Stop, collaborate, and listen

The seasons may change, but the continued attention that natural gas extraction via hydraulic fracturing, (more popularly known as fracking,) receives does not. This summer saw a lot of activity associated with fracking.An eminent committee was assembled by DOE Secretary Chu to weigh in on actions the industry and federal agencies should implement, New York provided guidelines of where fracking should and shouldn’t be done, New Jersey first attempted to permanently ban and then issued a one-year moratorium on fracking, Texas required disclosure of fracking fluids, and NGOs continue to apply pressure to ensure that safeguards are put into place.

Perhaps most alarming for the natural gas industry is a growing group of landowners who are second guessing their participation in the process, either because they feel that they are not being sufficiently compensated or because they are concerned about potential environmental impacts.
The industry has demonstrated a commitment to address some of the key concerns raised by fracking, including fracking fluids’ potential impact on drinking water during injection and disposal.

As the New York Times recently noted, companies are affirming the practical benefits of addressing these concerns head on. Rebecca Thingelstad, an engineer from oil and gas company Anadarko, emphasized the financial benefits beyond building goodwill: ”If everyone's comfortable with it, you can get your permits through faster.”

Later this month, key public affairs leaders from oil and gas companies will gather in Houston to discuss “practical, commercial solutions to drive forward the industry’s position.” This is well and good. Consensus can help elevate the industry point of view above the cacophony of voices. It is essential, however, that there be consensus on more than just the messaging and among more than just industry representatives. As I have written here before, what is truly needed is alignment on a better way forward. Proactive leadership from key oil and gas players, better still from a united industry, can go a long way toward alleviating critics’ concerns.
Such leadership could include:
·         Engaging with a select group of leading environmental NGOs. The natural gas industry can learn from meaningful progress made in the past on similarly controversial issues. Two fairly recent successes—the NGO-corporate middle ground on climate policy forged through the Pew-led USCAP process, and a similar breakthrough on CAFE standards shepherded by the Aspen Institute—provide a blueprint. Both involved a respected third-party facilitator working confidentially with a small, representative group of the most influential companies and NGOs. Adapting a similar approach here could help address the most sensitive issues to everyone’s collective benefit.
 
·         Based on this dialogue, establishing meaningful and economically feasible, fracking guidelines. These guidelines would explicitly address environmental and community concerns, including: the composition of fracking fluids, emissions from trucks transporting water and fracking fluid, method and location of fracking fluid disposal, and guidance on where it is safe to explore and where the industry will abstain from venturing (e.g., within a certain distance from sensitive areas such as schools).
 
·         Supporting the incorporation of these guidelines into states’ regulatory efforts. As New York, New Jersey, and Texas have demonstrated, states are not standing idly by waiting for the industry to act. Rather than responding to inevitable regulation, the industry can drive this effort—and do so in a way that is responsive to the broad range of stakeholders.
 
As my colleague, Truman Semans proposed, broader industry-NGO collaboration could even go so far as to develop a “Green-T” (therm) mechanism similar to the successful Green-e model that has advanced the legitimacy of renewable energy and GHG reduction products.
The U.S. natural gas resource is incredibly valuable to our national security, economic development, and obligation to curb greenhouse gas emissions. It is therefore imperative that we get this right and find practical common ground between the natural gas industry and concerned stakeholders.
Doing so will build the trust and constructive dialogue needed to successfully navigate our way through these current challenges and proactively address future hurdles that will doubtlessly arise as this method of natural gas development further matures.
 
Dan Saccardi is a Senior Associate with GreenOrder, an LRN Advisory Group. GreenOrder is a strategy and management consulting firm that helps companies gain competitive advantage through environmental innovation.

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