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Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop (2018)

Chapter: 5 Intersection of Technology and Regulation: Smoothing the Interface Through Time

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Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
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5

Intersection of Technology and Regulation: Smoothing the Interface Through Time

The third panel session of the workshop provided an overview of the interface between technology and regulation, adapting to technology change, improving practices, and technology development to avoid future legacy problems. The three presentations were followed by a panel discussion moderated by Nick Tew (Geological Survey of Alabama and State Oil and Gas Board of Alabama). In Tew’s opening remarks he emphasized that during the past few years technology has outpaced the ability of regulatory organizations to stay apace with development of unconventional oil and gas fields. He noted that the administrative and legislative systems within which the regulatory organizations operate may constrain the ability of regulatory agencies to respond immediately to new technology developments. If regulations are written broadly enough or with enough flexibility, they may keep up with technology, he said, but sometimes regulation cannot and the timeframes within which technology and regulation interact and evolve become important.

PANEL PRESENTATIONS

The Interface of Technology and Regulation

Scott Anderson, Environmental Defense Fund

The oil and gas industry is extremely dynamic, Anderson began, with technologies and practices that are constantly changing. The associated risks and options to control risks and the scientific understanding of the risks posed by development are also changing with time. As a result of these dynamic variables, writing a single set of rules or regulations that will handle all the risks on a permanent basis is not possible or desirable. Thus, it is essential that the regulatory system be adaptive, he said.

Effective regulators, Anderson noted, have long recognized that it is vital for them to pursue continual improvement. In recent years, regulators represented by the Interstate Oil and Gas Compact Commission (IOGCC) and Groundwater Protection Council (GWPC)

Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
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have rededicated themselves to the process of continual improvement and are developing new programs toward that end. Anderson emphasized that most of his presentation would address these efforts.

The State Oil and Gas Regulatory Exchange was formed in recent years by the IOGCC and GWPC, Anderson continued. The mission of the Exchange is to review state programs to see if states are keeping pace with what is going on elsewhere in the country. He mentioned that Virginia and Idaho are the first two states to undergo review. Anderson also noted that the GWPC is now publishing on a triennial basis a review of state water protection rules in oil and gas agencies. He indicated that the third edition of the triennial review will likely be available in 2017. Regulators around the country are beginning to use the reviews as a source book for ideas to upgrade their regulations.

Anderson noted the importance of professional development and training opportunities for field inspectors. One relatively new project he highlighted called “Top Corps” trains field inspectors and is coordinated jointly by the University of Texas, Colorado School of Mines, and The Pennsylvania State University. Through the program, field inspector training includes exposure to cutting edge science and new engineering developments. He noted an annual inspectors summit, where inspectors from around the country come together and discuss their experiences. The IOGCC has also begun offering professional development opportunities.

Anderson then described a project he co-chaired that developed nine recommendations for ways in which state regulatory programs can improve how they adapt to changes in technology and industry practices. The method of the study was based on interviews with industry and regulators. Some of the recommendations included:

  • The need for a two-way process for communication between the technical community and regulators. Anderson illustrated that a standard part of IOGCC meetings includes regulators sitting down together to discuss their current issues and solutions. That information is recorded and an annotated list of topics is sent annually to entities such as the American Petroleum Institute, Society of Petroleum Engineers, and International Association of Drilling Contractors as an information request. The intent is to maintain dialogue and exchange of information between regulators and the technical community.
  • The promotion of the concept of chief technology officers in regulatory agencies. The role of this individual would be to maintain oversight on technology practices and innovation and make regulators aware of these developments.
  • Data management, data science, and technology transfer for regulators. The latter approach would involve the technical community organizing outreach to regulators to provide them with information about new technology and practices.

Anderson also noted the interest of regulators in improving the discoverability and access to the fruits of research, and particularly, federal research. To conclude, he underscored the excitement of seeing the process of continual improvement being adopted by the state regulators in the last four to five years.

