Can Shale Gas Help Accelerate the Transition to Sustainability?
by John C. Dernbach and James R. May
Few energy issues in recent decades have proven as contentious as shale gas. The rapid recent development of shale gas in the United States has reduced gas prices, helped the U.S. economy recover from the recent recession, reduced U.S. dependence on foreign energy supplies, and even apparently helped reduce U.S. greenhouse gas emissions. But adverse air and water quality impacts as well as community disruption raise large questions about the desirability of shale gas. Supporters and opponents often speak in such strikingly different divergent terms that they seem to be describing different activities.
Sustainable development would force a more complete understanding of whether shale gas contributes to overall human wellbeing. Conventional development, which is based on both economic and social development and requires a foundation of peace and security, tends to adversely affect both the environment and people who depend on that environment.1 To its critics, shale gas is just another version of conventional development. Sustainable development, in partial contrast, would further the economic, security, and social goals of conventional development, but would at the same time protect the environment and the people who depend on it.2
Yet it is not enough for shale gas to contribute to some degree to environmental protection, economic and social development, and peace and security. Extreme poverty is still widespread, and environmental conditions around the world continue to deteriorate.3 Concentrations of greenhouse gases in the atmosphere are rising and are already at levels that have not been seen for at least 800,000 years.4 The 2012 United Nations Conference on Sustainable Development thus emphasized the need to “accelerate progress” toward sustainability.5 Similarly, the 2012 Conference of the Parties of the U.N. Framework Convention on Climate Change agreed on the importance of “accelerating the reduction of global greenhouse gases.”6 So the question is not simply, how do we achieve sustainable development? The question, rather, is: How do we accelerate the transition?7
This article is an evaluation of unconventional shale gas, often called gas from hydrofracturing or “fracking,” from this perspective. It is based mostly on experience in the United States, “which is the only country with several decades of experience and long-term statistical records.”8
While there are large literatures on shale gas and sustainable development, very little has been written about whether or under what conditions shale gas furthers sustainability. Because there is widespread consensus about sustainability as a policy norm, this norm could serve as a useful point of departure for achieving some common ground on how to deal with shale gas development. This matters because other countries and states will encourage or support shale gas development to the extent that it can be done in a sustainable way.
The article suggests that sustainable shale gas development:
1. Requires a sophisticated and comprehensive regulatory system to protect the environment and public health as well as a legal and policy framework capable of both ensuring significant social and economic benefits and ensuring that no one is made socially or economically worse off in absolute terms.
2. Must be nested in ambitious national and international energy and climate change laws to ensure that it is a bridge fuel to a sustainable future, and does not delay or divert from that objective.
3. Must occur within a political and legal system that is committed to accelerating the transition to sustainability.
In the United States, there is evidence that the first criterion has been met in some ways in some jurisdictions; these issues tend to be easier to address. There is less evidence that the latter two criteria have been met. If shale gas is to accelerate the transition to sustainability, major changes in law are needed.
Sustainable Development Principles Relevant to Law
Several important principles provide a foundation for sustainable development law. The key action principle is integrated decision making. The root problem, countries agreed at the 1992 United Nations (UN) Conference on Environment and Development, or Earth Summit, is that development decisions are made with insufficient regard for the environment and the people who depend on it. The Rio Declaration, a statement of 27 principles adopted at this conference, says: “In order to achieve sustainable development, environmental protection shall constitute an integral part of the development process and cannot be considered in isolation from it.”9 Other sustainable development principles relevant to shale gas development are set out in Table 1.
Sustainable Development Principles Especially Relevant to Shale Gasa
Complete scientific certainty should not preclude cost-effective actions that would move toward sustainability. Less formally, it means “better safe than sorry.”
Polluters should bear the cost of preventing or controlling their pollution, rather than forcing the environment or others to bear the costs of their pollution. While this is basic environmental economics, it also contains more than a grain of social justice.
Future generations should not have to bear the costs of current development, experiencing a poorer quality environment or fewer resources.
Environmental impact assessment
This principle requires a description and analysis of proposed major actions as well as an analysis of alternatives to those actions.
