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Social Responsibility

Colorado Drillers Tread Lightly Amid Rising Tide of Resentment

Source: Bloomberg Businessweek | 2 September 2014

A fight over hydraulic fracturing is looming in Texas. Another stand-off is shaping up in Colorado. Yet drillers’ reactions couldn’t be more different.

In Texas, drillers are doing their noisy in-your-face fracturing as usual. Meanwhile, on a small farm about an hour from the Colorado Rocky Mountains, the oil industry is giving hydraulic fracturing a makeover, cutting back on rumbling trucks and tamping down on pollution.

Oil companies in Colorado are responding to a rising tide of resentment as local communities and environmental activists vie to impose measures to ban fracking or restrict drilling. A series of ballot initiatives and other grass roots opposition around the country is seen as threatening the booming shale industry, even in oil-friendly Texas, where the US energy renaissance began.

Last December, Anadarko named Alex Hohmann, an engineer who previously helped complete wells, to lead a new team dealing with community relations. Now, Hohmann, 31, spends his time visiting potential sites and neighborhoods, sometimes going door-to-door, acting as a kind of oil-drilling diplomat.

“When your oilfield is intermingled with 250,000 people, it’s increasingly important to take into account the neighborhood, the church, and the school,” Hohmann said on a recent tour of several Anadarko drilling sites. “We have to demystify it, to help people see it as compatible with their lives. That’s our industry’s challenge.”

He and his three-person team answer a hotline, send notices to homes and neighborhood associations and organize community meetings. Hohmann even hired security guards to monitor a wellsite near a playground 24 hours a day for more than a week while work was done, ensuring that no children came to harm, he said.

Rice University Scientists Seek Long-Term Answers To Stem Increase of Water Use at Wells

Source: Rice University | 2 September 2014

Rice University scientists have performed a detailed analysis of water produced by hydraulic fracturing of three gas reservoirs and suggested environmentally friendly remedies are needed to treat and reuse it.

Fig. 1—Amounts of total carbon (TC), nonpurgeable organic carbon (NPOC), and total inorganic carbon (TIC) in the samples. Image courtesy of the Barron Research Group.

Rice University researchers performed a detailed analysis of produced water from three underground shale gas formations subject to hydraulic fracturing. Fig. 1 shows the amounts of total carbon (TC), nonpurgeable organic carbon (NPOC) and total inorganic carbon (TIC) in the samples.

More advanced recycling rather than disposal of produced water pumped back out of wells could calm fears of accidental spillage and save millions of gallons of fresh water a year, said Rice chemist Andrew Barron. He led the study that appeared this week in the Royal Society of Chemistry journal Environmental Science: Processes and Impacts.

The amount of water used by Texas drillers for hydraulic fracturing may only be 1.5% of that used by farming and municipalities, but it still amounts to as much as 5.6 million gallons a year for the Texas portion of the Haynesville formation and 2.8 million gallons for Eagle Ford. That, Barron said, can place a considerable burden on nearby communities.

Barron noted that shale gas wells, the focus of the new study, make most of their water within the first few weeks of production. After that, a few barrels a day are commonly produced.

Social Media Survey Shows Lopsided Reporting on Fracturing

Source: Drilling Contractor | 11 August 2014

Approximately 57% of US consumers believe that fracturing is one of the three most important environmental issues today, a new report shows. The study, conducted by communications consultancy Makovsky, also found that 71% of respondents say they hear about the issue at least weekly and 79% say they hear about it primarily from social media. The survey was conducted between June and July 2014 via social media; there were 1,600 respondents.

With social media becoming one of the top sources of public information on fracturing, Makovsky found that most of the social conversation is taking place on Twitter from antifracturing activists and groups. Analyzing 1.3 million Twitter mentions of fracturing from January through July 2014, the group found that anti-fracturing advocates are generating 2,000% more impressions than those supportive of the issue.

For companies in the oil and gas industry trying to maintain its license to operate—reflecting the local community’s acceptance or approval of a project or presence—effective use of social media is emerging as a critical success factor for resource development.

