Data Management Systems - EnVIRONMENT

Chapter Two
Operations and
Environment
Abstract
Expanded natural gas and oil resources have
dramatically improved the North American energy
supply outlook. However, prudent production and
delivery of these resources presents operational
and environmental challenges. Technological
advances have made shale gas, tight oil, deepwater
offshore, oil sands, and other resources economically recoverable. If these resources are to be available and economic for development, continuous
attention to reducing risks is essential to ensure
pollution prevention, public safety and health, and
environmental protection. These outcomes are
important in their own right, but also in order to
enjoy access to the resources for extraction and ultimate satisfaction of consumers energy demand.
Given the importance of these issues, they have
strongly influenced the study process.
This chapter examines the major environmental
and safety issues that must be addressed in order to
safely produce and deliver North American natural
gas and oil resources; examines the historical context of environmentally responsible development
and improvements in technology, regulation, and
environmental management; and describes the
variation in natural gas and oil resources and the
Introduction AND SUMMARY

Environmental Challenges
Expanded potential of natural gas and oil resources
has dramatically improved the North American
energy supply outlook. The increased use of natural
gas is likely to reduce the overall carbon intensity of
resulting variation in environmental impacts and

issues. The main focus of this chapter is to consider ways in which industry and government can
improve environmental performance, reduce risk,
engage with stakeholders, and develop and communicate important information on environmental impacts.
The outline of the Operations and Environment
chapter is as follows:
yy Introduction and Summary
yy Resource Play Variations and Associated Environmental Challenges
yy History of Innovation in Environmental Stewardship
yy History of Natural Gas and Oil Environmental
Laws
yy Sustainable Strategies and Systems for the Continued Prudent Development of North American
Natural Gas and Oil
yy Offshore Safety and Environmental Management
yy Key Findings and Policy Recommendations.
energy use, benefit the economy, and improve energy

security. Prudent production and delivery of these
resources presents operational and environmental
challenges. Through technological advances, tremendous new natural gas and oil supply sources have
been identified in the North American resource base.
These advances make shale gas, deepwater offshore,
tight oil, oil sands, and other resources economically
CHAPTER 2 OPERATIONS AND ENVIRONMENT
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recoverable. Continuous attention to reducing risks

is essential to ensure pollution prevention, public and
worker safety and health, and environmental protection. These are essential outcomes in order to enjoy
access to the resources for extraction and ultimate
satisfaction of consumers energy demand. Due to
the importance of these issues, their influence on the
study process has been significant. Risk to the environment exists with natural gas and oil development,
as with any energy source. Local, state, and federal
governments have developed a mix of prohibitions,
regulations, and scientific study to reduce potential
environmental impacts of natural gas and oil development. Parties discussing energy policy can be missing
a common vocabulary and set of references to have
a constructive conversation and make educated decisions. No form of energy comes without impacts to
the environment. An appropriate framework for discussing energy sources is necessary.
Environmental challenges associated with natural gas and oil development vary by location, such as
onshore versus offshore, and by the methods employed
to extract the resource. Although each well involves
drilling into the crust of the earth and constructing
well casing using steel pipe and cement, differences
arise from the affected environment, resource type,
regional and operating conditions, and proximity to
environmental receptors. The public, policymakers,
and regulators have expressed the following environmental concerns about onshore operations:
yy Hydraulic Fracturing Consumption of freshwater (volumes and sources), treatment and disposal
of produced water returned to the surface, seismic
impacts, chemical disclosure of fracture fluid additives, potential ground and surface water contamination, chemical and waste storage, and the volume
of truck traffic.
yy Water Management Produced water handling
and disposal has created apprehension about existing water treatment facilities and the ability to treat
naturally occurring radioactive material, adjust
salinity, and safely discharge effluent.
yy Land Use Encroachment The encroachment into
rural and urban areas results in perceived changes
to quality of life, especially in newly developed or
redeveloped natural gas and oil areas.
yy Methane Migration Methane in domestic drinking water wells, either naturally occurring or from
natural gas development.
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yy Air Emissions Emissions generated from combustion, leaks, or other fugitive emissions during
the production and delivery of natural gas and oil
present challenges regarding climate change and
human health impacts.
Offshore operations environmental challenges are
somewhat different than onshore due to the sensitivities of the marine environment, harsh operating conditions, remote locations in the case of the Arctic, and
advanced technologies employed. These challenges
include:
yy Prevention of and Response to a Major Release
The pressures and temperatures associated with
remote wellhead locations that are difficult to access
on the bottom of the ocean floor, and high flow rate
of deepwater wells, make the containment of a subsea release challenging.
yy Safety Offshore natural gas and oil drilling practices, called into question by the recent Deepwater
Horizon incident, have resulted in a weakened public perception of offshore process and worker safety.
The limited operating space coupled with significant
production volumes can create a higher-risk work
environment.
yy Marine Impacts Seismic noise generated by offshore natural gas and oil exploration activities is
recognized as a concern for whale populations and
other marine life, including fish.
yy Arctic Ice Environments Responding to an oil
spill in seasonal subzero temperatures with the
presence of broken sea ice and 24-hour darkness is
difficult and presents challenges not faced in other
marine environments.
The development of oil sands poses unique environmental challenges that differ from those associated
with other onshore oil resources, including:
yy Water Consumption Large volumes of water have
generated public and regulatory issues associated
with water sourcing, groundwater withdrawals, and
protecting water quality.
yy Land Disturbances Removal of overburden for
surface mining can fragment wildlife habitat and
increase the risk of soil erosion or surface runoff events to nearby water systems, resulting in
impacts to water quality and aquatic species.
yy Greenhouse Gas (GHG) Emissions Transportation fuels produced solely from oil sands result in
PRUDENT DEVELOPMENT: Realizing the Potential of North Americas Abundant Natural Gas and Oil Resources
well-to-wheels life-cycle GHG emissions 5% to 15%

higher than the average crude oil refined. The carbon intensity of oil sands can vary based on extraction, refining and transport method. And, in 2009,
well-to-wheel emissions from oil sands processed

in the United States were only 6% higher than the
average crude oil consumed in the United States.
Over time, incremental efficiency improvements,
Hydraulic Fracturing
Hydraulic fracturing is the treatment applied
to reservoir rock to improve the flow of trapped
oil or natural gas from its initial location to the
wellbore. This process involves creating fractures
in the formation and placing sand or proppant
in those fractures to hold them open. Fracturing is accomplished by injecting water and fluids
designed for the specific site under high pressure
in a process that is engineered, controlled, and
monitored.
Fracturing Facts
yy Hydraulic fracturing was first used in 1947 in an
oil well in Grant County, Kansas, and by 2002,
the practice had already been used approximately
a million times in the United States.*
yy Up to 95% of wells drilled today are hydraulically
fractured, accounting for more than 43% of total
U.S. oil production and 67% of natural gas production.
yy The first known instance where hydraulic fracturing was raised as a technology of concern
was when it was used in shallow coalbed methane formations that contained freshwater (Black
Warrior Basin, Alabama, 1997).
drilling goes through shallower areas, with the

drilling equipment and production pipe sealed
off using casing and cementing techniques.
yy The technology and its application are continuously evolving. For example, testing and development are underway of safer fracturing fluid
additives.
yy The Interstate Oil and Gas Compact Commission
(IOGCC), comprised of 30 member states in the
United States, reported in 2009 that there have
been no cases where hydraulic fracturing has
been verified to have contaminated water.
yy A new voluntary chemical registry (FracFocus)
for disclosing fracture fluid additives was
launched in the spring of 2011 by the Ground
Water Protection Council and the IOGCC. Texas
operators are required by law to use FracFocus.
yy The Environmental Protection Agency concluded
in 2004 that the injection of hydraulic fracturing fluids into coalbed methane wells poses little
or no threat to underground sources of drinking water. The U.S. Environmental Protection
Agency is currently studying hydraulic fracturing
in unconventional formations to better understand the full life-cycle relationship between
hydraulic fracturing and drinking water and
groundwater resources.
yy In areas with deep unconventional formations

(such as the Marcellus areas of Appalachia), the
shale gas under development is separated from
freshwater aquifers by thousands of feet and
multiple confining layers. To reach these deep
formations where the fracturing of rock occurs,
yy The Secretary of Energys Advisory Board is also

studying ways to improve the safety and environmental performance relating to shale gas development, including hydraulic fracturing.
* Interstate Oil and Gas Compact Commission, Testimony

Submitted to the House Committee on Natural Resources,
Subcommittee on Energy and Mineral Resources, June 18,
2009, Attachment B.
Interstate Oil and Gas Compact Commission, Testimony

Subcommittee on Energy and Mineral Resources,
June 18, 2009, Attachment B.
IHS Global Insights, Measuring the Economic and Energy

Impacts of Proposals to Regulate Hydraulic Fracturing,
2009; and Energy Information Administration, Natural Gas and Crude Oil Production, December 2010 and
July 2011.
U.S. Environmental Protection Agency, Office of Water,

Office of Ground Water and Drinking Water, Evaluation
of Impacts to Underground Sources of Drinking Water
by Hydraulic Fracturing of Coalbed Methane Reservoirs
(4606M) EPA 816-R-04-003, June 2004.
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as well as new technologies, such as the application

of solvents to mobilize oil in situ (as an alternative
to heat) are expected to continue to reduce the GHG
intensity of unconventional operations.
The natural gas and oil industry today is notably
active. The rig count, for example, has doubled in the
United States in the last 10 years, largely as a result of
deep shale and other unconventional natural gas and
oil resources. This has increased the need for regulators to respond in an appropriate and timely fashion
and companies to engage with local communities and
ensure that responsible and effective environmental
management practices are used. This heightened level
of activity, especially in shale gas development, exists
within a context shaped by:
yy Public Awareness of Industry Operations The
public has been disappointed by low performance
of some operators, creating a sense of alarm about
technologies and practices with which they may not
be familiar, such as hydraulic fracturing.
yy Location Development is occurring in areas where
there has not been significant activity in decades.
yy Transparency Questions have arisen regarding
the transparency of the industry from policymakers, nongovernmental organizations, and stakeholders.
yy Regulatory Responsibilities There is increased
pressure on the regulatory agencies to oversee the
growing activity, be knowledgeable about the technological developments, and administer regulatory
programs during times of extraordinary budget
pressures.
yy Complex Regulatory Framework There is
increased environmental regulatory complexity at
the federal, state, and local levels.
To address public concerns, some in the industry
have made efforts to be more transparent by voluntarily disclosing information about chemical additives
and practices, initiating expansions of training and
information exchange programs, investing in research
and development efforts, and embarking on extensive community and government outreach programs.
Furthermore, emphasis on safe and environmentally
responsible performance, coupled with environmental sustainability, has been or has recently become
part of the business principles in many companies.
In 2009, the U.S. natural gas and oil industry spent
about $14.6 billion on the environment, including
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over $4.3 billion for implementing new technologies

and other environment-related expenditures in the
exploration, production and transportation sectors.1
Prudent Development
Prudent development of natural gas and oil
resources in North America reflects concepts related
to achieving a broadly acceptable balance of several
factors: economic growth, environmental stewardship
and sustainability, energy security, and human health
and safety. Prudent development necessarily involves
tradeoffs among these factors. Consideration of the
distribution of costs and benefits is a key part of prudent development.
Environmentally responsible development is
another key element of prudent development, underpinning environmental stewardship and sustainability. In the context of recovering natural gas and oil
resources while protecting public health and the environment, environmentally responsible development
requires:
yy Thorough predevelopment planning
yy Development of effective regulatory approaches
yy A commitment to continuous improvement
yy A commitment to implementing planned actions
yy Evolution of development concepts and practices.
Predevelopment Planning Appropriate planning
includes identifying and mitigating risks to public
health, worker safety, and the environment, conserving natural resources, using technologies appropriate to the task, and incorporating engagement with
parties impacted by the development of a resource.
Due to the diversity of areas with natural gas and oil
resources, the specific requirements associated with
prudent development vary between locations.
1 American Petroleum Institute, Environmental Expenditures
by the U.S. Oil and Natural Gas Industry: 1990-2009, February
2011. The estimates in this annual report are derived from survey data. The number of survey responses can vary each year,
and many companies do not track environmental spending
directly. As such, the aggregate estimates for specific industry sectors may either over or underestimate environmental
expenditures, and do not represent the expenditure patterns
of any individual company. With increased emphasis on corporate environmental performance and the implementation
of recently proposed or promulgated regulations, aggregate
industry environmental expenditures may be substantially
higher in future years.
Effective Regulatory Approaches Environmentally responsible development requires regulatory

approaches that are protective of environmental systems, land uses, human safety and health, and the
development interests of surface and mineral right
owners. In the context of federal and state or provincial jurisdictional relationships, prudent regulation
involves assigning the various responsibilities for different aspects of development and protection to the
level of government that can most effectively administer them.
Continuous Improvement Continuous improvement of operations and regulations involves adherence to standards and adoption of improved practices
based on advances in science, technology, methods
for improved risk management, and lessons learned.
Planned Actions Environmentally responsible
development includes a commitment by all parties
to follow through on planned actions to accomplish
agreed-upon goals. The commitment of the chief executive officer or appropriate leader is critical to success.
This will be evident, in part, by the leader acting as a
visible and active champion and recognizing the time
and effort involved in development and integration.
In the end, all levels of the organization must be committed to and involved with the implementation.
Development Concepts and Practices Societal
expectations and understanding of the environment
have changed over time. This must be reflected in
the evolution of development concepts and specific
practices that constitute environmentally responsible
development. Past practices considered acceptable at
one time may be inadequate now and in the future particularly due to competition for finite or constrained
land, water, air, and other resources.
Major Findings: Assuring

Prudent Development
The history of natural gas and oil development
includes continual technological advances, improved
systems management, and improved regulatory processes. This has allowed for the production of new
and more challenging resource plays while improving
environmental performance. The industry has demonstrated great innovation and success in addressing
technological needs and environmental issues involved
in accessing and developing conventional resources.
Future development of the most promising unconven-
tional natural gas and oil resources, such as shale gas,

tight oil, deepwater offshore natural gas and oil, and oil
sands, will require even more proactive efforts to successfully implement safe and environmentally responsible development. However, many in and outside of
the natural gas and oil industry understand that inferior practices could undermine public trust. The result
could be that parts of the natural gas and oil resource
base become or remain off limits for development.
Maintaining access to the resource does not depend on
changing public perception so much as earning public
confidence with excellent performance. This is crucial
to realizing the full potential of North Americas abundant natural gas and oil resources.
With that in mind, the following key topics should
be considered to ensure that excellent environmental
performance is the norm in all places where natural
gas and oil development occurs. For each of these topics, findings and recommendations have been derived
from the analysis, summarized in this chapter and
discussed more fully in the Key Findings and Policy
Recommendations section.
Environmental Sustainability and

Community Engagement
The concept of environmental sustainability is
often used to refer to the objective of a government,
company, industry, or organization to set and work
towards achieving goals related to improving society,
protecting the environment, and driving economic
success. The long-term goal of achieving environmental sustainability is often aspirational in nature. In
addition, there is not one correct approach to encouraging or implementing environmental sustainability
within a company or industry. It can be accomplished
by individual companies adopting business strategies
and activities that meet the needs of the company and
stakeholders while protecting environmental sustainability and enhancing human and natural resources
for the future. A number of natural gas and oil companies already have environmental sustainability goals
incorporated into their business.
Providing information to the public is not enough.
Community engagement involves both speaking and
listening. Natural gas and oil companies should work
with the community and seek ways to reduce the negative impacts of development. This includes predevelopment planning to identify issues such as noise and
traffic and seek ways to mitigate them.
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Community engagement needs to be a core value

of companies. Even though a company may believe
its environmental performance is at the highest level,
it must nevertheless maintain transparency regarding issues important to public stakeholders. Industry
needs to explain its production practices and environmental, safety, and health impacts in non-proprietary
terms. Collaboration among companies, government,
and other stakeholders is often essential to the success
of industry-wide efforts. It can also increase the trust
and support of government and citizens. Such discussions can more effectively incorporate local environmental sustainability priorities and challenges.
Listening to these challenges can support a company
in staying ahead of issues that can impact reputation,
production delays, lawsuits, and regulatory actions.
In order to make public engagement meaningful and
successful, companies must listen to stakeholders, ask
for alternative views, and reflect stakeholders positions in strategic objectives and communications.
Sufficient resources should be devoted to this effort.
Corporate Responsibility
Natural gas and oil companies should continue to
improve the development and use of Environmental
Management Systems (EMSs) and implementation
of environmental sustainability practices. There is a
wide variance in how these systems are defined and

applied across the natural gas and oil companies and
service companies in the industry. There is also variance in the effectiveness in managing environmental
risks. The establishment of councils of excellence will
go a long way to improve implementation of EMSs
throughout the industry. A properly implemented
EMS can provide greater efficiencies as consistent
practices are developed and implemented by each
company, which also helps establish responsibility
to properly mitigate and manage risks. Each energyproducing company is accountable for its health and
environmental impacts and each producer is obligated
to minimize these impacts. In order to ensure environmentally responsible development, all levels of
the natural gas and oil industry should be encouraged
to use appropriate and comprehensive predevelopment planning, stakeholder engagement, risk assessment, and the innovative applications of technology.
These elements must be adapted to the variability of
resource plays and regional differences.
Councils of Excellence
While most natural gas and oil companies operate at a high environmental performance level, some
companies are not as far along. Companies gain
Planning and Risk Assessment

Operators and regulators have long recognized
that operations in extreme or sensitive environments, such as arctic climates, deepwater offshore
settings, and wetlands, require careful planning
to ensure operational success, worker safety, and
environmental performance. As operations have
moved into deeper, more challenging plays in more
conventional settings, the need for more careful
planning of these operations is necessary. The
new paradigm for planning involves not only careful operational and logistic plans, but also requires
that those plans be developed specifically to accomplish clear environmental protection goals as well
as worker safety and public safety goals. In addition, risks must be identified and assessed.
Early planning for prevention of hazardous
events preserves the largest numbers of response
options; in contrast, during a crisis event, options
are reduced as urgency overtakes systematic analysis, planning, and thought. Options become more
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abundant again only long after the event and as the

latter stages of the recovery mode lead to detailed
retrospectives and root-cause analysis.
Recent events have shown that careful planning
across the entire operational life cycle is essential.
The tragic events associated with the Macondo well
blowout put a spotlight on the need to have plans
that will prevent accidents, quickly and accurately
identify incidents that do occur, and provide effective response to mitigate the impacts that may
occur. In addition, public opposition to coalbed
natural gas and shale gas development in several
areas has highlighted the need for public involvement and public education to engage stakeholders
and to inform the way firms manage environmental and operational risks.
Shell oil offshore safety study: http://www.
scribd.com/doc/8438367/Bow-Ties-and-OffshoreSafety-Studies.
exposure to and adopt new technologies and operating practices in different ways and at different
rates. Although accidents, spills, and other problems have occurred, overall environmental protection
has improved. This has occurred as companies have
applied more sophisticated technologies to drilling
and production practices.
Broad systems (i.e., operational, management, technological, and communications) within the industry
and government must be managed to work together
to achieve consistently high environmental performance. More systematic mechanisms to identify,
evaluate, and disseminate information about environmental best practices would promote consistently
higher environmental performance. North American
natural gas and oil companies should explore opportunities to share best practices for protecting the environment, safety, and public health while developing
different types of resource opportunities.
An existing example of best practice sharing and
recommended practice development is the Petroleum
Technology Transfer Council, a national network of
state universities, independent producers, service
companies, federal agencies, and national labs established in 1994 to provide a forum for the transfer of
technology and best practices within the producer
community, adapted to the regional level. The latest
example is the recently formed Center of Offshore
Safety, which will promote the highest level of safety
for offshore operations, through an effective program
that addresses management practices, communication and teamwork, and which relies on independent,
third-party auditing and verification. Natural gas and
oil companies should draw upon existing activities,
as appropriate, and form regionally focused councils
of excellence to function as centralized repositories
and systematic mechanisms to collect, catalog, and
disseminate non-proprietary standards, practices,
procedures, and management systems that would
be made available to all appropriate government
and private sources. Because development of natural gas and oil resources differs depending on factors
such as the geology, water resources, and geography
of the region, what constitutes effective practices is
regionally defined. As such, there may be a need for
multiple councils, each with a regional focus. The
councils would be industry led and should be open to
companies, regulators, policymakers, nongovernmental organization stakeholders, and the public. These
recommendations are supported by findings and
recommendations on sustainable systems and building public confidence in the Key Findings and Policy
Recommendations section of this chapter.
Effective Regulation
High-quality regulation is often risk-based, considers flexible approaches where feasible, encourages
innovation, is informed by public input, and is based
on sound science. A balance between prescriptive and
performance-based approaches is sought in developing high-quality regulation, with consideration given
to efficiency and effectiveness. Such regulation is
based on the best available data, takes into account
benefits and costs, evolves as technology changes,
and has other attributes necessary for implementing
effective regulatory programs and enabling regulatory compliance without unnecessary burdens. Highquality regulation can increase the potential for protecting public health, safety, and the environment,
while promoting economic growth, innovation, competitiveness, and job creation.
Regulation of oil and gas operations is best accomplished at the state level. A one-size-fits-all approach
to regulation is not a viable option to ensure the
highest level of safety and environmental protection.
State agencies have extensive knowledge of geological
conditions, which vary from state to state. State regulators are well suited to consider many variables, such
as the regional hydrogeology, topography and seasonal climate variation to ensure wells are constructed
properly, environmental footprints are minimized,
and operations are conducted safely. State regulators
are in close proximity to conduct inspections, oversee local operations, enforce existing regulations, and
target new regulations to improve safety and environmental performance. State regulators have management responsibility for other natural resources (e.g.,
wildlife, fisheries, etc.) and are in the best place to
integrate the regulation and management of all natural resources, including oil and gas.
Regulators should continue to evolve regulatory
requirements to address new information and best
practices for operations and safety programs. Each
state with natural gas and oil development has laws
and regulations governing the conduct of companies
and potential impacts. But each state is not equal
in maintaining knowledge of the implications of scientific and technological advancements in improving regulations to protect the environment, public
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health, and safety. Similarly, states may vary in the

resources dedicated to conduct timely and thorough
reviews of permit applications and plans, inspections, and enforcement. Each state should be able
to ensure that: (1) actions are carried out efficiently
and effectively; (2) regulatory staff have the appropriate technical competencies to provide oversight of
industry actions and keep pace with industry practices and technology; (3)standards evolve over time
to take into account technological innovation, intensity of development, and scientific advancements; and
(4) regulations are enforced.
To deal with the limitations of prescriptive regulations, some agencies have developed performancebased requirements allowing for the use of new practices and technologies while meeting environmental
protection goals. This approach potentially allows
greater flexibility and innovation while ensuring environmental protection, but both operators and regulators have recognized that this is not the best approach
in all cases. State and federal agencies must seek a
balance between prescriptive and performance-based
regulations to encourage innovation and environmental improvements while maintaining worker and
public safety.
For these government initiatives to be successful,

state and federal regulatory agencies will need a sufficient level of staff to carry out new and in some cases
heightened regulatory requirements. To this end,
state and federal governments must provide the necessary financial resources to support regulation and
enforcement. A fee-based funding mechanism is one
approach to provide these in states where there are
neither the resources nor adequate industry contributions to support this function, provided that such
fees support the institutional mission of efficient and
effective regulation and are not used solely to increase
taxes for general budgetary support.
Environmental Footprint Analysis

As discussed in the section entitled Sustainable
Strategies and Systems for the Continued Prudent
Development of North American Natural Gas and
Oil, an environmental footprint (EF) analysis can be
a valuable tool for considering the environmental benefits, impacts, and risks associated with each energy
source in comparison to the other energy sources that
are available. In theory, an EF analysis is an objective, science-based assessment of the potential positive and negative impacts of each energy source. In
Issues on the Horizon: Decisions for the Regulatory Path Forward

State, federal, and in some cases, regional regulations are in place to govern oil and natural gas production for the purpose of achieving environmental protection. The interaction of these many layers
of regulation is complex and generally effective.
However, regulation among jurisdictions is uneven
and in some cases requires strengthening resources
available for staffing, continuous training to keep
current with changes in the industry, and enforcement. In certain circumstances, there are federal
legislative exemptions or special considerations
afforded the natural gas and oil industry that some
environmental advocates believe result in material
deficiencies in environmental protection, particularly in relation to water and air quality. Others,
including many in the natural gas and oil industry
and in state governments, maintain that the special classifications under federal law are appropriate and supported by scientific or economic findings, and addressed by state laws. These special
considerations exist for many industries.
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There is a range of views on whether particular

outstanding regulatory issues are best addressed
through state or federal regulatory action. Many
state agencies have unique knowledge and expertise relative to the local geological, hydrological,
environmental, and land use setting, and are
responsible for regulation and development of
private and state natural gas and oil resources,
as well as for implementing certain federal laws.
Federal agencies have similar responsibilities for
federal mineral development where the federal
government owns or controls such mineral rights
or lands. Some entities believe states are generally more nimble than federal agencies in their
ability to adapt to changes in technology and
new industry practices. Others believe that only
through federal regulation can there be assurance of a reasonably consistent level of environmental and public health protection across
the country.
practice, EF analyses tend to remain in early stages of

development, with analyses exhibiting widely varying
assumptions and different techniques for measuring
impacts that often produce apples-to-oranges comparisons across fuels and energy resources. An EF
analysis is often conducted in a manner to consider
the environmental impacts across the life cycle of an
operation or product. When this is done, a life-cycle
assessment (LCA) is typically employed to define the
beginning, middle, and end phases or steps to be considered in the EF analysis.2
There are technical issues such as incomplete data
and the lack of consensus around quantification of
impacts and risks. This latter fact complicates the
ability of this potentially important analysis to provide policymakers with useful information to evaluate the relative importance of the different impacts.
Moreover, the different resource types for the same
fuel may have different impacts, such as with shale gas
versus conventional gas. The results of an EF analysis are not intended to be a rationale to avoid mitigating the impacts of any fuel. An EF analysis can be
an effective tool for evaluating the relative impacts of
each energy source by each type of impacted environmental resource.
To illustrate why a standard EF methodology is
needed, it is useful to examine existing studies on
the subject and their similarities and differences. The
fundamental assumptions and organization of any EF
analysis strongly influence its quantitative results and
the validity of comparisons to other studies. Different
studies have different boundaries around the analysis
i.e., how far back and forward in the life cycle they
go. Results will be very different when comparing the
footprint of raw fuels vs. end uses, where the latter
takes into account efficiencies of end-use technologies
and their impacts. There are many other large and
small assumptions that go into arriving at the final
estimate of footprint.
The body of literature on EF represents an evolving
set of related estimates rather than a set of independent analyses. Most EF analyses use previous studies as the sources for their data so that estimates
from different studies cannot necessarily be seen as
2 Science Applications International Corporation (SAIC), Life
Cycle Assessment: Principles and Practice, EPA/600-R-06-060,
prepared for the National Risk Management Research laboratory, Office of Research and Development, U.S. Environmental Protection Agency, May 2006, accessed June 29, 2011,
http://www.epa.gov/nrmrl/lcaccess/pdfs/600r06060.pdf.
independent nor can their agreement be taken as

evidence for the reliability of the results if they are
interdependent. Furthermore, due to the large scope
of EF analyses, they face a wide assortment of analytical issues that arise from research in other fields
such as geology, biology, health sciences, chemistry,
engineering, climate studies, and social science. Adding to the difficulty of comparing the results is the fact
that different EF studies have different definitions of
what represents an environmental impact and may be
estimating quantities whose definitions only partially
overlap.
A comparison of two such studies serves to illustrate
a few of these issues. The Bonneville Power Administration Fish & Wildlife Implementation Plan Final Environmental Impact Statement (BPA study) and The Environmental Cost of Energy prepared by the Applied Energy
Studies Foundation (AESF) took different approaches
to determining the EF for a range of energy sources.
While the former focused on health effects and monetized those effects, the latter analyzed a broader
range of environmental impacts and did not assign
dollar values. The BPA study assessed a variety of
energy sources but did not evaluate a full life cycle,
neglecting to include transportation and production
impacts. The AESF study addressed a wider range of
energy sources considered under a full primary lifecycle assessment, including extraction, processing,
transportation, and generation. There were also many
methodological differences.
Figures 2-1 and 2-2 display some of the results from
the two studies on water and land resources. The figures show that the results of the two studies vary
widely, for the reasons stated above. Such differences
argue for the development of a sound, consistent
approach to footprint analysis that is vetted through
the various stakeholder groups and would result in
a comparable set of estimates for the impacts of the
various energy sources.
The federal government should support the development of a methodology(ies) for conducting an EF
analysis. As sound methodologies are established
and vetted, regulators and other policymakers should
refine their understanding of the environmental footprint of energy sources, including natural gas and oil,
as part of providing a high-quality information base
for making decisions about energy choices that reflect
the different nature and intensity of impacts. As environmental considerations of energy choices become
175
Figure 2-1. Water Consumed to Provide Electricity to 1,000 Average U.S. Households Annually
Figure 2-1. Water Consumed to Provide Electricity to 1,000 Average U.S. Households Annually
MILLION GALLONS PER 11,000 MEGAWATT HOURS
BONNEVILLE POWER ADMINISTRATION
ENVIRONMENTAL COST OF ENERGY
5,145,900
5
4,290,000
4
3,312,400
3
2,095,000
1
0
NATURAL GAS
COAL
16,500
WIND
Figure 2-2. Area Disturbed to Provide Electricity to 1,000 Average U.S. Households Annually
Figure 2-2. Area Disturbed to Provide Electricity to 1,000 Average U.S. Households Annually
BONNEVILLE POWER ADMINISTRATION
ENVIRONMENTAL COST OF ENERGY
ACRES PER 11,000 MEGAWATT HOURS
21.2
20
10
2.59
1.77
176
0.3
2.45
0.63
NATURAL GAS
COAL
WIND
more relevant in a carbon-constrained economy,

developing better, more complete information about
impacts from producing, transporting, and consuming different forms of energy will provide a more
robust foundation for public policy decisions that
affect the future energy mix of North America. Similarly, such information could be incorporated into
analyses used in making investment and purchasing
decisions by consumers, producers, and state and federal governments.
Technology
Improvements in environmental performance have
occurred in every phase of natural gas and oil development for both offshore and onshore operations, from
construction, drilling, completion and stimulation,
through production, plugging of the well, and final reclamation. Industry has implemented new technologies
and innovative practices to better control water use,
reduce air emissions, and ensure groundwater protection. Additional performance improvements have been
developed for hydraulic fracturing, materials management, and overall operations and management.
Continued development of advanced technologies
and operating practices is critical to future recovery of
high potential natural gas and oil resources along with
improved environmental performance. Research and
development conducted by both industry and government, in such areas as siting and planning, drilling, stimulation, and environmental management to
minimize water, air, and land impacts, will make it
possible to develop future natural gas and oil supplies
Examples of Industry Technological and Environmental Advances

Well Control Methods (such as rotary rigs,
mud systems, casing and cementing, and blowout preventers): Designed to stop the uncontrolled releases of oil and gas from wells.
Drilling Advances (such as directional/horizontal drilling and multi-well drilling pads, and
elimination of open pits through closed loop
mud systems): Greatly reduces the number of
wells drilled and surface area footprint (and attendant environmental impacts), allows for centralization of facilities, and avoids/minimizes risk to sensitive environments.
Deepwater Subsea Production Systems (such
as subsea completions with tie back to production platforms): Offer an automated and leakresistant system that significantly reduces the
environmental footprint and enables recovery of
previously uneconomic reservoirs.
Subsea Well Containment: Subsea containment systems are available that can operate in up
to 10,000 feet of water and contain up to 60,000
barrels of oil per day. Equipment designed to contain 100,000 barrels of fluid per day will be available by the end of 2012.
Remote Monitoring Systems and Downhole
Instrumentation: Allow for real-time view of
downhole conditions i.e., another set of eyes to

review ongoing operations and provide feedback on
critical operations.
Underground Injection Control Program (e.g.,
construction of enhanced oil recovery and disposal wells): Protects groundwater and allows
subsurface disposal instead of surface disposal.
Water Treatment and Reuse Technology: Conserves freshwater, reduces transportation impacts,
and decreases discharge volumes.
Modern Plugging Methods (such as cement
formulation and plugging techniques): Greatly
reduces environmental risks from abandoned
wells.
Remote Operated Vehicles: Enables robotic
capabilities in ultra-deepwater operations.
Long Distance Transport of Natural Gas
(including pipeline technology and compression): Greatly reduces the venting of natural gas
as a waste.
Pipeline Leak-Detection Systems: Enables
increased monitoring capability to determine pipeline integrity and provide for rapid response at the
earliest signs of a pipeline leak or failure.
177
while protecting the environment. The accompanying text box includes examples of industry technology
advancements that have led to better environmental
protection.
While it is important not to jeopardize this private
enterprise system of innovation, sometimes the payoff period for such research is too long to attract private support. Therefore, private investment cannot
always be counted on to perform this research, and
federal government agencies should also perform
important roles in supporting the development of
new technology. In other cases, the intellectual property developed by research is better held as a public
good rather than being held privately. This can occur
when the benefits of the research would accrue to the
United States as a whole, yet do not meet the criteria
of any individual company to justify the investment
such as with methane hydrate extraction technologies. Public research and development investment
may also be justified when it improves recovery of federally owned natural gas and oil, producing benefits
that accrue directly to the government through the
collection of royalties.
Data Management
Modern computer systems have provided a means
for more data to be readily available to operators,
regulators, and the public. Use and analysis of these
data have provided a means to conduct more complex technical and environmental assessments, which
may, in turn, increase regulatory requirements. The
increased complexities of new technologies require
that operators and regulators have access to and can
quickly assess larger and more complex data sets so
that they can minimize risk and maximize environmental protection. Widespread access to the Internet
has also increased the opportunities for more efficient
data sharing in the areas of regulatory reporting, data
sharing between partners, and increased public access
to operational and compliance information maintained by public agencies.
A common issue is that both private and public
organizations have not created standard data management processes or common programs across their
own enterprises. Non-centralized data limits the
ability of users to share information and make more
effective use of the information gathered. Historically, many agencies and companies developed their
data management systems in relative isolation so
178
that much of the data is not easily shared. Different

software packages and data standards have been used
over the years, which made it difficult for agencies to
receive data from companies and also difficult, if not
impossible, to share operational and environmental
data.
Additional efforts are needed in the area of standardization of data and its communication between
entities. This standardization is expected to provide
benefits to the public in environmental and health
protection, and could also provide industry with cost
savings. These cost savings will result from making the data easier to communicate with others and
report to regulators, as well as from streamlining
regulations, reducing duplicative reporting, and providing means to review and learn lessons from past
incidents.
Industry Transparency and