Adapting to Changing Technology, Changing Ownership, and New Data

Eric Vendel, Ohio Department of Natural Resources Division of Oil and Gas

Vendel, providing a regulator’s perspective on new technology, said that regulators are

Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
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FIGURE 5.1 Regulator considerations regarding new technology. SOURCE: Vendel, slide 2.

often perceived as being behind the curve regarding staying abreast of changing technology. However, he advocated that sometimes regulators are actually ahead of the curve with regard to changing technology and how industry applies it within the regulatory framework.

A regulator generally considers several, interconnected categories of new technology (Figure 5.1), he said. Federal law is one of the considerations because of the ancillary industries supporting unconventional development (e.g., rail cars for disposing of brine) and the fact that a state may be preempted from regulating this industry because of the primacy of a federal body. From a state perspective, the state has to analyze new technologies pursuant to state laws and rules, he continued. Some regulations are prescriptive and some are performance based. Vendel also noted that some regulations authorize practices and give broad discretion, while some establish prohibitions. Thus, constraints may exist in adapting regulation to new technology based on existing state statutes and laws.

In the context of new technology, regulators consider the regulatory structure—the state laws and regulations—and public health and safety, Vendel said. Will the new technology impact be positive or negative on public health and safety? Regulators also consider potential environmental impacts whether they might be positive or negative.

Regulators also take into account the knowledge base they may need to understand a new technology, he said. In this regard, Vendel remarked on the benefits to states based on the collaboration between the Interstate Oil & Gas Compact Commission (IOGCC) and the Groundwater Protection Council (GWPC) through the States’ First Initiative in areas such as stray gas and gas storage.

Ohio has been proactive in adapting regulation to new technology, he said, and shared two examples, Ohio’s well construction rule and their induced seismicity program, to illustrate his point. Prior to the well site construction rule, Ohio had about 600 well sites constructed on hillsides, Vendel continued. About 50 percent of those well pads had failure rates that caused slippages and landslides impacting nearby creeks and streams. The well site

Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
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FIGURE 5.2 Regulator considerations regarding new technology. The Utica Shale occurs in the eastern part of Ohio. The locations of the real-time monitoring stations owned by the Ohio Department of Natural Resources are shown as blue triangles. SOURCE: Vendel, slide 6.

construction rule required engineering plans, a permit, and land reclamation with engineer-certified drawings and plans, technical review of the plans, and engineers in the field ensuring that well sites are constructed to reduce environmental impacts. This rule has been a real success with few failures since the rule was implemented, he said.

Vendel then described Ohio’s induced seismicity program, OhioNET Seismic Network, which includes a total of 65 monitoring stations where seismic data are received in real time. Twenty-one of these stations are owned by the Ohio Department of Natural Resources (Figure 5.2), while the remainder are operator leased or owned by companies. The state also has 15 temporary array stations used to monitor seismic activity through the USGS and the Central and Eastern United Sates (CEUS-Seismic Source Characterization for Nuclear Facilities).1

Vendel then addressed state concerns regarding changes in well ownership and specifically, issues of financial assurance and bankruptcy. Financial assurance is very important for Ohio because one can have a bond or revocable letter of credit or cash deposits in Ohio. The $15,000 financial assurance blanket in Ohio is intended to cover all of an owner’s wells in the state and is below what may really be required. The state is presently revisiting the value of this financial assurance. Tangentially related to financial assurance is the issue of bankruptcy. If a company goes into bankruptcy, the likelihood is that good assets are purchased and the bad assets are left behind. The bad assets either go to the state or the land owner. When the state has to devote a budget towards remedying leaking wells in some of those bad assets, funding for enforcement and resources to allocate to new technology are reduced. He challenged experts in the audience to identify novel ways to provide adequate financial assurance.

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1 Available at: http://www.ceus-ssc.com/ (accessed on February 21, 2017).

Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
×

He concluded his presentation by discussing the proactive approach that Ohio has taken to update their Risk-Based Data Management System (RBDMS).2 The system will be a real-time geographic information-based database, and will include electronic permitting, and tracking of ownership changes. These features will aid real time enforcement and help reduce instances of negative legacy impacts.

Improving Practices: Performance Standards, Third-Party Certification, and Other Approaches

Susan Packard LeGros, Center for Responsible Shale Development

Packard LeGros opened her presentation by remarking on the convergence among the attendees at the workshop that technology has advanced at a pace that exceeds the ability of state government and regulation to keep up.

She recognized that the regulatory process, by its very nature, needs to be slow, conscientious, and considered. In terms of a practical example of how state government and regulatory changes can work, she illustrated a case from Pennsylvania. Pennsylvania recently promulgated a set of regulations for the unconventional oil and gas industry, she said. These regulations were considered for five years and within one week after they were promulgated, a legal challenge was filed against portions of the regulations. The industry, therefore, is uncertain about how to deal with the regulation of impoundments and pits, which are used to store wastewater from oil and gas development. Another way to deal with such problems, she suggested, is through performance-based standards.

The Center for Responsible Shale Development (CRSD) brings together different viewpoints on what is the right thing to do, what constitutes continuous improvement, and how to identify common ground and opportunities to move forward. The genesis of the CRSD lies in an initial report3 by the Secretary of Energy’s Shale Gas Production Committee. Packard LeGros noted that whenever she looks at both the initial report and the subsequent final report,4 she is struck by the accuracy of their assessment of what is needed and how it still resonates today on appropriate ways to deal with the challenges of shale gas development. One of the report recommendations suggested that industry needs to create an organization dedicated to continuous improvement and best practices, and that those best practices need to be based on scientific information, measurement, and field experience. This approach is similar to the CRSD’s guiding principles.

The organization was formed by a local civic group who looked at the implications of shale gas development in the Marcellus play, Packard LeGros said. The group identified 15 standards dealing primarily with shale gas development and the risk associated with environmental impacts to water and air. These standards were adopted by the Center’s Board and made public.

The group also determined it was important to have a third party certification scheme (Figure 5.3) so the public and others could have a degree of confidence that standards were being met, as determined by a neutral group of auditors. The scheme involves a two-year certification period with the initial audits and guidance posted on the CRSD website.5

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2 Available at http://www.rbdmsonline.org/ (accessed on February 22, 2017).

3 Available at https://www.shalegas.energy.gov/resources/081811_90_day_report_final.pdf (accessed on February 23, 2017).

4 Available at https://www.shalegas.energy.gov/resources/111811_final_report.pdf (access on February 23, 2017).

5 Available at http://www.responsibleshaledevelopment.org/ (accessed on February 23, 2017).

Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
×
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FIGURE 5.3 The third-party certification scheme used by the Center for Responsible Shale Development. The certification is based on the Center’s 15 initial performance standards (Center for Responsible Shale Development, undated). SOURCE: Packard LeGros, slide 10.

Interim audits are performed during that two-year period and these results are also posted on the website. A decision based on the audit report is made by a group of third-party individuals not associated with either the industry or the NGO community. The decision is final and non-appealable, she said. Since 2014, they have certified four different operators and are now in the process of a second round of certification for some of those companies that were initially certified.

The Center is also working on continuous improvement because the goal of the organization is to identify ways performance standards can articulate a level of performance that exceeds existing state regulation. This presents a continuing challenge, for example, when the performance standards were initially drafted in 2011 and 2012; state regulations had not at that time caught up to industry’s activities and technologies. Today, however, many state regulators have been proactive in raising the bar of their expectations and performance criteria to which industry has to comply. The Center’s goal is not simply to adopt what states are doing and to stay ahead of states in some way, but to help identify meaningful ways of continuous improvement and best practices across the industry. This approach has been carried out through a new wastewater management program standard the Center has adopted, she said. She then showed a conceptual model of how the process within the organization works (Figure 5.4). The heart of the organization is a standards group made up of representatives from each of the participating organizations who work together to identify areas that need attention, do research, and then identify standards that are adopted by their board, put into practice, certified to the extent the companies apply for certification, and then the model continues.