Hydraulic Fracturing Guidelines Issued by API To Ease Community Fears

Source: Bloomberg | 14 July 2014

The oil industry’s largest lobbying group began a new effort to ease public fears about hydraulic fracturing after a legal setback in New York state and a voter push in Colorado to ban the drilling practice.

The American Petroleum Institute (API), a Washington-based group that includes Exxon Mobil and Chevron, released guidelines for improving community relations as hydraulic fracturing extends to more towns, raising concerns about pollution risks.

The suggestions will help “raise the bar for the industry,” David Miller, director of standards for the group that has guided the industry on well design and preventing spills since 1924, said. The effort will help oil and gas companies develop “lasting relationships” with communities where drilling occurs, he said.

Industry, Watchdog Groups Agree: Water Wells Should Be Tested Before Hydraulic Fracturing

Source: Santa Fe New Mexican | 26 June 2014

The oil and gas industry is urging domestic well owners in New Mexico to test their water quality before and after drilling. Industry watchdog groups want the same thing but for very different reasons.

The New Mexico Oil and Gas Association is encouraging oil and gas well developers to get permission from water well owners to test as a way of proving that drilling and fracking are safe and won’t hurt water quality.

Watchdogs like Kathleen Dudley of Drilling Mora County said water quality tests before oil and gas drilling occurs is insurance for property owners, but they ought to pay for their own tests.

“If a homeowner does not know the quality of water before any industrial activity occurs, they have no baseline by which they can make industry accountable,” Dudley said.

Analysis: Will Texas Fracturing Verdict Stand?

Source: Reed Smith via Mondaq | 22 May 2014

On 22 April 2014, after a two-and-a-half week trial, a Dallas County Court at Law entered a final judgment on a split jury verdict awarding USD 2.925 million to a Texas family, Bob and Lisa Parr from Decatur, against Barnett Shale operator Aruba Petroleum of Plano, Texas, for personal injury and property damages arising out of Aruba’s drilling operations near the Plaintiffs’ property. Parr v. Aruba Petroleum, Cause No. 11-1650-E, County Court at Law No. 5, Dallas County, Texas. Although it has been characterized by some observers as a “win against fracking,” there are reasons to question whether the verdict will stand on appeal and whether it is a harbinger of verdicts to come in the oil and gas industry.

 

Occidental Says It Will Not Drill Where California Residents Do Not Want It

Source: Bloomberg | 6 May 2014

Occidental Petroleum Chief Executive Officer Steve Chazen said the company’s California spinoff will have plenty of places to drill that will not be hindered by a growing anti-hydraulic-fracturing movement in the state.

The new company, which will be spun off to shareholders as California Resources by year end, won’t drill in communities that oppose oil and gas activity or hydraulic fracturing, Chazen said in a call with investors. Occidental can avoid communities such as Beverly Hills, which have passed limits on hydraulic fracturing, he said.

“To the extent that towns don’t want us there, we won’t be there,” Chazen said, noting that some communities that oppose drilling have high unemployment rates. “Maybe the people in Beverly Hills should park their Rolls Royces and ride bicycles going forward. You can see why I’m not going to be part of the California company.”

Landowners Group Calls for Reassurance on Relaxing Access Rights

Source: CLA | 1 May 2014

The Country Land and Business Association (CLA), the membership organization for owners of land, property, and businesses in rural England and Wales, on 23 April said reports of a potential announcement relaxing access rights for shale gas operators should come as “little surprise.”

The organization said the government has already made clear its commitment to developing the shale gas industry, but landowners need reassurance if access rights for hydraulic fracturing are relaxed.

CLA President Henry Robinson said, “The shale gas industry has consistently pointed to subsurface access rights as a major barrier to the investment and development of fracking.

“This potential announcement is hardly surprising but landowners must be given assurances over what is happening on their land and any liability removed.

“It is vital that any new system put in place recognizes landowners existing rights by providing adequate compensation for any losses incurred and provides a better way to develop an industry in the national interest.”