Public Education
Earning public trust through excellent environmental performance includes maintaining transparency and informing the public about operations and
risks. This information and understanding is critical
to achieving and maintaining the publics permission
to operate in many parts of North America. Industry needs to clearly explain nonproprietary production practices and environmental, safety, and health
impacts. The public should have the information necessary to have a clear understanding of the challenges,
risks, and benefits associated with natural gas and oil
production. Transparent reporting of comparable
and reliable information can provide companies the
tangible and intangible benefits of stronger relationships with communities, employees, and public interest groups. This is an essential part of earning public
trust and critical to establishing appropriate public
policies and regulations. In addition to ensuring public access to important data about environmental and
operational performance, public education can take
many forms, including information libraries, K-12
curricula, media campaigns, speakers bureaus, websites, and studies of risks in areas of special consideration.
One recent example of the natural gas and oil
industrys efforts at transparency is found in FracFocus, the hydraulic fracturing chemical registry
website. A joint project of the Ground Water Protection Council (GWPC) and the Interstate Oil and Gas
Framing Questions
The Operations & Environment Task Group was
tasked with answering the following framing questions:
3. What is the environmental and regulatory

framework for growth and development of
North American natural gas and oil resources?
1. What is the evolution of environmental

improvements in operating practices and technologies used across the range of resource
plays and regional differences?
4. What technological and operational advances

are on the horizon to improve efficiency and
environmental performance in offshore and
onshore operations?
2. What is the environmental footprint of

upstream and midstream natural gas and oil
operations, including greenhouse gas emissions, compared to other energy sources?
5. What sustainable development principles and

practices will enhance and demonstrate North
American environmental leadership into the
future?
Compact Commission (IOGCC), FracFocus provides information about the chemicals used in the
hydraulic fracturing of natural gas and oil wells along
with educational materials on hydraulic fracturing,
groundwater protection, and regulation. Many natural gas and oil companies participate in FracFocus but
not all do so. Increasing the participation in FracFocus to all natural gas and oil companies that engage in
hydraulic fracturing, and adding into the system all
wells currently in drilling and production, would be
important steps in raising the level of industry transparency.
Chapter Organization
This chapter presents discussion and analysis
leading to the major findings and recommendations presented above. The Resource Play Variations and Associated Environmental Challenges
section describes how variations in natural gas and
oil resource types lead to associated variations in
environmental impacts and challenges. The History
of Innovation in Environmental Stewardship section presents information showing how innovation
in technology and practices has improved environmental performance throughout the history of the
industry. The History of Natural Gas and Oil Environmental Laws section describes this history as it
applies to natural gas and oil development. The Sustainable Strategies and Systems for the Continued
Prudent Development of North American Natural
Gas and Oil section addresses these topics and how
they could be applied into the future. The Offshore
Environmental Management section includes the
unique aspects of offshore safety and environmental management that must be considered to ensure
that offshore production is both safe and environmentally responsible. The Key Findings and Policy
Recommendations section presents a more complete
discussion of the Operations & Environment Task
Groups findings and recommendations.
Resource Play Variations and

Associated Environmental
Challenges
The accumulation of natural gas and oil requires
three elements: a hydrocarbon source, a reservoir to
store the hydrocarbons, and a trapping mechanism
to hold them in place. These three elements exist
in a wide range of resource plays throughout North
America. Consequently, North American producers
operate in diverse geographic regions, characterized
by differences in topography/geomorphology, rainfall, and ecosystems, as summarized in Table 2-1.
Most natural gas and oil wells incorporate a common
set of processes3 that result in a common set of operational and environmental challenges. Despite these
similarities, a one-size-fits-all approach to exploration and production would be impossible. Operators
face unique or more intense challenges in developing
resources of certain types or with certain physical,
geographic, or physiographic characteristics. Unique
3 Paul Bommer, A Primer of Oilwell Drilling: A Basic Text of Oil and
Gas Drilling, 7th ed. Austin: The University of Texas Continuing Education Petroleum Extension Service, October 2008.
179
Table 2-1. Play Variation by Geographic Distribution

Region
Topography
Rainfall
Ecosystem
Onshore
Northeast/Midwest USA/
Canada
Hills and valleys,

open flood plains
Rain and snow prevalent
Deciduous forests
Southwest/ Midcontinent
Relatively flat plain/

uplifted plateau
Mainly dry with

rainy periods
Open rangeland
Western mountain region

USA Canada
Upthrusted mountain
ranges and foreland basins
Mainly dry with

winter snows
Alpine
West Coast USA/Canada
Mixed terrain of high

mountains and flats
Rainy on coast,
very dry inland
Rainy forests near Pacific,

desert
Coastal/Shallow
<1,000 water depth to

coastal marsh
Severe hurricane potential
Wetlands, marine estuaries

to marine habitat
Deep, Outer Continental

Shelf
>1,000 water depth
Severe hurricane potential
Marine habitat
Arctic
Open water to
ice-covered water
Severe weather, ice
Open water to
ice-covered water
Offshore
strategies, technologies, and environmental considerations are required when developing and managing
each individual resource play. Table 2-2 summarizes
some important operational and environmental concerns inherent in each type of play.
Significant geographic and physiographic diversity
can be found within a single resource play type, again
necessitating varying development strategies, as illustrated in Table 2-3 for current shale plays. Multiple
play types may even be located in a single physiographic basin, as in the Uinta-Piceance basin in Utah
and Colorado.4 Figure 2-3 presents the play types
found in the Uinta-Piceance basin, which include, but
are not limited to, coalbed natural gas, shale gas, oil
sands and tight oil, oil shale (kerogen), and conventional natural gas and oil.
Operational and environmental differences are particularly pronounced between onshore and offshore
development, and between conventional and unconventional resource development.5 Accordingly, this
section addresses the challenges and potential impacts
4 Charles W. Spencer, Uinta-Piceance Basin Province (020)

(n.d.), accessed June 27, 2011, http://certmapper.cr.usgs.gov/
data/noga95/prov20/text/prov20.pdf.
5 U.S. Department of Energy, Environmental Benefits of
Advanced Oil and Gas Exploration and Production Technology,
DOE-FE-0385, October 1999.
180
associated with development of conventional natural

gas and oil resources both onshore and offshore, and
then those associated with unconventional resources.
Overview of the Life Cycle

of Natural Gas and Oil Exploration
and Production
The following brief overview of natural gas and oil
exploration and production is a general description
that applies to all play types, both onshore and offshore, and provides context for this chapter.
yy Exploration Performed to establish the presence
of hydrocarbon-bearing rocks in an area of interest,
exploration typically begins with geologic evaluation to identify underground geologic structures
and properties characteristic of hydrocarbon accumulations. Various surveys are employed to assess
specific traits of rocks such as: magnetic surveys
evaluate magnetic field intensity variations; geochemical surveys look for the presence of naturally
migrated hydrocarbons near the surface; gravimetric surveys find variations in the gravity field; and
seismic surveys, the most common survey type,
evaluate the acoustic properties of the rock.
Once a potential oil or natural gas accumulation
is identified, an exploration well is drilled to confirm the presence of hydrocarbons and further
Table 2-2. Resource Plays Operational and Environmental Challenges

Resource Play
Onshore
Operational and Environmental Challenges

Conventional: Oil
Typical direct impacts can include changes in land-use patterns, habitat fragmentation, aesthetic and noise
alterations, extraneous light, atmospheric emissions (GHGs, VOCs, NOx, etc.), soil erosion and sedimentation
considerations, introduction of noxious vegetation, surface water quality and quantity changes, waste disposal
challenges (drilling fluids, cuttings, muds, produced water), and spills and leakages.
Typical indirect impacts can be associated with creation of new access routes that lead to unplanned
consequences, social changes resulting from employment opportunities, stress on existing infrastructures,
increased traffic, secondary ecological issues such as food and nutrient supply changes, breeding area and
migratory route pattern changes, increased vulnerability to predators, and hydrology changes from siltation.
All of these potential impacts can be compounded because long-term occupation of sites requires access
to facilities resulting in long-term loss of habitat and land use, coupled with long-term effects of vegetation
clearance, including erosion, and possible changes to surface hydrology.
Unconventional: Oil Sands, Heavy Oil
Requires special production operations that can be water and energy intensive. Surface disturbances per
production unit are generally larger than conventional oil and require more infrastructure, resulting in greater
air emissions.
Unconventional: Oil Shale
Requires special production operations that can be resource intensive. Potentially extensive surface
disturbance required. Both in situ and surface retorting are energy intensive and produce large quantities of
GHG emissions.
Unconventional: Tight Oil, Shale Oil
Requires horizontal wells and hydraulic fracturing to produce the resource.
Conventional: Gas
The same operational and environmental challenges as associated with conventional oil would be experienced
with conventional gas development.
Unconventional: Tight Gas
Requires special completion techniques to produce gas in economic quantities. Hydraulic fracturing is
typically required. Heterogeneity of resource requires unique development, which could affect level of
environmental impact.
Unconventional: Coalbed Natural Gas
Withdrawal of large quantities of freshwater to liberate gas production may be required; to reduce the
hydrostatic head, dense well patterns may be needed. Disposal and treatment of produced water create
challenges and conflicts when associated with arid western conditions where freshwater can be scarce.
Unconventional: Shale Gas
High Volume Hydraulic Fracturing (HVHF) of horizontal wells is often required to develop this resource. Water
sourcing and produced water disposal, treatment, and reuse from HVHF are a challenge. Development in a
range of geographic and urban/rural areas creates socioeconomic challenges and increases demand on local
infrastructure, traffic, labor force, education, medical, and other services.
Offshore
Offshore
Long-term site selection based upon biological and socioeconomic sensitivities and minimum disturbance.
Risk of impact to sensitive species and commercially important species, resource conflicts, and access
difficulties. Long-term support and supply base requirement and impacts on local port infrastructure. Drill
cuttings, drilling mud, produced water, sewage, sanitary and kitchen wastes, spillages, and leakage must be
disposed of appropriately. Emissions from power and processing plants affect air quality. Impact of noise and
light from facilities.
Offshore Arctic Specific
Ice-related environment must be addressed; special consideration for Arctic marine species and disturbance
of habitat. Atmospheric emissions from vessel engines and platform equipment are heavily scrutinized by the
U.S. EPA. Discharges to ocean limited due to environmental concerns. Bilges, sewage, spillages, waste, and
garbage need to be disposed on shore.
181
Table 2-3. Shale Plays

Formation
Basin
Depth, ft*
Thickness, ft
Location
New Albany
Comments
Illinois Basin
5002,000
50100, 20
KY, IL, IN
Shallow, produces formation water, small gas

production since 1858, minor until horizontal
drilling became an option. Produces from 60 main
fields; possible control natural fractures related
to faulting, folds, and draping, high water levels
indicate permeability. Well spacing, 80acres;
drinking water depth, 400ft.
Antrim
Michigan
Basin
6002,200
20200,
70120
MI
Classic play shallow, produces formation water,

actively developed since 1980s, unique based on
depth, water, thin pay zone to develop. Two sets
of dominant fractures, no key fields developed,
limited production outside of area of natural
fractures, the fractures require stimulation for
production. Well spacing, 40160 acres; drinking
water depth, 300 ft.
Marcellus
Appalachian
Basin
4,0008,500
<900,
50200
NY, PA,
OH, WV
Most expansive shale play in U.S., several attempts

at development, but 2003 first economic well with
horizontal drilling and hydraulic fracturing, key to
success of play. Lower in relative gas content to
other plays, but sheer size makes good play. Well
spacing, 40160 acres; drinking water depth, 850 ft.
Bakken
Williston
Basin
8,000
10,000#
ND, MT
Shale oil
Mancos
San Juan
Basin
>18,000**
1,0005,000
NM, CO
Exploration play natural fractures and thin sands

are key to production, there is shear failure at high
drawdowns, fluid treatment selection important,
overpressured.
Lewis
San Juan
Basin
>5,000
200300
CO, NM,
WY
Classic play late 1990s start of play, typically

secondary completion in wells targeting other
intervals, allows economics to not rely solely on
Lewis. Well spacing, 80320 acres; drinking water
depth, <4,000 ft.
Baxter
Vermillion
Basin
Up to 2,500
CO, WY,
UT
Emerging play
* Ground Water Protection Council (GWPC) and ALL Consulting, Modern Shale Gas Development in the United States: A Primer,
prepared for the U.S. Department of Energy, Office of Fossil Energy, National Energy Technology Laboratory, April 2009.
EnergyIndustryPhotos.com, The New Albany Shale, Maps and Info (n.d.), accessed April 21, 2011,
http://www.energyindustryphotos.com/new_albany_shale.htm.
GWPC and ALL Consulting, Modern Shale Gas Development in the United States: A Primer.
OilShaleGas.com, Woodford Shale Oil & Natural Gas Field Arkoma Basin Oklahoma (n.d.), accessed April 21, 2011,
http://oilshalegas.com/woodfordshale.html.
# Montana Board of Oil and Gas Conservation, Online Oil and Natural Gas Database, (n.d.), accessed May 2011,
http://www.bogc.dnrc.mt.gov/MBOGCdotNET/frmFilterNavigation.aspx.
** IHS, Inc., Energy Information, Software & Solutions (n.d.), accessed June 27, 2011,
http://energy.ihs.com/NR/rdonlyres/345C2AAA-AAE3-435F-B1B0-6E8A883A105A/0/curtisnape08.pdf.
Halliburton, The Mancos Shale, presentation (n.d.), accessed April 21, 2011,
http://www.halliburton.com/public/solutions/contents/Shale/related_docs/Mancos.pdf.
John B. Curtis, Fractured Shale-Gas Systems, AAPG Bulletin 86, no. 11, November 2002, pages 19211938.
182
Table 2-3. Shale Plays (continued)

Formation
Haynesville
Basin
AKA Bossier
Depth, ft*
Thickness, ft
Location
10,500
13,500
200270,
200300
LA
AKA Haynesville/Bossier, still being delineated,

potential realized in 2007. Well spacing, 40560
acres; drinking water depth, 400ft.
AL, GA
Very hydrosensitive formation, drilling involves

minimal water use, and production began in 2005.
Conasauga
Barnett
Fort Worth
and Permian
Basins
Woodford
Comments
6,5008,500
100600,
50200##
TX
Classic play most prominent shale gas play in the

United States, deep Barnett (>18,000) exploration
play. Innovation has played a part in increasing
recovery to 20%; however, infill drilling has been
key to increases in reserves. Initial completions
used 100,0001,000,000 pounds of proppant,
very costly and did not work, light sand fracturing
introduced in 1998 and has been successful. Using
horizontal drilling increased production rates by
2-3 times over vertical wellbores. Well spacing,
80160 acres; drinking water depth, 1,200 ft.
6,000
11,000
120220***
OK, TX
Emerging play development began in 2003-2004

via vertical wells, horizontal now being explored,
early phases of development, higher than average
gas content. Well spacing, 640 acres, drinking
water depth, 400 ft.
Floyd
Black Warrior
Basin
9,000
801,000
AL, MS
Exploration play
Fayetteville
Arkoma
Basin
1,0007,000
20200
AR, OK
Emerging play exploration began in 2000s, key to

success horizontal drilling and hydraulic fracturing,
early results from vertical wells mediocre. Well
spacing, 80160 acres, drinking water depth, 500 ft.
9,000###
200****
NY, OH,
Quebec
Exploration play
Utica
## John B. Curtis, Fractured Shale-Gas Systems, AAPG Bulletin 86, no. 11, November 2002, pages 19211938.
*** OilShaleGas.com, Woodford Shale Oil & Natural Gas Field Arkoma Basin Oklahoma.
IHS, Inc., Energy Information, Software & Solutions.
OilShaleGas.com, Woodford Shale Oil & Natural Gas Field Arkoma Basin Oklahoma.
### IHS, Inc., Energy Information, Software & Solutions.
**** OilShaleGas.com, Woodford Shale Oil & Natural Gas Field Arkoma Basin Oklahoma.
Note: Additional Shale Plays Include: Huron (Ohio Shale, OH, WV, KY), Pearsall-Eagle Ford (Maverick Basin, TX), Pierre
(Raton Basin, CO), Gammon (Williston Basin, MT), Collingswood (Michigan), Niobrara (CO, WY), Monterey (CA), McClure
(West Coast), Horton Bluff & Lorraine (Eastern Canada), Horn River Muskwa (British Columbia) and Montney (Alberta,
Northeast British Columbia).
183
184
TIGHT OIL
TAR SANDS
CONVENTIONAL GAS AND OIL
COALBED NATURAL GAS
CO
Source: Modified from U.S. Geological Survey (USGS), Petroleum Systems and Geologic Assessment of Oil and Gas
in the Uinta-Piceance Province, Utah and Colorado, USGS Digital Data Series DDS-69-B (2002).
Note: The full extent of all resource areas are not visible as they overlap one another.
OIL SHALE (KEROGEN)
SHALE GAS
UINTA-PICEANCE BASIN
UT
WY
20
12.5
40
25
80 Kilometers
50 Miles
2-3. Generalized
Resource
Areas
withinthe
theUinta-Piceance
Uinta-Piceance Basin
thethe
Distribution
of Fossil
Fuel Source
Rocks and
Reservoirs
FigureFigure
2-3. Generalized
Resource
Areas
within
BasinShowing
Showing
Distribution
of Fossil
Fuel Source
Rocks
and Reservoirs
evaluate the reservoir rock. Numerous tests are run

to characterize the formation, allowing geologists
and engineers to determine whether or not the site
is likely to produce oil or natural gas in economic
quantities. If the site is determined to be of poor
quality, the exploration well is plugged and abandoned and no further action is taken. If the well is
successful, the operator will run further appraisals
of the area to delineate the extent of the reservoir
and type and quantity of oil or natural gas.
yy Siting During site selection, operators identify
optimal drilling locations, formulate a land control strategy, and design the infrastructure to rapidly bring wells into production. Available drilling
technologies may also be a factor in site selection
and planning. Site selection involves geological
characterization; habitat evaluations; storm water
management; road and feeder pipeline development; construction; and reclamation planning,
including topsoil conservation and revegetation.
Companies take actions to adhere to federal, state,
tribal, and local regulatory and permitting requirements addressing environmental, archaeological,
development, and surface use issues. Regulations
and enforcement can vary widely among different
agencies. These rules require companies to plan
for the entire life of the well, unexpected events,
safety, environmental protection, and final reclamation once the production cycle is complete. Public outreach efforts may also be initiated during the
siting phase.
yy Planning and Design The site is then prepared
and a well pad constructed to support the variety
of heavy equipment needed during drilling, completion, and production operations. Alocation that is
not part of an existing gas field or large development design may require construction of additional
facilities. The current design paradigm includes a
flexible drilling site that can accommodate multiple
wellheads. Multi-well drilling pad locations have a
slightly larger footprint than single-well pad sites,
typically ranging from one to five acres or larger.
Multi-well pads on a local and regional scale can
comparatively reduce environmental impacts, particularly habitat fragmentation and land use coupled impacts such as erosion and sedimentation.
Site preparation includes clearing, grubbing, and
leveling an area and preparing the surface to support movement of heavy equipment. The site preparation usually includes spreading a uniform layer
of crushed stone over geotextile fabric constructing

an access road, establishing erosion and sediment
control structures, and installing surface impoundments for retention of drilling fluid and possibly
freshwater. The potential environmental impacts
of site development include erosion and sedimentation, habitat fragmentation, noise, introduction
of invasive vegetation, increased traffic, direct disturbance of sensitive resources, and dust. Most
impacts can be mitigated by locating a site in lesssensitive areas and with proper site design.
yy Drilling Drilling is conducted to reach natural
gas and oil reservoirs, creating a pathway for the
extraction of hydrocarbons. Optimization of time
is essential in this highly coordinated and expensive
process, with most rigs running 24 hours a day. The
time needed to drill a well is highly variable, ranging
from days for shallow coalbed natural gas (CBNG)
wells to months for more complicated and deeper
exploratory wells in a new field.
A well is drilled by a rotating bit that cuts through
rock. Fluid specifically designed for each well is circulated through the drill pipe and bit and back up
the space between the drill pipe and the wellbore
to condition the hole, manage pressure, keep the
bit cool, and move the drill cuttings to the surface.
This fluid can be compressed air or water, but most
often is drilling mud, which is comprised of water,
clays, and chemicals. As drilling proceeds, lengths
of pipe are added onto the drill string. Surface
casing is run into the wellbore to isolate the drilling process from any shallow aquifer zones once
a predetermined depth is reached. Depending on
the geologic conditions, one or multiple strings of
intermediate casing may be run to isolate shallow
hydrocarbons and to protect shallower formations
from deeper pressures.
Drilling continues through the surface and possibly
intermediate casing until the total depth of the well
is reached. Each string of casing is cemented in place
and the integrity evaluated to protect the groundwater and formation. Liquid and solid materials
and waste brought to the surface during drilling are
disposed of by a variety of permitted processes that
are chosen to meet the needs of individual wellconstruction projects. Depending on data needs
and regulatory requirements, open-hole well logs
or other measurements may be run. At this point,
production casing or liner and cement are run in the
wellbore or, depending on the completion plan, the
185
portion of the wellbore containing the producing

formation may be left open. The integrity of the
casing and cement is essential to avoid possible
groundwater contamination. Figure 2-4 is a schematic of a completed well showing the casing and
tubing strings and cement. After installation, wellbores are evaluated and if everything is intact and
effectively working, a collection of valves, gauges,
fittings, spools, and chokes (a Christmas tree) is
placed on top of the well to control the flow of formation fluids, isolating the well while still allowing
access for completion and maintenance.
yy Completion Once a well has been drilled and
tested (logged, cored, and pressure data), the target reservoir rocks porosity and permeability are
examined to determine whether the well will be
completed or plugged. If the potential flow of

hydrocarbons is low, the well may not justify the
cost of completion. In these cases, the well is
plugged with cement in several places and abandoned. If test information indicates a well will be
commercially productive, it is completed by preparing the bottom of the hole as necessary and
running the tubing or other equipment into the
wellbore. In most formations, stimulation is necessary to make a connection between the formation and the wellbore to enable the flow of oil or
gas. During stimulation, the casing at the depth of
the reservoir rock is perforated, if necessary, and
the rock is either hydraulically fractured, acidized,
enhanced, or otherwise stimulated to increase the
permeability. Hydraulic fracturing is the practice of injecting water, chemicals, and sand into a
Figure 2-4. Example of Wellbore Schematic
186
wellbore for the purpose of fracturing the formation to create the permeability necessary for
movement of natural gas and oil in the formation
to the wellbore.
In initial (primary) production, the natural pressure
of the reservoir is usually enough to drive liquid
and gas hydrocarbons to the surface. However, in
some types of reservoirs, this pressure drops over
time and additional lift is required. A pump jack or
gas lift system may be installed on a well to provide
artificial lift. In some cases, reservoir pressure is
enhanced with the injection of gas, water, or steam
directly into the reservoir to increase hydrocarbon
flow into the wellbore. The reservoir injection process may require additional wells. Enhanced oil
recovery and secondary recovery are important
components in increasing potential production
from oil-bearing formations.
yy Production and Delivery Well products are often
a complex mixture of liquid hydrocarbons, gas,
water, and solids. Once well products reach the
surface, field facilities gather and separate the mixture, removing and disposing of or recycling constituents that are not saleable. The hydrocarbons
are then transported by pipeline to end users. Purchasers have contract standards for the natural gas
and oil accepted, often called pipeline quality. For
example, oil purchasers typically limit the amount
of basic sediment and water to less than 1%. Gas
purchasers set similar limits on water, water vapor,
hydrogen sulfide, carbon dioxide, and British thermal unit (Btu) content.
Throughout its producing life, a well is continually
monitored and maintained to ensure that its integrity is maintained and its production is optimized.
Interim reclamation also takes place throughout
the life of an operation. For example, when a portion of the pad can be reclaimed following drilling
and completion, reseeding can be initiated to start
the process towards complete mitigation.
yy Reclamation Once a well is no longer economic,
after years or decades of production, it is plugged
and abandoned, which involves filling the well
casing with cement and removing the wellhead,
pump jacks, tanks, pipes, and other location facilities and equipment. Federal land and state natural gas and oil agencies specify the time frame and
methods for plugging the well, reclaiming the soil,
and completing other environmental and safety
protections. Reclamation does not necessarily

require full ecological restoration, but focuses on
creating short-term stability and restoring the
visual and hydrological potential to allow the site
to naturally return to its original state or serve a
future intended use.
Developing Onshore Conventional

Natural Gas and Oil Resources
Conventional oil is accessed by what could be termed
standard well extraction methods. Typically, conventional oil wells produce from a pressure-driven system,
meaning oil flows from the reservoir to the wellbore
and to the surface based on a pressure difference
between the reservoir rock and the wellbore. Over
time, the well may require assistance in lifting the oil
from the reservoir to the surface, via pumps, secondary
recovery methods (e.g., waterflood), and/or enhanced
oil recovery methods (e.g., thermal, miscible, or chemical means). Primary production from a conventional
oil well may only average 10% of the original oil in
place; with the use of enhanced oil recovery, recovery
may only reach 3060% original oil in place.
Conventional natural gas deposits, similar to conventional oil, originate from proximal organic-rich
source beds, such as shale. The gases migrate into
either structural or stratigraphic traps, which are
sealed by low-permeability shale formations, mudstones, or salt. The gas remains trapped in these
discrete accumulations of sandstone or carbonate
reservoirs, both of which have interconnected pore
networks that allow gas flow to the wellbore. Due
to their ease of access and high porosity and permeability, conventional gas resources require a low
number of wells to economically access the resource,
which is often held in small pockets within the stratigraphy.
Conventional oil has been produced from a wide
geographic area across the country. Characterized
as a more mature resource development, conventional oil currently accounts for only 30% of the
existing North American reserves. Although some
conventional oil wells have gone into abandonment
and cleanup, many of the fields are becoming prolific again via unconventional drilling techniques.
Figure 2-5 outlines conventional natural gas and
oil basins that have been developed in the lower-48
states of the United States.
187
188
LOS ANGELES
SANTA
MARIA
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COASTAL
VENTURA
BULL
MTNS
SALTON TROUGH
BLACK
MESA
SAN
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PARADOX
PERMIAN
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CITY
ILLINOIS
APPALACHIAN
CONVENTIONAL GAS AND OIL BASINS
COASTAL
MICHIGAN
BLACK
WARRIOR
MISSISSIPPI
GULF COAST
ARKOMA
CHEROKEE
BEND
ARCH-FORT
WORTH
ANADARKO
SHIRLY
HANNA
LARAMIE
WILLISTON
DENVER
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RIVER
UINTAPICEANCE
WYOMING
THRUST GREATER
BELT
GREEN
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SW MONTANA
MONTANA
THRUST
BELT
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SAN JOAQUIN
SACRAMENTO
NORTHERN
COASTAL
WESTERN
OREGON
WASHINGTON
NORTH
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MONTANA
Figure 2-5. Major Conventional Natural Gas and Oil Basins in the Lower-48 States
Figure 2-5. Major Conventional Natural Gas and Oil Basins in the Lower-48 States
Environmental challenges for onshore conventional natural gas and oil development include potential impacts to surface water, groundwater, air quality,
land, public health, wildlife and habitat, and community character and quality of life that will vary depending on local conditions.
yy Wildlife Potential impacts to wildlife are attributable primarily to construction of roads and pads
through habitat loss and habitat fragmentation.
Migratory or reproductive behavior may be disturbed due to noise and vehicle traffic. Improperly managed surface impoundments can result in
injury or death for terrestrial wildlife and birds,
especially migratory waterfowl. In addition, the
movement of equipment and materials creates the
risk of introducing invasive species from one area
to another.
yy Surface Water The potential for impacts to surface water primarily results from storm water runoff
or spills. During construction, storm water runoff
must be managed to prevent erosion of roads and
slopes of well pads. Such soil erosion, if allowed to
reach streams or lakes, can adversely affect surface
water quality and may impact aquatic wildlife. In
addition, if pads are not properly constructed, storm
water runoff can wash lubricants and other chemicals from machinery or surface stains and transport
these chemicals to surrounding soils or streams.
Potential impacts from spills can result from produced water, fuels, or other chemicals that may be
temporarily stored on site. If such spills are not contained on the well pad, they may reach surface water
bodies and affect both water quality and aquatic life.
yy Groundwater The potential for groundwater
impacts exists during drilling and produced water
management as well as after plugging and abandonment. During drilling, proper casing and cementing is required to ensure that groundwater aquifers
are protected. If produced water is injected into an
underground injection control (UIC) well for secondary recovery or disposal, wells must be properly
constructed and cemented to ensure that injected
fluids do not contaminate underground sources
of drinking water. Groundwater impacts also can
result from improper disposal of wastes. In addition, wells must be properly plugged to ensure that
the plug is not degraded by subsurface chemical and
pressure conditions. Improperly plugged wells can
allow oil, gas, or saltwater to migrate into groundwater aquifers over time.
yy Air Quality The potential for air quality impacts

comes primarily from engine emissions, dust, and
methane emissions. Engine emissions include construction equipment, transport trucks, personal
vehicles, drilling rigs, and compressor engines. Such
emissions can contribute both regulated pollutants
and greenhouse gases. Dust can be generated by
truck and personal vehicle traffic. In addition, methane can be released by flaring or venting and may
also escape through leaks in piping or equipment.
Each of these challenges can be magnified depending on site-specific geologic, geographic, climatic, or
other environmental factors. For example, the potential for erosion is greater in areas with steep slopes
or erosive soils. In addition, sensitive or extreme
environments, such as wetlands, deserts, and arctic
regions, can be susceptible to impacts from relatively
small disruptions and may be very slow to recover
from adverse impacts. Furthermore, threatened and
endangered species are more likely to be encountered
in such areas.
Developing Offshore Conventional

Offshore development is a major source of natural gas and oil to North America. Typically, offshore
resources must be well proven and capable of producing greater volumes per well to justify the added cost
of their development relative to onshore resources.
The reservoirs themselves usually are of a conventional nature.
The offshore environment presents extreme variations in physical conditions. From potential hurricane conditions on the East and West Coasts and in
the Gulf of Mexico to the rigors of the Arctic North,
these conditions demand special considerations when
planning for development, timing, and safety. Managing subsea operations and maintaining equipment
in this environment also adds to the development and
operational complexity.
Operating in a water environment eliminates or
minimizes many of the challenges associated with
soil and habitat disturbance that affect onshore development; yet offshore production poses a number
of unique environmental challenges. Seismic noise
generated by offshore natural gas and oil exploration activities is recognized as a concern for whale
populations and other marine life, including fish.
189
Other considerations germane to offshore operations include special health and safety precautions;
physical and other logistical constraints affecting
the offshore management of drilling fluids, cuttings,
and wastewater; noise and air emissions generated
from the drilling equipment and support vessels and
aircraft; industrial or solid waste including paint,
spent solvents, and packing materials; subsea pipeline integrity; harmful aquatic organisms introduced
from vessels traveling from other geographic regions;
decommissioning offshore platforms; and ice-related
environmental adaptations in arctic environments.
Properly trained personnel whose knowledge
is continually assessed through regular drills and
exercises are the first line of defense in detecting
spills or other problems. Quickly detecting and
responding to spills is one of the biggest challenges
for offshore production, given the remote location of
these facilities and the fact that drilling is occurring
under water and out of human sight. Detecting spills
or other problems also depends on indirect indications
provided by instruments, gauges, or sensors. Once
a problem is detected, identifying its cause and the
most effective response also depends on this equipment, coupled with visual inspection by divers or by
remotely operated vehicles. After corrective action,
any material or personnel not already on the rig must
be transported from shore via helicopter or ship.
The high volume of production from offshore wells
means that large quantities of hydrocarbons can be
released in a relatively short time, affecting aquatic,
terrestrial, and avian wildlife. Stationary and bottom-dwelling aquatic organisms can be especially
vulnerable. Terrestrial wildlife can be affected when
oil is washed ashore, and birds can be affected both
by oil that is washed ashore and by oil floating in the
sea. Mitigating harmful impacts requires that spill
response capabilities are in place and can be rapidly
deployed. In arctic environments, periods of prolonged darkness, subzero temperature, and the presence of ice requires that response equipment and
strategies are adequately developed to be effective
under these challenging conditions.
Developing Unconventional
Unconventional resources are so termed because
they require additional techniques to produce beyond
those necessary for conventional resources. Uncon190
ventional play types, which are nearly all onshore,

offer high resource potential and can pose specific
environmental challenges due to the technologies
required to produce them.
yy Classes of unconventional oil include heavy oil, such
as bitumen found in oil sands; oil shale or kerogen,
which must be heated to transform it into a hydrocarbon; and tight oil, which may be conventional in
form, but is produced from low permeability formations using unconventional methods.
yy Unconventional gas resources, sometimes called
continuous gas reservoirs, include shale gas, tight
gas, and CBNG. These resources typically lack the
matrix permeability that is characteristic of conventional accumulations, connecting the pores of
the rock together. Since this lack of permeability
greatly reduces the ability for gas to flow, production requires induced fracturing or permeability.
Recent advances in stimulation techniques, such as
hydraulic fracturing, have improved the economics
of these reservoirs, enabling them to become key
resource plays in North America.
Oil Sands and Heavy Oil

