Future development of oil and gas plays across the United States depends on the energy sector maintaining its “social license to operate,” industry executives and environmentalists said at recent energy conferences in Oklahoma City.
Bill Whitsitt, executive vice president for public affairs at Devon Energy Corp., said technology advances in hydraulic fracturing and horizontal drilling opened areas of the country that haven't had much experience with oil and gas drilling. That has led to increased scrutiny of industry practices for drilling, water use, noise and emissions.
“We have to understand that there are real, legitimate concerns that are raised and we cannot appear to be dismissive,” Whitsitt said Sept. 25 at the Southern States Energy Board annual meeting in Oklahoma City. “We have to be responsive and make sure we are addressing every one of those concerns. Otherwise we risk losing that social license to operate, losing the ability to get permits because the fear factor is too great.”
Whitsitt said the term “fracking” is increasingly being used by those outside the energy industry as a shorthand way to describe all oil and gas development, not just the specific process of perforating wells and injecting fluid for breaking apart shale to release oil or natural gas.
Tom Price, senior vice president of corporate development and government relations at Chesapeake Energy Corp., said discussions over energy development and the environment have taken on the divisive tenor of partisan politics.
“In many ways, the polarization we see in the political arena is not a whole lot different than what we see in the energy and environmental arena,” Price said last week at the Governor's Energy Conference in Oklahoma City. “In most cases, we're talking past each other.”
Much of the backlash over fracking has come from the expansion of oil and gas development in the last decade, said Mark Brownstein, chief counsel of the Environmental Defense Fund's energy program.
“Even in communities where drilling has historically gone on, it is much more intense than it used to be: Many more trucks, many more rigs, many more workers, many of whom come from outside the community,” Brownstein said at the Governor's Energy Conference. “All of these things serve to create a perception on the part of the community that they are perhaps under siege, and that is an anxiety.”
Robert Jones, senior vice president with Keystone pipeline operator TransCanada Corp., said incidents from refinery fires to spills and well blowouts affect public perception about operators across the energy sector.
“I do agree we need to improve, because the public expects us to improve,” Jones said at the Southern States Energy Board meeting. “The challenge we have is we need to get the story out that we are improving. The safest way to do things is the right way to do it, and typically it's the right economic reason to do something. Nobody builds a pipeline to fail.”
Whitsitt said the political fights over the planned Keystone XL pipeline and many protests against hydraulic fracturing can be traced to activists who want to stop the future use of fossil fuels.
“There are a lot of folks in the middle who are in agreement that we need a better and more economic energy future for this country,” Whitsitt said last month. “Every now and then, they hear from those folks who don't want fossil fuels that the world is going to come to an end if we continue to produce.”
In the end, most consumers want affordable energy, Price said.
“I never, ever hear a suggestion of what a viable economic solution is if we're going to eliminate coal, oil and natural gas,” Price said.
Brownstein said communities where there is oil and gas development want more information about exactly what is going on in their backyards. Industry officials citing studies from other states isn't enough, he said.
“The only way you're going to convince the general public that this is in fact safe is if you're able to demonstrate with real numbers that this is safe,” Brownstein said.
Whitsitt said the industry and state regulators already do some air and water quality testing. More states are requiring disclosure of hydraulic fracturing fluids through the FracFocus.org website.
Meanwhile, operators have been able to use longer drilling laterals to develop larger areas from fewer well sites.
“We're talking about how do you manage risk and what is the risk of the emissions, versus what makes sense and what is economic to do,” Whitsitt said last week.
“We think we do a pretty good job; not that we can't always do better. … We've provided more and more data, and it still doesn't seem to be enough for people to be satisfied that we're not somehow causing harm.”
Brownstein said in other parts of the country there is a great degree of skepticism of both the industry and state regulators.
“Look, this is an industrial process,” Brownstein said. “There's no way around it. It's like any other homeowner if a factory were suddenly just set up next door, even temporarily; you'd have a lot of questions about what's going on over that fence line: ‘Is that process safe? Will my environment be safe once you're gone? Are there legacy issues there that I have to worry about?' These things are completely understandable. You don't have to be a rabid environmentalist to feel that.”