Energy Department Welcomes Fracturing Chemical Disclosure

Source: Rigzone | 28 April 2014

The US Department of Energy said on 25 April that it welcomes the decision by oil and gas industry supplier Baker Hughes to disclose all chemicals in hydraulic fracturing fluid. But Halliburton, a major competitor in the field, isn’t committing to such disclosure.

Deputy Assistant Energy Secretary Paula Gant said that Baker Hughes’ move “is an important step in building public confidence” and the department “hopes others will follow their lead.”

The oil and gas industry has said the hydraulic fracturing chemicals are disclosed at tens of thousands of wells, but environmental and health groups and government regulators decry a loophole that allows companies to hide chemical “trade secrets.”

Houston-based Halliburton said on 25 April that it is studying the move by Baker Hughes, which is also based in that city. Halliburton said it had an interest in protecting “our intellectual property and the substantial investment it represents” and will examine the new Baker Hughes format for its ability to protect such investments.

Baker Hughes said it now believes it is possible to disclose 100% “of the chemical ingredients we use in hydraulic fracturing fluids without compromising our formulations,” to increase public trust.

Baker Hughes To Reveal All Hydraulic Fracturing Chemicals

Source: Fuel Fix | 25 April 2014

Baker Hughes says it is ready to divulge all the chemicals it uses in hydraulic fracturing, revelations that other big industry players have limited by asserting the potions they use to get at trapped oil and gas are trade secrets.

In a statement recently posted on its website, the Houston-based oilfield services firm says it “believes it is possible to disclose 100 percent of the chemical ingredients we use in hydraulic fracturing fluids without compromising our formulations—a balance that increases public trust while encouraging commercial innovation.”

Baker Hughes included a disclaimer: It would reveal its chemical data “where accepted by our customers and relevant governmental authorities.” The company said it will take several months for it to negotiate with its suppliers before it can release its data.

The new disclosures, the company said, would eliminate any trade secret claims about its reports to FracFocus, an industry-backed database that regulators in Texas and other states use as a clearinghouse for fracturing-fluid data.

Texas Family Wins Landmark USD-3-Million Verdict Against Hydraulic Fracturing Firm

Source: PR Newswire | 23 April 2014

A Dallas jury awarded a local family USD 3 million for the illnesses they suffered from exposure to contaminated ground water, solid toxic waste, and airborne chemicals generated by natural gas hydraulic fracturing operations surrounding their 40-acre ranch.

The verdict against Aruba Petroleum is seen as a landmark decision for opponents of hydraulic fracturing, the process of drilling and injecting high-pressure fluid into the ground in order to fracture shale rock to release natural gas. Up to 600 chemicals are used in fracturing fluid, including several known carcinogens and other toxins. According to studies, only 30 to 50% of the fracturing fluid is recovered in an operation. The rest of the toxic fluid is left to penetrate the ground and is not biodegradable.

Robert and Lisa Parr, along with their young daughter, began experiencing health problems in 2009, after Aruba began drilling the first of 20 wells that the company operates less than 2 miles from the Parr’s ranch near Decatur, Texas, about 45 miles northwest of Fort Worth.

Apache CEO, Vermont Activist Build Alliance

Source: Reuters | 21 April 2014

Steve Farris runs a USD-33-billion Texas oil and gas company and turns, for advice, to a bearded Vermont environmentalist.

As other energy firms battled climate change and antipollution activists in recent years, the Apache chief executive instead built an alliance with Steven Heim, managing director of Boston Common Asset Management, one of the better-known socially responsible investment firms.

The relationship helped Apache sidestep time-consuming proxy fights that have plagued some of its peers, in exchange for changes like committing to protect the rights of native peoples living near remote gas projects, and using cleaner chemicals in hydraulic fracturing, a drilling method that environmentalists say could threaten groundwater.

Heim also stages investor meetings for Apache where its executives and engineers take questions on topics such as pollution or human rights. These draw representatives from mainstream investment firms such as T. Rowe Price, Gabelli & Co, and Morgan Stanley & Co.

“What I’ve been trying to do is to elevate the level of understanding of issues by the investors, not just the executives,” Heim said.