Oil sands (e.g., extra heavy oil, bituminous sands)
are a type of bitumen deposit. The sands are naturally occurring mixtures of sand, clay, water, and an
extremely dense and viscous form of petroleum called
bitumen. Oil sand reserves have only recently been
considered part of the worlds oil reserves, as higher
oil prices and new technology enable them to be profitably extracted and upgraded to usable products.
Found in many countries throughout the world, oil
sands exist in greatest quantities in Canada and Venezuela. Currently, the Western Canada Sedimentary
Basin in northern Alberta is the only producer of
synthetic crude oil from bitumen deposits. The main
deposits are located in three areas in Alberta: Athabasca, Peace River, and Cold Lake.
Heavy crude oil feedstock needs pre-processing
before it is fit for conventional refineries. This
upgrading adds to the production cost and environmental considerations. In addition, the production of
oil sands entails substantially greater water consumption than conventional methods. Conventional oil
production, on average, uses from 0.1 to 0.3 barrels of
water per barrel of oil produced. Unconventional oil
supply water use ranges from 0.6 to 4 barrels of water
per barrel of oil produced.6 In some cases, fresh water

is required for unconventional extraction; however
non-potable water sources are also used where possible. For example, in steam-assisted gravity drainage (SAGD) operations in the Alberta oil sands, the
industry uses saline, or non-drinkable, water from
deep underground formations, which has allowed
the industry to reduce the amount of net water for
operations to 0.6 to 0.9 barrels per barrel of bitumen
produced.7 Furthermore, due to extensive recycling
of process water by oil sands producers, the average
amount of fresh water used per barrel of bitumen
produced is lower: 0.39 barrels for SAGD. Also, the
amount of fresh water consumed to produce a barrel
of bitumen has steadily declined over the last 25 years
and is much lower than producing a barrel of bitumen
from surface mining operations (2.5 barrels of water).
However, because the void left by the extracted bitumen in the underground formations is filled by water,
the final ratio of water used to oil produced for in situ
operations is closer to 1:1.8
Instead of being produced by wells, oil sands are
sometimes harvested by surface mining and separating the bitumen from the inorganic material at centralized surface facilities. Surface mining can create
many of the same challenges faced by surface coal
mines, including large-scale surface disturbance,
changes to surface contours and surface water drainage, and reclamation. Mining also can disrupt surface
water flows, remove portions of formations that contain usable groundwater, and potentially affect aquifers that occur below the producing zone. In addition, because the bitumen is separated from the sand
by hot water, the process uses large volumes of water
and results in large volumes of processed water that
is frequently stored in surface ponds while awaiting
treatment and disposal. There are concerns that these
6 Energy-Water Nexus Committee, Energy Demands on Water
Resources Report to Congress on the Interdependency of
Energy and Water, Department of Energy, Sandia National
Laboratory, December 2006.
7 Donahue, William, In Situ Oil Sands get ready for massive
water demands in northern and central Alberta, Water Matters, Table 1 Annual Water Use in Situ Oil Sands Operations
in Alberta, August 2010.
8 Griffiths, M., A. Taylor, and D. Woynillowicz. Troubled
Waters, Troubling Trends: Technology and Policy Options
to Reduce Water Use in Oil and Oil Sands Development in
Alberta, Pembina Institute for Appropriate Development,
Table 3-1, 2006.
ponds could result in surface or groundwater contamination and in adverse impacts to wildlife, especially
birds, if not properly managed.9
Another production method for oil sands is SAGD, a
process that, again, requires substantially more water
than conventional production. Combusting fuels to
heat water for steam injection can also result in higher
air emissions. In addition, mobilizing the bitumen in
the subsurface can create concerns about the potential impacts to any aquifers that may occur below the
production zone.10
Oil Shale
Oil shale is a fine-grained sedimentary rock containing organic matter that yields substantial amounts of
oil and combustible gas upon destructive distillation.
Destructive distillation (i.e., retorting) uses heat to
decompose the organic matter in the shale, producing hydrocarbon liquids and gases. This need for additional thermochemical decomposition, or pyrolysis, is
the main difference between oil sands and oil shale;
oil sands already have the product hydrocarbons,
whereas oil shale yields kerogen that must be cooked
to make the product hydrocarbons.
The economic potential of an oil shale resource is
largely determined by the price of petroleum and the
depth of the deposit; if it is near enough to surface,
it can be developed via open pit or conventional mining or by in situ methods. Additional factors include
transportation access, workforce availability, and the
chemical characteristics of the geology. Upon retorting, the number of gallons per ton of rock that can be
generated also largely influences the economic viability of the play.
Oil shale resources in North America are highly variable in composition and much of the supply remains
to be further evaluated. In Canada, 19 deposits have
been discovered, with the greatest potential coming from the Albert Formation in New Brunswick.
Additional deposits of interest in Canada include
the Devonian Kettle Point Formation and Ordovician Collingwood Shale located in southern Ontario,
and the Carboniferous oil shales in the Grinnell
9 National Energy Technology Laboratory (NETL), Unconventional Oil Resources Annual Report Fiscal Year 2004, November 3, 2004.
10 NETL, Unconventional Oil Resources Annual Report Fiscal
Year 2004.
191
Peninsula in the Canadian Arctic Archipelago. Oil

shales in the United States are found throughout
the East between formations known as Devonian
through Mississippian black shales and in Pennsylvanian aged shales in association with coal. In the West,
the Green River Formation is found in the U.S. Rocky
Mountain region. Other deposits exist throughout
the West and Alaska; however, limited research has
been conducted on these areas. The main potentially
productive area for oil shale is the Green River Formation near the common borders of Wyoming, Utah,
and Colorado, which contains about half of the world
reserves.
The environmental challenges associated with
oil shale development using surface mining, coupled with surface retorting, are similar to those
discussed above for oil sands and heavy oil. However, in situ retorting, which is expected to be
more widely used in the future, has different environmental challenges. The in situ conversion process developed by Shell involves placing electrical heaters in deep vertical holes drilled through
a section of the underground oil shale. The portion of oil shale penetrated is heated over a
two- to three-year period, until a temperature of
650700 degrees Fahrenheit is reached, at which
point the oil shale releases the liquid hydrocarbon.
The released hydrocarbon product is collected in
production wells located within the heated zone.11
In situ retorting of deep shale oils requires the
development of a dense network of roads, pipelines,
well pads, and processing facilities. The surface disturbance associated with this development is envisioned to be greater than the disturbance associated
with conventional oil or gas fields, to which in situ
processing can be compared. However, the technical feasibility of the concept centers on solving two
major environmental issues: controlling groundwater
during production and preventing subsurface environmental contamination, including groundwater
impacts.12
11 Bureau of Land Management, Oil Shale and Tar Sands Programmatic Environmental Impact Statement, (2008), accessed June
2011, http://ostseis.anl.gov/guide/oilshale/.
12 James T. Bartis, T. LaTourrette, L. Dixon, D. J. Peterson, and
G. Cecchine (RAND Corporation), Oil Shale Development in the
United States: Prospects and Policy Issues, MG-414-NETL, prepared for the National Energy Technology Laboratory, U.S.
Department of Energy, 2005, accessed June 27, 2011, http://
www.rand.org/pubs/monographs/2005/RAND_MG414.pdf.
192
Both mining and in situ conversion process recovery, coupled with processing activities for oil shale,
involve a variety of environmental challenges, such
as GHG emissions, disturbance of mined land, and
potential impacts to wildlife, air, and water quality.
The development of a commercial oil shale industry
in the United States would also have social and economic challenges for local and regional communities
as activity increases and workers move into the area.
Of singular concern would be development in the
arid western United States because a large amount of
water is required for oil shale processing.
Tight Oil, Shale Oil

Tight oil or shale oil (not to be confused with oil
shale) fields typically have some conventional oil
resource play characteristics and produce light crude.
However, they are unconventional in the sense that
porosity and permeability are too low to produce the
oil without stimulation. Two examples of successful
tight oil fields are the Bakken in North Dakota and
Montana, and the Eagle Ford in South Texas. Oil
companies discovered these fields decades ago, but
only with recent advances in horizontal drilling and
hydraulic fracturing technologies have they become
economic to drill and produce.
Extracting oil from shale uses the same process as
extracting gas from shale: injecting large quantities of
water, sand, and chemicals deep underground at high
pressure to create fractures that allow the oil flow.
The potential environmental impacts associated with
hydraulic fracturing practices associated with shale
are discussed in the following shale gas section.
Shale Gas
Shale gas is produced from low permeability shale
formations that are both the reservoir and the source
of the gas. As discussed below, tight gas is also sourced
from low permeability formations, but unlike shale gas,
the methane is not generated by the source rock. Coalbed natural gas is generated by its source rock through
either biogenic or thermogenic reactions, whereas
shale gas is generated only by thermogenic processes.
Subtle trapping mechanisms typically hold the gas
in the shale, allowing large areas of shale to be gas saturated. The potential for shale gas production in a reservoir is determined in part by the amount of gas generated by the shale, retention of this gas, presence of
fractures, and the mechanical properties of the rock.

The storage of the gas in the shale can greatly affect
the speed and efficiency of production. The percentage of gas recovered by current production methods
in shale gas reservoirs is low.
single technique for injection has worked universally.

Numerous techniques have been applied in the Appalachian Basin alone, including carbon dioxide, basic
fluid and chemical mix, foam nitrogen and carbon
dioxide, and just water.
Shale gas is one of the most rapidly expanding play

types in onshore North America. This rock was formerly seen as only a source of natural gas and a seal
for conventional reservoirs, but, with advances in
drilling and completion technology, shale gas plays
are becoming economically viable. As shown in
Figure 2-6, North American shale basins are widespread across the continent. Currently, the most
active shale plays include the Barnett, Haynesville/
Bossier, Antrim, Fayetteville, Marcellus, and New
Albany in the lower-48 states. Significant variations
across these areas present operational challenges that
must be addressed through play-specific strategies,
with exploration and development approaches suited
to the unique characteristics of each reservoir. Shale
basins are source rocks and the development of horizontal drilling coupled with hydraulic fracturing has
made the development of these resources viable.
Horizontal wells require large volumes of fluids to

fracture, introducing a number of environmental challenges. Use of freshwater has raised questions about
the potential impacts of surface water and groundwater withdrawals on other users and on aquatic life.
Produced water from shale gas wells has posed additional challenges because some production areas lack
UIC wells with sufficient capacity to receive the volume of water generated. Where produced water has
been treated and discharged into surface water bodies, questions have been raised about the potential
impacts to the receiving stream.
Advances in horizontal well drilling and hydraulic

fracturing have been instrumental in spurring the
production of shale gas. Horizontal drilling within
the formation allows more exposure of the formation
to the wellbore than a vertical well. This enables production with fewer wells overall, which lessens associated environmental impacts. Use of multi-well drilling pads further reduces the environmental footprint
and economic costs. The use of horizontal wells for
shale gas production can reduce the wildlife and other
surface use related challenges associated with conventional oil and gas production. Because multiple wells
are frequently drilled from a single pad, and because
each well is so productive, the amount of infrastructure and associated disturbance per well and per unit
of energy produced can be reduced by as much as 90%.
Whether shale gas wells are drilled vertically only
or with horizontal lengths in the formation, most
are hydraulically fractured to stimulate production.13
(For more information on hydraulic fracturing, see the
Hydraulic Fracturing section later in this chapter.)
Given the variability seen in the shale formations, no
13 Ground Water Protection Council and ALL Consulting, Modern
Shale Gas Development in the United States: A Primer, prepared
for the U.S. Department of Energy, Office of Fossil Energy,
National Energy Technology Laboratory, April 2009.
Chemicals needed for fracturing fluids also pose

challenges regarding safe transportation and storage
to prevent impacts to drinking water that might result
from spills. The potential for residual chemicals in the
produced water exacerbates the challenges associated
with its management. Concerns about the chemicals
used in hydraulic fracturing have led to repeated calls
for public disclosure of this information. While some
states have added rules requiring chemical disclosure
for hydraulic fracturing, the requirements to date are
not widespread and are not consistent. In addition,
in order for such disclosures to be useful, the information must be readily available. To address the concern
about chemical use and to make the information easily accessible over the Internet, industry has teamed
with the Ground Water Protection Council and the
Interstate Oil and Gas Compact Commission to create
a voluntary disclosure and information website called
FracFocus.
The rapid expansion of shale gas development has
brought natural gas activity to regions that have not
recently experienced widespread development. The
introduction of these activities has brought changes
in land use to both urban and rural areas. Along with
the development have come changes in traffic, noise,
and the landscape. In addition to provoking concerns
about health and safety, these changes in local areas
have drawn attention to shale gas development and
the environmental challenges associated with it.
While not unique to shale gas production, there
have been some widely publicized instances of
water wells being contaminated by methane. This
193
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MONTNEY
HORN RIVER
HERMOSA
MANCOS
HILLIARDBAXTERMANCOS
LEWIS
EAGLE
FORD
BARNETT
BEND
WOODFORD
PIERRE
EXCELLO
MULKY
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NIOBRARA
MOWRY
BARNETTWOODFORD
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COLORADO
GROUP
HAYNESVILLE
CHATTANOOGA
FLOYDNEAL
CONASAUGA
DEVONIAN
(OHIO)
ANTRIM
SHALE GAS BASINS
WOODFORD/
CANEY
FAYETTEVILLE
NEW
ALBANY
COLLINGWOOD
Figure 2-6. North American Shale Gas Basins
MARCELLUS
UTICA
HORTON
BLUFF
contamination has not been associated with fractures created by hydraulic fracturing, but can occur
during drilling when shallow geologic zones that
contain some natural gas are encountered. Drilling
through these zones can cause the gas to migrate
to drinking water aquifers and into domestic wells.
Industry continues to develop and apply drilling and
cementing strategies to further minimize the occurrence of gas migration.
As with conventional gas production, emissions
of criteria pollutants, hazardous air pollutants, and
GHG emissions from combustion, leaks, or other
fugitive emissions are associated with various points
in the shale gas development life cycle. In particular,
concerns about methane emissions from shale gas
wells and chemical emissions from produced water
have been raised as concerns for climate change and
human health.
Tight Gas
While tight gas is produced from conventional reservoir rock types such as sandstone and (less often)
carbonates, it is considered an unconventional
resource because the very low porosity of the reservoirs necessitates special completions techniques to
stimulate production. Reservoirs commonly lack a
water contact, and can range from a single reservoir
that is laterally extensive (tens of thousands of acres)
to stacked reservoirs thousands of feet thick.
Stimulation techniques often involve hydraulic
fracturing. Tight-gas drilling programs are under way
in the Appalachian Basin, Rocky Mountain basins
into Canada, and eastern and southern Texas. Figure 2-7 presents the tight gas basins in the lower-48
states.
Different drilling and completion techniques must
be used in different areas to respond to the heterogeneity of tight gas accumulations in both geology and
surface environmental setting. The appropriate wellbore design allows optimum contact with the producing formation, while avoiding infill drilling and minimizing footprint.
Environmental challenges for tight gas are similar
to those associated with shale gas with regards to
hydraulic fracturing. Other more common challenges
associated with surface disturbances and waste disposal are similar to conventional natural gas and oil
practices.
Coalbed Natural Gas

Natural gas is created naturally in coal formations
through one of two distinct pathways: a bacterial (or
biogenic) pathway, with anaerobic bacteria reducing
carbon dioxide to form methane at low temperatures,
or a thermogenic pathway, where the natural heat and
pressure within the earth convert organic matter from
coal into gas. Under the biogenic process, very shallow accumulations can occur, with maximum depths
of 4,000 feet, and the gas is composed mostly of methane with some carbon dioxide and nitrogen. Thermogenic CBNG is formed deeper in the earth, thousands
of feet below the surface, and contains methane and
heavier hydrocarbons. It may also contain hydrogen
sulfide. Thermogenic gas can migrate into shallower
coalbeds, adding to the self-sourced gas stored there.
The shallow coalbeds where CBNG occurs are completely permeated by water, the pressure of which
holds the gas in the reservoir, adsorbed onto the grain
surfaces of the coal or as a free phase in the water. In
order to produce the gas, the water must be removed,
reducing the pressure and allowing the gas to move
within the coal matrix to the wellbore. Production of
water dominates shallow CBNG wells until the pressure in the coal is reduced below saturation, allowing
gas to readily move. At this point, gas production
begins and water declines, a process that typically
takes several months. Understanding this driver for
production has been essential in the successful development of CBNG plays. The need for safe and efficient
wastewater disposal is a significant environmental
challenge for producing CBNG.
Although the most prolific CBNG basins are located
in the western United States (see Figure 2-8), the
Appalachian Basin, Illinois Basin, and some areas of
Alaska and Canada also have notable accumulations.
CBNG production generally is accomplished by
tightly spaced vertical wells. Several completion technologies have been evaluated including open hole
cavity completion, open hole completion, and (most
common) cased hole single- or multi-seam completion. Cased hole single- or multi-seam completions
may involve a form of hydraulic fracturing. Unlike
hydraulic fracturing in tight gas reservoirs, no proppants are used in CBNG production. Instead, water
is injected into the coal, a process that may result in
fracturing of the coal, but predominantly acts to flush
out the coal grains, flossing existing fissures to allow
the gas to flow to the wellbore.
195
196
GREAT
BASIN
RIVER
SAN
LUIS
ESPANOLA
ALBUQUERQUE
SALTON
TROUGH
SAN
JUAN
PICEANCE
UINTA
GREATER
GREEN
RIVER
SOUTH
PARK
DENVER
HANNA
POWDER
RIVER
PERMIAN
MAVERICK
FORT
WORTH
GULF COAST
ARKOMA
MIDCONTINENT
RIFT
RATON
ANADARKO
CRAZY
MOUNTAINS
BIGHORN
WIND
Source: Energy Information Administration, last updated April 2009.
SACRAMENTO SAN JOAQUIN
MODOC
SNAKE RIVER
PLAIN
COLUMBIA
WILLIAMETTE PUGET SOUND

TROUGH
TIGHT GAS BASINS
EAST TEXAS & NORTH LOUISIANA
APPALACHIAN
MICHIGAN
BLACK
WARRIOR
Figure 2-7. Tight Gas Basins in the Lower-48 States
Figure 2-7. Tight Gas Basins in the Lower-48 States
197
BLACK
MESA
SOUTHWESTERN
UTAH
UINTA
GREATER
GREEN
RIVER
BIGHORN
TERTIARY
LAKE BEDS
NORTH CENTRAL
MONTANA
RATON
MAVERICK
SOUTHWESTERN
SAN
JUAN
PICEANCE
DENVER
WIND
RIVER
POWDER
RIVER
WILLISTON
ILLINOIS
CBNG BASINS
GULF COAST
ARKOMA
CHEROKEE
FOREST
CITY
BLACK
WARRIOR
MICHIGAN
Figure 2-8. Major Coalbed Natural Gas (CBNG) Basins in the Lower-48 States
Figure 2-8. Major Coalbed Natural Gas (CBNG) Basins in the Lower-48 States
APPALACHIAN
CBNG produced water varies in the amount of salts

and metals in some cases, depending on the geology and hydrology of the coal formation and surrounding rocks. Both the quality and quantity of the
produced water have a large inuence on the way in
which the water is managed. For example, the large
amounts of water produced from the relatively shallow coalbeds in the Powder River basin of Montana
and Wyoming contain fairly low levels of salt that is
easily treated to meet state standards prior to being
reused or released. If this water is released into local
rivers and streams for disposal, the concerns focus on
the assimilative capacity of the receiving body so that
downstream irrigation is not adversely affected. The
produced water is sought after by ranchers and farmers for beneficial uses such as livestock watering and
irrigation, but again, the quality has to meet appropriate standards. Some produced water meets quality
standards for beneficial reuse or release without having to be treated.
The opposite is true of the deep coal formation of
Colorado, New Mexico, and Utah where very saline
water is produced but only in small quantities as
compared to the Powder River basin coals. However,
generally in these locations, suitable geologic formations for underground injection are readily available
and, therefore, much of the produced water is injected
into deep formations for permanent disposal. As this
example illustrates, many factors influence the treatment or disposal options chosen by operators. Some
of the factors include quality and quantity of produced water, availability of suitable geology for injection, exiting infrastructure, cost of treatment and
transport, the waters age in the coalbed and possible
connections to other groundwater sources, and state
regulatory requirements.14
History of Innovation in
Environmental Stewardship
Key Points:
yy Advances in technology and operating practices, in all phases of the development life
cycle and in all production settings, have
14 National Academy of Sciences, Management and Effects of

Coal Bed Methane Produced Water in the Western United
States, 2010, accessed June 2011, http://www.scribd.com/
doc/44556385/Coalbed-Methane-Produced-Water-Report-inBrief.
198
allowed production of new and more challenging resources while at the same time improving environmental protection.
yy Moving forward, we can expect to see technology and operational advancements that will
allow production of even more challenging
resources while continuing to improve environmental performance.
The modern history of natural gas and oil began
in 1858 when Colonel Drake applied saltwater boring techniques to drill for rock oil in Titusville, Pennsylvania. He unknowingly ushered in a new era that
would see the escalation of capitalism and modern
business, the linking of national strategies and global
politics, and the emergence of a society dominated
by hydrocarbons and the conveniences that define
21st-century man. The history of natural gas and
oil development encompasses geographical advances
across North America and the world; an enhanced
knowledge of geology and ecology; breakthroughs
in chemical, mechanical, and environmental engineering; and countless conveniences that utilized
the energy density of hydrocarbons to deliver energy
and products to enhance the quality of life for Americans. Today, the history of natural gas and oil across
the United States has come full circle, from the initial development of oil in western Pennsylvania in the
1860s to the current boom in Marcellus Shale natural
gas drilling initiated in 2006. Drilling has returned
to its birthplace, Pennsylvania, with new challenges
(albeit natural gas instead of oil) for a new century.
Resource extraction in North America has been
transformed over the last century to reflect the social
values of providing cleaner energy with fewer environmental impacts. As the natural gas and oil industry has matured, measures for protecting threatened
or endangered species and other environmental
resources have grown more sophisticated and effective. Regulatory agencies at the federal, state, and
local level have endeavored to be vigilant in overseeing natural gas and oil operations for compliance of
rules, regulations, and statutes. Public concerns and
involvement have become increasingly important in
driving the evolution of environmental regulations,
as well as the technologies and operational practices
employed by industry to protect the environment or
community beyond regulatory requirements.
New technologies coupled with management systems and conscientious employees are responsible
for reducing the environmental footprint of natural
gas and oil development activities over time. Flexibility within environmental regulations has allowed
technology to be adapted to different settings and
circumstances encountered during development.
In some cases, new production technologies have
required changes to the strategies employed to protect
the environment; in other cases, the efficiencies associated with advanced technologies have resulted in
improved environmental performance. In still other
cases, new environmental regulations have resulted in
innovative practices and technologies that have been
employed to ensure compliance.
Together, voluntary actions and regulatory oversight have led to a more harmonious concert between
the natural gas and oil industry and the environment.
Todays industry views environmental stewardship
as a strategy to assuring access to future reservoirs.
Continued innovation in exploration and production
technologies can further minimize the risks in developing North American natural gas and oil resources,
particularly those in highly sensitive areas and frontier resources plays.
This section discusses the evolution of technologies and practices for onshore and offshore exploration and production, followed by a discussion of
future expectations in environmental stewardship.
Advances have taken place in all phases of the development, as well as across environmental media, giving
rise to the prospect of future natural gas exploration
and production trends that are progressively smarter
and more effective in environmental protection.
yy Air Quality Improvements have been realized
through advances in pipeline technologies, which
have reduced the venting of natural gas as a waste;
use of natural gas-fired or electric engines during production to reduce site emissions; measures
to reduce emissions and dust from truck traffic;
and industry efforts to reduce methane emissions
through the Natural Gas STAR Program.
yy Water Quality Innovations in protecting water
resources include improvements in well construction, well control, and plugging practices; development of produced water injection wells for
enhanced oil recovery; and advances in water use
management practices, including reuse of produced
water in hydraulic fracture operations.
yy Land Management and Wildlife Protection Seismic and drilling technologies, including horizontal
drilling, have significantly reduced the amount of
land surface disturbance in onshore development,
lessening impacts such as erosion and habitat fragmentation.
yy Materials Management Ongoing improvements
in managing drilling fluids and cuttings, as well as
produced water during production, have reduced
environmental impacts of operations. Closed loop
drilling systems reduce the volume of waste and
eliminate a potential source of contamination.
yy Offshore Environmental Management
Extended-reach and horizontal drilling, unmanned
satellite production systems, and floating production systems have been instrumental in reducing the amount and surface extent of the infrastructures needed to produce subsea hydrocarbon
resources. Other environmental improvements
have included mitigation measures to reduce the
potential impacts of seismic surveys on marine life,
and the adoption of environmental management
systems as a means of systematically and continuously improving environmental performance.
yy Data Management Digital data acquisition and
telecommunications technologies have facilitated
prudent development of natural gas and oil for
example, through measurement-while-drilling systems. Internet technologies have increased the
opportunities for more efficient data sharing in the
areas of regulatory reporting, data sharing between
partners, and public access to operational and compliance information maintained by public agencies.
Figure 2-9 depicts the advancement of the U.S.
natural gas and oil industry in six roughly quartercentury time blocks. Drilling activity is shown from
1844 to 2010, indicating the percentage of wells that
were oil or natural gas (with the remainder assumed
to be freshwater or saltwater). Also shown are natural gas and oil discoveries and technological achievements, environmental laws and regulations, and historical highlights.
Onshore Development of
Natural Gas and Oil
Just like the gold rushes of the 1800s, early oil exploration and production conjures images of wooden derrick forests with operators working in close proximity
199
Continuous Innovation of Technology and Environmental

Stewardship inFigure
the Natural
Gas and
Oil Industry
2-9. The Evolution
of Technology
in the Natural Gas and Oil Industry:
Continuous Innovation of Technology and Environmental Stewardship in the Natural Gas and Oil Industry
D R I L L I N G A C T I V I T Y I N T H E U N I T E D S TAT E S
150 wells per 64,000

acres (100 square miles)
January 1, 1925 to December 31, 1949
50250 wells per 64,000

251500 wells per 64,000

5011,000 wells per 64,000

>1,000 wells per 64,000

ENVIRONMENTAL L AWS & REGUL ATIONS
1863 PA enacts first anti-pollution law preventing

running of tar and distillery refuse into creeks
1915 CA enacts well drilling, production, and

abandonment law
1935 Interstate Oil & Gas Compact Commission

(IOGCC) established (OK, TX, CO, IL, NM, and KS)
1879 NY mandates plugging of abandoned oil and

natural gas wells to prevent freshwater contamination
1917 OK expands oil and natural gas regulatory

mandate to groundwater protection and well
plugging and abandonment
1941 Multiple states enact moratoria on aspects

of oil and gas conservation and environmental
regulation to support war effort
1918 Migratory Bird Treaty Act
1946 KS Board of Health authorized to regulate oil

field brine disposal
1883 OH enacts law regulating methods of casing

and plugging oil and natural gas wells
1890 PA enacts first law requiring non-producing
wells to be plugged
1899 TX enacts law on groundwater protection, well
abandonment, and conservation of natural gas
OIL & GAS TECHNOLOGY
1821 First well dug specifically intended to obtain
natural gas in Fredonia, NY, by William Hart
1839 Marcellus Shale identified and named by NY
state geologist James Halls
1854 First oil company, Pennsylvania Rock Oil
Company, formed by James M. Townsend
1858 First shale gas well fracture using gun powder
in Fredonia, NY, by Preston Barmore (first petroleum
engineer)
1859 First successful oil well, Drake Well, drilled in
Titusville, PA (about 70 ft.)
1870 First and largest multinational corporation,
Standard Oil Company, founded by John D.
Rockefeller and Henry Flagler
1924 Oil Pollution Control Act
1946 Bureau of Land Management created by

President Harry Truman

1891 First lengthy natural gas pipeline constructed
from wells in central IN to Chicago, IL (120 mi.)
1897 First offshore well drilled south of Santa
Barbara, CA (455 ft. below seabed)
1901 Oil explorer Captain Anthony Lucas drills
Spindletop Gusher in Beaumont, TX
1905 Oil strike in Glen Pool, OK, heralded as
largest discovery of its time
18611865
Civil War
18581890
Internal combustion
engine
200

1922 Wildcatter James S. Abercrombie and
machinist Harry S. Cameron develop successful
ram-type blowout preventer
1927 First patent on caustic flooding for improved
oil recovery
1929 Barite introduced to drilling fluids
1909 H. Hughes Sr. and Walter Sharp introduce

Two-Cone Drill Bit, enabling deep boring
1929 First controlled directional drilling in Huntington

Beach, CA, by H. John Eastman
1911 Standard Oil Company dissolved by

Sherman Antitrust Act
1930 East Texas Oilfield discovered by Dad Joiner

1933 Hughes Tool Company develops Tricone Drill Bit
1917 American Association of Petroleum

Geologists founded
1934 First relief well to control a blowout used in

Conroe, TX, by H. John Eastman
1921 First horizontal oil well drilled in Texon, TX

1921 First experimental use of seismic
imaging at Vines Branch, OK
1840 First recorded

use of natural gas
for manufacturing,
Centerville, PA
1948 Federal Water Pollution Control Act (FWPCA)
1897 Thomas
Edison invented
incandescent lamp
1903 Wright
Brothers first flight
1905 First
gas station
1938 Cooper-Bessmer Integral-Angle Gas Engine

Compressor installed in natural gas pipeline
1908 Ford Model-T
19391945 WWII
1911 U.S. military

converts to oil as
fuel source
1945 Worlds first

nuclear explosion
at Trinity test site,
Alamogordo, NM
19141919 WWI
1929 Start of Great
Depression
1958 First commercial

nuclear power plant,
Shippingport, PA
1958 First integrated
circuit silicon chip
1960 OPEC formed
Figure 2-9. The Evolution of Technology in the Natural Gas and Oil Industry
(Continued)
January 1, 2000 to January 6, 2011
1953 Outer Continental Shelf Lands Act
1976 Resource Conservation and Recovery Act

and Federal Land Policy and Management Act
1999 State Review of Oil and Natural Gas Environmental Regulations (STRONGER) established
1977 Surface Mining Control and Reclamation

Act, Toxic Substances Control Act, and FWPCA
renamed Clean Water Act
2001 U.S. House passes legislation opening a

portion of the Arctic National Wildlife Refuge to oil
and gas drilling; Senate rejects proposal
1977 FERC established
2005 Energy Policy Act clarifies hydraulic

fracturing with regards to SDWA
1968 Cuyahoga River engulfed in

flames in northeastern OH
1969 Santa Barbara oil spill leads to
environmental legislation and is the impetus
for the environmental law movement in the U.S.
1970 National Environmental Policy Act,
Occupational Safety and Health Act, Clean Air Act,
and the U.S. EPA established
1980 Comprehensive Environmental Response,

Compensation and Liability Act
1972 Noise Control Act
1986 Title III Superfund Amendments and

Reauthorization Act
1973 Endangered Species Act
1987 Pipeline Safety Act
1974 Safe Drinking Water Act
1989 Hazard Communication Standard
1989 Exxon Valdez runs aground in

Prince William Sound, AK
1947 Hydraulic fracturing first used in the U.S. as

experiment to stimulate an oil well, Grant County, KS
(Stanolind Oil)
19472011 Kerr-McGee drills first offshore well
out of sight of land, Vermilion Parish, LA, with
continuous firsts in offshore technology afterward
1967 First 3D seismic survey (Exxon) in
Friendswood field, Houston, TX
1968 First well drilled in >1,000 ft of water by
Humble Oil in Santa Barbara channel
1968 Oil discovered on Alaskas North Slope
2005 DOI opens thousands of acres on the Alaska

North Slope for drilling
2008 Ten-year moratoria on U.S. offshore oil and
natural gas leasing end
2010 WY enacts new oil and gas regulations
requiring full chemical disclosure for hydraulic
fracturing fluid additives
2010 Deepwater Horizon oil rig explodes
in the Gulf of Mexico, causing largest offshore oil
spill in U.S. history
1989 GWPC and IOGCC initiate reviews of state

oil and natural gas regulatory programs
2010 San Bruno, CA, natural gas pipeline

explosion
1990 Oil Pollution Act

1977 Trans-Alaska Oil Pipeline System completed

after three years of work
1977 U.S. DOE established
1995 Mitchell Energy refines hydraulic fracturing

coupled with horizontal wells in the Barnett Shale,
TX, to recover natural gas
1978 First fixed offshore platform >1,000 ft. deep,

Shell Cognac
1997 Baker Hughes Corporation introduces rotary

closed loop drilling system
1982 First steerable drilling system
1999 Largest oil discovery in Gulf of Mexico,

BP Thunder Horse field (6,000 ft.,1 billion BOE)
1972 Landset satellite used for remote sensing
2006 New seismic recording technique measures

hydraulic fracture propagation in unconventional
reservoirs
1972 First use of carbon dioxide-enhanced

oil recovery, Scurry County, TX
1960 First large-scale

geothermal electric
plant, The Geysers, CA
1969 First man walks on
the moon (Neil Armstrong)
1970 Founding of
Earth Day
1973 First personal
computer
1973 Arab Oil Embargo
1978 Natural Gas Policy

Act enables competitive
wellhead pricing, which
spurs production
1980s Large-scale
wind farm technology
used for the first time
in CA
1978 NASA dedicates

first solar photovoltaic
system, AZ
1986 Crude oil

price collapses
1980 Iraq-Iran War
1990 World Wide Web
19901991
Persian Gulf War
1991 Drawdown of
Strategic Petroleum Reserve
1997 Kyoto Agreement to
limit greenhouse gases
2009 Oil price tops $140/

bbl; Dow Jones Industrial
Average plunges 360 points
2010 World oil demand
reaches 87 million bbls/day
2003 U.S.-Iraq War
201
with little or no regard for the environmental impacts

of their actions. The petroleum industry has matured
over the last century, evolving into a highly technical
industry that develops and employs innovative solutions in all aspects of exploration, drilling, completion, production, and site restoration.
that drilling on ridge tops would result in dry holes.