Public participation, access to information, and justice
Sustainable development requires an informed and engaged citizenry, as well as a court system that permits successful challenges to unsustainable practices or activities.
Sustainable production and consumption of energy
For developed countries, this requires much lower per-capita energy use and a much lower greenhouse gas footprint, fostered in part by greater energy efficiency and conservation as well as serious reduction of greenhouse gas emissions. Developing countries are not insulated from doing these things, but universal access to modern energy is also essential.b
aUnited Nations Conference on Environment and Development (1992),9 “Rio Declaration on Environment and Development,” principles 3, 8, 10, 15–17.
These principles provide much of the evaluative frame for shale gas in this article.
Rapid Development and Potential for Shale Gas
Conventional gas (or oil) extraction ordinarily involves drilling for a pool or concentration of gas or oil in particular rock strata. Unconventional gas development is a process that injects large amounts of water under pressure to shatter shale strata and thereby liberate and capture the gas embedded within it. Hydraulic fracturing, using high water pressure to open cracks in reservoir rocks and sand to keep the fractures open when pressure is released, is a long-established technique. What is new is the combination of practices—the way operators drill horizontally to expose more shale to the wellbore, use millions of gallons of water and fluids to fracture shale and release the gas trapped in the shale, complete several wells on a given drilling pad, and produce millions of cubic feet of gas per day.
Hydraulic production of shale gas was first employed at a large scale around 2000 in the Barnett shale formation in Texas, and then in other shale formations.10 U.S. production has grown very quickly, “from 0.3 trillion cubic feet in 2000 to 9.6 trillion cubic feet in 2012.”10 This has had a profound effect on the gas market, both in and out of the United States. Gas prices have fallen—in the range of US$3.50–5.00 per million BTUs11—and are likely to remain low. Low prices reduce heating and electricity bills for homes and businesses, and benefit the national economy. “Shale gas has the potential to improve the economic lot of every citizen of the US,” says Vikram Rao, Executive Director of the Research Triangle Energy Consortium, a nonprofit energy organization. “There is also a real possibility that, together with distributed cleaner energy such as wind and solar, cheap energy in the form of shale gas could improve the human condition worldwide.”12
Shale gas (and oil) development can also improve a nation’s energy security by reducing its reliance on potentially uncertain imports from other countries. Since 2005, the United States has gone from consideration of natural gas imports to preparations for becoming a gas exporter.12 European interest in shale gas is prompted in part by a desire to limit the need for imports from Russia.
The two top producers of “commercially viable natural gas from shale formations” are the United States and Canada.13 In 2012, shale gas production was 39% of total U.S. gas production, and 15% of total Canadian gas production. China’s shale gas production is less than 1% of its overall production, and a dozen other countries have done exploratory drilling.13
The potential for global shale gas production, however, is considerable. Table 2 shows the 10 countries with the largest technically recoverable shale gas reserves. China, Argentina, and Algeria are the top three, followed by the United States and Canada.
Top 10 Countries With Technically Recoverable Shale Gas Resources
Shale Gas (Trillion Cubic Feet)
Estimates for all countries are by the U.S. Energy Information Administration (2013).82 The U.S. estimate in parentheses is by Advanced Resources International.
U.S. and Canadian production has been greatly aided by several factors. Property rights to gas reserves are privately owned, which means that they are easier to exploit than reserves held by the government, as they are in most other countries.14 The United States and Canada also have a significant existing natural gas pipeline infrastructure, which means that shale-gas-producing wells only need to be hooked up to existing pipelines.14 Many other countries (including China) have shale that is harder to exploit, or lack the water needed for hydraulic fracturing.15,16 In spite of these hurdles, there is considerable international interest in exploiting shale gas.
