Analysis: Green groups find success fighting shale oil boom

Reuters, by Ayesha Rascoe, Washington,  Tue Dec 27, 2011

(Reuters) - A resurgent green movement is launching a multi-pronged counter-attack against the shale oil and gas boom in the United States that could slow, though ultimately not stop, development.

Building upon their unexpected success in the battle against the Keystone XL pipeline, a renewed onslaught from environmentalists is putting the shale industry on the defensive while adding to costs, limiting expansion and potentially scuttling major projects.

"I think it's the totality of what's going on all at once, that's the biggest concern," said Barclay Nicholson, a lawyer for the Washington-based Fulbright & Jaworski law firm, which has represented companies involved in shale development.

With new oversight pending from federal and state authorities and lawsuits, Nicholson said critics of shale development have a plethora of avenues to fight back.

Environmentalists, alarmed at what they see as unchecked industrialization of rural areas, say they are working to secure more regulation of the rapidly growing shale industry to protect fragile areas from damaging practices.

PIECE MEAL APPROACH

After legislation aimed at addressing climate change failed to make it into law last year, green groups have been forced to take a more piece meal approach to energy policy.

That strategy worked well against TransCanada's proposed Canada-to-Texas Keystone XL pipeline, which environmentalists successfully turned into a potent symbol of the threat of carbon-intensive oil sands crude.

In November the Obama administration delayed the project, once described as a "no brainer" by Canada's Prime Minister Stephen Harper, after a wave of protests erupted in Washington and on the campaign trail.

The decision was like a shot of adrenalin for the green movement and groups are planning more creative and high profile efforts to fight a range of energy projects.

Republicans in Congress maneuvered to keep Keystone alive by including a provision in tax legislation that would force the White House to make decision on the project within 60 days.

But green groups have vowed to fight on and the administration has already said it cannot approve the project because of the time needed to study new routes.

"For the moment we're stuck fighting one pipeline, one gas well at a time," said Bill McKibben, who rose to prominence with his staging of huge protests against Keystone and is now using his influence to attack the fracking bonanza.

FRACKING IN THE SPOTLIGHT

Oil and gas companies are using advanced drilling techniques to unlock vast stores of shale fuel across the country, which is bringing legions of rigs, trucks and workers to areas unused to such activity.

The companies employ the controversial "fracking" drilling process, that involves fracturing rock formations by shooting vast and often secret cocktails of water and chemicals deep underground to free a trove of hydrocarbons.

The oil and gas industry argues that the fracking technique has been used safely for years and advances in the practice have set off a revolution that is creating jobs and boosting U.S. energy security.

But, environmentalists warn against downplaying their concerns about fracking.

"I'm not sure that they really want a Keystone XL fight on their hands, because the public is strong and they're not going to back down on this issue," said Deb Nardone, director of the Sierra Club's natural gas reform campaign, which formally launched this year.

Worries about shale output have already prompted the Environmental Protection Agency and the Interior Department to begin crafting new regulations that address issues such as wastewater disposal and disclosure of chemicals.

Green Groups have made headway with their appeals in New York, where authorities have imposed a temporary moratorium on shale drilling. Environmentalists also cheered a decision by regulators to delay a vote on lifting a ban on shale drilling in the Delaware River basin that affects the states of New York, Pennsylvania, Delaware and New Jersey.

John Sachs, a director at energy investment bank Taylor-DeJongh, said the economic and domestic energy benefits of access to cleaner burning natural gas will ultimately win out, but green groups may be able to make inroads in some areas.

"It may slow down some of the development in some states," Sachs said. He said such delays would not necessarily be negative for development, because it would allow industry and regulators to address some of the public concerns.

CHANGING THE MAP

American Gas Association president Dave McCurdy recently told reporters that while there were some legitimate concerns about development, the problems were manageable.

"None of those are going to halt the production of shale gas in this country," McCurdy told reporters earlier this month. "It is changing the political and economic map."

Still, the expansion of shale production has spawned dozens of local groups and activists focused on combating development.

Scott Ely, a resident of the small town of Dimock, Pennsylvania, very much at the epicenter of the fight over shale production, said he is trying to spread his story.

Green groups have rallied in support of Ely and 10 other families in Dimock that say their water was contaminated after Cabot Oil and Gas began drilling in their area. Cabot has denied responsibility.

"As far as the oil industry goes, this is a machine you're probably not going to be able to stop because the world needs its gas," Ely said in Dimock in December where supporters in a publicity event delivered fresh water to the families. "But because of what we did three years ago, when we started coming out, they've already started making changes in the way they operate."

(Reporting By Ayesha Rascoe; Editing by Bob Burgdorfer)

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