Exploration in other regions revealed the error in this
assumption. In actuality, oil floats on top of water
and, outside the Appalachians, often exists on ridge
tops. The paradigm continues to shift as today natural
gas and oil can be extracted from impermeable rock.
Exploration
Hundreds of years ago, before any wells were drilled,
natural gas was found to be naturally percolating up
through the soil and through creeks, where mischievous children would light it for entertainment. The
original production system for oil involved damming
up an oil seep, and then floating the oil down a river
to be picked up by a weir.
Once the relationships between oil location and

anticline geology were understood, exploration
quickly expanded beyond Pennsylvania and the exploration industry was born. Prior to 1920, exploration
activities were noninvasive and typically conducted
on foot or on horseback, producing no noticeable
impacts to the environment. Exploration usually
involved field mapping and gravity surveys, neither of
which left an obvious impression.
During the 19th century and into the early years of

the 20th century, prospecting was pretty much a hitor-miss proposition. A geologist looked for exposed
beds of asphalt, oil springs, naturally occurring methane in streams, or traces of hydrocarbons in water
wells to help identify potential sources of oil. Methods ranged from divining rods to creekology (drilling inside the curve of a creek), but none was a sure
thing and most wildcatters thought close was the
best geologic method (meaning being close enough to
the last well to smell it).15
The development of more sophisticated seismic

methods for subsurface imaging changed all that.
Seismic imaging required the drilling of holes for dynamite and the laying of miles of cable across the countryside, and large trucks and other support vehicles
were often used to carry equipment and machines. In
the 1930s and 1940s, it was commonplace to see systematic patterns of drill holes across the landscape,
reaching down through soil layers to bedrock for the
placement of charges, coupled with heavy truck tracks
traversing the fields.
Analyzing streams and domestic water wells for the

presence of naturally occurring methane proved to
be one of the more successful prospecting methods.
A map of domestic well locations with corresponding
concentrations of hydrocarbons would be drawn and
potential drilling locations plotted based on isotropic
concentrations, zeroing in on the sweet spot.16 The
presence of naturally occurring methane in domestic water wells prompted several states, including
New York, Pennsylvania, Colorado, and Wyoming, to
pass laws regarding the placement of wells in relationship to construction of a house.
With the availability of computers in the late 1960s,

processing of large seismic data sets became manageable, and common depth point seismic operations
became the standard operating procedure. More
recently, three-dimensional (3D) seismic tools for
subsurface imaging have provided economically viable
methods of discovering and producing natural gas and
oil from ever more challenging and remote locations.
Slowly, oilmen, geologists, and drillers began to

notice seismology and subsurface structure. Due to
anomalies of Appalachian regional geology and topography, oil there was located in valleys, leading many
people to surmise that oil flowed downward and
15 O. Scott Perry, Oil Exploration, The Handbook of Texas Online,
Texas State Historical Association, accessed April 11, 2011,
http://www.tshaonline.org/handbook/online/articles/doo15.
16 Craig Miner, Discovery! Cycles of Change in the Kansas Oil & Gas
Industry 1860-1987, Wichita, KS: KIOGA, 1987.
202
Today, geologists and geophysicists use an array of

advanced techniques to find commercial accumulations of natural gas and oil. High-speed computing,
remote sensing and imaging, geologic interpretation,
and visualization technology are coupled with global
positioning systems, the latest geographical information systems, and 3D seismic and four-dimensional
(4D) imaging capabilities to pinpoint promising new
reservoirs. In place of dynamite, seismic technology now employs less intrusive methods designed to
mitigate surface and near-surface impacts, such as
designed-for-purpose air explosives, contained surface explosions, and vibrators. These technological
advances, combined with state regulations for registering seismic surveys, have eliminated or reduced
many of the onshore environmental impacts associated with seismic exploration (e.g., unplugged shot
holes and vehicle tracks).17
Modern sensing technology has significantly
reduced dry holes in both exploration and production
operations, conserving valuable natural resources and
minimizing drilling activities and associated impacts.
Thanks to this technology, success rates for discovery
of economical quantities of natural gas and oil are up
more than 50% over the last 30 years.18 In the most
recent decade alone, the drilling success rate improved
from 75% successful wells in 1999 to 90% success as
of 2009.19
Drilling
Drilling was rudimentary in the 19th century,
employing wooden derricks that raised and lowered
cable tool drills repeatedly, taking advantage of gravity to grind up the bottom of the hole. To clean cuttings from the borehole, workers would bail out the
waste and pour it on the ground next to the rig.
As drilling technology matured, engine-powered
rotary drilling rigs combined drilling and setting of
the string, enabling deeper wells (more than 30,000
feet today) and the discovery of more resources. The
first rotary drilling rig was developed in France in the
1860s, but it was not until 1901 when Captain Antony Lucas used one to drill a gusher (Spindletop) near
Beaumont, Texas, that they were adapted for natural
gas and oil development. Drillers for the first time
could steer the bit to maintain a straight hole and perform real-time examination of rock samples for densities, allowing them to maintain pressure on the drilling process to control fluid entering and exiting the
borehole. Early circulating systems in rotary drilling
were focused on controlling subsurface pressures and
cleaning the cuttings from the wellbore.
At first, there was no mechanism to control the
flow of oil or gas once the drill bit penetrated the target formation. Wildcatter James S. Abercrombie and
17 Diane Freeman, No Seismic Footprints Left Behind, AAPG
Explorer, October 1999, accessed April 11, 2011, http://www.
aapg.org/explorer/1999/10oct/conoco3d.cfm.
18 Lee C. Gerhard and William F. Larson, The Environmental

Evolution of the Petroleum Industry, Interstate Oil and Gas
Compact Commission, April 2001.
19 M. C. Godec, Environmental Performance of the Exploration and Production Industry: Past, Present, and Future, SPE
Paper 120918, 2009.
machinist Harry S. Cameron are credited with developing the first successful ram-type blowout preventer
(BOP) in 1922. Mud system advances occurred in the
late 1920s with the addition of barite and bentonite
into drilling fluids to add weight to the fluid, which
prevented formation fluids from entering into the
wellbore, kept the drill bit cool and clean, and transported the cuttings to the surface. Use of rotary drilling and mud systems has helped to stop blowouts and
resulting spills and fires. Another important advance
in well control technology has been casing and
cementing for wellbores, which forms a seal between
potable water aquifers and the borehole, keeping
freshwater from being mixed with other fluids.
When introduced in 1984, steerable drilling was
very expensive; but cost improvements enabled its
use by 1990 to establish horizontal wellbores in large
resource plays, accessing many more feet of formation than a conventional vertical well. Using horizontal drilling, bores of more than a half-mile have been
drilled successfully. Horizontal drilling can access the
same resources with fewer wells spaced further apart,
reducing the environmental impacts including waste
disposal, material use, and energy consumption.
Operational footprints are further reduced since the
drill rigs no longer stay at the site but are moved to
the next project. Today, horizontal drilling permits
access to previously inaccessible reservoirs, production from unconventional source rock, and the ability to produce resources in deeper offshore waters.
The benefits of this technology include reduction of
the number of wells required to produce a resource;
development of multi-well pads that confer a variety
of environmental advantages; the ability to avoid sensitive surface environments; and use of centralized
facilities to service multiple wells.
Prudent resource development has been greatly
facilitated by data management systems. Todays
measurement-while-drilling and logging-whiledrilling technologies, for example, allow real-time
analysis of rock properties and more effective steering of the drill into reservoirs. Basic rig instrumentation has been an integral part of drilling operations
since the early 20th century. With the introduction of the Geolograph in 1937, time-based analog
charts soon became the de facto record of events
and a basic tool for trend analysis and identification
of anomalies. A gradual shift to digital information capture began in the mid-1970s, as computerized mud-logging units were deployed to drill sites.
203
Digital data acquisition offered greater flexibility in

how data were stored, displayed, and utilized, while
advances in telecommunications technology enabled
transmission of the data to other locations, aggregating data from various sources, coordinating data
analyses, and engaging remotely located personnel.
As drilling technology continues to advance, rigs
are becoming smaller. Coiled tubing rigs allow drilling of shallow to intermediate-depth wells without a
derrick, using a motorized drill bit and flexible coiled
tubing applied from a revolving drum and fed by mud
pumps. With a smaller hole (slim hole), drilling
waste is reduced along with environmental impacts.
Drilling fluids and cuttings are the largest potential
waste stream during drilling. Fluids consist primarily
of water with entrained solids. Barite, a heavy mineral, is commonly introduced to add density to the
drilling fluid; bentonite, a swelling clay, is used to add
viscosity and provide a slick wall cake on the wellbore.
Both of these key additives have low environmental impacts. Improvements in waste management
include milling of cuttings for reinjection in former
or abandoned wellbores, where supported by the geology, eliminating mud pits and reducing the potential
environmental impact of leaks and handling. Current technologies such as closed-loop drilling systems allow for cuttings to be separated and disposed
via landfill while the muds are reused in subsequent
drilling operations. The approach can reduce cost for
operators, reduces the volume of waste, and promotes
zero discharge of wastes.
Operators have instituted a variety of practices to
address regional and site-specific air quality concerns
associated with drilling. In some cases, operators
have employed natural gas-fired engines or electric
engines for compressors or drilling rigs in order to
reduce site emissions. Intensive planning and the use
of remote monitoring and reporting equipment have
reduced truck traffic during both drilling and production phases, limiting engine emissions and fugitive
dust. These practices have the added benefit of mitigating community impacts by reducing road damage
and traffic congestion.
In scenic areas, measures are taken during development to minimize surface disturbances and habitat
fragmentation, although some visual impacts remain
until all the reclamation activities are completed. Typical methods include stockpiling topsoil and replanting
vegetation to reclaim roads. Some roads are reclaimed
204
when production ceases while others remain in place

for recreational or other beneficial activities; in
Alaska, ice roads and ice pads may be used to facilitate
development without leaving a permanent impact.20
Advanced drilling technologies have reduced the
amount of surface disturbance required to develop
natural gas and resources by as much as 90% in some
cases. Less surface disturbance reduces the potential for erosion and reduces vegetation loss including
deforestation. In addition, the need for fewer well
pads and roads minimizes habitat fragmentation for
wildlife, and also results in fewer vehicle miles traveled with the attendant lower air emissions. Evidence of the reduced environmental impact resulting from new drilling technology is widespread. On
Alaskas North Slope, for example, the surface footprint of drill pads has been reduced from 60 acres to
6 acres. Tens of wells are drilled from these small pad
footprints, resulting in the elimination of other pad
sites and associated infrastructure; and the Department of Energy (DOE) reports that the volumes of
waste generated from 100 barrels of oil equivalent
of reserve additions has shrunk from 7.5 to 3.4 barrels.21 Another example is found in Ecuador, where
ARCO developed a 200-million-barrel field from
one 5-acre rainforest site using directional drilling.
The facility was normally unmanned as an impactreduction measure and there was no road to the site.
The pipeline was carefully placed between the trees
under the rainforest canopy, making it near invisible
from the air. Electricity was used on the production
site to reduce engine noise and eliminate exhaust
emissions; the power was supplied along the same
path as the pipeline, further consolidating any disturbances. This approach was implemented with no
increase in cost over conventional methods.22
Hydraulic fracturing is an integral part of natural
gas and oil development across the United States. Its
objectives are to increase the rate at which a well is
20 U.S. Department of Energy, Environmental Benefits of Advanced
Oil and Gas Exploration and Production Technology, DOE-FE-0385,
October 1999, accessed April 15, 2011, http://fossil.energy.gov/
programs/oilgas/publications/environ_benefits/env_benefits.
pdf.
21 U.S. Department of Energy, Environmental Benefits of Advanced
Oil and Gas Exploration and Production Technology.
22 K. Lathrop, C. Slack, and R. Draper, The Villano Project: Preserving the Effort with Words and Pictures, Atlantic Richfield
Corporation, 1999.
able to produce natural gas or oil and to increase the

economically recoverable reserves for a well. Production increases from this technology, especially when
it is combined with horizontal drilling, dramatically
reduce the environmental footprint of development
while economically commercializing historically undevelopable resources.
Fracturing in its various forms is over 150 years
old.23 The first shale gas fracturing job was performed
in 1858 in Fredonia, New York, prior to Colonel Drake
drilling his first oil well.24 Black powder was used in
multiple stages and the resultant flow rate changes
were recorded after each stage. The first experimental hydraulic fracturing treatment for oil production
was performed in Grant County, Kansas, in 1947
by Stanolind Oil. A limestone formation approximately 2,400 feet below ground level was fractured
using 1,000 gallons of naphthenic-acid and palm-oil
thickened gasoline, followed by a gel breaker. Following the experiment, an industry paper was written by
J. B. Clark of Stanolind Oil introducing the technology. In 1949, a patent was issued granting Halliburton Oil Well Cementing Company the exclusive right
to pump the new Hydrafrac process.
ations. Today, the technology is used on up to 95% of

new wells and is continuously refined and modified to
optimize fracture networking and maximize resource
production. The future influence of hydraulic fracturing technology on the industry and energy market
could be staggering, as new sources of unconventional
hydrocarbon resources are discovered and exploited.
Modern hydraulic fracturing technology involves
sophisticated, engineering processes designed to create distinct fracture networks in specific rock strata.
Figure 2-10 shows a cross-section diagram of a horizontal well with multiple completion stages where
pathways have been created and filled with proppant. Advanced fracturing processes are continually
refined to account for in situ reservoir characteristics and optimize natural gas and oil production,
using tools such as modeling, micro-seismic fracture
mapping, and tilt-meter analysis to define the success and orientation of the fractures created. While
Figure 2-10. Horizontal Well Completion Stages
The first commercial application of hydraulic

fracturing was performed in March 1949, at a well
12 miles east of Duncan, Oklahoma. The same day,
a second well was hydraulically fractured near Holliday, Texas. In the first year, 332 wells were hydraulically fractured with the new technology, yielding an
average production increase of 75%. Since then, more
than 2 million hydraulic fracture stimulations have
been completed in the United States.25
Over time, hydraulic fracturing has evolved in
response to challenges posed by different resource
types and diverse locations, environmental challenges, costs and economics, and regulatory consider23 John A. Harper, The Marcellus Shale An Old New Gas Reservoir in Pennsylvania, Pennsylvania Geology, 38, no. 1, Spring
2008: pages 213, accessed June 29, 2011, http://www.dcnr.
state.pa.us/topogeo/pub/pageolmag/pdfs/v38n1.pdf.
24 Eileen and Gary Lash, SUNY Fredonia Shale Research Institute, Kicking Down the Well, The Early History of Natural Gas
( 2010), accessed June 29, 2011, http://www.fredonia.edu/
shaleinstitute/history.asp.
25 Carl T. Montgomery and Michael B. Smith, Hydraulic Fracturing History of an Enduring Technology, JPT: The Journal of Petroleum Technology 62, no. 12, December 2010: pages
2632, accessed June 29, 2011, http://www.spe.org/jpt/print/
archives/2010/12/10Hydraulic.pdf.
205
hydraulic fracturing typically is used during the initial completion of the well, it also can occur after the
initial completion of a well, when it is believed that
stimulation of the well could provide additional economic benefit.
The makeup of fracturing fluids is varied to meet

specific reservoir and operational conditions, precluding one-size-fits-all formulas. Water and sand
are the most common constituents of most fracturing fluids. More recently, advances in water use
Hydraulic fracturing is the treatment applied to
reservoir rock to improve the flow of trapped oil
or natural gas from its initial location to the wellbore. This process involves creating fractures in the
formation and placing sand or proppant in those
fractures to hold them open. Fracturing is accomplished by injecting water and fluids designed for
the specific site under high pressure in a process
that is engineered, controlled, and monitored.
Fracturing Facts
yy Hydraulic fracturing was first used in 1947 in an
oil well in Grant County, Kansas, and by 2002,
the practice had already been used approximately
a million times in the United States.*
yy Up to 95% of wells drilled today are hydraulically
fractured, accounting for more than 43% of total
U.S. oil production and 67% of natural gas production.
yy The first known instance where hydraulic fracturing was raised as a technology of concern
was when it was used in shallow coalbed methane formations that contained freshwater (Black
Warrior Basin, Alabama, 1997).
drilling goes through shallower areas, with the

drilling equipment and production pipe sealed
off using casing and cementing techniques.
yy The technology and its application are continuously evolving. For example, testing and development are underway of safer fracturing fluid
additives.
yy The Interstate Oil and Gas Compact Commission
(IOGCC), comprised of 30 member states in the
United States, reported in 2009 that there have
been no cases where hydraulic fracturing has
been verified to have contaminated water.
yy A new voluntary chemical registry (FracFocus)
for disclosing fracture fluid additives was
launched in the spring of 2011 by the Ground
Water Protection Council and the IOGCC. Texas
operators are required by law to use FracFocus.
yy The Environmental Protection Agency concluded
in 2004 that the injection of hydraulic fracturing fluids into coalbed methane wells poses little
or no threat to underground sources of drinking water. The U.S. Environmental Protection
Agency is currently studying hydraulic fracturing
in unconventional formations to better understand the full life-cycle relationship between
hydraulic fracturing and drinking water and
groundwater resources.
yy In areas with deep unconventional formations

(such as the Marcellus areas of Appalachia), the
shale gas under development is separated from
freshwater aquifers by thousands of feet and
multiple confining layers. To reach these deep
formations where the fracturing of rock occurs,
yy The Secretary of Energys Advisory Board is also

studying ways to improve the safety and environmental performance relating to shale gas development, including hydraulic fracturing.
* Interstate Oil and Gas Compact Commission, Testimony

Subcommittee on Energy and Mineral Resources, June 18,
2009, Attachment B.
Interstate Oil and Gas Compact Commission, Testimony

Subcommittee on Energy and Mineral Resources,
June 18, 2009, Attachment B.
IHS Global Insights, Measuring the Economic and Energy

Impacts of Proposals to Regulate Hydraulic Fracturing,
2009; and Energy Information Administration, Natural Gas and Crude Oil Production, December 2010 and
July 2011.
U.S. Environmental Protection Agency, Office of Water,

Office of Ground Water and Drinking Water, Evaluation
of Impacts to Underground Sources of Drinking Water
by Hydraulic Fracturing of Coalbed Methane Reservoirs
(4606M) EPA 816-R-04-003, June 2004.
206
management practices have resulted in reduced

demands on freshwater sources. The volumes of
freshwater used for hydraulic fracturing of shale
gas wells have led to concerns about the potential impacts to local and regional water supplies as
well as potential impacts to aquatic wildlife. Going
beyond regulatory requirements designed to ensure
that water withdrawals do not adversely affect the
environment, many operators are pursuing reuse of
produced water in subsequent fracture operations.
This reuse of produced water reduces demands on
freshwater, and impacts associated with trucking of
water, such as traffic congestion, road damage, dust,
and engine emissions. In addition, reuse reduces the
amount of water to be disposed.
Production
Oil and saltwater are almost always produced
together. Produced saltwater which can be up to
10 times the salinity of seawater at 400,000 parts
per million represents the largest potential waste
stream during oil production. Improper disposal of
saltwater can affect freshwater and can harm vegetation, in turn increasing erosion.
In the 19th century, there was little interest in properly disposing of saltwater since population densities
were low and potable water supplies plentiful. Typically, saltwater was simply poured out on the ground.
By the early 20th century, it became commonplace to
store produced water in ponds. A thin film of oil on
the waters surface reduced the rate of evaporation,
increasing the chance for infiltration and damage to
underlying aquifers. Some states instituted regulated
disposal, requiring lined ponds or impoundments.
Today, injecting produced water into approved disposal zones (injection wells) has become the preferred
alternative for disposal, greatly reducing surface and
groundwater contamination. Injection of produced
water to improve production began as early as 1910
in Pennsylvania. The Safe Drinking Water Act, passed
in 1974, established the UIC program, which sets well
casing and cementing standards to ensure protection
of underground sources of drinking water.
If disposal systems cross salt beds, it is necessary
to protect well casings against corrosion by inserting
tubing in the casing. Historically, when disposal wells
were reaching the end of their useful life or sold, operators would pull the corroded tubing and then inject
saltwater. This caused rapid casing corrosion and leaks
into salt beds. Many states have regulations in place

to inspect and conduct mechanical integrity tests of
disposal systems, to prevent the escape of saltwater.
Another environmental issue in producing and
transporting oil is prevention and remediation of
spills. Although oil is naturally biodegradable, spilled
oil stains the soil; and with large spills, animals and
birds could be adversely affected. In the early days of
oil production, spills occurred regularly as product was
flowed into tanks or barrels, especially when the volume of the container was miscalculated. Gushers were
common as well, spilling oil onto the ground where
it found its way to ponds or other drainage systems.
Today, the product is rigorously defended. Mechanical integrity inspections detect any small leaks in the
piping at the producing wellhead to prevent potential
minor spills. Additionally, with the diking of tank
batteries, crude oil releases are contained and remediated. Contaminated soils are removed and deposited
in an approved landfill or cleaned using bioremediation technologies such as oil-metabolizing microbes.
Several studies have found that turning the soil and
using additives such as fertilizers can speed biodegradation without the use of microbes. Soil amendments
can be added to salt-impacted soil to increase permeability and lessen clay hydration; additionally, a cap of
new soil can be used.
In the early days of oil production, coproduced natural gas (termed casinghead gas) was either flared or
vented into the air. Venting has been outlawed over
the past 50 years in most states and most cases. In
some situations, reinjection of casinghead gas into the
reservoir allows the operator to increase production by
maintaining field pressures. This method was used on
Alaskas North Slope; the U.S. Department of Energy
(1999) reported that, as a result, the reserves at Prudhoe Bay were 30% higher than originally thought.26
A byproduct of natural gas and oil production is
hydrogen sulfide (H2S), a flammable gas that can be
toxic above certain exposures. Hydrogen sulfide
presents a danger to workers who might have to be
in an enclosed space, such as those inspecting inside
tanks. In large-scale production fields where oil
is produced with H2S, constant odors are an issue.
26 U.S. Department of Energy, Office of Fossil Energy, Environmental Benefits of Advanced Oil and Gas Exploration and Production Technology, DOE-FE-0385, October 1999, accessed
June 29, 2011, http://fossil.energy.gov/programs/oilgas/
publications/environ_benefits/env_benefits.pdf.
207
Production sites are constantly monitored to protect

both workers and nearby communities from hydrogen
sulfide. Hydrogen sulfide in natural gas can be processed to produce sulfur as a marketable byproduct.
practices. Because methane is a potent greenhouse

gas, these emission reductions help protect the environment while at the same time conserving a clean
energy source.
Visibility of natural gas and oil facilities is considered by some to be intrusive, and to have negative
impacts on recreation and aesthetics. Many times the
visible impact can be mitigated through camouflage
paints or barriers. In the Barnett Shale in the DallasFort Worth area, for example, companies have landscaped, built decorative walls, and painted to blend
facilities to the surroundings.
Today, pipelines are essential for the transport of

produced hydrocarbons within North America. Maintaining a safe and environmentally sound pipeline
network that meets growing energy demands represents a major challenge for the pipeline industry.
Pipeline location is crucial to minimize the potential
risk to the public and the environment. Pipeline route
planning is coordinated with public officials and supported by best engineering practices. Once operational, integrity of the pipeline network incorporates
best management practices, including sound integrity
management practices and ongoing damage prevention programs involving public officials, emergency
officials, and the affected public.
Today, most production operation activities involve

continual monitoring, maintenance, and assessment
of the well and well site to ensure integrity, safety, and
security. Maintenance and assessment are accomplished using wireline units or workover rigs, both of
which are much smaller than the drilling rig used to
bore the well. Monitoring activities include Bradenhead27 pressure monitoring; air emissions monitoring; storm water, spill prevention, and wildlife controls maintenance; interim reclamation assessment;
and water management.
Pipelines
As new uses for natural gas were developed, pipelines were needed to transport it to major population
centers. Over time, improvements have been made
in the construction material and welding techniques
used in pipelines. In addition, compressor stations
have been added to enable transportation of natural
gas over longer distances from remote fields. Developments of pipelines and compressors have reduced
the widespread venting of natural gas as a waste,
substantially reducing the amount of greenhouse
gases being released.
As an example of practices that go beyond regulatory requirements, industry has teamed with the EPA
to reduce methane emissions through the Natural Gas
STAR Program. The program is a voluntary partnership that encourages the dissemination and use of
cost-effective practices and technologies that reduce
emissions of methane, including pipeline-related
27 The monitoring of the pressure between the well casing and
the drill pipe using a device (Bradenhead) that is situated at
the top of the well casing, where it allows a drill pipe to be
extended into the well while the wellhead is sealed and the
annulus is pressurized.
208
Reclamation
Once production drops below an economically feasible level, an oil or gas field is plugged and abandoned
to remediate the site for recreation, wildlife management, industrial, or agricultural uses. In the 1800s
and early 1900s, plugging was not done at all or consisted of simply throwing a tree down the wellbore.
These early practices resulted in oil and brine contamination of groundwater. In the 1890s, Pennsylvania
passed the first plugging requirements, which were
aimed at protecting the oil resource from flooding by
freshwater.
Modern plugging techniques ensure groundwater
and surface water protection. Operators remove any
recyclable materials during plugging and move in a
workover rig that sets cement plugs to separate any
production zone from water zones. A steel plate may
be welded over the hole below farm-plow depth.
Additional activities associated with reclaiming a
wellsite include restoring the soil and the contour of
the landscape. Over time, nature reclaims producing
sites even without human intervention, as evidenced
by the former Drake discovery well. Despite extensive
industrial activities in the mid and late 19th century,
the site now shows no trace of development.
Offshore reclamation is similar to onshore except
that plugging is done with the platform in place
and freshwater protection is not an issue. Offshore
platforms have been used to support recreational
fisheries and abandoned platforms have been sunk to

provide artificial reefs for aquatic habitats. Other disposal methods for the platform include towing it to
the shore and dismantling it.
Offshore Development of
Natural Gas and Oil
Drilling offshore began near the turn of the 20th
century when shallow-water fixed platforms were
used to access offshore reservoirs. Offshore production accelerated after 1947, when the first offshore
well was drilled at a location completely out of sight of
land. Since then, offshore production, particularly in
the U.S. Gulf of Mexico, has contributed significantly
to total U.S. energy production. Today, about 35% of
crude oil production in the United States comes from
offshore developments.
Because costs of offshore development typically are
considerably higher than for land-based development,
economic justification hinges on the potential for
larger volumes of hydrocarbon reserves. The need for
detailed research and exploration on the potential play
prior to drilling has driven advances in technologies
used offshore; some of these technologies have also
been adapted for onshore exploration and production.
Three technologies are instrumental in reducing the
amount and surface extent of infrastructures necessary for offshore production. First, extended-reach
and horizontal drilling allows for greater hydrocarbon
production with fewer facilities and a smaller environmental footprint. Second, unmanned satellite production systems, which contain wellhead and manifold systems with no or minimal processing facilities,
are being used to develop smaller fields or sections of
larger fields. Production from these systems flows to
a central facility for processing. Satellite facilities can
either be installed on small platform structures or on
the seafloor. Third, floating production systems typically are used in deepwater and in conjunction with
subsea production or satellite systems. Since fixed
structures are not utilized, these systems have the
added advantage of being easily removed at the end of
the field development.
Advances in such areas as seismic, drilling and completion, and well control technologies have overcome
many barriers to prudent development of offshore
resources. The development of offshore natural gas
and oil technologies is complicated by overlapping
statutes and regulatory agencies. Environmental

rigors of subsea operations include maintaining pipeline integrity and addressing offshore safety and environmental management as a broad safety sustainability planning challenge. Because of the complexities
faced in subsea operations, the use of EMSs has been
particularly beneficial in offshore development.
Seismic Technology
Geophysical technologies have been a critical tool
in hydrocarbon exploration since the early part of the
20th century. Prior to the mid-1980s, the majority
of seismic data collected in offshore settings were
two-dimensional (2D), meaning they defined a plane
where the seismic-derived structure (depth of the
plane) pertained to a single surface traverse (edge of
the plane). Since that time, techniques to assemble
3D seismic data were developed by integrating multiple 2D planes (as multiple surface traverses) into
projection of a 3D volume. Currently, 3D seismic
has become the standard tool for exploration and
development, especially in the Gulf of Mexico. In an
exploration context, seismic data are used to identify
regions or geologic trends that have higher potential for commercial resources, with the ultimate goal
being to reduce the amount of wildcat drilling necessary to successfully locate economic reserves. Once a
prospect has been identified, seismic is a critical tool
to identify potential drilling hazards. During the production phase, time-lapsed 3D seismic acquired over
months or years (commonly called 4D seismic in recognition of the time dimension) can be a critical tool
for understanding the effectiveness of the development strategy and allow for adjustments to maximize
production from existing wellbores, potentially eliminating the need for additional drilling. 4D seismic can
also help increase overall resource recovery.
Seismic noise generated by offshore natural gas and
oil exploration activities is recognized as a concern
for whale populations and other marine life, including fish. Scientific understanding of these potential impacts has expanded significantly in the last
two decades, but important gaps in knowledge still
exist. Potential impacts include behavioral changes,
masking, auditory injury, physical injury, and other
indirect effects, and for fisheries, reduction in catch
rates of some commercial species. Seven nations
the United States, Australia, Brazil, Canada, Ireland, New Zealand, and the United Kingdom have
national guidelines requiring mitigation measures
209
during marine seismic surveys. In the United States

and in most of the other countries that have guidelines, the two most commonly used mitigation measures involve visually observing a monitoring zone
around the array and temporarily suspending seismic
activities when a protected species is detected within
the zone; and gradually increasing the emitted sound
level from the seismic array (called soft-start or rampup) before a survey begins or resumes after a period of
silence. The intent of a soft-start procedure is to warn
marine animals of pending seismic operations and to
allow sufficient time for those animals to leave the
immediate vicinity. The questioning of the efficacy
of the soft-start method by some has prompted a
four-year Australian study to gain better understanding as to whether animals do move out of the immediate vicinity of the seismic source as it slowly ramps
up. Seasonal and geographical restrictions have been
implemented in some jurisdictions, including Australia, Brazil, Canada, the United Kingdom, and the
United States. In the United States and other jurisdictions, research is underway to develop additional
mitigation and monitoring tools and to investigate
the effectiveness of current mitigation measures.
Additional technological refinement can be developed to supplement current seismic acquisition and
mitigation methods, leading to a more environmentally sustainable approach to geophysical data acquisition. Additional considerations for design changes
include reducing unwanted noise from air gun seismic
sources and refining limited alternatives to air guns
(e.g., marine vibroseis devices).
Drilling and Completion Technology

One of the remarkable accomplishments of the
petroleum industry has been the development of
technology for drilling wells offshore. While the
rotary drilling process used for offshore drilling is
similar to that for land-based drilling, modified drilling rigs and methods are required to suit the more
complex subsea environment. For example, offshore operations often require closed-loop drilling
so that there is limited discharge of drilling wastes.
Important drilling developments related to offshore
resources have included:
yy Embedded operation-while-drilling functions
(measurement, logging pressure management,
reaming, casing installation)
yy Improved mud motors
210
yy Polycrystalline Diamond Compact bits and bicentered bits

yy Top drives
yy Expandable casings
yy Low-viscosity non-aqueous drilling fluids (clayfree, flat-rheology, and micronized barite systems)
yy Improved software modeling (wellbore stability,
hydraulics, torque and drag, etc.)
yy Improved hole-cleaning practices
yy Sharing of nonproprietary operational best practices.
Industry anticipates that additional improvement
to drilling technologies and performance will further reduce environmental impacts, providing for
more environmentally responsible development of
offshore resources.
Significant differences also exist in well completion methods for offshore development. The advent
of the first horizontal Christmas tree in 1993 allowed
operators access to the wellbore for workovers and
interventions without having to disturb the tree and
associated flowlines, service lines, or control umbilicals.28 Developments of subsea and other equipment
for higher pressures and temperatures continued
as operators progressed to drill deeper wells with
more stressful physical conditions. The next major
advance in subsea trees came in 2007 with the introduction of an all-electric tree.29
Well Control Technology

