3/11/2013: Fracking's "revolving door"; China a long way from shale revolution

Fracking's 'revolving door' draws a warning – “Many of Pennsylvania's policymakers, regulators and enforcement workers have come from the oil and gas industry they oversee, or they leave state jobs for industry jobs, according to a recent report that questions the impacts of such a "revolving door" on public policy decisions. A report titled "Fracking and the Revolving Door in Pennsylvania" identified 45 current or former state officials who have links to the energy industry and gas drilling and fracking regulation, including 28 who have left to take industry jobs. The 30-page report, released two weeks ago by the Public Accountability Initiative (public-accountability.org), a Buffalo, N.Y.-based nonprofit, nonpartisan research organization focused on corporate and government accountability, said that attrition from government jobs to positions in the regulated industry calls into question the commitment of those employees to enforce regulations on companies they could soon work for. Enforcement could also be hurt, the report said, when industry executives move into regulatory positions in government. According to the report, the last four governors, including Tom Corbett, have "strong ties to the natural gas industry," as do a number of administrators from previous governors' offices, and 20 DEP administrators and employees, Democrats and Republicans alike, including all five DEP secretaries since the department was created in 1995. That group includes DEP Secretary Michael Krancer, who was a judge on the state Environmental Hearing Board before his appointment as secretary. But prior to that, the report said, he was a general counsel at a utility, Exelon, that relies on natural gas, and once worked as a litigation partner at Blank Rome LLP, a law firm and lobbying group that represents natural gas interests and is an associate member of the Marcellus Shale Coalition. "The revolving door data in this report raises troubling questions about the incentives that may be guiding public officials' oversight of fracking in Pennsylvania, from governors to DEP secretaries to well inspectors." Robert Galbraith, a research analyst at Public Accountability Initiative, said in the report he authored… The report notes that Mr. Corbett received campaign contributions totaling more than $1.8 million from the oil and gas industry, and worked as a lawyer for Waste Management, a waste hauling firm that's a member of the Marcellus Shale Coalition, a lobbying organization for shale gas development… "No doubt, Pennsylvania's citizens would expect their government to draw from talented citizens when filling important positions of trust," Mr. Shirk wrote. "But, to protect our taxpayers, Pennsylvania has strict ethics and disclosure laws to guard against undue influence in the policymaking arena.”” (Post-Gazette)

Health study holding up N.Y. decision on fracking – “A health study cited by leading environmentalist Robert F. Kennedy Jr. as pivotal in helping persuade New York Gov. Andrew Cuomo to hold off on plans for limited gas drilling is likely years away from conclusions about whether the technology involved is safe, according to the project's leaders. With New York entering the fifth year of review of the process known as hydraulic fracturing, or fracking, growing calls to wait for the Geisinger Health System study to be finished could push a final decision back several more years, frustrating landowners and the industry that had hoped to begin tapping the gas reserve that lies below parts of the state… "We don't really believe that there is a fast answer here, if you're looking at the issue of health impacts," Andy Deubler, an executive vice president at Geisinger Health System in Pennsylvania, said in an interview. "You've got to have all the data before you can come to a conclusion."” (Associated Press)

Spain Shale Gas Reserves Estimated to Equal 39 Years of Demand – “Spain, a country that’s yet to produce its first shale gas, probably has enough resources of the fuel to satisfy domestic demand for at least 39 years, according to the nation’s Council of Mining Engineers. The estimated reserves of natural gas trapped in shale rock are about 50 trillion cubic feet, Fernando Pendas, a water and oil geology professor at University of Oviedo, said today at a briefing in Madrid to present the council’s findings. The estimate could double once exploration studies are finalized and more is discovered through breaking open rock using hydraulic fracturing, knowns as fracking. “If we don’t allow fracking, Spain would have missed out on a huge opportunity,” Pendas said. As many 100 companies have applied for permits to begin exploration using fracking in Spain during the past five years.”” (Bloomberg)

China's ragtag shale army a long way from revolution – “China's plans to unlock what could be the world's biggest shale gas reserves risk running further off track after 16 firms awarded exploration rights in the latest auction lacked one core skill - not one has drilled a gas well before. Beijing is hoping shale gas can transform the country in the same way as the U.S. boom, though to date there has been little commercial production and a target of producing 6.5 billion cubic meters of gas by 2015 in the world's biggest energy consumer looks out of reach, according to industry experts. The lack of experience exploiting shale among new firms scrambling to enter the sector will make it an even bigger challenge to get at the gas, and if they fail to deliver China will struggle to reduce its dependence on expensive imports of oil, liquefied natural gas and coal. The auction winners will have to buy in the expertise they lack, offering the prospect of lucrative contracts for specialist foreign firms such as Schlumberger (SLB.N) or Halliburton (HAL.N) for the "fracking" (hydraulic fracturing) technology to get at the gas…. China's potential is clear. The government puts technically recoverable shale gas reserves at 25 trillion cubic meters, while the U.S. Energy Information Agency has them at 36.1 tcm, in both cases larger than U.S. reserves estimated at 24.4 tcm. But China's shale deposits are mostly found deeper underground than in the U.S. and reserves are more scattered, making it difficult to adapt the technology that has worked in the United States to China's geology. Big oil firms including PetroChina and Sinopec Corp (0386.HK) working on what are considered some of the best prospects are making slow progress. They had drilled more than 60 shale wells by May 2012, mostly in the southwest Sichuan basin, but PetroChina had produced only just over 11 million cubic meters in its most promising area by November.”” (Reuters)