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Golden Rules for a Golden Age of Gas

Oil markets
By Paul Hodges on 11-Aug-2012

Shale gas Aug12.pngA blog reader has kindly forwarded an important new study ‘Golden rules for a Golden Age of Gas’, produced by the International Energy Agency (IEA). It sets out what needs to be done to maintain public confidence in ‘fracking’ and the other techniques used to extract unconventional gas.

It is clearly a vital piece of work. US developments have already shown, as the IEA notes, that:

“Natural gas is poised to enter a golden age, but will do so only if a significant proportion of the world’s vast resources of unconventional gas – shale gas, tight gas and coalbed methane – can be developed profitably and in an environmentally acceptable manner.”

The good news, as they add, is that:

“The technologies and know-how exist for unconventional gas to be produced in a way that satisfactorily meets these challenges, but a continuous drive from governments and industry to improve performance is required if public confidence is to be maintained or earned.”

The issue is that success is far from assured. The states of New York, New Jersey and Maryland have already put in place temporary bans on fracking. Similar actions have been taken in other parts of the world, such as France. Ignoring legitimate concerns will only lead to a sense that the industry has something to hide – silence, as we all know, indicates guilt.

The chart above, from the report, highlights some key areas of concern. All of these can, and should be addressed as a matter of urgency. As the IEA note, the main need is for companies to act responsibly and transparently. Governments also need to develop the appropriate regulatory regimes, based on sound science and high quality data.

Equally, companies and governments need to guarantee public access to the data, so that it can be properly debated and understood by the communities affected, and by the wider public. Regulatory regimes also need to be properly enforced, in order to build public confidence.

The IEA report is an important step forward in this vital area. The blog can only hope that its conclusions are widely accepted and implemented.