Blowout preventers have been used for nearly a century in control of oil well drilling on land. The onshore
BOP equipment technology has been adapted and
used in offshore wells since the 1960s. A key difference in surface and subsea BOPs is in the remote
control technology required for subsea BOP operation. Because BOPs are meant to be fail-safe devices,
efforts are made to minimize their complexity to
ensure ram BOP reliability and longevity. As a result,
28 H. B. Skeels, B. C. Hopkins, and C. E. Cunningham, The Horizontal Subsea Tree: A Unique Configuration Evolution, OTC
7244, prepared for the Offshore Technology Conference,
May 36, 1993.
29 L. Bouquier, J. P. Signoret, and R. Lopez, First Application of
the All-Electric Subsea Production System: Implementation
of a New Technology, OTC 18819, prepared for the Offshore
Technology Conference, April30May3, 2007.
despite the ever-increasing demands placed on them,

state-of-the-art ram BOPs are conceptually the same
as the first effective models and resemble those units
in many ways.
Recently, underwater remotely operated vehicles
(ROVs) have been employed to assist in well control. These unoccupied, highly maneuverable vehicles
are operated by a person on board a vessel. They are
linked to the ship by a tether (umbilical cable), a group
of cables that carry electrical power, video, and data
signals between the operator and the vehicle. High
power applications often will use hydraulics in addition to electrical cabling. Most ROVs are equipped
with at least a video camera and lights. Additional
equipment may include sonar, magnetometers, a still
camera, a manipulator or cutting arm, water samplers, and instruments that measure water clarity,
light penetration, and temperature.
Arctic Baseline Science

The compilation by Westlien documented scientific
knowledge of the Arctic Ocean surrounding Alaska
that has accrued through studies dating from 1900
through 2010.30 Over the last 100 years, scientists, using ever-advancing technology, have refined
our knowledge of the Arctic resulting in a detailed
understanding of the physical environment, biological resources, various ecosystem processes, as
well as its human inhabitants. The Bureau of Ocean
Energy Management, Regulation and Enforcement
(BOEMRE) Environmental Studies Program Information System contains 700 technical summaries of
BOEMRE-sponsored environmental research projects
as well as over 2,000 entries for research reports, studies, workshops, and seminars for Alaska. In addition
to BOEMRE-supported studies, other federal agencies and organizations conducting science programs
with implications for the Arctic marine ecosystem
include the Bureau of Land Management, Department of Defense, EPA, NASA, National Oceanic and
Atmospheric Administration (NOAA), National Park
Service, and Marine Mammal Commission. These
government programs are further enhanced by
industry-supported science, as well as international
programs like the Russian-American Long-Term Census of the Arctic.
30 Shell Exploration & Production Company, Science of the U.S.
Arctic Outer Continental Shelf, vol. 1, November 2010, accessed
June 29, 2011, http://www-static.shell.com/static/usa/downloads/2010/alaska/215723_booklet_spreads_rs.pdf.
The 2011 Presidential Oil Spill Commission recognized that significant scientific knowledge exists
for Arctic regions and supported the proposition
that Arctic natural gas and oil developments should
be qualified on individual merit. Specifically, it was
stated that:
The existing gaps in data also support an
approach that distinguishes in leasing decisions
between those areas where information exists
and those where it does not, as well as where
response capability may be less and the related
environmental risks may therefore be greater.
The need for additional research should not be
used as a de facto moratorium on activity in the
Arctic, but instead should be carried out with
specific time frames in mind in order to inform
the decision-making process.31
The case can be made that the scientific data currently available are more than adequate and complete
to identify, assess, and minimize the potential impacts
of limited offshore natural gas and oil operations of the
types previously proposed for the Beaufort Sea and the
Chukchi Sea. The Ocean Research and Resources Advisory Panel, a collaborative group consisting of government agencies, academia, nongovernmental organizations, and the private sector, found that knowledge
of the Arctic Ocean has further increased in recent
years through additional efforts of the Department
of Defense (Navy), the National Research Council, the
CIA-funded MEDEA project (Measurements of Earth
Data for Environmental Analysis an informationsharing program to declassify certain information
gathered for military intelligence purposes to be used
for science), and other U.S. government activities that
have not been widely publicized.32
Although there are ample opportunities to add
valuable knowledge through selected studies, the currently available physical and biological science studies
from the many scientific research programs have been
incorporated into numerous impact assessments
31 National Commission on the BP Deepwater Horizon Oil Spill
and Offshore Drilling, Deep Water: The Gulf Oil disaster and
the Future of Offshore Drilling, report to the President, January 2011, 303, accessed June 27, 2011, http://www.oilspillcommission.gov/sites/default/files/documents/DEEPWATER_
ReporttothePresident_FINAL.pdf.
32 Ocean Research and Resources Advisory Panel (ORRAP), Key
Findings and Recommendations Related to Arctic Research
and Resource Management, ORRAP of the National Oceanographic Partnership Program, December 16, 2010.
211
conducted to assess the potential negative impact

and positive benefit of natural gas and oil exploration
activities in the U.S. Arctic.
Future Expectations
Technology advancements over the past century
have enabled production of natural gas and oil from
non-traditional resources, decreasing costs of recovery while effectively shrinking the footprint of operations, protecting the environment, and safeguarding
workers health. In the coming decade, even smaller
physical operational footprints are envisioned through
the deployment of such technologies as microbore
drilling, advanced imaging of reservoirs in a nonintrusive surface view, and borehole imaging. Tools
and rigs are expected to become lighter, decreasing
surface impacts and operating profiles. Advances in
computer processing will be harnessed in high-power
diagnostics and risk-based data interpretation, leading to fewer wells and reducing the chance of dry holes.
Equipping drilling tools with implanted sensors
will enhance the accuracy of searches for hydrocarbons, leading to a higher rate of recovery in reservoirs
and, in turn, reducing cutting wastes and increasing recovery or reuse of produced water. Muds will
become more advanced and environmentally friendly.
Planning will take the forefront to ensure mitigation
and anticipation of activities that could impact the
environment and operations. Visual, noise, and emissions impacts will be reduced through technological
advances of monitoring and reduced energy consumption of equipment. These improvements will all
contribute to a more efficient operation.
History of Natural gas and

oil Environmental Laws
Key Points:
yy There is a comprehensive set of state and federal regulations in place that govern all aspects
of oil and natural gas production and environmental protection.
yy Many state agencies have been involved in
regulating oil and gas development for longer
than the federal government and have unique
knowledge and expertise relative to the local
geological, hydrological, environmental, and
212
land use setting, and are responsible for regulation and development of private and state natural gas and oil resources, as well as for implementing certain federal laws and regulations.
yy Effective regulation balances prescriptive
requirements with performance-based requirements that encourage innovation and accommodate changing technologies and practices.
The evolution of water and environmental resource
protection regulations governing natural gas and oil
exploration, production, and well abandonment has
followed a unique pattern. Most producing industries,
including those related to oil refining and other downstream operations, developed controls for preventing
pollution to air, water, and land resources primarily
in response to federal pollution control acts passed
by Congress between 1972 and 1990. In contrast,
the upstream (production) sector of the petroleum
industry began to initiate water protection measures
in response to individual state statutes and regulations enacted in the early part of the 20th century.
Most of these early regulations on well construction and plugging were not designed to protect
ground or surface water from the impacts of natural gas and oil production. Rather, the regulations
were meant to prevent waters from adjacent nonproductive formations and upper aquifers from
flooding the oil-producing reservoir during drilling
and production. The influx of alien waters could be
of such a volume that drillers lost the hole before
penetrating the target oil horizon. Thus, casing and
cementing activities were incipient oil conservation
measures to prevent loss of a saleable product. This
kind of thinking was evident in the technical books
of the period. For example, in 1919, geologist Dorsey
Hager wrote a book called Practical Oil Geology. In
Chapter 9, entitled Water Enemy of the Petroleum
Industry, Mr. Hager states: The danger of water in
oil fields must not be underestimated. Water flooding is a danger often present where care is not taken
in advance to protect the wells. In these early years,
the principal focus was on protection of the petroleum resource from the effects of water incursion and
not on protection of water resources themselves.
Most oil producers of the early period (prior to
1935) believed that royalty payments to the landowner for the privilege of extracting oil or natural gas
from beneath their land adequately compensated the

landowner for any surface and water resource damages caused to the property. These damages included
accidental spillage of oil or saltwater, leakage of produced water from storage and disposal pits, and loss
of agricultural land taken out of production by the
occupancy of property. Pollution to groundwater from
activities at individual tank battery locations sometimes rendered freshwater aquifers unusable for a long
period of time; yet even landowners who had experienced considerable damage to their farms first viewed
surface pollution as a necessary evil and an inherent
part of the oil or natural gas production process.
Prior to 1935
Through the early 1930s, regulation of the exploration and production industry was irregular rather than
systematic. New York required the plugging of abandoned wells as early as 1879. Ohio reported enacting
the first law for regulating methods used to case and
plug natural gas and oil wells to prevent water from
penetrating and contaminating the oil-bearing rock
in 1883. In 1890, Pennsylvania passed the first law
requiring non-producing wells to be plugged in order
to protect the integrity of the producing formation.
Texas legislature passed a law relating to protection of
groundwater, well abandonment, and conservation of
natural gas in 1899. In 1915, the Oil and Natural Gas
Division of the Oklahoma Corporation Commission
was given exclusive jurisdiction over all wells drilled
for the exploration and production of natural gas and
oil, and in 1917, the Commission was given authority
over related groundwater protection and mandated to
develop procedures for plugging and abandonment.
The Texas Railroad Commission was given similar
authorities in 1917 and 1919, respectively. California enacted a plugging program in 1915 and added a
groundwater protection component in 1929. Other
states set up natural gas and oil regulatory commissions, often without specific authority to promulgate
regulations and where enforcement authority was
only available under the general statutes and civil or
county control.
Around 1931, a barrel of oil, which cost about
80 cents to produce, sold for as low as 15 cents. This
differential between supply and demand improved
somewhat in ensuing years through the early 1930s.
However, the potential for serious gluts of unmarketable oil remained and several governors over the
objections of oil producers, some state legislators,
and landowners felt that some framework of government controls over the production of oil was necessary. The United States was then, and still is, the
only oil-producing country in the world where minerals rights can be privately owned and the owner of the
natural gas and oil rights can make a lease agreement
with a company to extract hydrocarbons in return for
a royalty payment based on a percentage of each barrel produced and sold.
Initiation of Natural Gas and Oil

Conservation
In 1935, after several aborted attempts to come
up with an acceptable concept for government intervention into the supply-demand roller coaster, six
states Oklahoma, Texas, Colorado, Illinois, New
Mexico, and Kansas formed the Interstate Oil Compact Commission (IOCC). In 1991, the organization
changed its name to the Interstate Oil and Gas Compact Commission. The purpose of the IOCC was to
promote conservation of oil resources through an
orderly development of oil reservoirs. Companies
would predict a market demand for their product and
the state agency would then set an annual or semiannual extraction allowable for each producing field
(or producing horizon) based on the market prediction. Governor Marland of Oklahoma supported a
concept addressing economic waste and believed
that government should prorate production to obtain
a fair price for crude oil. This concept was eventually
changed to embrace the term physical waste and the
six states ratified the Compact agreement.
One of the early efforts of the Compact was the
development of a set of model regulations that the
states could use as a pattern to establish their own
regulatory framework. Even though the model established a format for natural gas and oil conservation,
the protection of groundwater from pollution was
carried as a secondary consideration in most regulations, particularly as the regulations applied to well
construction and plugging. In the early 1960s, the
IOCC also developed a model for natural gas regulation similar to that created for oil in 1935.
From 1941 through the end of World War II, several state legislatures enacted moratoriums on the
enforcement of environmental regulations and conservation practices controlling supply and demand
due to the increased need for oil for the war effort.
213
In late 1941, the beneficial effect of conservation in

the late 1930s had been proven and the United States
had a surplus capacity of about 1 million barrels of oil,
approximately 80% of which was produced from Compact states. By 1945, the IOCC had grown in membership to 17 states and was a sustaining force in providing models for natural gas- and oil-producing states to
follow in promulgating regulations.
U.S. Oil Production Dominance

From 1946 to 1960, most oil- and natural gasproducing states established a regulatory agency to
enforce oil and natural gas conservation practices.
Still, the environmental protection aspects of the oil
regulatory picture developed sporadically. State statutes regarding pollution abatement and control of oil
field practices and waste emanated from individual
events rather than from an overall welfare of the
nation impetus. Kansas, for example, gave its board
of health (not the Corporation Commission) authority in 1946 to issue orders against oil field brine disposal pits that were causing saltwater pollution; but it
was not until January 1958 that the board could issue
permits for acceptable pit usage and deny permits for
those deemed to cause potential pollution.
Texas adopted no-pit rules in the late 1960s and
several other states placed stricter limits on how long
produced fluids could be retained in pits. The concern
over pit usage stemmed from a realization that these
so-called produced water evaporation pits were little more than unsealed seepage pits and, as a result,
domestic water wells were being contaminated with
saltwater.
Environmental Movement
The 1970s brought the nations environmental consciousness to the forefront. The passage of the Federal
Water Pollution Control Act (FWPCA) in 1972 sent the
message that discharges of pollutants to the nations
waterways, estuaries, and drainages, even intermittent ones, were no longer acceptable and discharges
of specific inorganic pollutants were to be regulated
either by state or federal permit. Congress authorized
formation of the U.S. EPA to implement the FWPCA
and successive environmental and water resource protection acts. Section 311 of the FWPCA and its successor, the Clean Water Act (CWA) of 1977, elevated the
consequence of accidental spillage of oil from a producing lease to a finable offense when the oil entered a
214
flowing stream. The non-reporting of an oil spill

was also a finable offense. Another part of the CWA
required containment dikes around tank batteries and
oil storage facilities to prevent releases of oil to navigable streams, which by definition included almost every
intermittent upper reach of a stream if it connected to
a potential flowing watercourse. This program, called
the Spill Prevention, Control, and Countermeasures
program, was administered under the direct implementation authority of the EPA. Prior to the FWPCA,
most state natural gas and oil regulatory agencies
required operators to contain, report, and clean up
serious oil spills on water. However, few operators
were fined unless they refused to obey a state agency
directive. The CWA marked the first time that the
natural gas- and oil-producing industry was subject to
direct dealings with a federal agency on environmental
protection issues. In 1974, Congress passed the Safe
Drinking Water Act (SDWA), which authorized the
EPA to promulgate regulations for wells used to inject
fluids into subsurface formations. This section of the
SDWA was called the Underground Injection Control
Program, and included wells used for either disposal
of excess produced water or for injection of produced
water to increase recovery of oil. Between 1982 and
1990, 20 oil-producing states applied for and received
primary enforcement authority (primacy) from the
EPA to administer the program under Section 1425 of
the SDWA. (Additional states received primacy under
Section 1422 of the SDWA.) Delegating authority to
the states allowed those with longstanding natural
gas and oil regulatory programs to demonstrate that
their programs were as effective in protecting groundwater as those promulgated and administered by the
EPA. The major initial impact of the UIC program was
that operators had to verify the mechanical integrity
of each of their injection wells once every five years.
Prior to the UIC program, most regulatory agencies
only required operators to test an injection well if it
was known or suspected to be leaking.
In the 1970s, domestic oil production began to
decline. Some landowners, who were actively engaged
in agriculture, came to view the oil production on their
acreage as a nuisance, rather than a benefit. Landowners and tenants increased demands that state natural
gas and oil regulators direct operators to plug idle and
non-productive wells. In response, many states set up
temporarily abandoned or idle well programs that
required operators to monitor the mechanical integrity of these wells and certify annually that idle wells
had a future purpose.
In the 1980s, particularly after the 1986 depression

in the industry, several states (Kansas, Texas, California, and others) received legislative authorization to
establish dedicated funding to contract the plugging
of abandoned or orphan wells. These well plugging
funds resulted in the permanent closure of thousands
of wells that might have posed a threat to the environment.
Congress passed the Resource Conservation and
Recovery Act (RCRA) in 1976, which gave the EPA
authority to regulate the disposition and disposal of
hazardous substances. Fluids produced during the
exploration and production of natural gas and oil
were originally excluded from RCRA and set aside for
further study. In 1988, the EPA administrator issued
a regulatory determination that wastes produced in
connection with natural gas and oil exploration and
production operations would remain under state regulation and would be exempt from the RCRA Subtitle C regulatory regime. In response to this decision,
IOGCC committees developed environmental program guidelines for states to strengthen their natural
gas and oil waste management programs (excluding
those under the UIC program). Beginning in 1991,
the IOGCC asked state committees to systematically
review state natural gas and oil environmental regulatory programs against the guidelines. These review
committees were comprised of state natural gas and
oil regulators, state environmental regulators, major
and local natural gas and oil producers and members of environmental advocacy organizations. This
work is carried forward today by the State Review
of Oil and Natural Gas Environmental Regulations
(STRONGER).
Environmental Regulation
Refinement
The last two decades have provided new environmental regulatory challenges to natural gas and oil
producers. Many states formed separate departments to administer overall environmental regulations in response to a programmatic shift in emphasis
towards protection of water and land resources and to
the special technical knowledge needed to implement
programs. Such changes provided better coordination of environmental permitting and field inspection
activities and improved documentation of accountable actions to state legislatures, the public, and the
petroleum industry. Several states revised existing
regulations concerning pits, tanks, and well construc-
tion to reflect the latest technological, environmental,

and public policy needs of the state. There has also
been increased scrutiny of operators who fail to maintain compliance standards. During this period, several states, including Kansas, Oklahoma, Indiana, and
Louisiana, set up formal penalty schedules and operator suspension procedures to address habitual or flagrant noncompliance. Penalties that had applied only
to Class II (natural gas and oil related) injection wells
were now adopted for a whole range of environmental
programs.
Operators have also been subject to increased well
and performance bonding and financial assurance
requirements. Since 1990, intensified environmental awareness has resulted in the implementation of
several new environmental programs. Some of these
programs are listed below.
yy The discovery of CBNG in Montana, Wyoming, the
Four Corners area, and the Black Warrior Basin
of Alabama, brought the search for gas into some
areas previously unexplored for hydrocarbons. In
Colorado and California, which had always regulated natural gas and oil at the state level under
home rule statutes, citizens now exerted pressure
to regulate them through county or city ordinance.
In 2008, Colorado revised its regulations to allow
for expanded public participation in the permitting
and environmental assessment of oil field sites.
This participation included review by other state
water protection agencies.
yy In the mid-1990s, citizens became concerned over
the amount of naturally occurring radioactive
material produced at some natural gas and oil lease
locations. Sufficient radium and other radioactive
isotopes in some produced water caused a coating of precipitate to develop in tubular goods and
at pump connections. Operators were concerned
when loads of salvage pipe were rejected by prospective buyers and were returned to them for disposal. As a result, some states, such as Louisiana
and Texas, developed regulations governing the
disposition of this pipe and other naturally occurring radioactive material and wastes.
yy The Community Right-To-Know portion of Superfund (Section 312 of SARA Title III) of 1988 required
oil operators to submit Material Safety Data Sheets
reporting how much hydrocarbon was stored onsite at a lease facility. The state level administration of this program is usually administered by the
principal state environmental agency rather than
215
the natural gas and oil regulatory agency. This law

also has a provision under Section 304 whereby the
operator has to make changes in the facility design
if a large release of hydrocarbons occurs.
evidence of this early social consensus: historic oil

fields are interspersed with urban and suburban
development in Baldwin Hills, a number of the beach
communities, and even Beverly Hills.
yy The Oil Pollution Act of 1990 has had a huge impact

on offshore natural gas and oil production operations, shipping, pipeline, and terminals primarily throughout the U.S. coastal areas of Louisiana,
Texas, Mississippi, and Alabama. The Oil Pollution
Act began as a reaction to the Exxon Valdez incident
in Alaska in 1988 and required the use of doublehulled vessels to transport oil.
In the postwar decades, several changes have influenced the regulatory processes governing natural gas
and oil development and in some cases, the achievability of such development on a field-wide scale in economic and practical terms. Among these changes are:
Transformation of Public Confidence

Environmental protection technologies, practices,
and regulations have evolved along with natural
gas and oil production technologies. The direction
of change has been movement from conservation
for the economic protection of natural gas and oil
resource operators to a multidimensional approach
involving citizens rights, government regulation,
and the rights of developers. As operators, citizens,
and governments became more aware of the ways in
which production could affect the environment, they
developed a new perspective on environmental stewardship. In the early years of this process, which originated in energy-producing states decades before the
environmental movement of the 1960s, the primary
emphasis was on conservation and efficient production of the resource with a focus on economics. The
term conservation, in fact, initially served as a legal
term of art to describe measures to avoid physical
and economic waste of natural gas and oil resources.
State regulations were developed to address well spacing, pooling, and unitization in producing natural gas
and oil fields, among other issues, recognizing a public interest in orderly development of natural gas and
oil resources, and in balancing the interests of those
holding rights to those resources. The governing
assumption was that those interests were primarily
economic in nature.
During this period, conflicts over surface uses and
occasional controversies over surface or groundwater
pollution incidents were most often resolved by the
legal system under principles of tort law or nuisance
and in the case of surface use conflicts, occasionally through local zoning ordinances. Natural gas and
oil drilling and production operations were broadly
seen as legitimate industrial activities. The postwar
development of metropolitan Los Angeles provides
216
yy The emergence of grassroots networks able to influence local community opinion

yy The shift of some regulatory agencies from a historic pro-development mission to a position of
adjudicating the interests of opposing parties
yy The emergence of a strong interest by the public
to manage, restrict, or prevent projects they see as
affecting them
yy The erosion of a social consensus that development of energy resources is at all times in the public
interest.
Controversy in the 1950s and early 1960s over
development of the portion of Californias Wilmington Oil Field that extends under much of the City of
Long Beach and out into Long Beach Harbor augured
this change in social consensus. Development of the
original section of the Wilmington Field north and
west of Long Beach underneath the communities
of Wilmington and Carson caused extensive surface
subsidence and a proliferation of surface production
equipment and pipelines. When the state of California, which owned the mineral rights to the Wilmington Field under tidelands in Long Beach Harbor, first
proposed development of the resource, the city of
Long Beach vigorously opposed the states proposal
with the strong support of city residents. The outcome of years of litigation and administrative delay
resulted in a historic decision in which the state committed to develop the Long Beach portion of the field
using water injection to control subsidence and to
increase oil recovery. That this dispute occurred in the
middle of a dynamic and growing metropolitan area
ensured substantial media coverage, and led many in
the public to recognize that an energized citizenry
could influence not only local government, but oil
field development promoted by state government.
The seminal event that shifted public perception
about natural gas and oil drilling was the Santa Barbara oil spill in 1969. A drilling accident at an offshore
oil rig sent almost 3 million gallons of oil into the Santa
Barbara channel. As volunteers rushed to the beach
and harbor to assist with cleanup, the days events
spurred a new environmental movement beginning that evening in Santa Barbara and soon extending throughout the United States. Public clamor over
the spill led Congress to pass, and President Richard
Nixon to sign, the National Environmental Policy Act
(NEPA). Similar public pressure led to the passage of
the California Environmental Quality Act (CEQA).
The spill was used again and again as a justification for
passage of other environmental statutes or the adoption of new regulations intended to address pollution
and environmental risk.
The spill and its aftermath were among the factors
leading to passage of the Coastal Zone Management
Act (CZMA). The state of California imposed a moratorium on further exploration drilling in state tidelands that was not lifted until 1981, and which was
reimposed several years later. Many major environmental groups focused their position statements on
opposition to offshore natural gas and oil drilling and
production. Over time, many in the general public
developed a distrust of the competence and credibility of the natural gas and oil industry that has never
fully abated.
In the early 1980s, the California State Lands Commission cautiously lifted the moratorium on drilling
from new locations in state tidelands (drilling from
existing offshore structures had been allowed with
state permit approvals). At the same time, the Reagan administration, through then-Interior Secretary
James Watt, proposed an ambitious plan of new federal natural gas and oil lease sales in the Pacific Outer
Continental Shelf (OCS). Natural gas and oil companies proposing to drill or to develop federal OCS leases
promptly found themselves challenged by energized
and resourceful community groups, not just in Santa
Barbara County, but up and down the California coast
from San Diego to Humboldt County. These groups
proved adept at using early generation telecommunications and computer networks and a web of personal relationships to exchange strategies and lessons
learned on grassroots organization, local referendum
campaigns, and other methods to mobilize community opposition to offshore natural gas and oil projects.
They recruited activists to attend public hearings to
speak out against oil projects, particularly those of the
California Coastal Commission, the State Lands Commission, and the Board of Supervisors of Santa Bar-
bara County. As a result, administrative hearings that

two decades before might have taken place in relative
obscurity were forums for creative acts of street theatre, notably at Minerals Management Service scoping hearings for OCS lease sales proposed off the coast
of Northern California in the mid-1980s. In time,
grassroots opponents of new projects in the California
Pacific offshore found funding to sustain their efforts.
The natural gas and oil industry adapted slowly to
this transition in the regulatory environment in California. Nor was the industry nimble in forming coalitions and mustering its supporters at public hearings.
While the industry debated the percentage of the public represented by opponents of offshore natural gas
and oil development, it could not deny their energy.
Declining oil prices in the mid-1980s, the complexity
of a post-NEPA, post-CEQA regulatory environment,
and the efforts of opposition groups in Californias
coastal counties combined to discourage many of the
major companies from further pursuit of new projects in the California offshore. Most have since sold
or decommissioned their assets there.
The lessons of California for the environmental
movement have been discussed frequently and at
length. Their effects elsewhere on regulatory processes governing the development and production of
natural gas and oil have been significant. California
became the proving ground for use of administrative
processes to express public opposition to (or at least
skepticism of) natural gas and oil projects, and for the
use of administrative requirements to subject project
proposals to rigorous third-party scrutiny. Whereas
agencies in the early decades of regulating natural
gas and oil development were often in the position
of encouraging development (and in many cases were
statutorily charged to do so), beginning with California and the West Coast states, some agencies took on
the role of arbiter between the interests of those advocating and those opposing natural gas and oil projects.
Also, the experience of California spread through the
broader public to nurture an expectation that administrative processes existed not merely to resolve the
interests of owners of mineral rights, but to recognize
and address the interests of those who were potentially affected by natural gas and oil development.
This transition in purpose and expectation for
administrative processes has not been linear, and it
has varied in pace and in outcome from state to state.
But to some extent, underscored by media coverage of
217
controversies over energy projects of many types and

in many locations, this transition is occurring everywhere in North America.
Historically, development of a natural gas or oil
field was grounded in property transactions and in
the administrative adjudication of the rights of participants in those transactions. Companies acquired
natural gas and oil leases through negotiation with
mineral rights owners, then voluntarily farmed out
or pooled their leasehold acreage to assemble sufficient working interest and capital to drill. Subsequently, companies would negotiate, or work within
the framework of state regulatory processes to form
units to optimize the development and production
of the resource discovered through drilling. Over
time, as state (and later, federal) laws were enacted to
ensure safe and environmentally responsible operations, companies would also obtain necessary permits
and approvals. In the early years of enforcement of
these laws, issuance of such permits and approvals
most often occurred on strictly technical grounds. A
company would submit an application demonstrating its ability to comply with the law in question, and
upon review by agency staff, sometimes accompanied
by a largely technical hearing, the permit or approval
would be issued. Sometimes companies would need
to obtain site construction permits, zoning variances, or similar approvals from local governments,
but these were likewise based on technical and factual
showings.
Affected Populace Opinion

The contemporary approach to development of a
natural gas or oil field adds to this transaction-based
history an evolving emphasis on the rights and interests of those who are potentially affected by the
transactions. The potential for controversy is greatest
where large numbers of people consider themselves
affected by natural gas and oil development, but have
no direct economic interest in the development. This
was, and to a certain extent remains, the case along
the California coast, where many residents felt they
were at the mercy of decisions made between the federal government and oil companies. This potential
also exists where an ownership of the surface rights
has been separated from ownership of the mineral
rights, known as split estate. Examples include both
fee land states like Texas and public lands in the Intermountain West, where the U.S. government issued
patents and deeds to the surface while retaining the
218
minerals. It is also the case in natural gas plays such

as the Barnett Shale near Fort Worth, Texas, where
severance may exist, or where mineral interest ownership may be so fragmented into small lots that owners of mineral rights may not see an economic benefit
that outweighs the inconvenience of having a large
drilling operation nearby.
Similar controversy has more recently emerged
where a critical mass of local citizens becomes a stakeholder in the maintenance of intangible but nonetheless strongly held values such as landscape or lifestyle.
Many Santa Barbara residents in the offshore oil
debates of the 1980s feared that their community and
region could take on an unwanted industrial character if offshore oil projects proliferated. They fought
to preserve vistas free of offshore platforms (though
some 20 platforms could be found in Santa Barbara
Channel at the time). Opponents of natural gas exploration in the Intermountain West have fought to preserve the undeveloped character of Colorados Roan
Plateau, Wyomings Red Desert, and New Mexicos
Galisteo Basin. Currently, in New York State, controversy surrounds proposed natural gas development
in the Catskill portion of the Marcellus Shale, which
supplies drinking water to New York City. Many local
residents, as well as customers of the New York City
Water Supply System and the citys government,
oppose plans to develop this resource.
Controversy and opposition to energy development projects can also find fertile ground in situations where the scale of development or perceptions and fears about future development exceed
the capability of existing regulatory processes to
resolve the issues in dispute. The state of New York
is again a good example. Many members of the public opposed to any development of the Marcellus Shale
natural gas resource in the state have petitioned the
New York Department of Environmental Conservation
not to approve a new regulatory scheme for drilling and
production of the shale gas, even though the department is statutorily directed to issue such regulations.
This has resulted in protracted delays in the issuance
of revised New York Department of Environmental
Conservation regulations and in a suspension of new
project activity in the New York Marcellus region.
The transaction-based framework for natural gas
and oil development, guided by a regulatory process
supporting conservation and efficient production
of the resource, has evolved into a new framework
that is open to the influence of parties who may not

be directly involved in the underlying transactions.
These parties express interests that often fall outside the scope of agencies with traditional authority over natural gas and oil drilling and production
operations, and may even fall outside the authority of
other state or federal agencies with an environmental mission. In the breadth of ongoing public debate
over subjects pertaining to energy and the environment, a consensus that existed in support of developing energy resources, and that recognized their economic and general social value, no longer exists. With
this change, long-prevalent assumptions about what
rights a party holds to the development of minerals
acquired through ownership, lease, or contractual
arrangement are being questioned.
This leaves to mineral rights owners, their lessees,
and operating companies, along with administrative
agencies and governments at every level, the challenge of addressing public perceptions and responding to public concerns in order to foster a decisionmaking environment in which resource development
can proceed. The need to secure the legal right to
drill through the appropriate sequence of property
transactions has not changed. The need to secure the
appropriate permits and regulatory approvals to be
able to drill in compliance with applicable laws and
regulations has not changed. What has changed is the
need to identify and engage with those who are potentially affected, broadly defined, by a proposed project.
Not only must they be identified, but also the prudent
operator must make best efforts to understand and
to provide means to address their convictions, questions, and concerns within the budget and scope of
his project. It has long been understood that natural gas and oil projects take place within boundaries
of economic feasibility and rate of return, and in the
context of legal title and geologic, logistical, and site
surface characteristics. Over the past few decades,
the enactment of new laws and regulations have also
clarified that such projects must be considered in the
context of their environment; that is, project plans
must address their effects on air quality, on surface
environment and the uses to which that environment
may be put, on soils, on surface water and groundwater, on habitat and wildlife, and in some areas, on
impacts to traffic and other infrastructure, and on
community character and quality of life. Figure 2-11
illustrates the extensive process required for permitting a shale gas well in Pennsylvania, which addresses
this variety of environmental impacts.
Now the task of effective project planning has

expanded to include measures to address concerns of
people who live in the community or region in which
the project is proposed to take place. Project success
or failure, timely completion, or uneconomic delay,
increasingly depends on the degree to which issues
of public concern are recognized and addressed in the
project plan. Likewise, the pace of development of our
natural gas endowment will be influenced by the ability to accomplish this project by project, field by field,
and region by region. The specific approaches will
vary greatly across the universe of projects. But as has
been the case with many other attributes of successful
natural gas and oil development projects, resolution
will depend upon informed observation, thoughtful
consideration of past experience, and adaptability to
circumstance.
Hydraulic fracturing stimulates production in
oil or gas wells and provides the industry a means
to increase recovery of the hydrocarbon resource
and lessen the environmental footprint from the
development of natural gas and oil resources. Individuals and organizations concerned about the environmental and social consequences of hydraulic
fracturing cite air emissions, surface- and groundwater withdrawals, produced water management,
surface disturbances, invasive vegetation, habitat
fragmentation, seismic vibrations, amplified noise,
visual alterations, and community changes as potential problems. These environmental concerns have
influenced legislative and regulatory policies as they
relate to hydraulic fracturing. However, as hydraulic fracturing technology has progressed, operators
and regulators have identified and developed extensive mitigation measures to reduce the probability of
impacts.
The Safe Drinking Water Act was enacted in 1974,
25 years after the commercial onset of hydraulic
fracturing operations. Hydraulic fracturing was not
considered for federal regulation under the SDWA
during drafting. However, opponents to the technology and existing regulatory framework have
emerged over the last decade to bring hydraulic
fracturing into the forefront of the current environmental regulatory debate. Table 2-4 outlines the
drivers of hydraulic fracturing since the passage of
the SDWA.
219
Figure 2-11. The Natural Gas and Oil Industry is Well Regulated:
Figure 2-11. The Natural Gas and Oil Industry
Project Development Requirements in Pennsylvania
1. LEASE LAND
2. SEISMIC ACQUISITION
Multiple Use Stipulations

Non-Surface Use Stips
Federal ESA Review
START
LEASE CONDITIONS
DCNR Species of Concern

High Occupancy Road Permits
Local Zoning Issues
Seasonal Game Restrictions
Stream, Road & Pad Buffers
Holiday Work Restrictions
Disturbance Limits
Road Use Bonds
DCNR - Seismic Survey Agreement

U.S. Fish & Wildlife
DCNR
PA Game
PA Fish & Boat
PNDI Mapping
PA Game Comm. Right-of-Way & Spec. Use
DEP Explosive Permits
PA DOT State Road Permits
PA County Local Road Use Permits
Collect Seismic Data