Environmental and Public Health Protection
Various environmental risks are presented by shale gas development. Resources for the Future, a nonprofit environmental research organization, has identified 264 different possible risks. RFF asked 215 experts to identify which of these should be of the highest priority for future regulatory or voluntary action. Figure 1 shows the results of that study. Seismic effects from drilling or underground disposal of fracturing fluids are also gaining attention; the state of Ohio decided in 2013 to impose new restrictions to prevent such effects.17
Priority Environmental Risks from Shale Gas Development
As Figure 1 indicates, effects on water quality and water availability are among the most prominent risks. Operative terminology can confuse, and warrants explanation. Industry representatives often use the term “fracking” narrowly to refer to the use of high-pressure water and explosives to fracture the shale. On the other hand, the public tends to understand “fracking” to refer to the entire unconventional gas development process in ways not limited to hydrofracturing, including not only exploration and extraction but also pipeline development and ultimate fuel uses.
This disjunction in terminology has consequences. While industry representatives may be accurate in claiming a lack of “documented cases” of groundwater contamination from hydrofracturing per se, groundwater and well water contamination from unconventional gas development is well documented.18,19,20,21 “Faulty casing and cementing cause most well integrity problems”22 because they lead to migration into groundwater of gas, hydrofracturing fluids, or flowback water from gas production that may include salts and radioactive material. The authors of one study conclude that “optimizing well integrity is a critical, feasible, and cost-effective way to reduce problems with drinking water contamination and to alleviate public concerns accompanying shale gas extraction.”19 (p. 14081)
Potential contamination issues aside, most unconventional gas development uses considerable amounts of water. Water availability is particularly a problem in the upper reaches of streams and waterways, where surface water withdrawals are more likely to have adverse effects on aquatic life.23 In areas that have relatively little rainfall, the use of water for hydrofracturing can also create or contribute to conflicts over scarce supplies.24
Almost nothing is known about potential public health hazards from shale gas development, including not only toxic chemicals and pollutants, but also waste, noise, workplace injuries, and community stress.25 “Despite broad public concern, no comprehensive population-based studies of the public health effects of unconventional natural gas operations exist.”26
The primary burden of environmental and public health regulation of shale gas in the United States has fallen on the states. This is due in part to the historic role that states have played in regulating oil and gas operations. Shale gas development has forced states to consider or adopt changes to their existing laws to accommodate differences between conventional and unconventional gas extraction. The speed of shale gas development caught many state regulatory agencies somewhat unprepared, and they have had to adjust very rapidly to large-scale gas development of a kind they had not seen before. In addition, industry best practices on many issues27 are evolving rapidly, generally outpacing state regulatory changes, which can require 1 to 2 years from start to finish.
Congress has not exhibited much if any appetite for national shale gas legislation. In fact, Congress has created a host of exemptions to many federal environmental laws for the shale gas industry.28 Still, many risks from shale gas fall within the ambit of long-standing and still applicable federal laws, the Clean Air Act and the Clean Water Act in particular.
RFF issued a report in 2013 that compared 25 separate aspects of shale gas regulation in 31 states with actual or potential shale gas production.29 It found wide variation among states, including those pertaining to cementing, well diameter, and thickness of boring pipes (known as “casing”); the buffer distance between operational well pads and neighboring residences, commercial districts, schools and hospitals, and water supplies (known as a “setback”); and limitations on hours of operation, noise, and traffic patterns (known as “operational requirements”).29 (p. 18)
According to a separate review by the Natural Resources Defense Council, only half of the 29 states with hydraulic fracturing require any form of public disclosure of the chemical composition of hydrofracturing chemicals; “none provide comprehensive disclosure.”30 The absence of public information about such chemicals increases the public’s sense that these chemicals impose significant risks.31
There are also limits to state governments’ willingness and ability to enforce those laws, and to provide the public an opportunity to participate in their development and implementation. Pennsylvania, for example, mandates a relatively short permit review time (45 days),32 which limits public opportunity to comment effectively on permit applications. Such limits produce less protective outcomes than would otherwise occur.33
Should the federal government have a larger role? An obvious model is the federal Surface Mining Control and Reclamation Act of 1977, which sets minimum federal standards for surface coal mining and provides funding to states to improve their regulatory programs.34 There are strong arguments for35 and against36 similar legislation for shale gas.
