In lieu of tight federal and state regulations of the shale drilling industry, the industry is promoting "certification." Case in point is the new "Center for Sustainable Shale Development" (CSSD) certification scheme. Drillers who promise to meet certain standards will be given a gold star, which will then be used in advertising and other promotional materials. This CSSD certification system is supposed to elevate standards for drillers using hydraulic fracturing in the Marcellus shale formation and presumably will serve as a model in other areas.
Safe, sustainable shale resource development. It’s achievable.Not surprisingly, this idea has earned fawning praise in the media (e.g., Washington Post, Philadelphia Inquirer, Pittsburgh Business Times, Los Angeles Times, and Times of Trenton). Critical thinking is a lost art in America.
This belief forms the foundation for the Center for Sustainable Shale Development (CSSD) – an unprecedented collaboration built on constructive engagement among environmental organizations, philanthropic foundations and energy companies from across the Appalachian Basin.
The result of this unique collaboration: the development of rigorous performance standards for sustainable shale development and a commitment to continuous improvement to ensure safe and environmentally responsible development of our abundant shale resources. CSSD will offer an independent, third-party evaluation process to certify companies that achieve and maintain these standards.
Several industry giants, environmental groups, and philanthropic organizations got together and negotiated for two years on 15 standards for shale drillers. The standards do address critical problems associated with hydraulic fracturing in the handling of drilling fluids, water consumption, chemical disclosure, pad design, and emissions from rolling stock and drilling equipment. They are also meaningless.
There is nothing inherently wrong with consensus standards that satisfy environmental groups and deemed reasonable by industry giants. The rules are sensible and long overdue. The trouble is these standards should be regulations, not voluntary guidelines. No driller in Pennsylvania, Ohio, or West Virginia will be required to adhere to these standards. State regulations are lax and regulatory agencies are grossly underfunded. The CSSD certification will not change reality on the ground anytime soon.
The Washington Post gives voice to the delusion that these non-binding rules will have a big impact in the real world.
The center can’t require companies to comply with them. It can only audit those that voluntarily sign up. But there is plenty of value in that. The industry can hardly now claim that the rules are too onerous. Any small-town mayor or rural landowner thinking of allowing fracking can insist that companies be certified. State and federal policymakers, meanwhile, can look to the center’s standards as a guide as they write their own rules. That includes politicians in New York and Maryland who are still on the fence about whether and how fracking can be regulated effectively.No mayor or zoning commission can require certification for drilling companies. They can ask. They can plead. But they will lose in court if they try to demand it.
Landowners can insist before signing a lease, but that is also meaningless. Bigger royalty payments will almost always carry the day. Even if a landowner will only sign with a certified driller, leases are bought and sold all the time.
The idea that politicians are going to rush to adopt these standards as regulations is also laughable. Governors looking to resource extraction as the foundation for their economy are not going to adopt tough regulations and fund enforcement. If you need proof, look no farther than Pennsylvania, Ohio, and West Virginia.
The certification idea has also been sold as the equivalent of Leadership in Energy and Environmental Design (LEED) certification for buildings or Underwriters Laboratories (UL) certification for electronics. Except the products are not analogous. LEED certification means the building will deliver energy savings, which will be attractive to building owners. CSSD certification will not affect the performance of the natural gas. Natural gas is sold as a bulk and blended commodity. There is no way to identify source for end-users. Utilities are going to base long-term contracts on distributor price, not driller certification.
John Hanger is another one of those pushing the idea that CSSD certification will affect leasing and buying decisions. You may have heard of Hanger as former head of the Pennsylvania Department of Environmental Protection under former Gov. Ed Rendell and current Democratic challenger to Gov. Tom Corbett. He is also a principal in the law firm providing legal services to CSSD. Here is Hanger slobbering over CSSD:
Yesterday's successful launch of the Center For Sustainable Shale Development (CSSD) in Pittsburgh is a game changing event for shale gas development. Simply put, as is the case with forestry products now, gas consumers will increasingly demand that the gas they buy be certified as sustainably produced.Consumers have little choice on gas sourcing. Hanger should be smart enough to understand that. Likewise, no politician is ever going to require sourcing from CSSD certified producers. The idea that utilities will give preferential treatment to CSSD gas is equally ridiculous.
Ultimately, it will matter not that individual gas producers like or dislike CSSD. What will be decisive is that consumers of gas from Washington DC to Maine and from New York to Chicago will demand that their gas is certified as sustainably managed. For example, I suspect that Mayor Bloomberg and many other political, business, and regulatory leaders are already exploring when and how they will get CSSD certified gas.
Indeed, the public concern about shale gas development is so intense that electricity generators and competitive retail electricity suppliers will jump or be pushed to use increasingly CSSD certified gas in the making of electricity. And power production is a vital market for gas producers.The CSSD certification has also created a rift within the environmental community. Groups opposed to lax regulation are not buying into the value of a certification scheme. Even the Environmental Defense Fund, a CSSD participant, was forced to admit that certification is no substitute for regulation. From the Huffington Post:
The Environmental Defense Fund responded to the Sierra Club criticism by noting that the new plan is meant to be a complement to strong regulations, not a replacement.In the absence of strong regulations, the industry is licking its chops over the chance to greenwash hydraulic fracturing.
"When an opportunity comes to engage companies constructively and hold them to a higher standard, we're going to take that opportunity every time," said Mark Brownstein, EDF associate vice president. He added that the new partnership with oil and gas companies comes with "a heavy dose of trust but verify" reality.
Paul Goodfellow, Shell’s US vice-president for “unconventional” resources such as shale reserves, said one aim of the group was to encourage a “rational” dialogue over the opportunities and risks of shale production, which had often been lost in competing claims between the industry and environmental groups.Give the public "an understanding" of what is going on in the shale frenzy or confuse them into thinking that hydraulic fracturing is tightly regulated? For a company that demonstrated incompetence on a grand scale in the Arctic last year, Shell needs a well-bamboozled public.
“The big thing is finding a way to give the public an understanding and a confidence in what we are doing (emphasis added),” he said.
The gambit is working. Media coverage of the CSSD is filled with adjectives like "stringent," "sound," and "rigorous." For the casual reader, it sure seems like something momental is taking place that will reduce the adverse environmental impacts associated with hydraulic fracturing. Take a look at the introduction to the CSSD story in Sustainable Business.
In an unprecedented move, natural gas companies and environmental organizations are collaborating on voluntary standards that could calm the uproar over fracking.Something unprecedented has indeed taken place. Some environmental groups have found a way to settle for voluntary standards for hydraulic fracturing instead of demanding tough state and federal regulations.
Frustrated by endless delays of federal regulation of the industry while the negative impacts of this very lack of regulation add up in communities around the country, the two sides have called a truce in the Northeast.
One final point. I don't see Chesapeake Energy or Range Resources listed among those singing songs and roasting marshmallows around the CSSD campfire. They are the big players in the Marcellus sandbox. Shell and Chevron are big multinational players, but not in this area. Their interest is shale oil, which has much bigger profit margins than shale gas.
Perhaps I am cynical, but all of this smells more like a public relations stunt by fossil industry heavy-weights than meaningful steps to limit the negative environmental impacts of shale oil and gas extraction. When the industry agrees to the CSSD standards as regulations, complete with significant penalties for violations, then there is something to celebrate. And when the "Halliburton loophole" to the Clean Water Act and Safe Drinking Water Act is cemented shut. Until then, I prefer the lyrics of a certain Dixie Chicks song to Kumbaya with climate killers.
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