Evaluate Data
Submit Bid to SLO
LEGEND:
BMP Best Management Practice
COE U.S. Army Corps of Engineers
DCNR PA Dept. of Conservation &
Natural Resources
DEP PA Dept. of Environmental Protection
EA Environmental Assessment
220
SRBC Post Drill Report

DEP Solid Waste Mgmt Permit
DEP Gas Flaring Permit
DEP Post Drill Reports
EPA Environmental Protection Agency

ESA Federal Endangered Species Act
FAA Federal Aviation Administration
NOI Notice of Intent
PA DOT PA Dept. of Transportation
TEMPORARY FLOW BACK
Cuttings & Waste Mgmt. (Tested &

Sent to DEP Licensed Landfill)
Adhere to Previous Permit Conditions
Obey All Lease Stips
Obey Local Ordinance Requests
Inspections & Oversight
PA Fish & Boat
PA Game
DCNR
DEP
SRBC
Local
Operator
Frac Focus Report
SPUD, DRILL & FRAC WELL
Local Water Well Survey & Tests

DEP Coal/Non-Coal Determination
Surface Owner Sign-off
DEP File Drilling Plan Compliant
with PA Const. & Op. Stds.
DEP Pre-Spud Notification
Local Sewage Permits
SRBC Registration
DEP/SRBC Water Mgmt Plan
6. WELL START UP
DEP PERMIT TO DRILL
5. DRILLING AND COMPLETION
Well Test & Clean Up

All Water Recycled
Solids Disposed offsite at
Approved, Permitted Facility
PNDI PA Natural Diversity Inventory

SLO State Lands Office
SPCC Spill Prevention, Control &
Countermeasure Plan
SRBC Susquehanna River Basin Commission
U.S. F&W U.S. Fish & Wildlife Service
Figure 2-11. The Natural Gas and Oil Industry is Well Regulated:
is Well Regulated: ProjectProject

Development
Requirements
in Pennsylvania
Development
Requirements
in Pennsylvania (continued)
3. SITE SELECTION
4. LOCAL CONSTRUCTION
FEMA/Local-Flood Plain Determination

U.S. FAA Air Clearance Consult
PA Biological Review
Pre-const. EA Forestry Approval of Location
PA DEP Road Const. Plan
NOI to DEP (w/ Local Notice & Comment)

Managing Agencies Seasonal Activity
Restrictions
PA DOT Road Const. Permits
DCNR Location and Approval

DEP COE - Wetlands & Stream Crossings
PA Game Commission Species of Concern
PA Fish & Boat Species of Concern
U.S. F&W Federal ESA Issues; Seasonal Stips
Penn-State Historical Preservation Cultural Resources
PA County Local Road Const. Permits

SRBC Water Access Permits
Local Municipal Zoning & Land
Development Permits
DEP Pre-Const. Meeting
Storm water Pre-Const. Notice (BMP)
Activity Notice Various Agencies

Build Location & Access Roads
DEP Inspection
Compliance Monitoring (Life of Well)
7. RESTORATION AND RELEASE
Repeat Steps 3 & 4
Maintenance Activities
Repeat Steps 3 & 4
Inspections (Life of Well)
DEP
EPA
SRBC
COE
U.S. F&W
Operator
Monitor Well Integrity
(Reg. Req.)
DCNR
TERMINATION OF PRODUCTION
Construct
Gathering Lines
Construct
Permanent
Facilities
Connect
to Sales Line
DECOMMISSIONING
DEP Air Permits

EPA SPCC Requirements
PRODUCE WELL
INFRASTRUCTURE & HOOK UP
AND PRODUCTION
DEP Plugging Permit

Landowner/Lease - Adhere
to Restoration Requirements
END
Release of
Land & Location
Operator Shut-In Production
Plug Well
Decommission & Remove
Equipment
Abandon Gathering Lines
(See Steps 3 & 4)
Source: Adapted from Governors Marcellus Shale Advisory, Commission Report by Jim Cawley, Lt. Governor, Commonwealth of
Pennsylvania, July 22, 2011. Full Report Found at http://www.pa.gov. Also see Pennsylvania Public Records for Grugan
development: Gathering Line - Permit #ESX10-035-0002, GP0518291004, GP0818291001; COP Tract 289 Pad E Permit #ESX10-081-0076, API #37-081-20446 (Well #E-1029H); COP Tract 285 Pad C - Permit #GP0718291001, ESX10-035-0007.
Additional reporting and oversight required for exceptions to permitted activity not shown.
221
As hydraulic fracturing is applied to unconventional resources, it has become the focus of many
regulatory modifications at the federal, regional,
state, and local levels. Although hydraulic fractur-
ing is currently regulated at all of these levels (most

prominently the state), many groups and individuals
have called for additional federal regulation under
the UIC program.
Table 2-4. History of Hydraulic Fracturing Regulation

Year
1940s
to
Present
Action
Entity
Comments
Adoption of state
natural gas and oil
regulatory programs
All natural gas- and

oil-producing states,
including OK, TX, LA,
CO, WY, PA, etc.
States have adopted their own comprehensive laws

and regulations to protect drinking water supplies,
including the regulation of hydraulic fracturing.
These states programs have been refined over the
years, as necessary, to address industry changes.
1974
Safe Drinking Water Act

(SDWA)
U.S. Environmental
Protection Agency
(U.S. EPA)
Act drafted to protect health by regulating nations

public drinking water supply.
1996
Legal Environmental
Assistance Foundation,
Inc. (LEAF) vs. U.S. EPA
U.S. EPA
Alabama regulation of hydraulic fracturing in

coalbed natural gas stimulations under the
Underground Injection Control (UIC) program.
2003
Memorandum of
Understanding (MOU)
between U.S. EPA and
service companies
U.S. EPA
Major service companies agree to refrain from

using diesel fuel in hydraulic fracturing fluids in
stimulations involving underground sources of
drinking water (USDWs) associated with CBM wells.
2004
Evaluation of Impacts
to USDWs by Hydraulic
Fracturing of Coalbed
Methane (CBM)
Reservoirs Final Report
U.S. EPA
Study evaluated potential threat to USDWs from

injection of hydraulic fracturing fluids into CBM
wells. Concluded that injection of hydraulic
fracturing fluids into CBM wells poses minimal
threat to USDWs.
2005
Energy Policy Act
U.S. House
Clarified that hydraulic fracturing (exception for

diesel fuel) was not underground injection as
defined in the SDWA.
2009
Frac Act Introduced
U.S. Congress
Act would require chemical disclosure of hydraulic

fracture fluid additives.
2010
Wyoming natural gas

and oil Regulations
State of Wyoming
Full chemical disclosure of fracturing fluids

regulations put into place.
2010
State Regulations
Various
Multiple state regulatory bodies and legislators

studying or enacting regulations on disclosure of
hydraulic fracturing fluids.
2010
Study
U.S. EPA
EPA announces commencement of a new study

investigating the possible relationships between
hydraulic fracturing and drinking water.
2011
Establishment of
Secretary of Energy
Advisory Board
(SEAB) Natural Gas
Subcommittee
U.S. DOE
The frac panel was established to provide

recommendations to the SEAB on how to improve
the safety and environmental performance
of natural gas hydraulic fracturing from shale
formations.
2011
EPA Regulation Review
U.S. EPA
EPA initiates process to develop guidance for diesel

use in UIC operations.
222
Sustainable Strategies and

Systems for the Continued
Prudent Development of
North American NATURAL GAS
AND Oil
Key Points:
yy Environmental sustainability can be accomplished by individual companies adopting
business strategies that meet the needs of the
company and stakeholders, while enhancing
human and natural resources for the future.
yy To support informed energy decisions, an
objective assessment of the environmental
footprint (benefits, adverse impacts, and risks)
of each potential energy source is essential.
yy Stakeholder engagement can provide valuable
insights that lead to better decisions and strategies.
yy Public-private partnerships have proven to be
a successful tool to collaborate with stakeholders and to drive environmental sustainability
goals within a sector.
yy An environmental management system is a
tool that can be used to drive environmental
sustainability in a systematic manner.
yy Information sharing, transparency, and continued environmental stewardship are prerequisites to gaining public confidence.
Prudent development of secure and reliable domestic sources of energy includes protecting the environment and public health, and is essential to maintain
our quality of life and economic strength in North
America. Along with renewable energy sources,
domestically produced oil and natural gas are positioned to provide electricity and fuel for many decades
to come. The future role of natural gas and oil within
the North American energy portfolio hinges on the
ability of companies to demonstrate their ability to
sustainably produce such energy resources. For any
industry, achieving the goal of environmental sustainability is an aspirational goal.
The idea of sustainably producing natural gas and
oil resources is not yet well defined (see Definitions of Sustainable Development at the end of this
chapter). Sustainable development is defined by the

Brundtland Commission as meeting the needs of the
present without compromising the ability of future
generations to meet their own needs. Conceptually,
sustainable development within the natural gas and
oil industry may be driven by a vision for global leadership by the North American industry in setting the
standard for technological and environmental performance. It may be reflected in: regional, state, and provincial strategies; pace of development; management
of community impacts; investment of revenues in
sustainable businesses, infrastructure, assets for the
future; and public-private partnerships for sustainable development. Sustainable development goals,
which are aspirational in nature, include:
yy Continually decreasing the surface footprint, working towards zero air emissions during production,
achieving a positive water balance, and moving
towards materials management not waste generation
yy Measurable benefits to and reduction of impacts
on communities and ecosystems where production
occurs
yy Ensuring development occurs at a rate where a high
level of environmental compliance is consistently
achieved
yy Economic success of sustainable energy companies.
Ultimately, environmental sustainability can be
accomplished by individual companies adopting business strategies and activities that meet the needs
of the company and stakeholders while protecting
and enhancing human and natural resources for the
future. A number of natural gas and oil companies
already have incorporated environmental sustainability goals into their business.
A sound framework for sustainable natural gas and
oil resource recovery would include a regulatory program that drives ongoing environmental improvement, allows operational flexibility to drive innovation
in technologies and practices, and requires measurement of key environmental and social impacts. Other
essential elements include:
yy Realistic sustainability comparisons of energy
sources (social, environmental, and economic metrics) using life-cycle assessments (LCAs) and footprint analyses
yy Use of industry-developed environmental management systems to systematically drive environmental sustainability
223
yy Public-private partnerships (of industry, nongovernmental organizations, and government) that

engage stakeholders in defining and supporting
sustainable outcomes
yy An effective data management system that provides data standardization to regulatory agencies
with appropriate and standard information (via
uploads from operators), and allows operators and
regulators to maintain the system via a single data
portal for effective data extraction and sharing of
solutions and lessons learned.
Each of these four elements is discussed below.
Life-Cycle Assessments and

Footprint Analyses
Numerous decisions by a host of players will determine the energy economy of North America in future
decades. Questions of investments, research and
development expenditures, policy priorities, and
legislation and regulatory requirements all influence
these decisions. While most energy decisions ultimately are economically driven, environmental implications are increasingly important. Virtually any form
of energy development and generation can result in
both adverse and beneficial effects to air, water, land,
community, and quality of life. These impacts can be
realized on the environment at the global, national,
regional, state, and local levels.
Environmental matters can affect energy projects
and companies in many ways and may delay or even
halt projects, including:
yy Operational economics may be affected, for example, when compliance requirements and negative
environmental externalities not included in the
original plan increase project costs.
yy Operational changes may be required, such as
increasing efficiencies, implementing recycling,
encouraging conservation, implementing efforts to
reduce GHG emissions, and designing criteria for
more sustainable generation, extraction, and transportation methods.
yy Project feasibility and access to resources may be
limited by permit moratoria, land use restrictions,
and timing restrictions on development activities.
yy Changes to the social license and perception of the
domestic energy industry may affect public trust.
224
yy Markets accounting for the above factors will affect

valuations and responses.
To ensure environmentally responsible development of North American energy resources, it
is important that energy policy decisions rest on
science-based, consistent, comparative information
on the environmental impacts of each, otherwise
known as the environmental footprint (EF). The EF
can be defined as the breadth of incremental impacts
necessary to adequately compare the footprint of
source types.33 It is the sum of positive and negative
environmental impacts of developing, processing,
transporting, and using an energy resource, considering all aspects of extracting, developing, processing,
and transporting an energy source. Therefore, the
EF can be assessed following principles developed for
life-cycle assessments.
Use of an LCA approach will result in the evaluation of all stages of development and use of an energy
source, with the understanding that stages are sequential and interdependent. By analyzing each natural
medium (air, water, and land) in connection with
each resource input (energy, water, or other resource),
LCA facilitates the appraisal of cumulative environmental impacts accruing during all stages in development and transport of an energy source (e.g., raw
material extraction, material transportation, material
processing, ultimate material use).34 Capturing
impacts not contemplated in more established examinations is one benefit of adopting an LCA. A challenge is combining the LCA for each medium and
resource into a single EF analysis for each unique
area. Decisions are needed on how to balance and
compare various impacts for example, determining
whether water use is valued at a higher level than air
emissions. At this time, there is a need for a standard
method for creating an overall EF for energy sources
across all media and all resource use.
To be of greatest value, the EF would present
impacts in a common set of metrics, under a series of
main categories, such as resource consumption, land
utilization, discharges (air and water), risk assessment,
33 Science Applications International Corporation (SAIC), Life
Cycle Assessment: Principles and Practice, EPA/600-R-06-060,
prepared for the National Risk Management Research Laboratory, Office of Research and Development, U.S. Environmental
Protection Agency, May 2006, accessed June 29, 2011, http://
www.epa.gov/nrmrl/lcaccess/pdfs/600r06060.pdf.
34 SAIC, Life Cycle Assessment: Principles and Practice.
toxic potency, and energy expenditure. Decision makers will then have information to weigh against social
factors such as job creation, job retention, national security, energy independence, wealth exportation, resource
depletion, and other considerations to select the energy
resource appropriate for the specific circumstance in
accord with national, regional, and local priorities.
An objective understanding of impacts can enhance
the decision-making process. For instance, policymakers may wish to evaluate the requirement that by
a specified date, 20% of the nations electrical needs
must be provided by wind power. An LCA can be used
to compare the EF of the necessary amount of wind
power to the EF of other energy sources. The increase
in the desired power type could then be evaluated to
predict the likely environmental consequence of the
contemplated development compared to that of an
alternative energy source.
Additional benefits of an EF analysis include
involving stakeholders in planning and implementing transparency into the process. A collective,
transparent approach increases all stakeholders
understanding of the issues and encourages objectivity in both public and private decision-making.
A recent National Research Council study, entitled
Hidden Cost of Energy: Unpriced Consequences of
Energy Production and Use, specifically reports findings about health and environmental externalities
from various energy types and calls for a life-cycle
analysis of full fuel cycles.35 Additionally, an independent research study issued by the Applied Energy
Studies Foundation, titled The Environmental Cost of
Energy, identified the need for further in-depth analysis of environmental implications associated with
the development of various renewable and nonrenewable energy sources.36 An LCA for energy37 can
include, but is not limited to, an examination of the
following subjects:
yy Extraction of the raw resource, including:
Drilling natural gas or oil wells and transportation to a processing facility or the end user
35 National Research Council of the National Academies, Hidden
Costs of Energy: Unpriced Consequences of Energy Production and
Use, The National Academies Press, 2010, accessed June 29,
2011, http://www.nap.edu/catalog.php?record_id=12794.
36 Applied Energy Studies Foundation (AESF), The Environmental
Cost of Energy, September 2010, accessed June 29, 2011, http://
energydecisions.org/Downloads/ECOE-Report-AESF.pdf.
Mining of coal or uranium and transportation to

a processing facility
Constructing a solar or wind farm and transmission to the end user
Farming of biofuels feedstocks (e.g., algae, corn,
soy, switch grass, wood) and transportation to
the end user.
yy Processing, manufacturing, and conversion,
including:
Ethanol from corn
Biodiesel from soy
Uranium ore into fuel rods
Oil or natural gas into commercial fuels.
yy Energy end use, reuse, and maintenance, including
use of:
Coal to generate electricity and transmission of
electric-power to the end user
Natural gas to generate electricity and transmission of electric-power to the end user
Nuclear fuel to generate electricity and transmission of electric-power to the end user
Biodiesel or compressed natural gas to power
vehicles
Petroleum-derived gasoline or diesel to power
vehicles
Electricity to power vehicles.
yy Management of emissions, effluent, and waste,
including:
Produced water and hydraulic-fracture-produced
water from oil or gas drilling and production
Spent nuclear fuel wastes
Spent semiconductor solar panels
Spent lubricating and cooling oils from wind
turbines
Mine tails and spoils.
In developing an LCA, the baseline year and level
of comprehensiveness to adequately define a life cycle
must be determined. The baseline year can be established based upon the validity of the historical data.
The appropriate level of detail could include the primary life-cycle parameters including the energy necessary to drill the well or mine the coal. A primary
225
life-cycle parameter is the sequence of activities [that]

directly contributes to making, using, or disposing of
the product or material.38 The primary assessment
includes an evaluation of the environmental impacts
from extraction to final end use, including processing,
transportation, distribution, and waste streams generated along the way.
mental considerations apply to all energy LCAs: scalability, metrics, regulatory compliance, and unique
considerations. The methodology must include:
Secondary life-cycle parameters include activities

such as the manufacture of the blades for a wind turbine, the manufacture of the drilling rig for a natural
gas well, or the manufacture of semi-conductor panels
for a solar farm.39 Performing a secondary life-cycle
assessment can be extremely complex. Deciding
which factors to include or exclude may be subjective and difficult to apply consistently across energy
sources.
yy Consistent and compatible metrics to facilitate

comparative analyses, including risk so that both
probable and consequential impacts are assessed
An LCA using primary life-cycle parameters is the

most realistic approach for obtaining a comparable
assessment level. Figure 2-12 presents process-based
primary LCA of energy resources, including inputs
(raw materials, energy, and water) and outputs (air
emissions, water discharges, surface impacts, biological changes, and noise and visual impacts). Each
energy source must be evaluated to the same level of
detail. The policymaker must define and justify the
limits of the analysis and ensure an appropriate peer
review.
A comprehensive, objective EF analysis will ensure
that public policy decisions are based on sound and
comparable information. Determining the appropriate methodology and establishing a system to collect the necessary information would provide sound
analytic results on environmental impacts for policy
decisions. This process would involve interested
stakeholders in public forums and enable discussion
of a variety of viewpoints and issues. The following
sections suggest an approach for conducting such a
process and provide an EF analysis example, including
the issues and gaps involved.
Fundamentals of Energy Life-Cycle

Assessments
A standard methodology is key to comparing the
EF of energy types. While each energy type involves
unique characteristics specific to location, four funda38 SAIC, Life Cycle Assessment: Principles and Practice.
226
yy A scalability filter to avoid making comparisons

that are inappropriate
yy A primary life-cycle approach to defining the limits
of factors to be included and those that are excluded
yy Recognition that not all criteria for comparison

are quantitative and that qualitative or semiquantitative data must be analyzed in some cases
yy An assumption that energy development is performed in substantial compliance with applicable
environmental regulations
yy An accounting for unique situational or location
factors
yy The temporal nature of the impacts.
Figure 2-12. Life-Cycle Assessment
Figure 2-12. Life-Cycle Assessment
EMISSIONS AND
EFFLUENTS
EXTRACTION OF
RAW ENERGY
SOURCE
PROCESSING AND
CONVERSION
TO ELECTRICITY
OR FUEL
ENERGY
END USE
WASTES AND
OTHER
BURDENS
Source: National Research Council of the National Academies,
Hidden Costs of Energy: Unpriced Consequences of Energy
Production and Use, The National Academies Press, 2010,
accessed June 29, 2011, www.nap.edu/catalog.php?
record id=12794.
Those factors must be equitably analyzed within and

among energy development scenarios to objectively
describe and compare the various energy resources.
An EF analysis can become complex due to the myriad
of factors, variations, and methodology issues. The
analysis needs defined boundaries and documented
assumptions. A comprehensive EF analysis has not
been conducted for energy resources at this time.
Some of the needed data exist in various sources, but
it is not comprehensive or in the required form.
Scalability
Meaningful comparison of energy sources must
include scalability. Scalability means an energy source
can contribute to the current North American electrical or fuel needs (i.e., grid, industrial combustion,
routine daily heating, and transportation). Energy
sources that are not yet scalable and exist only in an
experimental capacity (e.g., hydrogen cell technology)
or are limited to local application (e.g., rooftop solar
power) cannot realistically be compared to other scalable sources. It is most appropriate to compare one
scalable source to another scalable source.
Metrics
A consistent, objective, and quantitative set of
measurements or units (i.e., metrics) is important to
ensure an effective comparison of dissimilar energy
sources. Most of the energy sources included here are
capable of generating electricity, with the exception
of corn-ethanol and biodiesel. Therefore, the unit of
1,000 megawatt-hours (MWh), which is commonly
referenced in the electric-power industry, is a useful
comparative metric. The impact (e.g., surface disturbance, air emissions) associated with generating 1,000
MWh from various energy sources can be compared
using a metric such as acres disturbed per 1,000 MWh
generated, or tons of CO2 emitted per 1,000 MWh
generated. For heating fuels, environmental impacts
assessed on a basis of 1 million British thermal units
(MMBtu) also would be appropriate. For transportation, assessment units for environmental impacts per
mile driven (for example, pounds of CO2 emitted per
100 miles driven) would be appropriate.
The use of these assessment units allows for scaling
and facilitates the comparison of evolving technologies to existing technologies. Because some renewable
sources produce energy in specific forms (e.g., elec-
tricity or transportation fuels), comparisons should

be made by determining the EF associated with delivering that form of energy based on its end use.
These calculations could also account for the relative quality of fuels. Different grades of coal will have
different Btu contents. Measurements based on heat
or electrical power produced account for the thermal
or thermal-equivalent energy content of each energy
source.
Some impact types cannot easily be quantified
and some assessments may be constrained to semiquantitative or even qualitative terms. That constraint may be especially true for impacts related to
quality of life. Not all environmental impacts are
similar nor can all environmental impacts readily be
placed into quantifiable terms. However, where quantitative assessments are possible, they should be associated with a standard metric, or measure, in order to
make valid comparisons.
Environmental Regulatory Compliance

Industries differ in compliance requirements, levels
of compliance attained, and environmental impacts
resulting from noncompliance. For purposes of the
EF analysis, an assumption of compliance is essential
since it would be difficult to assign a level of noncompliance and then evaluate the environmental impact
of those noncompliant activities across industries. If
that reality is to be reflected in the EF analysis, a consistent methodology for including risk must be identified and accepted.
Federal and state laws, regulations, mandatory controls, and mitigation measures govern most practices.
These requirements regulate the degree or intensity
of the environmental impacts of these practices. For
example:
yy Natural gas and oil extraction and coal and uranium
mining operations are subject to federal, state, and
local regulations that are intended to limit the environmental impacts from those activities.
yy The Clean Air Act regulates emissions from electrical power generating facilities and industrial manufacturing plants.
yy The Clean Water Act and Safe Drinking Water Act
address impacts to surface and groundwater.
yy Emissions from automobiles and other motor vehicles are regulated at the federal and state levels.
227
These regulations are assumed in the footprint

analysis to be effective in achieving the goals of protecting human health and the environment. However, it would be beneficial to include a risk factor
in the EF analysis to account for the differences in
noncompliance-caused impacts to assess the effect of
anthropogenic actions.
Unique and Additional Considerations

Not all energy sources are appropriate in all locations. The sun does not shine with the same reliability
in all parts of the world. Likewise, the distribution
of consistent, forceful wind is not uniform. Soil type
and weather conditions affect areas where biomass
plants can be grown under natural conditions. Oil,
gas, and coal deposits are only found in certain geographical locations. These natural variations mean
that energy sources may have greater, lesser, or simply different environmental impacts depending upon
where that resource is or can be located. Such factors
must be considered when comparing different energy
sources to each other or in comparing one energy
source in different locations. For example, the environmental impacts and challenges of oil drilling in the
offshore Arctic are different from those of oil drilling
in the offshore Gulf of Mexico. Different land types or
locations will have different sensitivities to impacts;
for instance, some desert, tundra, and wetland landscapes may be more sensitive to impact and so may
require a longer period of time to recover.
Impacts to freshwater and clear air can also be
magnified in high population density areas where
the number of receptors is maximized. For instance,
changes to air quality may push pollutant levels over
critical non-attainment thresholds in areas with high
population densities where other anthropogenic
impacts already exist. However, it is also the case that
small changes in air quality may be very noticeable in
pristine areas such as Class I airsheds.
The temporal nature of impacts should also be considered. Environmental impacts can vary over time
and be short-term, long-term, temporary, or permanent. Temporary visual impacts associated with
drilling for natural gas and oil differ from the permanent visual impacts associated with wind farms. The
time dimension of changes to the chemistry of the
atmosphere from combustion of fossil fuels is also a
consideration. Impacts on the global environment
that are essentially permanent in the scale of human
228
existence are driving a host of energy policy decisions at the state and federal levels that will have a
growing influence on energy choices. Other impacts
are reversible or can be remediated. A photovoltaic
solar array constructed in an open landscape can easily be reclaimed when the solar arrays productive life
has ended while the impacts of mountaintop mining
are often not reclaimable due to preexisting conditions. The environmental impacts of biofuels and
biomass include land use for farming. This requires
a continual land disturbance causing loss of soil, surface runoff, sedimentation buildup, and continual
chemical use in fertilizers and pesticides. Wind and
gas development creates an initial disturbance to the
land that may be more permanent (i.e., roads and
site construction), but may be partially reclaimed,
have a more minor ongoing impact (i.e., traffic), and
have limited recurring replacement requirements
(i.e., wind turbines).
The nature of the resource being developed and the
technology that will be used to develop it must be
taken into account when doing an EF analysis. Shallow conventional natural gas and oil development
involves different drilling and production techniques
than the development of unconventional petroleum
reservoirs (e.g., CBNG, shale gas, shale oil). Resource
extraction methods are different and waste byproducts can also differ in both quantity and quality.
Some natural resources can be accessed from remote
locations. Oil or gas wells can be drilled directionally
to reach reservoirs located under sensitive environments (e.g., wetlands, tundra, lakes, or deserts) or
under sensitive locations (e.g., historic landmarks or
parklands). Similarly, underground mining can take
place beneath areas where direct surface mining may
not be acceptable (e.g., under towns and cities).
It is evident that unique and sometimes intangible
variables must be included in a comprehensive analysis of energy-source alternatives. It is also apparent
that in some cases, those variables can be defined by
quantitative metrics, whereas in other cases, qualitative comparison may be the only means possible.
A measurement of environmental consequences
should be assessed at a common end point and from
a common form, such as assessing the environmental
consequences for sources used to generate electricity
to the point where the electricity is ready to be placed
on the grid. Understanding of the boundary issues to
be included in an analysis is critical to the development
of an assessment producing comparable results. This

becomes particularly evident when assessing highly
dissimilar sources of energy (e.g., concentrated versus
dispersed generation and use, direct generation and
use versus energy that requires intermediate processing to use). Hence, the varied nature of the resources
used to generate energy creates a need to develop common methodologies for assessment.
The level of data detail and quality of the data that
can be obtained for analysis may be a limiting factor. Data may be varied or nonexistent, depending
on the energy source or environmental media being
analyzed. Activities associated with the development
of non-renewable resources have been studied and
assessed in various documents developed by federal
agencies such as the Bureau of Land Management
and the U.S. Forest Service. Such assessments do not
appear to be available for other resources or for all of
the impacts of interest.
Data exist regarding environmental impacts for
specific locations in which resource development
is occurring. The data are maintained by a variety
of regulatory authorities and for various purposes,
but those data cannot always be applied or extrapolated to other locations. For instance, assessments
of environment impacts for development of natural
gas and oil resources in the Rocky Mountain Front
region of the United States would not necessarily be
applicable to the Gulf Coast region. Data sources also
can become outdated due to changing technologies,
resources, and regulations. Each of those data-related
factors will influence the level of detail possible for a
data-driven assessment.
Example of EF Calculations
To illustrate why a standard environmental footprint
methodology is needed, as recommended here, it is useful to examine existing studies on the subject and their
similarities and differences. Some of those studies are
referenced here and in the associated topic papers.
The fundamental assumptions and organization
of any EF analysis deeply influence its quantitative
results and the validity of comparisons to other studies. One basic set of assumptions involves the boundaries of the analysis, including which phases of energy
development and use are included. For example,
a comparison of the footprint of raw fuels will not
take into account the relative efficiency of end-use
technologies, such as electric power generation or
automobile technologies, and the impacts associated

with those end uses. There is also a methodological
decision to make on how far back in the life cycle to
go, such as whether to include the impacts of producing construction and equipment materials. There
are many other large and small assumptions that go
into arriving at the final result. Every EF analysis is
performed within such a structure of methodology,
assumptions, and data.
Estimating the EF requires findings from many
other types of studies, including air quality modeling, ground and surface water analyses, production
reports, efficiency analyses, studies of environmental emissions and discharges, fuel transport, and risk
assessment, to name a few. Due to the large scope
of these requirements, EF analyses face a wide assortment of analytical issues that arise from research in
other fields such as geology, biology, health sciences,
chemistry, engineering, climate studies, and social
science. Almost all studies are careful to specify the
uncertainty involved in their estimates. Some present a range of results. Some arrive at point estimates
then discuss or attempt to quantify the uncertainty
around those estimates. Those ranges or uncertainties can be large and this can also make inter-study
comparison difficult to interpret.
Since most EF analyses use previous studies as the
source for their data and assumptions, the body of
literature on environmental footprint represents an
evolving set of related estimates rather than a set of
independent analyses. The assumptions, estimates,
and methods of one study are often used in subsequent
studies, sometimes in modified form. The relationship between studies, therefore, should be taken into
account in comparing them. Estimates from different
studies cannot necessarily be seen as independent and
their agreement cannot be taken as evidence for the
reliability of the results if they are interdependent.
Adding to the difficulty of comparing the results
of several studies is the fact that EF studies are not
always assessing the same thing. Each study has
its definition of what represents an environmental
impact and its assumptions about how those impacts
should be estimated. As a result, studies that are
being compared may actually be estimating quantities
whose definitions only partially overlap.
A comparison of two such studies serves to illustrate
a few of these issues. The Bonneville Power Administration Fish & Wildlife Implementation Plan Final
229
Environmental Impact Statement (BPA study) and The

Environmental Cost of Energy, prepared by the Applied
Energy Studies Foundation (AESF), took different approaches to determining the EF for a range of
energy sources. While the former focused on health
effects and monetized those effects, the latter analyzed a broader range of environmental impacts and
did not assign dollar values. The BPA study assessed
a variety of energy sources but did not evaluate a full
life cycle, neglecting to include transportation and
production impacts. The AESF study addressed a
wider range of energy sources considered under a full
primary life-cycle assessment, including extraction,
processing, transportation, and generation. There
were also many methodological differences.
Figures 2-1 and 2-2, found earlier in this chapter,
display some of the results from the two studies on
water and land resources. The figures show that the
results of the two studies vary widely, for the reasons
stated above. Such differences argue for the development of a sound, consistent approach to footprint
analysis that is vetted through the various stakeholder
groups and would result in a comparable set of estimates for the impacts of the various energy sources.
In developing the EF examples above, numerous
data deficiencies became apparent. First, much of
the information and data needed for an EF analysis
may exist, but not in the form required, or in forms
that are not easily accessible. Second, most attempts
at EF analysis did not include risk-assessment scores
as indicators of the likelihood of future environmental catastrophes involving individual energy sources.
Last, none of the examples of EF analysis included criteria for peer review of the outcomes.
Although EF results are informative and instructive, they are limited to quantitative data and environmental impacts. Challenges remain for including
qualitative data and community impacts. The Key
Findings and Policy Recommendations section of this
chapter contains recommendations for developing EF
LCA inputs for making sound, science-based decisions
that affect the future energy mix of North America.
Environmental Management
Systems
Perhaps one of the most important developments
in the environmental performance of natural gas and
oil operations has been the adoption of Environmental Management Systems (EMSs). A management
230
system can be defined as the framework of policy and

procedures used to ensure that an organization can
fulfill all tasks required to achieve its objectives.40 In
the environmental and sustainability context, a management system is a tool that provides a systematic
approach for managing those components of an operation, function, or business that are both critical to
achieve a desired level of environmental performance
and to enhance regulatory compliance.41
Companies in many sectors have adopted EMSs
over the last 20 years as a means of systematically and
continuously improving environmental performance.
An EMS is typically premised on a plan-do-check-act
approach and involves the development of a systematic approach to manage operational activities in ways
that meet environmental performance goals and support regulatory compliance.
Companies with an effective EMS profess a host of
benefits, including improved environmental performance, better environmental compliance, reduced
cost of compliance, improved operating performance,
increased accountability, and improved profitability.
For example, a leading energy company that implemented a safety and environmental management
system showed reductions of 34% in safety and environmental paperwork and cut 20% in annual training
costs in its first three years of operation.42
An effectively implemented EMS can reduce spills,
releases, and other environmental incidents by focusing on prevention and risk mitigation rather than
reaction. This improved performance benefits public health and environment, provides social benefits, and presents a more positive company image.
Financial rating agencies may factor the use of an
EMS into assessing a companys environmental and
safety performance for financial performance and
stability. Reducing incidents can improve profitability and reduce overall costs. A sound overall goal
for operational and environmental management
is to invest enough into prevention and appraisal
to significantly drive down failure costs, which
can include spill response, remediation, repair or
40
International Organization for Standardization, ISO
14001:2004, Environmental Management Systems Requirements with Guidance for Use, 2004.
41 John H. Statzer and Michael J. Baldwin, Environmental Management Systems, Key Issues on Design, Value & Implementation, February 2011.
42 Statzer and Baldwin, Environmental Management Systems.
replacement of equipment, litigation, and medical

costs for injured employees. Prevention includes
encouraging employees to decrease overall impacts,
including assessing in-process activities and integrating environment into operational standard operating
procedures.
A properly implemented EMS can enhance efficiencies through developing and using consistent practices across the company,43 and support institutionalization of knowledge, benefitting the company over
the long term. Systematic approaches in developing
processes can improve corporate-wide understanding of environmental goals and objectives. An EMS
can streamline alignment of cultures, procedures, and
corporate standards during mergers and acquisitions,
reducing associated risks and costs.
An EMS will vary significantly between companies.
But the standards for consideration of implementation follow some notable examples:44
yy United States: Standards for compliance assurance programs in the U.S. Department of Justice
Prosecutorial and U.S. Sentencing Commission
Guidelines; OHSAS 18001 Occupational Health
and Safety Management System; Environmental
Protection Agency National Enforcement Investigations Center 12 key elements of an Environmental Management System. ANSI:Z10-OHSMS
U.S. Bureau of Ocean Energy Management, Regulation and Enforcement 30 CFR Part 250 Safety &
Environmental Management Systems
One of the most widely recognized management

system standards is ISO 14001:2004, Environmental Management Systems (ISO 14001). ISO 14001 is
designed for use by organizations to minimize harmful effects on the environment caused by its activities
and to achieve continual improvement of its environmental performance. This standard contains 17 elements as shown in Table 2-5.
The ISO 14001 standard provides a framework
for companies to consider when developing an EMS.
Many natural gas and oil companies have developed
unique EMSs.
Important factors influencing the success of an
organization45 in implementing an EMS are executive
management attention and commitment; allocation
of appropriate time and resources; multi-functional
Table 2-5. ISO14001 Elements*

yy Environmental Policy
yy Environmental Aspects
yy Legal & Other Requirements
yy Objectives & Targets
yy Environmental Management Programs
yy Structure & Responsibility
yy Training, Awareness & Competence
yy European Union: Community Ecomanagement and

