev­as­tated large tracts of land and forests, and de­stroyed ground­wa­ter, rivers and com­mu­ni­ties

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