Another approach is to use mechanisms that encourage “internal self-critical reflection within institutions about their environmental performance.”37 STRONGER (State Review of Oil and Natural Gas Environmental Regulations), a multistakeholder organization, conducts voluntary reviews of state regulatory programs based on detailed guidelines that are regularly updated.38 Congress could also require shale gas companies, in effect, to either employ current best practices or explain why not. The act of publicly explaining departures from best practices would likely encourage all companies to continually improve their performance, making steady progress toward sustainability in environmental and public health protection over time.
Community Sustainability and Land Use
From a sustainability perspective, unconventional shale gas development should benefit communities—not only financially but also in terms of the quality of life of those who live or work in them. Yet unconventional shale gas development presents two challenges to community sustainability. First, it can substantially change the character of a community, particularly in areas that have not been subject to previous oil and gas development, by increasing population and economic activity, and by making a community busier, more industrial, and less pastoral. These changes, moreover, are not permanent. At some point, little or no gas will be economically available from existing gas wells. The “boom and bust” cycle typical of natural resources extraction in other contexts will play out in shale gas communities as well.
Second, the positive and negative effects of shale gas development are distributed unevenly through the population. Positive impacts include lease bonus and royalty income, increased employment, and increased economic activity. Negative effects include strain on local infrastructure; increased demand on local services; increased truck traffic; perceived decline in quality of life, particularly in areas that have not experienced oil or gas development before; and adverse environmental and public health effects. “Winners” and “losers” tend to be different people. According to a Wall Street Journal analysis of well location and census data in 11 major energy-producing states, people who receive economic benefits are less likely to be unhappy about negative community impacts than those who do not benefit financially.39
To address these challenges effectively, communities need to work on many fronts. Housing policy is an example. During a shale gas boom, housing prices can soar; many parts of Pennsylvania experienced a doubling or tripling of rents. In addition, the availability of housing, particularly for low-income people and senior citizens, was often compromised.40 Under these circumstances, it is not enough to simply build additional housing for workers; communities must also address existing housing problems that are made worse by shale gas development. Because temporary workers who drill for shale gas leave when drilling is completed, and are followed by more permanent workers, communities must also plan for, and make available, different kinds of housing over time.40
From an economic development perspective, it is both easy and dangerous for a municipality to focus primarily on economic benefits from shale gas. Yet history teaches that municipalities with diversified economies, or municipalities that use the shale gas boom to diversify their economies, are more likely to effectively weather the “bust” part of the “boom and bust” cycle.41 More generally, communities need an economic and social structure that ensures the availability of both funds and services when their shale gas is depleted.42
Appropriate land use rules also matter. The Wall Street Journal study found that more than 15.3 million people live “within a mile of a well that has been drilled since 2000. That is more people than live in Michigan or New York City.”39 Many of the worst environmental and public health impacts occur because various shale gas facilities and activities, including drilling rigs, compressor stations, and wastewater impoundments, are located too close to homes, farms, schools, and water resources. A traditional function of land use and zoning laws is to avoid or prevent such problems by separating incompatible uses. Many municipalities lack such laws or lack the resources and sophistication of the gas companies. Options for improving local land use decisions involving shale gas include assistance from state or national governments, collaborative stakeholder processes, and public education.43,44
Shale gas corporations must also be fully engaged and committed to achieving sustainability. Shale gas operators and their contractors bring a wide range of attitudes and approaches to their operations, from those who frequently ignore legal requirements to those who consistently aim to perform better than the law requires.
Private self-governance is especially important for shale gas development. According to the University of Pittsburgh’s Shale Gas Roundtable, a multistakeholder group, four elements are needed for shale gas regulation: a strong, adaptive, well-staffed legal and regulatory system; aggressive development and adoption of best management practices and performance standards; investments in technology and operational innovation; and targeted research to inform continuous improvement.45 These elements are a mix of public and private governance. A range of corporate sustainability frameworks and reporting mechanisms already exists, and many are widely applied, though not necessarily by shale gas companies.46 Whether companies use these frameworks or not, many are continually improving their practices (e.g., shifting from impoundments for produced water to tanks, which reduce air pollution and risk to migratory birds).