Audit Scheme Great Britain: BS (British Standard)
7750 Specification for Environmental Management
Systems
yy Communication
yy International: ISO 14001:2004 Environmental

Management System Standard
yy Operational Control
yy Industry associations also recognize this trend with

their own standards:
yy Monitoring & Measurement
American Petroleum Institute Model EHS Management System and Recommended Practice 75
American Chemistry Council Responsible Care
(RC 14001 or RCMS)
E&P Forum, Guidelines for the Development and
Application of HSE Management Systems.
yy Environmental Management System Documentation

yy Document Control
yy Emergency Preparedness & Response
yy Non-Conformance, Corrective & Preventative Action

yy Records
yy Environmental Management System Audit
yy Management Review
* See, for example, International Organization for Standardization (ISO), ISO 14000 Environmental Management,
2011, accessed April 15, 2011, http://www.iso.org/iso/
iso_catalogue/management_and_leadership_standards/
environmental_management.htm.
231
internal involvement; organizational willingness to

change; establishing goals and monitoring progress;
employee communication; and simplicity. It is critical
that upper management is a visible and active champion of the EMS and all levels of the organization are
committed to and involved in implementation. Necessary culture changes can include integrating environmental considerations and operational controls
into daily work tasks; repeatedly communicating with
employees and contractors on planning, prevention,
and continuous improvement; and incorporating
environmental objectives, initiatives, and activities
into employee performance evaluations and compensation.
Mandating the use of an EMS has been shown to
be ineffective in motivating environmental performance. But government agencies can incentivize and
recognize companies that are implementing effective,
performance-based EMSs. For example, agencies can
provide regulatory flexibility based on a companys
performance, and can work with an industry sector
to develop incentives and programs based on member companies environmental performance and use
of EMSs.
Public-Private Partnerships46
A key aspect of environmental sustainability for
any corporation is to adopt business strategies and
activities that meet the needs of the company and
internal and external stakeholders while protecting
and enhancing human and natural resources for the
future. One method of engaging key stakeholders is
through the use of what are known as public-private
partnerships. These arrangements typically focus on
relatively narrow issues identified as company development plans and activities that are being scrutinized
either during or before operations commence. As
the name suggests, regulatory agencies, community
leaders, and nongovernmental organizations (NGOs)
are typically engaged to ensure all relevant views are
captured. Public-private partnerships provide a less
confrontational method to share concerns and have
them resolved when compared to enforcement and
litigation. Often, public-private partnerships yield
results beyond what were initially anticipated by the
parties.
46 This does not refer to a public-private partnership where government services are being funded by a partnership between
industry and government. This refers to a partnership between
government and industry.
232
Frameworks for the development of public-private

partnerships can be described generally by asking the
four key questions of why, where, who, and what.47
Depending on the issue and scope of the engagement, the answers to those questions will vary greatly.
Some of the more recognizable public-private partnerships through which the petroleum industry has
engaged in recent years are summarized as follows:
yy EPA Natural Gas STAR program48 voluntary, costeffective methane reductions by the gas production
and transportation sectors
yy STRONGER49 a collaborative process by which
review teams composed of stakeholders from the
natural gas and oil industry, state environmental
regulatory programs, and members of the environmental and public interest communities review
state natural gas and oil waste management programs against a set of Guidelines developed and
agreed to by all the participating parties
Federal agencies, including EPA,50 have a long history of partnering with industry sectors on specific
goals or challenges. The natural gas and oil industry is well positioned to engage in a discussion with
agencies and stakeholders to develop a partnership
that drives environmental best practices, enables the
industry to actively engage with stakeholders on key
issues, and enhances effective environmental performance reporting.
For example, EPA created the program Design for
the Environment51 to incentivize the chemical industry to put green chemistry to work for people and
the planet. Members can use a label on products. For
47 International Petroleum Industry Environmental Conservation Association, Building NGO Capacity for Pipeline Monitoring and Audit in Azerbaijan, Partnerships in the Oil and
Natural Gas Industry, 2006.
48 U.S. Environmental Protection Agency, Natural Gas STAR
Program, updated April 13, 2011, accessed April 15, 2011,
http://www.epa.gov/gasstar/.
49 State Review of Oil & Natural Gas Environmental Regulations
(STRONGER), Inc., Homepage (n.d.), accessed April 15, 2011,
http://www.strongerinc.org/.
50 U.S. Environmental Protection Agency, Partnerships and Programs, updated February 2, 2011, accessed April 15, 2011,
http://www.epa.gov/oppt/pubs/opptprg.htm.
51 U.S. Environmental Protection Agency, Design for the Environment: An EPA Partnership Program, updated January 5,
2010, accessed April 15, 2011, http://www.epa.gov/opptintr/
dfe/pubs/about/index.htm.
natural gas and oil operators, the greatest value may be

achieved during regulatory and permitting processes.
Such a partnership can result in a label or recognition
that companies can use in permitting and other regulatory settings that are recognized by agencies.
Public-private partnerships are just an example of
a tool available to drive the industry towards greater
environmental sustainability to benefit communities
and the environment. An industry-driven program
closely aligned with the regulatory agencies and allowing stakeholder engagement is a possible strategy to
be considered and implemented.
Data Management Systems

Data management, as described by DOE in 2004, is
as relevant today as it was then.
What constitutes data, how data are collected,
who owns the data, how data are organized and
stored, how data sets may be reused, and what ultimately happens to data are significant issues that
are surfacing and demanding attention. New challenges have arisen because of exponential growth
of data and the capability to collect, organize, store,
and reuse it for future scientific endeavors. Sharing
of data in multidisciplinary and international collaborations has blurred traditional lines of scientific
communication. New issues have arisen as technology enables new kinds of analyses and as numeric
data and text data are integrated. End users of scientific data are demanding better access to more collections and expecting better quality. Information
organization and retrieval issues, once considered
essential for published research findings, now also
apply to data.52
Modern computer systems have provided a means
for more data to be readily available to operators, regulators, and the public for analysis. Use and analysis of
these data has provided a means for the development
of new technologies. These new technologies are in
turn more complex and generate more detailed information to be managed, and provide data to perform
more complex environmental assessments, which may
52 U.S. Department of Energy, Office of Scientific and Technical Information, The State of Data Management in the DOE
Research and Development Complex, Report of the Meeting
DOE Data Centers: Preparing for the Future, held July 1415,
2004, Oak Ridge, Tennessee, November 5, 2004, accessed
April 15, 2011, http://www.osti.gov/publications/2007/
datameetingreport.pdf.
increase regulatory requirements. This has a Catch

22 effect in that the increased complexities of new
technologies developed require that operators and
regulators have access to and quickly assess larger and
more complex data sets so they can advance new technologies that require more complex data. Widespread
access to the Internet has also increased the opportunities for more efficient data sharing in the areas of
regulatory reporting, data sharing between partners,
and an increased demand for public access to operational and compliance information maintained by
public agencies.
An issue commonly seen when evaluating data
management is that organizations have not created standard data management processes or common programs across their own enterprises. Noncentralized data limits the ability of users to share
information and make more effective use of the
information gathered. It is common that data management was done at a local level with each office
defining their process and technology. The end result
has been many fragmented technologies and data
sources that dont work to provide a cohesive picture
of the resource being tracked. Today organizations
have recognized the importance of data sharing and
are optimizing their data management across the
entire organization, either by introducing common
technologies and processes or linking the current
systems. In the future, data management conduits
and standards should be developed for exchange
of information between the industry stakeholders.
Care should especially be given to providing a means
to report to regulatory agencies so that common
data and information are easily transferred from the
lease operators to the various regulatory organizations and among the regulators. Providing a means
to accomplish this goal could streamline reporting
and potentially reduce duplicative efforts of dual
reporting.
Because historically many agencies and companies
developed their data management systems in relative isolation, much of the data are not easily shared.
Different software packages and data standards have
been used over the years, which made it difficult for
agencies to receive data from companies and also
difficult, if not impossible, to share operational and
environmental data. In some cases, revising these
systems would require massive capital outlays, not to
mention operational disruptions, in order to change
systems for which there has already been a substantial
233
investment. Efforts have been underway in light of

providing better means of sharing information moving into the future, and many software development
platforms have recognized the need for this option,
which is providing hope for the advancement of data
collection.
The fragmented approach to data management is
influenced by the current requirements in the United
States from multiple regulatory agencies, as well as by
a rich variation in resource plays and individual operator priorities.
As illustrated in Table 2-6, data collected by the
industry and regulatory community as a whole are
used in a diverse manner. There are also many standards being implemented across the industry to manage the information. These diverse requirements of
reporting and data collection can limit the effective
and efficient management of resources, and until a
unified approach to collecting and presenting the data
from the diverse streams is realized, the true benefits
of the data may not be seen. The benefits are expected
to provide a better means for the prudent development of resources and take advantage of past knowledge inherent in the collected data. Other countries
have started developing or have developed data portals to assist in this collection and dissemination of
information, making for more efficient and environmentally sound decision making.53,54,55
One highly visible example representing the importance of robust data management in assisting the
protection of human health and the environment was
seen in the explosion of PG&Es natural gas pipeline in
San Bruno, California (a suburb of San Francisco), on
September 9,2010. Preliminary investigations from
this tragedy, which resulted in the deaths of eight
people and the destruction of 38 homes, identified
the adequacy and accuracy of records as one of several
53 C. Makrides (Canada Nova Scotia Offshore Petroleum Board),
Review of the Canada Nova Scotia Offshore Petroleum
Boards Digital Data Management Centre, OTC 19089 (2007),
presented at the Offshore Technology Conference, Houston, Texas, April 31May 3, 2007, accessed April 15, 2011,
http://e-book.lib.sjtu.edu.cn/otc-2007/pdfs/otc19089.pdf.
54 UK Department of Energy & Climate Change, UK Oil Portal
(n.d.), accessed April 15, 2011, https://www.og.decc.gov.uk/
portal.htm.
55 UK Department of Energy & Climate Change, The Aims of the
UK Oil Portal (n.d.), accessed April 21, 2011, https://www.
og.decc.gov.uk/portal_files/aims.htm.
234
possible factors contributing to the pipeline

failure.56,57,58 A safe, reliable, expanded natural gas
pipeline delivery system is critical to meet growing gas
demand. The U.S. natural gas infrastructures, while
robust and reliable, are facing operational challenges.
Future efforts are needed to accomplish the goals of
prudent development of the U.S. natural gas and oil
natural resources relative to data management. These
efforts include the standardization of data, and its
communication between entities is seen as the most
advantageous benefit to the future. This standardization is expected to provide benefits to the public
in environmental and health, and could also provide
industry with cost-saving benefits. These cost-saving
benefits are seen to come from making the data easier to communicate with others, report to regulators,
streamline regulations, reduce duplicative reporting,
and provide means to review past incidents so mistakes may not be repeated or find more successful
ways to develop a resource.
Several efforts are underway to overcome some of
the identified limitations of data management. For
example, the U.S. Department of Energy, through
the Ground Water Protection Council, has created
the Risk Based Data Management System that allows
natural gas and oil state regulatory agencies to more
easily collect, manage, and analyze data. In addition,
the Ground Water Protection Council and the IOGCC,
through funds from DOE, have recently released the
FracFocus.org website that provides for the voluntary collection, sharing, and disclosure of hydraulic
fracturing chemical data that were previously either
unavailable or difficult for regulators and the public
to access. This website is the first step in an effort
to provide public disclosure of hydraulic fracturing
reported data and the first step in an even broader
56 California Public Utilities Commission, Report of the Independent Review Panel: San Bruno Explosion, rev. ed., June 24,
2011, accessed June 30, 2011, http://www.cpuc.ca.gov/NR/
rdonlyres/85E17CDA-7CE2-4D2D-93BA-B95D25CF98B2/0/
cpucfinalreportrevised62411.pdf.
57 Cynthia L. Quarterman (U.S. Department of Transportation, Pipeline and Hazardous Materials Safety Administration), letter to Deborah A.P. Hersman, Chair of National
Transportation Safety Board, January 5, 2011, accessed
June 30, 2011, http://phmsa.dot.gov/staticfiles/PHMSA/
DownloadableFiles/To%20NTSB%201%205%202011.pdf.
58 National Transportation Safety Board (NTSB), Natural Gas
Pipeline Explosion and Fire Investigation (n.d.), accessed
June 30, 2011, http://www.ntsb.gov/investigations/2010/
sanbruno_ca.html.
effort to create a public Digital Oil Field that would

allow both operators and agencies to realize significant efficiencies and improve environmental performance and compliance.
The development of a data portal from the currently
available public data sources could be a huge first step to
help in the realization of a new digital oil field era that
could benefit development of resources in the United
States as a whole. A new cohesive digital oil field is
where the benefits of data management in the pursuit
of prudent development will be most realized. Future
efforts from expansion of the data portal to migrate
from a data gathering and dissemination tool, of publicly available data streams, would be its evolution into a
data collection tool that could collate information from
the operators and push it back to the necessary regulatory agencies. This effort in todays regulatory climate
may appear to be a daunting task, but the benefits to
regulatory review and streamlining of permitting and
reporting could be seen as a major step in efficiency
and prudent development of resources. In addition, it
would provide a consistent interface to managing the
environmental and compliance data necessary for the
protection of health and human life.
OFFSHORE SAFETY AND

ENVIRONMENTAL MANAGEMENT
Key Points:
yy Offshore Leases:
The Gulf of Mexico provides 97% of federal
Outer Continental Shelf (OCS) production
and has nearly 7,000 active leases, 64% of
which are in deep water.
The Pacific OCS has 49 active leases off the
coast of Southern California, 43 of which are
producing. There have been no Pacific OCS
lease sales since 1984.
Alaska has 675 active leases and production
from a single, joint state-federal field.
The Atlantic does not have any active leases
or production.
yy Offshore Production: Gulf of Mexico provides
31% of U.S. oil and 11% U.S. gas, with the
majority of Gulf of Mexico production from
deep water (25% oil and 5% gas).
yy Offshore Regulation: Offshore development

in federal waters is regulated by a variety of
agencies including the BOEMRE (within the
Department of the Interior), U.S. Coast Guard,
Department of Transportation, Environmental Protection Agency, National Oceanic and
Atmospheric Administration, National Marine
Fisheries Service, Federal Energy Regulatory
Commission, U.S. Fish and Wildlife Service,
and U.S. Army Corps of Engineers. Additionally, coastal development includes state regulatory agencies. Conflicting statutory mandates
make it difficult to achieve a balanced and predictable federal offshore policy.
yy Scientific understanding of environmental
conditions in sensitive environments in deep
Gulf waters, along the regions coastal habitats, and in areas proposed for more drilling,
such as the Arctic, must be enhanced in order
to meet the expectations of stakeholders.
yy Seismic noise is recognized as a concern for
whale populations and other marine life,
including fish.
yy Decommissioning offshore platforms includes
beneficial options such as Rigs to Reefs that
have been underutilized.
Any technological endeavor involves risk and
there are risks associated with developing offshore
natural gas and oil resources. While the benefits of
development include the assured supply of energy, it
is important to ensure the energy recovery process
is conducted in a manner that is safe and environmentally responsible. As discussed in the previous
section, an effectively implemented EMS can reduce
spills, releases, and other environmental incidents
by focusing management and employee attention
on prevention and risk mitigation rather than reaction. Furthermore, each of the many complex activities needed to develop offshore energy resources
must identify and incorporate appropriate safetysustainability elements into plans and procedures.
To address safety concerns, the offshore natural gas
and oil industry manages and reduces potential risk
through the integration of key planning requirements
for hazards management, which are categorized into
four principal elements:
yy Prevention (P) Preemptive measures to reduce the
likelihood of a hazardous event
235
Table 2-6. Summary of Data Management Efforts

Sector
Standards:
Regulatory:
Industry:
236
Entity
Type
of Data
Publicly
Available
Issues
Energistics*
Standards for
Data
Yes
NGO-developed standards not

enforceable for adoption, Wellsite
Information Transfer Standard Markup
Language (WITSML), Production Markup
Language (PRODML), and Reservoir
Characterization Markup Language
(RESQML).
State Oil & Gas

Regulatory
Regulatory
Requirements/
Operations
Yes
Many state natural gas and oil regulatory

agencies, through a collaborative effort,
have developed de facto standards to
natural gas and oil regulatory data.
EMS ISO 14001
Environmental
Standard
Yes
Standards for the development of

Environmental Management Systems.
Nongovernmental
organizations (NGOs)
Various
Standards for
Data
Yes
Other NGOs have assisted in the

development of standards used by
various industry sectors. These have
ranged from efforts to generate
industry-wide standards by the
American Petroleum Institute through
the Petroleum Industry Data Exchange
(PIDX) and Professional Petroleum Data
Management Association (PPDM) to
pipeline specific standards by Pipeline
Open Data Standard (PODS).#
Federal Agencies
Regulatory
Requirements/
Operations
Yes FOIA
(Freedom of
Information
Act) Request
and Websites
Provide
Multiple federal agencies requiring

submission of regulatory and operational
data on natural gas and oil activities.
Standards between agencies may
not have been adopted on same data
elements, limiting ability to exchange.
State Agencies (Oil &

Gas, Environmental
Protection,
Department of
Transportation, etc.)
Regulatory
Requirements/
Operations
Yes Many
State Websites
Provide
Many individual state agencies require

the submission of data. These data
may be stored in paper files not readily
accessible to the public or industry as a
whole.
Operators
Regulatory
Requirements/
Operations/
Business
No
Individually housed industry data

management operations that are specific
to the needs of the operator. May not be
based on standards-based development,
making it difficult to communicate and
collaborate with other operators and
regulating communities.
Service Companies
Operations
No
Data are maintained as private

intellectual property.
Table 2-6. Summary of Data Management Efforts (continued)

Sector
Other Data:
Entity
Type
of Data
Publicly
Available
Issues
Data Vendors
Various
Yes
Purchased
Data vendors have existed for many

decades in the upstream market. These
vendors collect and collate data available
and provide tools to the industry for the
retrieval and presentation of the data.
Many times, they are a more efficient
means to get analyzable data.
NGOs
Various
Yes Membership,
Public Domain
Many NGOs are involved in support of

distribution of data to the industry or by
providing access to specific information.
Examples include Air Emissions by
Western Regional Air Partnership
(WRAP)** or the disclosure of hydraulic
fracturing chemical by the Groundwater
Preservation Council and the Interstate
Oil and Gas Compact Commission
(GWPC/IOGCC).
* Energistics, Homepage ( 2011), accessed March 21, 2011, http://www.energistics.org/home.

Ground Water Protection Council, Risk Based Data Management System (1992present), accessed April 15, 2011,
http://rbdmsonline.org/GWPC/.
International Organization for Standardization (ISO), ISO 14000 Essentials 2011, accessed March 21, 2011,
http://www.iso.org/iso/iso_14000_essentials.
PIDX International, website 2011, accessed June 27, 2011, http://www.pidx.org/.
Professional Petroleum Data Management (PPDM) Association, website (n.d.), accessed June27, 2011, http://www.ppdm.org/.
# Pipeline Open Data Standard (PODS) Association, website 2011, accessed June27, 2011, http://www.pods.org/.
** Western Regional Air Partnership, Oil/Gas Emissions Workgroup: Phase III Inventory 2009, accessed June27, 2011,
http://www.wrapair.org/forums/ogwg/PhaseIII_Inventory.html.
Ground Water Protection Council (GWPC) and Interstate Oil and Gas Compact Commission (IOGCC), FracFocus Chemical Disclosure
Registry website 2011, accessed June27, 2011, http://fracfocus.org/.
yy Detection (D) Early identification of a hazardous

event
yy Mitigation (M) Effective measures to arrest and
control a hazardous event
yy Recovery (R) Restoring normalcy after a hazardous event.
As shown graphically in Figure 2-13, a menu of
options that changes with time takes the shape of
a bowtie. Early planning for prevention of hazardous events preserves the largest numbers of response
options; in contrast, during a crisis event, options are
reduced as urgency overtakes systematic analysis,
planning, and thought. Options become more abun-
dant again only long after the event and as the latter stages of the recovery mode lead to detailed retrospectives and root-cause analysis. Thus, early and
comprehensive planning (or the P-D-M-R approach)
is important to sustaining safety during offshore
operations.
P-D-M-R safety-sustainability elements receive
different relative proportions of emphasis within
different offshore activities, depending on which
hazards are being managed. While all offshore
operational activities must include planning for
the Prevention (P) of hazards, not all combinations
of activities and issues would necessarily require
Recovery (R).
237
Figure 2-13. The Safety and Sustainability Model Featuring the P-D-M-R Elements
Figure 2-13. The Safety and Sustainability Model Featuring the P-D-M-R Elements
NUMBER OF OPTIONS
DETECTION
PREVENTION
MITIGATION
EVENT
RECOVERY
MANAGEMENT OF HAZARDS
TIME
Notes: Safety Responsible management of risks and hazards for human health.
Sustainability Responsible management of risks and hazards for natural environmental quality,
including water, air, animals, and plants.
Source: Modified based on Offshore Technology Report 2001/063 - Marine Risk Assessment, prepared for Health and Safety
Executives by Det Norske Veritas, 2002, of London Technical Consultancy. ISBN 0 71762231 2.
Table 2-7. P-D-M-R Safety-Sustainability Elements and Risk Management
Offshore
Operational
Topic Area
Safety-Sustainability in Offshore Development: Planning Emphasis

P = Prevention, D = Detection, M = Mitigation, R = Recovery
Human Health
&Safety
(Immediate)
Disturbance
of Marine
Mammals & Fish
Oil & Gas Spills

into Marine
Environment
Other Pollutant
Releases into Air or
Water
Environmental Footprints and

Regulatory Reviews
P, M
P, D, M, R
P, D, M, R
P, D, M, R
Environmental Management of
Seismic and Other Geophysical
Exploration Work
P, D, M
P, D, M
P, D, M, R
P, D, M, R
Subsea Drilling, Well

Operations, and Completions
P, D, M, R
P, M
P, D, M, R
P, D, M, R
Well-Control Management
and Response
P, D, M, R
P, M
P, D, M, R
P, D, M, R
Offshore Production Facilities

and Pipelines, Including Arctic
Platform Designs
P, D, M, R
P, M
P, D, M, R
P, D, M, R
Offshore Transportation
P, D, M, R
P, M
P, D, M, R
P, D, M, R
P, D
P, D, M
P, D, M
P, D, M
Data Management
238
Table 2-7 summarizes one view of how the safetysustainability elements are incorporated into risk
management and indicates combinations of P-D-M-R
emphasis for different intersections of seven topical
areas and four hazard categories. For example, core
topic 7 (Data Management) enables the dissemination of essential information used in oil-spill planning, recovery and restoration operations, but data
management alone cannot implement hazard Recovery measures. Fieldwork required for Recovery from
an oil-spill hazard remains the purview of core topic 4
(Well Control Management and Response). Therefore,
Table 2-8 indicates an R for Well Control Manage-
ment and Response under the Oil & Gas Spills into
Marine Environment, but not so for Data Management.
Center for Offshore Safety

To realize the intended benefits of P-D-M-R mapping into development plans, a credible infrastructure
is needed to ensure that effective planning tools are
available and that operators accept and demonstrate
accountability. The Presidential Oil Spill Commission (2011) endorsed the role of a new Ocean Energy
Safety Institute within the U.S. Department of the
Table 2-8. U.S. Government Agencies Involved in Offshore Natural Gas and Oil Regulations
Offshore Natural Gas and Oil Project Phase
Regulatory Authority
Federal
Statute
Predevelopment
Phase
(Exploration)
Development
Phase
(Design,
Construct)
Production
Phase
(Operations)
Divestiture Phase
(Decommissioning)
Bureau of Ocean
Energy, Management,
Regulation and
Enforcement
OCSLA,
NEPA,
NFEA, CAA,
NHPA
U.S. Coast Guard
OPA, PWSA
U.S. Department of
Transportation
HMTA
U.S. Environmental
Protection Agency
CWA, CAA,
RCRA
National Oceanic
and Atmospheric
Administration
CZMA
National Marine
Fisheries Service
MMPA, ESA,
MFC
Federal Energy
Regulatory Commission
NGPA
U.S. Fish and Wildlife

Service
ESA
U.S. Army Corps of

Engineers
CWA, RHA
Note: CAA = Clean Air Act; CWA = Clean Water Act; CZMA = Coastal Zone Management Act; ESA=Endangered Species Act; HMTA = Hazardous
Materials Transportation Act; MFC = Marine Fisheries Commission; MMPA = Marine Mammal Protection Act; NEPA = National Environmental
Policy Act; NFEA = National Fishing Enhancement Act; NGPA = Natural Gas Policy Act of 1978; NHPA = National Historic Preservation Act;
OCSLA = Outer Continental Shelf Lands Act; OPA=OilPollution Act; PWSA = Ports and Waterways Safety Act; RCRA = Resource Conservation
and Recovery Act; RHA = Rivers and Harbors Act.
239
Interior (DOI), but separately called upon industry

to embrace the potential for an industry safety institute to supplement government oversight of industry
operations.59 Based on an industry-led study, which
included review of five other safety programs including the Institute for Nuclear Power Operations and the
Occupational Safety and Health Administration Voluntary Protection Program, the Center for Offshore
Safety was formed. The Center for Offshore Safety is
administered by the separately funded standards and
certification arm of the American Petroleum Institute
and is open to companies exploring and producing
natural gas and oil offshore.
Outer Continental Shelf Safety

Oversight Board
The OCS Safety Oversight Board was established
by Secretary Salazar (Order No. 3298) on April 30,
2010. The purpose of the board was to provide
recommendations regarding interim measures that
could enhance OCS safety and improve the BOEMREs
overall management, regulation and oversight of OCS
operations.60
and Offshore Drilling, Deep Water: The Gulf Oil Disaster and the
Future of Offshore Drilling, report to the President, January
2011, page 272, accessed June 27, 2011, http://www.oilspillcommission.gov/sites/default/files/documents/DEEPWATER_
ReporttothePresident_FINAL.pdf.
and Offshore Drilling, Deep Water: The Gulf Oil Disaster and the
Future of Offshore Drilling, page 4.
On September 8, 2010, the Safety Oversight Board

issued a report providing recommendations for
improving the Bureau of Ocean Energy Managements
operational and management policies, notably:
yy Enhance personnel training and recruitment to
address the lack of technical expertise.
yy Increased fines and civil penalties to deter risky
industry practices.
yy Address real and perceived conflicts between
resource management, safety, and environmental
oversight and enforcement, and revenue collection
responsibilities.
yy Take steps to improve inter-agency coordination
with federal agencies related to oil spill response
and the mitigation of environmental effects of offshore energy development.
Regulatory Framework on the

Outer Continental Shelf
The 1953 Outer Continental Shelf Lands Act
(OCSLA), as amended, governs the development of
offshore mineral resources, including natural gas
and oil. The OCS consists of submerged lands lying
between the seaward extent of state jurisdiction and
the seaward extent of federal jurisdiction. OCSLA
provides the authority to the U.S. Coast Guard
(USCG) and BOEMRE to exercise control over the
exploration, exploitation, or development of OCS
mineral resources.
Regulatory Framework on the Outer Continental Shelf

Regarding references to BOEMRE, on October 1,
2011, the Bureau of Ocean Energy Management,
Regulation and Enforcement (BOEMRE), formerly
the Minerals Management Service (MMS), was
replaced by the Bureau of Ocean Energy Management (BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE) as part of a major
reorganization. BOEM is responsible for managing environmentally and economically responsible
development of the nations offshore resources. Its
functions will include offshore leasing, resource
evaluation, review and administration of oil and
gas exploration and development plans, renewable
energy development, National Environmental Pol240
icy Act (NEPA) analysis and environmental studies.