To conclude, Packard LeGros emphasized a number of ways (e.g., enhance reputa-

Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
×
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FIGURE 5.4 Model of how new standards are considered at the Center for Responsible Shale Development. SOURCE: Packard LeGros, slide 7.
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FIGURE 5.5 Incentivizing Voluntary Standards. SOURCE: Packard LeGros, slide 13.
Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
×

tion, enhanced community engagement, and greater operational effectiveness) to incentivize voluntary standards (Figure 5.5), which supplement the regulatory approach to shale development.

Technology Improvements and Strategic Direction of Hydrocarbon Resource Development in the 21st Century

David McBride, Anadarko Petroleum Corporation

McBride noted that he would talk about several innovative practices, each of which involves technology. He asked the workshop audience to consider regulation, innovation, economics, stakeholder relations, and voluntary standards as he presented his material. All of these considerations play into how and where the technology is developed and deployed, he said. He reviewed several topics, including horizontal drilling, greenhouse gas management, wellbore integrity, plugging and abandoning wells, water management, and stakeholder engagement, in the context of the intersection between technology and regulation.

The benefit of horizontal drilling to a company is the ability to drill multiple wells from one pad. McBride noted that this approach has enabled access to about ten times the amount of energy from one-tenth the number of wells compared to conventional drilling (Figure 5.6). This gives access to greater resources and contributes to less infrastructure on the surface landscape, which results in a smaller landscape footprint and reduction in the biological impacts.

In collaboration with other entities, Anadarko undertook an inventory to gain insights into the scale of methane leakage from wells and how to manage that leakage. Through the regulation of best practices, voluntary programs, and company initiatives, a lot of progress was made on greenhouse gas management. McBride suggested that technological innovation is still needed to reduce and ultimately eliminate methane emissions from facilities.

The obvious benefit to maintaining wellbore integrity is protecting groundwater, McBride said. When wells are drilled, they are designed with multiple layers of steel and cement to maintain well integrity (Figure 5.7). It is a continuous learning cycle because different geologies may require different well bore design.

McBride reiterated a point made earlier during the workshop that wells are not plugged and abandoned the same way today as they were in 1930. He emphasized the continuous efforts to improve the process and the need to continue monitoring. Companies like Anadarko are keen on making sure that once a well is plugged and abandoned that it remains in that

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FIGURE 5.6 Comparison between the surface footprints for various energy production projects that generate approximately the same amounts of energy. Left to right: horizontal drilling for shale resources, drilling for conventional oil and gas resources, wind farm; solar farm. SOURCE: McBride, slide 7.
Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
×
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FIGURE 5.7 Wellbore integrity and efforts to protect groundwater. SOURCE: McBride, slide 10.

state (Figure 5.8). He noted the use of a series of cement plugs set in the wellbore with inflow or integrity tests made at each stage to confirm the segment is hydraulically isolated.

The evolution of water management strategies is a good example of the positive confluence of regulation, innovation, and technology. About 40 to 50 years ago oil was king and natural gas was considered a waste. Natural gas was either vented or flared. Today, flares are rare because natural gas is a profitable commodity and industry has found a way to use it. A similar scenario relates to water. Companies are incentivized to identify ways to use everything that returns from the well bore, including water. Anadarko is looking at produced water as a usable byproduct.

McBride noted stakeholder engagement as a critical component of any company’s development of oil and gas resources. Stakeholders include local communities, states, the federal government, academic institutions, and other companies, he said, and progress is made on many of the topics of concern to these stakeholders by engaging with them.

Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
×
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FIGURE 5.8 Plug and abandonment of producing well. SOURCE: McBride, slide 11.

To conclude, McBride emphasized the importance of a healthy tension between the regulatory process and technology innovation. Good regulations can be a business enabler as well as a rule. One needs good regulations to address risk. A regulatory process that is not too prescriptive, does not stifle innovation, and is performance-based is preferable.

MODERATED DISCUSSION

A participant commented on the design of regulations and asked whether appropriate regulatory design could alleviate concerns about the technology interface and the adaptation of regulations to technology. If regulations were performance standards or economic incentive approaches, the participant said, those changes in technology would be incentivized by the regulations themselves. Anderson responded saying he disagreed with the statement and emphasized that the preference for regulations in this area is a mix between performance-based and prescriptive standards. He cited several examples to illustrate his point and concluded that the art of effective regulation is to know when to be prescriptive and when to be performance-based. Another participant followed by suggesting that performance-based rules may be useful, but that economic incentives are the drivers.

Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
×

A participant reiterated a previous comment about hydraulic fracturing, induced seismicity, and methane emissions capturing the public’s attention. The challenge is often placed on regulators who have to do something about the problem. The participant asked how does one know what to regulate, how far to extend the regulations, and what the costs and benefits are relative to a different approach? Tew responded by emphasizing that it is vital for regulators to keep up with the pace of technology as best they can. Regulators do have other tasks and responsibilities, but a vital part of their work is to do their best to keep up with improvements, scientific understanding, and technical developments. He noted that regulators do not often have the data needed to make some of these decisions. Researchers, however, can often provide regulators with data and answers to questions, Tew continued. At the same time, regulators are charged with public safety and looking after their citizens. Sometimes these different responsibilities result in difficult choices. In many situations, regulators look to their peers around the country and see what others have done in similar situations, and try to work with best practices and use past experiences to help guide their efforts. Vendel agreed and offered that the rule-making process helps facilitate a balance by bringing stakeholders together. In Ohio, for example, a statutory scheme is in place that requires regulators to go before a common-sense initiative board and the board looks at the financial impact of a regulation on the regulated community, especially the small business sector. After that, regulators are required to go before the Joint Committee on Agency Rule Review—a committee of ten legislators who can vote the rule down based on statutory criteria. He suggested that the process leads to a balance because multiple interests—state, industry, and other stakeholders—are considered.

The conversation shifted toward the practice of using voluntary standards. A participant commented that American Petroleum Institute (API) standards, such as casing standards, are broadly followed by industry and asked what sort of response industry provides to the voluntary standards developed by CRSD. Packard LeGros responded, indicating that some of the voluntary standards are aspirational and do not have a mechanism to determine who is meeting them or how to measure the impact they have. The API standards, which serve a very good purpose, were primarily drafted by industry and do not represent different points of view, she said. The performance standards that CRSD have crafted represent different points of view, ranging from industry to the environmental community. She emphasized the challenge to integrate even those two perspectives because both sectors can look at similar datasets and reach different conclusions about risk, disclosure, and the need for information. The CRSD is trying to demonstrate that their performance standards can be met. For example, new federal performance standards are incorporated into their standards for existing facilities, and the Center is demonstrating that those standards can be met and can help inform the regulatory process. A participant continued that thought by suggesting that although the CRSD is not focused on trying to impact regulations, the CRSD standards are robust, and by keeping the standards ahead of the rules, one is probably influencing the course of future regulation which may otherwise have challenges in maintaining pace with industry practice.

Long-term planning was not covered during the workshop a participant said, and emphasized the need for dynamic regulation and prediction. She asked whether the workshop should think about incentive principles that could be regularly revisited and refined, rather than setting a regulation in a conventional way. This approach might be considered an alternative type of regulation. In response, Tew said that regulators may at times find themselves directed to proactively regulate for situations that never take place. Regulators do not like to make regulations just for the sake of regulating, he continued. In some circumstances, regulators need to have several years of information before an appropriate regulatory regime can

Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
×

be put in place. Incentives might be appropriate in these types of situations. Vendel said that Ohio looked at the unconventional development in other states like Texas, Pennsylvania, and North Dakota to gain insights about how to address changes they were seeing in their state.