Shale gas development has apparently contributed to a decline in U.S. greenhouse gas emissions, even in the absence of comprehensive legislation. U.S. greenhouse emissions are 9.8% lower than they were in 2005,11 (p. 2) the result of the replacement of coal by lower carbon emitting natural gas, national energy efficiency requirements, state renewable energy and energy efficiency laws, and the economic downturn.47 More coal plants, in fact, are likely to be retired than previously projected.48 This reduction puts the United States about halfway toward achieving its commitment under the 2009 Copenhagen Accord, which was negotiated under the auspices of the United Nations Framework Convention on Climate Change. In the Copenhagen accord, the United States committed to reduce its greenhouse gas emissions within “the range of 17%” from 2005 levels by 2020, but explicitly linked achievement of that goal to legislation that has not been adopted.49 According to several life-cycle analyses, unconventional shale gas has lower greenhouse gas emissions than coal when used to produce electricity.50,51 A new combined-cycle natural gas plant that replaces a conventional coal plant emits about one-third of the carbon dioxide that the coal plant emits.52
A difficult methodological question confounds this conclusion to some degree—calculating the effect of methane leakage. Natural gas is made up mostly of methane, which is more than 20 times as potent a greenhouse gas as carbon dioxide over a 100-year period.4 (pp. 58–59) Methane leaks can occur in a variety of ways during gas production, transportation, and use. Recent studies employing different methodologies have found varying rates of methane leakage from the production and distribution of shale gas.53,54,55,56 Because of the potency of methane as a greenhouse gas, a relatively small leakage rate would offset or even reverse the entire apparent greenhouse gas benefit of fuel switching from coal to natural gas.
Measures can be taken to reduce methane leakage, as demonstrated by newly adopted regulations by the U.S. Environmental Protection Agency,57 state requirements such as those in Colorado,58 good industry practices, and other programs.59 In addition, large emitters of greenhouse gases, including methane, are required by a 2009 federal law to annually publish their emissions.60 Public reporting may help reduce emissions from gas production and distribution. Still, methane leakage offsets the ostensible greenhouse gas benefit of natural gas to some degree.
Even if there were no leakage, it is far from clear that greenhouse gas emissions in the United States are declining quickly enough. The Framework Convention’s overall objective is “stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.”61 At recent conferences of the parties to the Climate Change Convention, countries have agreed on the necessity of keeping the temperature increase from greenhouse gas emissions to 1.5 or 2 degrees Centigrade.62 Failure to do that, they have concluded, means a much reduced likelihood of achieving the Climate Change Convention’s goal. In general, greater reductions enhance the likelihood of staying below this threshold.4 (p. 1113) Achieving that goal requires significant annual reductions in global greenhouse gas emissions; the longer we wait, the steeper the annual reductions must be.63 James Hansen and others conclude that the world must therefore “move rapidly to carbon free energies and energy efficiency, leaving most remaining fossil fuels in the ground.”63 Stabilization of greenhouse gases at lower levels (450 parts per million) provides less opportunity for natural gas as a bridge fuel to a sustainable energy fuel than stabilization at higher levels (550 parts per million).64 A precautionary approach suggests a lower stabilization target and a shorter length for the bridge.65 Shale gas development will not provide a bridge to a sustainable future unless and until there are ambitious national and international climate change laws.
Another component of sustainable energy, of course, is universal access to energy. The relatively low prices for shale gas in the United States do make energy more affordable, particularly for the poor. Yet energy efficiency and conservation remain the cheapest and most sustainable approaches to energy use.66 Moreover, universal access must be part of an ambitious effort to address climate disruption, not a substitute for it.
