Smart regulations, risk communication may help refocus industry’s hydraulic fracturing debate

Posted on 29 January 2014

By Linda Hsieh, managing editor

Mark Boling, president of V+ Development Solutions,  recommends industry to advocate “smart regulations” - effective risk management.

Mark Boling, president of V+ Development Solutions, believes industry should support “smart regulations,” which to him means effective risk management.

The public debate around hydraulic fracturing has gone off track, jeopardizing opportunities for the energy industry and the potential economic and environmental benefits that unconventional resources can bring, asserted Mark Boling, president of V+ Development Solutions, a division of Southwestern Energy. Speaking at the IADC Houston Chapter luncheon last week, he recommended two actions that could help to refocus the discourse. One is to advocate “smart regulations,” which simply means effective risk management, Mr Boling said. The other is to “spend less time minimizing the public’s concerns about hydraulic fracturing and more time communicating the real risks and what industry is doing to mitigate those risks,” he said.

Whether the public’s concerns are rational or not, the industry’s response should never be “don’t worry about it.” “We need to stop doing that and say, ‘Yes, there are risks, but let me tell you what those risks are and what we do and what we have been doing for years to either eliminate or mitigate those risks,’” Mr Boling said. Industry also loses credibility when it argues it’s been conducting hydraulic fracturing operations for 60 years without any problems, he added. This kind of argument discounts the significant improvements that the industry has made to improve its operational integrity in the past several decades.

“To the public, when they hear hydraulic fracturing operations, they are not thinking of just the completion. They are thinking from the very day that the bulldozers show up to clear the location to the drilling rig coming out,” he said. “When you try to tell them that what you do today is the same thing we did 60 years ago, it doesn’t really ring true. As a matter of fact, you continue to lose credibility with them.”

Taking this “straight talk” approach with the public means that industry must walk the talk, especially when it comes to well integrity. Mr Boling noted four critical components to ensure integrity in a hydraulically fractured well. “The first is to evaluate stratigraphic confinement before you even go out there. How deep is your formation? What do you have between your target formation and your underground sources of drinking water? Do you have natural protective barriers? Is it enormously fractured? Do you have old wells that perhaps were improperly abandoned?”

Ensuring good well construction standards is also key, he said, because if “you get the well construction right, it’s 95% of the battle.” The third component is evaluating mechanical integrity before fracturing the well, and the fourth is real-time monitoring of the frac job in the producing well. While most companies would say they already do that, state laws don’t require it and, more importantly, the public doesn’t know you’re doing it, he said.

Simultaneous to well integrity issues that address the subsurface, industry also must pay more attention to surface impact, which includes pit construction, chemical storage, erosion sedimentation and truck traffic and road damage. “It’s stuff that impacts people’s daily lives. That’s what the community is worried about, and we need to step up and do more about it,” he said.

Around Mr Boling’s recommendation for smart regulations, he encouraged the industry to reconsider its own perception of regulations, noting that good regulations can benefit all stakeholders. When done smartly, regulations will help companies to identify and eliminate risks associated with their operations, he said.

To ensure regulations are done right, he continued, the industry must look to collaboration and risk communication. “It’s not to continue a rhetoric of ‘we can’t be regulated’… It’s sitting down with the people who are your biggest critics, the people who regulate you, and talking to them about what the risks really are and this is what we do.”

Public opinion and public policy are driven by perception, not reality, Mr Boling emphasized, and the widening gap between actual and perceived risks threatens the industry’s future. “Especially in the context of hydraulic fracturing operations, if we are not able to close that gap to where we do have smart regulations, we will never achieve what I think is critically important for the success of unconventional gas development in the United States. That is public trust and acceptance of hydraulic fracturing operations.”

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