Unconventional natural gas development in the US—and perhaps especially in Pennsylvania, the nation’s second largest producer—is marked by a lack of public confidence, a frayed social license to operate, and pipeline protests. So far, moratoria or outright bans on the practice have been enacted in Maryland and New York, in other U.S. localities, and in Germany, France, Wales, and Scotland. And a de facto moratorium has been in place since 2009 in the Delaware River Basin here in Pennsylvania.
While there is much hyperbole coming from both proponents and opponents of the practice, it is clear that the sustainability of shale gas is open to question.
What role—if any—does sustainability play in decisions concerning shale gas development in the U.S. and elsewhere?
Is it possible for shale gas development to achieve sustainable outcomes and avoid, minimize, and mitigate its complex, interconnected risks, while allaying public fears?
What laws and policies are needed to ensure that shale gas development helps to accelerate the transition to sustainability?
Some pretty important questions, in my view.
A new book, Shale Gas and the Future of Energy: Law and Policy for Sustainability, attempts to answer them.
I had the privilege of contributing (pro bono – I receive nothing from book sales) Chapter 3: Requiring Full Cost Accounting for Environmental and Social Impacts.
I argue that sustainable development of shale gas requires companies to internalize their costs and risks in making development decisions. The use and management of water and chemicals, for example, are cost drivers for shale gas companies and also account for many external, social, and environmental risks. Yet shale gas companies, by and large, don’t appear to be integrating into their accounting both internal costs and external risks of using water and chemicals.
The chapter argues that full cost accounting by industry of the various environmental and social risks of shale gas operations could lead to the elimination—or at least minimization—of the use of water and chemicals in the production process. That, in turn, would produce a broad range of additional economic, social, and environmental benefits, making shale gas production more sustainable than it currently is.
Quantification methods to assign values to environmental and other risks are well-established; what’s lacking is the will to use them in business decision making. The chapter explains how companies could employ full cost accounting and examines four regulatory and non-regulatory means of implementing it.
The chapter is based on my 2012 keynote address at the Howard Baker Technology Forum in Washington, DC, and a 2013 lecture that I delivered at Widener University Law School in Harrisburg.
There is a business case to be made for a drive to sustainability in shale gas development. Its lack of adoption by producers—evidenced in Pennsylvania by legislative opposition to methane emission reductions and basic protections for public health and the environment—shows that the case is far from being accepted.