Environmental Impact or Sustainability Assessment
Countries and regions facing active shale gas development should consider first conducting an environmental impact or sustainability assessment. The European Union has already conducted an environmental and public health assessment for shale gas development.67 The assessment found that the risks are greater than those for conventional gas, and that “robust regulatory regimes would be required to mitigate risks and to improve general public confidence.”67 (p. xv) The European Commission’s “minimum principles” recommend that member states “prepare a strategic environmental assessment to prevent, manage, and reduce the impacts on, and risks for, human health and the environment” before allowing exploration or development.68
Other assessments may also be appropriate. Public health assessments, as a stand-alone tool, can identify impacts and alternatives, ways of mitigating impacts, and ways of protecting the health of target populations.69
A broader approach, sustainability assessment, examines not only environmental but also short- and long-term community and economic impacts, and considers integrated policies to address those impacts.70 Sustainability assessments can be structured in a variety of ways, and applied in many contexts. They have been helpful for nonrenewable resource extraction projects in Canada.71 The National Research Council has recommended that that the U.S. Environmental Protection Agency use sustainability assessment in policymaking.72 “The defining characteristic of sustainability assessment” is that decisions “are informed by sustainability-based criteria, and aim to deliver multiple, lasting, mutually reinforcing gains rather than just mitigation of environmental damage.”71(p. 165) These gains cover “the full suite of requirements for progress toward sustainability.”71(p. 149)
Key features of sustainability assessment include “analysis of the short, long-term and cross-cutting economic, environmental and social effects of the proposed” action,70 (p. 19) consideration of alternatives, and stakeholder participation. Evaluation of subsequent outcomes and public reporting of those outcomes is also essential for sustainability assessment.72(pp. 68–71)
A key question is whether to have rules addressing trade-offs. Trade-off rules include systems that allow better outcomes in one aspect of a proposal (economic) to totally or partially compensate for poorer outcomes in another aspect of a proposal (environmental or social). Another and preferable option is to prohibit “natural or environmental capital” from being “traded off against produced or manufactured capital.”70(p. 23) A somewhat similar rule is that “trade-off decisions must not compromise the fundamental objective of net sustainability gain.”73 Use of the latter two trade-off rules would make achievement of the environmental protection and community well-being aspects of sustainability more likely, not only for the present generation but also for future generations.
A Role for a Constitutional Corrective?
Constitutionalism can also play a significant role in harmonizing shale gas extraction with sustainability principles. The unique legal and cultural power of constitutional law is perhaps the best explanation for the growth of what is known as “environmental constitutionalism” over the past few decades.74 In the 1970s, constitutions only sporadically sought to protect the environment, whereas constitutions are now rarely adopted or amended without some meaningful attention to environmental protection and the sustainable development of natural resources.75
Nearly 20 countries expressly recognize a constitutional goal of “sustainability” or “sustainable development.”76 Another dozen and a half promote sustainable development for the purpose of protecting the interests of future generations. Moreover, the constitutions of some countries require that resources be developed sustainably.77 Pennsylvania’s constitution embodies all three features and serves as an exemplar of the potential for constitutionalism to contribute to the discussion of the sustainability of shale gas.
Article I, Section 27 of the Pennsylvania constitution provides:
“The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.” (Source: Pennsylvania Constitution, Article I, Section 27 (1971).)
Courts are playing an increasingly prominent role vindicating sustainability principles in constitutional contexts.78 In 2012, the State of Pennsylvania enacted a law that promoted shale gas development by, among other things, requiring local governments to permit shale gas facilities in all zoning districts, including residential districts. At the end of 2013, the Pennsylvania Supreme Court held this and several other parts of the law to be unconstitutional because they deprived local governments of the ability to protect citizens and natural resources.79 A plurality of the court stated that the environmental rights of citizens and the property rights of gas companies must be treated equally, and expressly described the parity of these rights as fostering sustainable development.80
Sustainable development is a useful evaluative framework for shale gas development. It would have us analyze its environmental, social, economic, and security dimensions at the same time, and look for ways to make all four dimensions mutually reinforcing.
The sudden and unexpected development of shale gas has the potential to accelerate or hinder the transition to sustainability, depending on how it is handled. U.S. states with active shale gas development provide an abundant source of regulatory experience for other states and countries to examine. While shale gas has brought obvious benefits, it also brings risks and costs. Some of these risks and costs can be addressed more readily than others. By focusing on the issues that are harder to address, most prominently climate disruption, we gain a better understanding of how, or whether, shale gas development can accelerate the transition.
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