PINEDALE, Wyo.— Natural gas development in the U.S. will depend not only on what happens in Washington and in statehouses across the country. It could be shaped in part by what happens in a big antelope-dotted field south of this remote valley town.
Here, Shell Oil Co. and others are taking steps – some required and others voluntary – that soon may be the norm for reducing the environmental impact of gas drilling and the extraction process called hydraulic fracturing, or fracking.
Shell, for instance, now recycles more than half the water it uses in fracturing local wells, reducing the need for locally sourced fresh water.
It also has installed equipment that is sharply cutting emissions from drilling rigs and has shrunk its surface footprint by drilling more wells at a single site, rather than spacing them out checkerboard style, as is done in some other fields.
Shell Oil, the U.S. arm of the European oil giant Royal Dutch Shell, says its operations at the Pinedale Anticline Project Area reflect broader operating principles that should be adopted industrywide. It says that would help raise standards for the 7,000 producers drilling for gas in the U.S. and allay fears about development in shales and other tight rock formations, where huge quantities of gas have been discovered in recent years.
“This is a strong statement that says, as one of the premier companies in this business, this is how it should be done,” Marvin Odum, president of Shell Oil, said in an interview.
Yet, even a field held up as a model for sound operations has its problems.
Amid a ramp-up in industry activity in recent years, air quality in the Pinedale area has deteriorated, and more of the pristine mountain wilderness has become industrialized.
Shell also documented contamination in three of its industrial water wells in the Pinedale Anticline Project. Spokeswoman Kelly op de Weegh said Shell has since improved its water pump and storage tank design to prevent a recurrence.
New technologies and practices are steps in the right direction, said Jonathan Ratner, director of the Wyoming office of Western Watersheds Project, an environmental group.
“But where they’re at is so far from where they need to be,” he said.
The situation in Pinedale is a microcosm of the growing national debate over natural gas development in the U.S.
Proponents argue that tapping what could be a multi-decade supply of gas in shales and other tight rock formations is vital to domestic energy security, could create thousands of jobs and move the U.S. toward a cleaner energy source than oil and coal. But critics say development may come at too great a cost, if it fouls the air, threatens drinking water supplies and permanently scars the land.
Sees need to improve
Last month, a panel of experts chosen by the Energy Department issued a report that pleased neither side entirely. It said that while shale gas has great potential to meet a growing segment of the country’s energy needs, immediate steps are necessary to cut air pollution, protect groundwater supplies and share best practices.
In addition, the Environmental Protection Agency is doing a study of hydraulic fracturing – pumping thousands of gallons of water, sand and chemicals into a well at high pressure to force open cracks in rocks and release gas. Among other things, the study, due for completion next year, will explore concerns that toxic chemicals in the fracking fluids can leach from deep wells into shallow groundwater supplies. Industry officials say after 60 years of hydraulic fracturing, there is still no evidence of that happening.
“I can sit here till I’m blue in the face telling you we’ve fracked a million wells in our industry – a million – and that we can do it safely,” Chevron Corp. CEO John Watson said during a recent meeting with the Chronicle editorial board. “But after Macondo, nobody believes us,” he said, referring to BP’s deadly well blowout last year in the Gulf of Mexico.
The Pinedale Anticline area, in the Upper Green River Basin of west-central Wyoming, is one of the nation’s biggest natural gas fields. Flanked by the Rockies and situated on nearly 200,000 acres of rolling sagebrush, 80 percent of it federally owned, the field is estimated to hold more than 25 trillion cubic feet of gas.
A cleaner approach
Shell arrived about 10 years ago and has since drilled more than 500 wells. Along the way, it says it has significantly cleaned up the process. A few examples:
It reduced truck traffic by building a centralized hub for gathering water and natural gas liquids.
It reduced by two-thirds emissions of ozone-forming volatile organic compounds by installing better controls on storage tanks, increasing inspections and other steps; and slashed nitrous oxide emissions by 95 percent on drilling rigs by installing catalyst technology, required by regulation.
It eliminated large open pits at drill sites used for collecting water, drilling fluids and rock cuttings and replaced them with surface storage tanks.
“The things we do work here. Not everything we do here is transferable,” said James Sewell, a Shell senior environmental engineer, who did extensive work in Pinedale before moving to the Marcellus Shale formation in Pennsylvania, where Shell also has operations.
Regional differences, for example, in water access or air quality standards may call for different approaches. Shell officials said, though, that the guiding idea is the same: The industry should agree on industry standards for shale and tight gas operations that apply anywhere.
In June, the company released a set of principles it said could be a blueprint for the industry, including some already in wide use.
“The real intent here is to share best practices around how this business is done,” Odum said. “And that’s meant to supplement a very important process, which is in place and needs to stay in place.”
Charles Price, a rancher who lives near Pinedale and works amid natural gas operations, said for the most part Shell and other producers in the Pinedale Anticline area have tried to do the right thing.
“They’ve tightened up an awful lot,” said Price, 71, who remembers a time when oil companies used bottles of whiskey to bribe landowners for access to their property, before running roughshod over it.
Problems remain, however.
One of the biggest is the ongoing and rather unlikely struggle to reduce air pollution, which many in the area blame at least partly on the proliferation of gas rigs.
Ratner, with Western Watersheds, believes that industry overstates its environmental gains.
‘A PR component’
Lara Ryan, executive director of the Wyoming Land Trust, a nonprofit that works with private landowners to conserve agricultural and natural resources, agrees that industry’s environmental efforts are partly public relations.
“I certainly think there’s a PR component. No question. But I also think there’s a bottom-line function,” she said, because “bad operators are called out” and that hurts their business.
The Pinedale example, though imperfect, may provide an example of how oil companies and communities can balance the economic development industry brings with environmental protection, said Joel Bousman, a rancher and commissioner in Sublette County, which includes Pinedale.
“My philosophy,” he said, “is we can have it both ways if we’re careful.”