BSEE is responsible for safety and environmental
oversight of offshore oil and gas operations, including permitting and inspections, of offshore oil and
gas operations. Its functions include the development and enforcement of safety and environmental regulations, permitting offshore exploration,
development and production, inspections, offshore
regulatory programs, oil spill response and newly
formed training and environmental compliance
programs. Due to this NPC reports completion and
approval on September 15, 2011, the following discussion references the regulatory framework prior
to the October 1 reorganization.
The complex regulatory processes that affect offshore developments involve at least nine federal statutes, as well as nine different federal agencies. After the
Macondo blowout and oil spill in April 2010, the Minerals Management Service was replaced by BOEMRE
in June 2010, which in turn is subdivided into the
Bureau of Ocean Energy Management and the Bureau
of Safety and Environmental Enforcement, effective
October 1, 2011. Along with the U.S. Coast Guard,
BOEMRE is a key agency in regulating all OCS development phases. Other federal agencies involved with
offshore development include: the U.S. Department
of Transportation, U.S. Environmental Protection
Agency, National Oceanic and Atmospheric Administration, National Marine Fisheries Service, Federal
Energy Regulatory Commission, U.S. Fish and Wildlife Service, and the U.S. Army Corps of Engineers.
Table 2-8 provides a summary of federal agencies
(and their associated statutes) that are involved with
administering offshore regulations, and which phase
of offshore development they are principally involved
with.
BOEMRE regulations are contained in 30 CFR,
Chapter II, with operations regulations at Part 250.61
Specific reviews of possible environmental impacts
from routine events and accidents are required for
plans for exploration, development, and production. Separate from these requirements, there is
also specific permitting of proposed discharges, cooling water intake entrainment (for new facilities),
and implementation of various best management
practices plans required under the EPAs National Pollutant Discharge Elimination System permits. All
waste transport and onshore disposal/reuse is regulated under RCRA and DOT regulations, as well as
specific state regulations.
USCG regulations are contained in 33 CFR, Subchapter N.62 USCG regulations contain provisions
for occupational safety and health and citizenship of
workers on the OCS, firefighting and lifesaving equipment on OCS facilities, and operational requirements.
USCG regulations also contain many references to
other requirements in 46 CFR, which is related to
61 Code of Federal Regulations. Title 30, Mineral Resources.
Chapter II, Minerals Management Service, Department of the
Interior. Part 250, Oil and Natural Gas and Sulphur Operations
in the Outer Continental Shelf.
62 Code of Federal Regulations. Title 33, Navigation and Navigable Waters. Chapter I, Coast Guard, Department of Homeland
Security.
shipping, as well as the navigational rules and pollution prevention pertaining to oil, hazardous materials, and human waste.
For state and local government involvement, the
Coastal Zone Management Act requires federal agencies to provide them the opportunity to review leasing
and permit proposals. If a state disagrees with a proposed project, there is a process for resolving inconsistencies with the states coastal management plan or
an appeal can be filed. The OCSLA requires the Secretary of the Interior to accept the recommendations
of state and local governments on leasing proposals
unless it is determined that they do not balance federal and state interests. The OCS support facilities
that are located onshore are regulated by numerous
state and local statutory regimes.
One problem faced by the BOEMRE is the conflicting goals of OCSLA and other federal statutes.
Table 2-9 provides current examples of these conflicting issues. At a minimum, clarifications are needed
for certain overlapping authorities and responsibilities among the BOEMRE, U.S. Coast Guard, National
Oceanic and Atmospheric Administration, and
Department of Transportation.
Lease Sale Planning Process

BOEMRE has a five-year evaluation process that
takes place during the OCS planning process, lease
sale, and exploratory and development project
phases. A component of the process also includes the
performance of an environmental impact statement,
which is conducted pursuant to the National Environmental Policy Act (NEPA), and is designed to identify
risk-producing factors at a level appropriate for the
different stages of development. As the process
moves from a regional perspective to a very specific
location for a project, stipulations to minimize and
mitigate potential for harmful impacts to the environment as well as avoid conflicts between different user
groups are implemented. Before the project phase
is implemented, a number of different mechanisms
are used to ensure extensive oversight and intensive
environmental review. Some of these mechanisms are
highlighted below:
yy Statutory Requirements Energy and mineral
activities on the OCS are governed by numerous
statutory obligations and operations may not proceed unless the process requirements satisfy applicable laws.
241
Table 2-9. Examples of Conflicting Goals between the Bureau of Ocean Energy Management,
Regulation and Enforcement (BOEMRE) and Other Agencies
Examples of
Conflicting Goals
Purpose or Issue
BOEMRE Regulatory
Authorities
Memorandum of
Understanding between
Minerals Management Service/
BOEMRE and U.S.Coast Guard
(January 15, 1999)
Identifies the division of responsibilities and

communication process for these two agencies.
Annex 1 of the Memorandum of Understanding
includes a responsibility matrix for systems and
subsystems related to Mobile Offshore Drilling Units.
30 CFR Part 250
Notice to Lessees
(NTL) No.2009-N11
(December4,2009)
This NTL clarifies air quality jurisdiction on the OCS in

the Gulf of Mexico. However, timing of EPA approvals
of air emissions is a prolonged process in Alaska.
The timing should better coincide with the BOEMRE
permit and plan approval process.
30 CFR Part 250.302, 303,

and 304
Memorandum of
Understanding between
Department of the Interior and
Department of Transportation
(August 17, 1998)
Implements the regulation of OCS pipelines. BOEMRE

regulations apply to all OCS oil or gas pipelines
located upstream of the points at which operating
responsibility for the pipelines transfers from a
producing operator to a transporting operator.
30 CFR Part 250
U.S. Coast Guard and BOEMRE
Certain security procedures limit the BOEMREs ability

to conduct unannounced inspections.
30 CFR Part 250
yy Consultation Requirements Proposals for potential uses of the OCS must be published for public
review and comment pursuant to specified statutory and regulatory provisions.
yy NEPA Compliance Each successive step in the
process is subject to NEPA analyses, for five-year
program proposals, lease sale proposals, Marine
Mammal Protection Act authorizations, seismic
exploration proposals, exploration proposals, and
development and production proposals.
yy State and Local Government Roles The CZMA
requires federal agencies to provide state and local
governments the opportunity to review leasing and
permit proposals. If states disagree, an elaborate
mechanism for ensuring consistency with state
coastal zone plans is provided.
yy OCSLA Programmatic Process Pursuant to Section 18 of the OCSLA, no area of the OCS may be
offered for leasing unless the Secretary of the Interior complies with the requisite scientific, analytical, and deliberative process requirements.
yy OCSLA Lease Sale Process Once a 5-Year OCS
Leasing Program is approved in accordance with
Section 18 (above), specific lease sale proposals are
subject to the process provisions of Section 19 of
the OCSLA.
242
yy OCSLA Exploration Process Once a lease is

obtained, site-specific exploration proposals (seismic and exploratory drilling) must be subjected to
further analysis.
yy OCSLA Development and Production Process If
oil or natural gas is discovered in commercial quantities during the exploration process, site-specific
development and production plans must be subjected to further analysis, NEPA compliance, state
and local government CZMA review, Marine Mammal Protection Act authorization, Clean Air Act
compliance, CWA discharge permitting, and public
consultation and review prior to plan approval.
To provide checks and balances in its regulatory
program, the DOI and other agencies have the opportunity to review and comment on proposed rules and
the 5-Year OCS Leasing Program. There are existing Memoranda of Understanding and Memoranda
of Agreements with other agencies (e.g., U.S. Coast
Guard, U.S. Fish and Wildlife Service, Department
of Energy, and Department of Transportation), with
states, and with other countries to accomplish this.
The DOI is also held accountable to the White House,
and Congress via multiple avenues such as: (a) the
5-Year OCS Leasing Programs planning documents
and press releases on specific lease sales; (b) forms
that are submitted to the House, Senate, and the Government Accountability Office alerting them of imminent final rules; (c) information collection packages
(new and updates) that are submitted to the Office of
Management and Budget for approval and that provide cost and hour burdens of new and existing rules;
(d) an annual publication notice in the Federal Register listing civil penalties; and (e) annual appropriation
reports to Congress on the agencys performance over
the past year and its future goals.
Coastal Marine Spatial Planning

On July 19, 2010, President Obama signed an
Executive Order that led to the creation of a National
Policy for the Stewardship of the Ocean, our Coasts,
and the Great Lakes. The policy will be guided by the
National Ocean Council, which met for the first time
in November 2010. The National Ocean Council has
begun developing draft strategic action plans and held
a public comment period from June 2 to July 2, 2011.
These plans will address the nine priority objectives
that relate to the most pressing challenges facing the
ocean, coasts, and Great Lakes. One of the priority
objectives is for Coastal and Marine Spatial Planning
(CMSP).
CMSP is an integrated ecosystem-based management strategy with the goal of maintaining the
marine ecosystem in a healthy, productive and resilient condition. The intent of CMSP is to identify
areas most suitable for various types or classes of
activities to reduce conflicts among uses, reduce
environmental impacts, facilitate compatible uses,
and preserve critical ecosystem services to meet economic, environmental, security, and social objectives.
In addition, the National Ocean Policy states that one
of the guiding principles of CMSP is for multiple existing uses (e.g., commercial fishing, recreational fishing
and boating, subsistence uses, marine transportation,
sand and gravel mining, and natural gas and oil operations) and emerging uses (e.g., offshore renewable
energy and aquaculture) to be managed in a manner
that enhances compatibility among uses and with sustained ecosystem functions and services, provides for
public access, and increases certainty and predictability for economic investments.
It is still unclear whether CMSP will result in the
creation of and strict adherence to planning or systematic zoning areas in the ocean environment that
might preclude natural gas and oil development, or
how BOEMRE must use regionally developed coastal

and marine spatial plans to inform the statutory
development process under OCSLA.
Consideration of Studies on the

Deepwater Horizon Incident
This reports recommendations were developed
through independent research and analysis. Nonetheless, they bear some similarities with, and are
complementary to, recommendations from external
studies focused on the Deepwater Horizon incident
and the associated Macondo well blowout. The following external studies and investigations were considered, although some were not yet complete when
the review was conducted and only preliminary public
information may have been available.
yy The National Commission on the BP Deepwater
Horizon Oil Spill and Offshore Safety
yy The Bureau of Ocean Energy Management, Regulation and Enforcement and U.S. Coast Guard Joint
Investigation
yy The National Academy of Engineering Macondo
study
yy The Chemical Safety Board study
yy The Outer Continental Shelf Safety Oversight Board
yy BPs and Transoceans Company Investigations
yy Industry Study Group Investigations, and Congressional Investigations by: (1) the House Oversight
and Government Reform Committee; (2) the House
Natural Resources Committee; and (3) the House
Energy and Commerce Committee.
Many of the external study findings generally align
with findings and recommendations reported in this
study that are aimed at prudent offshore natural gas
and oil development. Specifically, the key aims for
sustainable future offshore operations must include
better coordination among regulatory agencies and
industry attention to honing best practices both in
equipment and operational risk management.
Offshore Operations and

Environmental Management
Findings
yy Seismic methods will continue to be the primary
geophysical tool used to discover, evaluate, and
enable responsible production of offshore oil and
gas resources.
243
yy Seismic noise is recognized as a concern for whale

populations and other marine life, including fish.
yy Pipelines have proven to be the safest, most reliable, economical, and environmentally favorable
way to transport oil and gas from well to shore. The
aging of the pipeline infrastructure is a concern.
yy Decommissioning offshore platforms includes beneficial options, such as Rigs to Reefs, that have
been underutilized.
yy Scientific understanding of environmental conditions in sensitive environments in deep Gulf waters
and coastal habitats in areas proposed for more
drilling, such as the Arctic, must be enhanced in
order to meet the expectations of stakeholders.
yy Oil-spill response must include multiple methods/
tools such as: (1) oil sensing and tracking; (2) dispersants; (3) in situ burning; (4) mechanical recovery; and (5) shoreline protection and cleanup. All of
these methods/tools must be properly developed,
available, and preapproved to effectively respond to
a large event.
yy The multiplicity of U.S. government regulatory
agencies involved in setting data reporting requirements has led to inefficiencies.
yy Conflicting statutory mandates make it difficult to
achieve a balanced and predictable federal offshore
policy.
yy Federal regulatory agencies lack technical expertise to oversee complex technical systems and
operations.
yy DOI/BOEMRE has implemented a NEPA policy that
limits the use of categorical exclusions. This leads
to preparation of more time-consuming environmental assessments, which has further slowed the
commencement of drilling in the Gulf of Mexico.
Key Findings and Policy

Recommendations
Key Findings
Sustainable Strategies and Systems
Sustainable development was defined by the
generations to meet their own needs. The concept
244
of sustainability is often used to refer to a companys

objective to achieve goals related to social, environmental, and economic needs.
There is not one correct approach to encouraging
or implementing environmental sustainability within
the industry. It can be accomplished by individual
companies adopting business strategies and activities
that meet the needs of the company and stakeholders
while protecting sustainability and enhancing human
and natural resources for the future. A number of natural gas and oil companies already have environmental
sustainability goals incorporated into their business.
An environmental management system strategy is
an industry-developed tool that can be used to drive
environmental sustainability in a systematic manner.
In addition, collaboration among companies, government, and other stakeholders is often essential to the
success of industry-wide efforts. Due to the complexity
of environmental sustainability issues, no one group
(government, stakeholders, or business) can master
the concept of environmental sustainability alone.
A properly implemented EMS can provide greater
efficiencies as consistent practices are developed and
used across the implementing company. Stakeholder
engagement can provide valuable insights that lead to
better decisions and strategies. It can also increase
the trust and support of government and citizens.
Such discussions can more effectively incorporate
local environmental sustainability priorities and concerns. Environmental sustainability is often seen as
first a local matter, then regional, and finally national
and international. Stakeholder discussions at a local
level can easily be incorporated into public-private
partnerships and overall environmental sustainability
goals and objectives. These can, in turn, be addressed
on a regional basis, whether by state or on a multistate basis that may include all jurisdictions involved
in a geologic basin or resource play.
Listening to these concerns can support a company
in staying ahead of issues that can impact reputation,
production delays, lawsuits, and regulatory actions.
Public-private partnerships have proven to be a
successful tool to collaborate with stakeholders and
to drive environmental sustainability goals within a
sector. These partnerships put the regulator in a different role. Instead of implementers of programs as
dictated by legislators, they are managers working for
outcomes that result in public benefit by navigating
the various strategic choices. Public-private partnerships, if properly designed and implemented, are an
effective tool to drive environmental sustainability
objectives consistently throughout an industry. It can
also enhance the ability to engage stakeholders and
incorporate input. Below are two examples of publicprivate partnerships through which the natural gas
and oil industry has engaged in recent years, but none
are focused on overall industry stewardship:
yy EPAs Natural Gas STAR program voluntary,
cost-effective methane reductions by the gas production and transportation sectors.
yy State Review of Oil and Natural Gas Environmental Regulations (STRONGER) a collaborative
process of the natural gas and oil industry, state
environmental regulatory programs, and members
of the environmental/public interest communities
to review state natural gas and oil waste management programs against a set of guidelines.
Finding:
Industrys and governments commitment to
an enhanced partnership focused on promoting
and using systems-based strategies to drive
environmental sustainability goals and outcomes
can minimize the environmental impact of
recovering North Americas natural gas and oil
resource.
Recommendations:
yy Industry and government should work with
stakeholders to implement public-private
partnerships focused on achieving environmental sustainability goals, sharing best practices, and measuring outcomes.
yy Government should recognize continuous
improvement within the regulatory and permitting processes in a manner to promote
innovation within the industry.
agencies and programs that govern natural gas and

oil operations and require compliance with environmental laws and regulations. Additional assurance is
provided by industry organizations and public-private
partnerships that develop industry standards, recommended practices, and guidelines, such as those cited
above, and industry associations, professional societies and organizations of states such as the Interstate
Oil and Gas Compact Commission and the Ground
Water Protection Council.
However, there may be a need for additional efforts
to coordinate systems, activities, and programs within
industry and between industry and government, to
collect and disseminate state-of-the art practices,
technologies, and management systems on a regional
or resource play specific basis. Such a set of repositories would give industry and regulators easy access to
the latest information on environmentally protective
practices, applicability, and effectiveness in different
areas and settings, and costs and benefits. It would
also provide the public with transparency for those
practices and with confidence that the principles of
excellent environmental performance are being followed by those companies that use these practices
and systems. The repositories should be open to companies, regulators, policymakers, NGO stakeholders,
and the public.
One recent example of the natural gas and oil
industrys efforts to build public confidence is found
in FracFocus, the hydraulic fracturing chemical registry website. A joint project of the Ground Water Protection Council and the IOGCC, FracFocus provides
information about the chemicals used in the hydraulic fracturing of oil and gas wells along with educational materials on hydraulic fracturing, groundwater
protection, and regulation. Many natural gas and oil
companies participate in FracFocus, but not all companies do so. Increasing the participation in FracFocus to all natural gas and oil companies that engage
in hydraulic fracturing and adding into the system all
wells currently in drilling or production would be an
important step in building public confidence.
Building Public Confidence
Finding:
One element of building public confidence and demonstrating the necessary environmental performance
is assuring the public that industry adheres to a set of
operational performance standards or principles that
minimize risk and are protective of the environment.
Much of this assurance is provided by the regulatory
Broad systems (i.e., operational, management,

technological, and communications) within the
industry and government must work together
to achieve efficient, sustainable, and prudent
development.
245
Recommendations:
Finding:
yy The leaders of companies set the expectations for organizations and focus attention on the critical nature of environmental
safeguards and practices. Therefore, commitment must be maintained to excellent
environmental performance and continuous
environmental improvement at both the leadership level of companies and throughout the
organization.
Prudent development of North American

natural gas and oil resources requires enhanced
predevelopment planning.
yy Industry and government should work

together to establish centralized and playspecific repositories that collect, catalog, and
disseminate standards, practices, procedures,
management systems, etc., from all appropriate private and government sources.
yy This will not take the place of standards-setting
bodies, but rather serve as a central repository
where industry, the public, and government
may review and have free access to the most
current standards and practices and a description of their applicable uses.
yy Every natural gas and oil company that uses
hydraulic fracturing should participate in
FracFocus and comply with applicable statemandated registries. The Department of the
Interior should require every natural gas and
oil company that uses hydraulic fracturing on
federal lands to participate in FracFocus.
Planning and Risk Assessment

Operators and regulators have long recognized that
operations in extreme or sensitive environments,
such as arctic climates, deepwater offshore settings,
and wetlands, require careful planning to ensure operational success, worker safety, and environmental
performance. As operations have moved into deeper,
more challenging plays in more conventional settings,
the need for more careful planning of these operations has been highlighted as well. The new paradigm
for planning involves not only careful operational
and logistic plans, but also requires that those plans
be developed specifically to accomplish clear environmental protection goals as well as worker safety and
public safety goals. In addition, risks must be identified and assessed.
246
Recommendation:
yy All levels of the oil and gas industry should
be encouraged to use appropriate and comprehensive predevelopment planning, stakeholder engagement, risk assessment, and the
innovative applications of technology, which
must be adapted to the variability of resource
plays and regional differences.
Regulatory Framework
There is a comprehensive set of state and federal
regulations in place that govern all aspects of natural gas and oil production and environmental protection. The U.S. EPA administers most of the federal environmental laws, although development on
federally owned land is regulated primarily by the
Bureau of Land Management (part of the Department of the Interior) and the U.S. Forest Service
(part of the Department of Agriculture) while offshore development in federal waters is regulated by
a variety of agencies, including the BOEMRE (within
the DOI), U.S. Coast Guard, Department of Transportation, Environmental Protection Agency, National
Oceanic and Atmospheric Administration, National
Marine Fisheries Service, Federal Energy Regulatory
Commission, U.S. Fish and Wildlife Service, and the
U.S. Army Corps of Engineers. In addition, each
state in which natural gas and oil is produced has
one or more regulatory agencies that permit wells
including the design, location, spacing, operation, and
abandonment as well as environmental activities
and discharges, including water management and disposal, waste management and disposal, air emissions,
underground injection, wildlife impacts, surface disturbance, and worker health and safety. Many of
the federal laws are implemented by the states under
agreements and plans approved by the appropriate
federal agencies.
To deal with the limitations of prescriptive regulations, some agencies have developed performancebased requirements that allow the use of new practices and new technologies so long as environmental
protection goals are met. This approach allows greater
flexibility and innovation while ensuring environmental protection, but both operators and regulators
have recognized that this is not the best approach in
all cases. Operators, regulators, and the public are in
a near-constant dialogue to ensure that regulations
are in place to effectively balance the need for natural
gas and oil production, and the need for flexibility and
innovation, with the need for regulatory certainty
and environmental protection.
Finding:
A balanced and optimized regulatory process is
critical to prudent development of resources.
Recommendations:
yy Regulators at the federal and state level should
have sufficient funding to ensure adequate
personnel, training, technical expertise, and
effective enforcement to properly regulate
natural gas and oil companies.
yy State and federal agencies should seek a balance between prescriptive and performancebased regulations to encourage innovation
and environmental improvements while
maintaining worker and public safety.
yy Federal agencies should undertake efforts to
better coordinate and streamline permitting
activities on federal lands and in the OCS.
Environmental Footprint
The U.S. economy depends on a reliable, affordable,
and abundant supply of energy. A key element of a reliable energy supply is one that can be developed prudently i.e., one that is sustainable environmentally,
economically, and socially. As the United States considers its energy sources for the future, assessing the
environmental impacts of the various energy sources
will be a significant factor in the choices that are made.
One useful approach for this is an environmental
footprint analysis that, to the extent possible, quantifies the potential environmental impacts of each source
on a per unit of energy basis. The footprint analysis
does not attempt to provide a single score to indicate
that one source is better than another. Instead, it provides an objective, science-based assessment of the
potential positive and negative impacts of each source
so that trade-offs can be evaluated and the relative
importance of different impacts can be weighed.
In practice, however, environmental footprint

analyses tend to remain in early stages of development, with analyses exhibiting different techniques
for measuring impacts and widely varying assumptions that often end up producing apples-to-oranges
comparisons across fuels and energy resources. There
are technical issues such as incomplete data and the
lack of consensus around quantification of impacts
and risks. This latter fact complicates the ability of
this potentially important technique to provide policymakers with useful information to evaluate the relative importance of the different impacts. Moreover,
the different resource types for the same fuel may
have different impacts, such as with shale gas versus
conventional gas. Environmental footprint results,
however, are not intended to be a rationale for not
mitigating the impacts of any fuel.
Policymakers should refine their understanding of
the life cycle and environmental footprint of energy
sources, including natural gas and oil, as part of providing a high-quality information base for making
decisions about energy choices that reflect the different nature and intensity of impacts. Information
from environmental footprint analyses could be incorporated into analyses used in making investment and
purchasing decisions by consumers, producers, and
state and federal governments.
With a high energy density and relatively low air
emissions, the overall footprint of natural gas and oil
appears to be smaller than most other energy sources
and compares favorably with all sources in available
analyses. In particular, shale gas, with higher than
average production per well, has an even smaller environmental footprint on an energy unit basis according
to some studies. Coupled with other factors such as
domestic abundance, reliably consistent production,
and its versatility as a fuel for many uses, the environmental footprint of natural gas, especially shale gas,
makes it an attractive energy source that can fuel the
U.S. economy both now and in the future.
Finding:
When compared with other energy sources, natural gas (and shale gas in particular) has a comparable or better overall environmental footprint
across the full life cycle than most other energy
sources.
247
Recommendations:
yy The federal government should support the
development of methodologies for assessing environmental footprint effects such as
impacts on water and land.
yy As sound methodologies are established and
vetted, regulators and others policymakers
should use environmental footprint analysis
to inform regulatory decisions and in implementing other policies where energy resource
choices involve economic and environmental
trade-offs.
research and technology development is conducted

by private companies and it is important to not
jeopardize this private enterprise system of innovation. However, sometimes the payoff period for such
research is too long to attract private support. Therefore, private investment cannot be counted on to perform this work. In other cases, the intellectual property developed by research is better held as a public
good rather than being held privately. This can occur
when the benefits of the research would accrue to the
United States as a whole, yet do not meet the criteria
of any individual company to justify the investment.
Finding:
Technology Innovation
The history of natural gas and oil development
has been one of continuous technology advances,
improved systems management, and improved regulatory processes that have allowed production of new
and more challenging resource plays, while at the
same time improving environmental performance.
These advances have led to production of resources
that until recently were not considered to be technically recoverable and have resulted in levels of environmental performance that could not have been
envisioned just a few years ago.
Improvements in environmental performance have
occurred in every phase of natural gas and oil development for both offshore and onshore operations,
from construction, drilling, completion through
production, plugging of the well, and final reclamation. New technologies and innovative practices have
been implemented to better control water use, reduce
air emissions, and ensure groundwater protection.
Additional performance improvements have been
developed for hydraulic fracturing, materials management, and overall operation and management.
As we move forward, we can expect to see even
more technology advancements that will allow production of ever more challenging resources while continuing to improve environmental performance. Such
advances must continue to be accompanied by regulations that provide effective environmental protection based on sound science while allowing innovative
changes that can lower costs and improve protection.
Continued support for research and technology
development is a necessary condition to enable development of our natural gas and oil resources. Much
248
Advances in technology, continuous operational

and environmental performance improvements,
and the appropriate assessment and mitigation
of risks are essential to ensure continued prudent
development of North American natural gas and
oil resources.
Recommendations:
yy Even as natural gas and oil companies continue
to fund their own proprietary technology and
other research, federal government agencies
should also perform important roles in supporting the development of new technology.
While different federal agencies may be appropriate homes for a range of research and technology development efforts, the Department of
Energy should lead in identifying, in some cases
funding, and in other cases supporting publicprivate partnerships for research and development on energy and certain environmental
issues of national interest. Examples where
federal involvement is needed include:
The environmental impact of oil spills
and cleanup, including residual effects of
chemical dispersants, and science-based risk
assessments
Science and pre-commercial technology
relating to methane hydrates
Technology and methods for understanding,
quantifying, and mitigating the environmental impacts and other risks of natural
gas and oil development to continue to
improve the environmental performance of
exploration and development activities.
yy State and federal agencies should continue

working to develop regulations that ensure
environmental protection and encourage technology advancement and innovative environmental practices.
Public Education
The importance of informing the public, maintaining transparency concerning operations and risks, and
gaining public confidence through excellent environmental performance is a recurring theme. This information and understanding is critical to achieving the
publics permission to operate in many parts of North
America. Public education can take many forms,
including information libraries, K-12 curricula, media
campaigns, speakers bureaus, web sites, and studies
of risks in areas of special concern, such as hydraulic
fracturing. Continuously improving environmental
stewardship is a prerequisite to gaining public confidence. The importance of this undertaking merits
highlighting through a separate finding.
Finding:
Public knowledge and confidence needs to be
built through open information sharing and
transparency about operations, impacts, risks,
and availability of mitigation strategies.
Recommendations:
yy The oil and gas industry must maintain and
publicize continuous effective environmental
performance and transparency.
yy The industry and state and federal agencies
must disseminate science-based information
on practices and risks to inform the public and
build public confidence.
Definitions of Sustainable Development

Sustainable development was defined by the
generations to meet their own needs.63 The concept
of sustainability is often used to refer to a companys
objective to achieve goals related to social, environmental, and economic needs. Sustainable development for industry can be referred to as the triple bottom line,64 a three-legged stool,65 or corporate social
responsibility.66 The triple bottom line was introduced
63 United Nations General Assembly, Report of the World Commission on Environment and Development: Our Common
Future, transmitted to the General Assembly as an Annex
to document A/42/427 Development and International
Co-Operation: Environment (1987), accessed April15,2011,
http://www.un-documents.net/wced-ocf.htm.
64 Timothy F. Slaper and Tanya J. Hall, The Triple Bottom Line:
What Is It and How Does It Work? Indiana Business Review
86, no. 1 (Spring 2011), accessed June 29, 2011, http://www.
ibrc.indiana.edu/ibr/2011/spring/article2.html.
65 United Nations General Assembly, Report of the World Commission on Environment and Development.
66 Cynthia A. Williams and Ruth V. Aguilera, Corporate Social
Responsibility in a Comparative Perspective, University of
Illinois at Urbana-Champaign (2007), accessed June 29, 2011,
http://www.business.illinois.edu/aguilera/pdf/Williams%20
Aguilera%20OUPfinal%20dec%202006.pdf.
by John Elkington in 1997 in order to demonstrate

that to reach sustainability, economic, environmental and social performance must be achieved.67 The
Global Reporting Initiative (GRI),68 a widely recognized sustainability measurement organization,
introduced draft Sustainability Reporting Guidelines
for organizations in 1999.69 GRI is currently developing a tool specifically designed to measure the different environmental aspects of the natural gas and oil
industry.70 This effort can be further defined once the
GRI tool is released.
Sustainability within business is not a clearly
defined concept for industry.71 Most companies have
67 William R. Blackburn, The Sustainability Handbook: the Complete Management Guide to Achieving Social, Economic and
Environmental Responsibility, Environmental Law Institute,
2007, page 4.
68
Global Reporting Initiative, Homepage (n.d.), accessed
April 15, 2011, http://www.globalreporting.org/Home.
69
Global Reporting Initiative, Homepage (n.d.), accessed
April 15, 2011, http://www.globalreporting.org/Home.
70 Global Reporting Initiative, Oil and natural gas (n.d.),
accessed April 15, 2011, http://www.globalreporting.org/
ReportingFramework/SectorSupplements/OilAndGas/.
71 Blackburn, The Sustainability Handbook, page 9.
249
Examples of Economic, Environmental, and Social Topics*

Examples of Economic Topics
yy Brand strength
yy Capital expenditures
yy Cash flow
yy Community donations
yy Credit rating
yy Debt and interest
yy Dividends
yy Liabilities
yy Local purchasing
yy Market share
yy Profits
yy R&D investments
yy Retained earnings
yy Return on investment
yy Sales
yy Taxes
yy Tax subsidies
yy Wages
Examples of Environmental Topics and Impacts (Benefit or Impact)

yy Air pollution
yy Biodiversity (wildlife or habitat)
yy Chemical spills
yy Compliance
yy Cultural resources
yy Energy use (conservation or consumption)
yy Greenhouse gases
yy Invasive species (increase or decrease)
yy Land disturbance (soil erosion, construction)
yy Natural resource use (consumption or conservation)
yy Noise and odors

yy Product energy use
yy Renewable energy
yy Soil contamination
yy Spills (prevention or occurrence)
yy Waste disposal (hazardous, solid, liquid)
yy Water quality (surface water or groundwater)
yy Water use (consumption or conservation)
yy Wetlands
Examples of Social Topics

yy Surface owner concerns or benefits
yy Visual changes
yy Community concerns, including environmental justice
yy Changes in reputation
yy Indoor air pollution
yy Access to healthcare
yy Charitable donations
yy Labor issues
yy Community education and outreach
yy Corporate governance
yy Employee benefits
yy Disaster relief
yy Emergency preparedness
yy Employee assistance programs
yy Employee diversity
yy Employee wellness programs
yy Employment
yy Ethics
yy Human rights
yy Impacts on local cultures and communities
yy Industrial hygiene
yy Legal compliance
yy Occupational health
yy Product safety
yy Securities regulation
yy Support for community services
yy Workplace safety
yy Transparent public reporting
* William R. Blackburn, The Sustainability Handbook: the Complete Management Guide to Achieving Social, Economic,
and Environmental Responsibility, Environmental Law Institute, 2007, pages 2527.
activities that further the cause of environmental sustainability. Financial success and long-term
employment can be part of a sustainability equation.
Strong corporate governance and business ethics are
other common sustainability successes for companies. Sustainability does not mean that a company
can achieve no negative impacts to society and the
environment. It is a process that supports companies moving towards a more sustainable outcome.
Companies can be perceived by society as being environmentally and socially conscious, or not based on
perceived or actual past occurrences. Jeffrey Immelt,
250
Chief Executive Officer of General Electric, was noted

for stating: The worlds changed. Businesses today
arent admired. Size is not respected. Theres a bigger
gulf today between the haves and have-nots than ever
before. Its up to us to use our platform to be a good
citizen. Because not only is it a nice thing to do, its a
business imperative.72
72
Marc Gunther, Money and Morals at GE, Fortune
(November 15, 2004), accessed April 15, 2011, http://
money.cnn.com/magazines/fortune/fortune_archive/2004/
11/15/8191077/index.htm.
Organizations can engage with stakeholders to

improve goals, metrics, monitoring systems, and
reports. To achieve superior performance, a business will continually challenge itself. James Collins, former Stanford University business professor, indicated that a common characteristic of great
companies is that they understand and confront the
brutal facts.73 Companies and industries often have
dialogues within their organizations, which can lead
to discussions based on hope rather than reality. Great
companies have the courage to listen to stakeholders
and ask for alternative views.74 Such companies will
reflect stakeholders views in strategic objectives and
communications. Listening to these concerns can
support a company to get ahead of issues that can
impact reputation, production delays, lawsuits, and
regulatory actions.75
Stakeholder engagement can provide valuable
insights that lead to better decisions and strategies.
It can also increase the trust and support of government and citizens. For example, Art Gibson of
Home Depot stated: A company cant realize the full
potential of environmental sustainability unless the
organization and its stakeholders are aligned on the
important aspects of that concept in a way that brings
mutual benefit. A good way to achieve that alignment
is through an engagement process. And from our
experience, a proactive, well-planned process is much
easier than a reactive one.76
In the sectors involved in land development, public
comment and hearings are often required for permitting and other government approvals. There are also
a number of laws requiring disclosures to agencies or
shareholders.
Such discussions can also more effectively incorporate local environmental sustainability priorities
and concerns. Environmental sustainability is often
seen as first a local matter, then regional, and finally,
national and international. Stakeholder discussions
at a local level can easily be incorporated into publicprivate partnerships and overall environmental sustainability goals and objectives.
Stakeholder engagement and partnerships have not

always proven successful. There are a few commonly
stated reasons for such engagements to be less than
successful, including:
yy Individuals in the organization are concerned about
the outcome of the engagement
yy Poor understanding of engagement techniques
yy Failure to effectively scope purpose of discussions
and partnership
yy Lack of evaluation of outcomes
yy Lack of resources.77
Any partnerships or engagements could focus on an
open dialogue with clear goals and purpose. These lessons can be taken into consideration for developing
public-private partnerships.
Public-private partnerships have proven to be a
successful tool to drive environmental sustainability goals within a sector. These partnerships put the
regulator in a different role. Instead of implementing
programs as dictated by legislators, they are managers striving for outcomes that result in public benefit by navigating the various strategic choices. This
can enhance accountability of public managers and
provide a greater source of regulatory and voluntary
tools. As the National Academy of Public Administrations 1995 report on the U.S. EPA states: At present,
EPA is hobbled by overly prescriptive statutes that pull
the agency in too many directions and permit managers too little discretion to make wise decisions. Congress should stop micromanaging EPA.78 The report
continues to press for a coherent integrated governing statute and indicates that EPA should promulgate
a mission statement of its own.79
Public-private partnerships, if properly designed
and implemented, are an effective tool to drive environmental sustainability objectives consistently
throughout an industry. It can also enhance the ability to engage stakeholders and incorporate input.
78 National Academy of Public Administration, Setting Priorities, Getting Results: A New Direction for the Environmental
Protection Agency, Report to Congress (Washington, D.C.,
1995), page 1.
79 National Academy of Public Administration, Setting Priorities, Getting Results, page 1.
251
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Chapter Two

Introduction AND SUMMARY

resulting variation in environmental impacts and

energy use, benefit the economy, and improve energy

recoverable. Continuous attention to reducing risks

well-to-wheels life-cycle GHG emissions 5% to 15%

well-to-wheel emissions from oil sands processed

drilling goes through shallower areas, with the

yy In areas with deep unconventional formations

yy The Secretary of Energys Advisory Board is also

* Interstate Oil and Gas Compact Commission, Testimony

Interstate Oil and Gas Compact Commission, Testimony

IHS Global Insights, Measuring the Economic and Energy

U.S. Environmental Protection Agency, Office of Water,

CHAPTER 2 OPERATIONS AND ENVIRONMENT

as well as new technologies, such as the application

over $4.3 billion for implementing new technologies

Effective Regulatory Approaches Environmentally responsible development requires regulatory

Major Findings: Assuring

tional natural gas and oil resources, such as shale gas,

Environmental Sustainability and

Community engagement needs to be a core value

wide variance in how these systems are defined and

Planning and Risk Assessment

abundant again only long after the event and as the

health, and safety. Similarly, states may vary in the

For these government initiatives to be successful,

Environmental Footprint Analysis

Issues on the Horizon: Decisions for the Regulatory Path Forward

There is a range of views on whether particular

practice, EF analyses tend to remain in early stages of

independent nor can their agreement be taken as

MILLION GALLONS PER 11,000 MEGAWATT HOURS

BONNEVILLE POWER ADMINISTRATION

ENVIRONMENTAL COST OF ENERGY

ENVIRONMENTAL COST OF ENERGY

ACRES PER 11,000 MEGAWATT HOURS

more relevant in a carbon-constrained economy,

Examples of Industry Technological and Environmental Advances

downhole conditions i.e., another set of eyes to

CHAPTER 2 OPERATIONS AND ENVIRONMENT

that much of the data is not easily shared. Different

Industry Transparency and

3. What is the environmental and regulatory

1. What is the evolution of environmental

4. What technological and operational advances

2. What is the environmental footprint of

5. What sustainable development principles and

Resource Play Variations and

Table 2-1. Play Variation by Geographic Distribution

Hills and valleys,

Rain and snow prevalent

Relatively flat plain/

Mainly dry with

Western mountain region

Mainly dry with

West Coast USA/Canada

Mixed terrain of high

Rainy forests near Pacific,

<1,000 water depth to