A participant noted the effectiveness of recent methane studies and emphasized the importance of more data to help understand and address certain issues. Recent methane studies brought together academia, industry, and NGOs in a true effort to collaborate. One of the reasons for the present workshop, the participant said, is to identify what knowledge is important and missing and how to fill that data gap. He asked the workshop audience to respond to identifying data gaps and what is needed to collect those data. Assuming that data are going to come from one source is a problem and instead requires a joint approach to data collection and analysis. Tew added that state regulatory agencies often don’t have the staff to generate data. He noted that in his state, the Alabama Oil and Gas Board—the regulatory body—collaborates with the State Geological Survey which has researchers to help answer some of these questions. He concurred with the participant regarding the need to build broad coalitions. Anderson cited two data gaps—data on spills, mainly surface spills, and when considering the beneficial use of oil and gas wastewater, how clean does the water need to be? McBride indicated that industry is familiar with formation water and they know the water quality criteria for receiving water if it is discharged. Anderson noted that EPA has indicated that key toxicity data are missing for 73 percent of the constituents in produced water from unconventional oil and gas development. McBride then emphasized the importance of technology and innovation and their role in encouraging efficiency and driving down economic costs. He elaborated that innovation in the oil field is valuable and emphasized the importance of industry collaboration with NGOs, like EDF.

Another participant pointed toward a useful reference—the prudent development study6 by the National Petroleum Council—which described the enormous national gas and oil resource in the United States and the need for it to be developed in a responsible and prudent way. The participant continued by offering the point that API invites anyone to participate in the development of standards. For standards to be accepted, the participant continued, the group that works on them has to be open to anyone. The participant also noted a GWPC study7 that dealt with spills in Ohio and Texas over a 5 to 15 year period. He suggested that the study was reassuring, as the frequency and significance of spills was small. Anderson stated that the study found about 400 instances (out of hundreds of thousands of oil and gas wells) of groundwater pollution caused by oil and gas over about a 20 year period in two states.

An online participant suggested that the intersection of technology and regulation may also need a science component and asked the panelists if the current interaction between scientists and regulators is adequate to ensure that research is answering the questions regulators are asking? Recent work on seismicity, as mandated by the Texas Legislature, might be an example of how this approach can work well, but that effort took legislative action. Is there a process or venue that could formalize the interaction and sharing of information between science and regulators to help work toward a common goal, the participant asked? Anderson said that two of the nine IOGCC recommendations currently being considered would directly address that question. Tew then indicated that the States First initiative of

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6 The Prudent Development: Realizing the Potential of North America’s Abundant Natural Gas and Oil Resources (2011) report is available at http://www.npc.org/reports/rd.html (accessed on March 2, 2017).

7 Groundwater Investigations And Their Role in Advancing Regulatory Reforms. A Two-State Review: Ohio and Texas. Available at https://fracfocus.org/sites/default/files/publications/state_oil__gas_agency_groundwater_investigations_optimized.pdf (accessed on March 2, 2017).

Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
×

IOGCC and the GWPC brought together a broad coalition of regulators, academia, and industry to do a seismicity primer,8 which was well-received.

Packard LeGros commented on a previous statement made about prudent development and said that even though the regulatory process is often described as cautious, the academic process is often more cautious. It is important to identify the issues being addressed by academia and what is being addressed by industry, and to merge those perspectives to develop consensus on what is prudent under the given circumstances, she said.

One participant noted that API follows a public process to solicit participation when it begins work on standards. However, a dilemma often arises because the expertise on a given topic is usually within industry and sometimes within state agencies. The participant had experience with a dozen different types of API standards groups which tried to engage state agency representatives but found that state agencies can be prevented from participating by law or may be restricted from traveling, thereby impacting the ability of state agencies to participate in the process. The participant suggested that states might try to find a solution to this challenge because of the need for greater engagement from state agencies and the public on these technical processes. Obtaining diverse input and perspectives is important for keeping the overall effort grounded. Vendel concurred with the comment and said that a unique aspect of a state agency is that they have access to designs, for example well designs, from numerous companies. Regulators have a unique insight on what works and what does not work so participation in these kinds of technical standards processes is important.

Legacy has many different components, a participant emphasized. The Day 1 workshop included several components during the day and the panelists have addressed and thought about legacy issues in various forms. The participant then asked the panelists, what is the primary area that needs to be advanced to ensure high standards of performance for the long term? The panelists responded by suggesting that solid-waste disposal; financial assurance; good historical records with accurate data on past drilling activity, well locations and conditions, and plugging and abandoning activities; and landscape and community impacts were critical needs.

In challenging economic times, Tew concluded, a lot of bankruptcies and acquisitions take place, and a lot of assets change hands. In many cases the current bonding amounts would not take care of addressing environmental issues with properties, he said. For coalbed methane development in Alabama, for example, a well plugging fund exists from funds paid by the industry over the years; however, this situation does not apply to other areas of the oil and gas industry. Some of the deep wells in South Alabama are costing a million dollars to plug, he said. The bonding amounts could not cover that, so in a situation where a number of companies could not fulfill their obligations, the state would be placed in a difficult position to address plugging these wells.

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8 The primer entitled “Potential Injection-Induced Seismicity Associated with Oil and Gas Development. A Primer on Technical and Regulatory Considerations Informing Risk Management and Mitigation” is available at http://www.gwpc.org/sites/default/files/finalprimerweb.pdf (accessed on March 2, 2017).

Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
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Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
×
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Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
×
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Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
×
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Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
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Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
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Page 47
Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
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Page 48
Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
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Page 49
Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
×
Page 50
Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
×
Page 51
Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
×
Page 52
Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
×
Page 53
Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
×
Page 54
Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
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Page 55
Suggested Citation:"5 Intersection of Technology and Regulation: Smoothing the Interface Through Time." National Academies of Sciences, Engineering, and Medicine. 2018. Onshore Unconventional Hydrocarbon Development: Legacy Issues and Innovations in Managing Risk–Day 1: Proceedings of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/25067.
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Next: 6 Plenary Remarks and Discussion »
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Oil and gas well completion and stimulation technologies to develop unconventional hydrocarbon resources in the United States have evolved over the past several decades, particularly in relation to the development of shale oil and shale gas. Shale oil and shale gas resources and the technology associated with their production are often termed "unconventional" because the oil and gas trapped inside the shale or other low-permeability rock formation cannot be extracted using conventional technologies. Since about 2005, the application of these technologies to fields in the U.S. have helped produce natural gas and oil in volumes that allowed the country to reduce its crude oil imports by more than 50% and to become a net natural gas exporter. The regional and national economic and energy advances gained through production and use of these resources have been accompanied, however, by rapid expansion of the infrastructure associated with the development of these fields and public concern over the impacts to surface- and groundwater, air, land, and communities where the resources are extracted.

The intent of the first day of the workshop of the National Academies of Sciences, Engineering, and Medicine's Roundtable on Unconventional Hydrocarbon Development was to discuss onshore unconventional hydrocarbon development in the context of potential environmental impacts and the ways in which the risks of these kinds of impacts can be managed. Specifically, the workshop sought to examine the lifecycle development of these fields, including decommissioning and reclamation of wells and related surface and pipeline infrastructure, and the approaches from industry practice, scientific research, and regulation that could help to ensure management of the operations in ways that minimize impacts to the environment throughout their active lifetimes and after operations have ceased. This publication summarizes the presentations and discussions from the workshop.

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