Thursday, March 27, 2014

Proposal: Best Practice Exchange between Alberta, Canada and Pennsylvania, USA

        Throughout my Canadian journey thus far, it has been clear that the three overriding issues that dictate energy policy are the same as in the United States: energy security, economy and jobs, and environmental protection (3 E’s).  A general related issue that has become more and more clear to me as I spent more time on energy policy at the “state” (aka province in Canada speak) vs. “national” level is that, like politics, “All energy policy is local.”

Source: Wikipedia
Alberta, like Pennsylvania, has a number of interesting programs to reach the goal of the “3E’s” – particularly regarding the challenges each faces environmentally with oil sands and hydraulic fracturing, respectively.  If each implemented the programs of the other, I believe there would be solid public policy advances to reach these energy policy goals.  And, there is one policy, not yet implemented by both
but recommended by Carnegie Mellon University researchers that I think would be useful for both Alberta, Canada and Pennsylvania (and ideally in multiple regions in the case of the United States).

            First, the Canadian programs that can serve as best practices for consideration in Pennsylvania and elsewhere for hydraulic fracturing regions:

(1) Canadian Oil Sands Innovation Alliance (COISA): COISA is an industry alliance (what in the US 
would be called a partnership) where 14 member companies (with the involvement of government, academia, and the public) share intellectual property on innovations related to environmental protection including improving measurement, accountability and environmental performance in four areas: tailings, water, land, and greenhouse gas emissions.  So far, these companies have shared 560 technologies and innovations with a development cost of $900 million.

Outside organizations and individuals can also submit non-confidential ideas for review through a program called E-tap.   Submitters will hear within 10 days if their proposed technologies are of interest. 

Why should this program be of interest in the US? I believe most industry leaders would agree with me that if there is an environmental incident, it does not just affect the image of the company with the incident, but the industry as a whole.  They should therefore want to work together to exchange ideas that help improve environmental protection.  On occasion, I hear that anti-trust regulations are a barrier, but I believe with the proper management, and if necessary, government help, anti-trust laws should not be a concern. In addition, I sometimes hear from technologists who have ideas to enhance the process or environmental protection, and from companies that say they would like innovations to enhance their process.  Yet there does not seem to be a centralized location for idea submission and vetting. 

Although, as discussed in this article, results will not happen overnight, this is typical with research and innovation.  We do need to get started, regardless. We did not have a presentation on COISA though it was mentioned during the tour.  One aspect that was unclear to me from the tour or the website is the degree to which the academic community, non-governmental organizations, and First Nation communities are involved.  Although outside parties were mentioned, I do think that you need to bring in that community, perhaps via an advisory board, to maintain the integrity of the program.

(2) Canada-Alberta Oil Sands Monitoring Program Information Portal and the Alberta Oil Sands Information Portal: The Joint Oil Sands Monitoring Program (JOSM) This site includes maps, monitoring site details including field data from scientist as well as analysis and interpretations of that data.  The interactive map, for example, includes information on the results from air, water, wildlife contaminants, and biodiversity disturbances.  When you click on the “Google earth” style map, you can get more information about that site and its results.  More work is on the way with a goal of 2015 to complete the activities outlined in the implementation plan.  COISA also plays a role here with a monitoring working group to provide industry input, focused on risk-based monitoring, to JOSM.

The Alberta Oil Sands Information Portal also provides useful information on the location of facilities and the ability to download information for further analysis (as does the previous site).   Click on a facility and you can see more detailed information about it.  Provided below is a picture showing information on the Suncor facility we visited a few days ago.

Interactive Map from Alberta Oil Sands Information Portal
In Pennsylvania, this data is not easily accessible…and it should be…to enhance public policy making and public confidence as well as identify what we do and do not know about the potential impacts of hydraulic fracturing. Although there are efforts underway to attempt to collect water data, what data is available is silo’ed  (as opposed to "one-stop" shopping) so you do not obtain a system’s perspective of the situation.  In addition, it is not easily accessible on a localized geographical basis as illustrated by the map above.

(3) Climate Change and Emissions Management Corporation(CCEMC):  Alberta takes its climate change strategy very seriously – much more than just a handful of U.S. states. Legislation passed in 2007 requires large emitters to reduce their greenhouse gas emissions.  The mechanism – a carbon levy (aka tax) of C$15/tonne CO2e and how it provides funding for the CCEMC is described in the graphic below.

 Technologies are funded that have the potential of reducing greenhouse gas emissions.  So far, CCEMC has funded 51 projects – a total commitment of C$212.8 million – on carbon capture and storage, energy efficiency, greening fossil fuels, and renewables.   Projects are funded not only in Alberta, but elsewhere, including the United States.  The results of a call for proposals focused on a CCEMC grand challenge on innovative carbon uses will be announced in about a month.  A new call for proposals that will provide C$65 million was just announced.  I’ll certainly pass this on to my colleagues back at Carnegie Mellon University.

In the United States, researchers would love this sort of funding stream for research activities – alas, the politics mean it is unlikely to occur – but it is nice to see it working elsewhere.

Source: Wikipedia
Second, I do want to spend a bit of time on programs in Pennsylvania that I think should be considered in Canada, particularly in Alberta.  Why do I think the programs are needed?  Because unlike the situation in Pennsylvania, the government of Alberta receives a major revenue stream from oil sands production, as they own the land where oil sands production is taking place.  In the United States, hydraulic fracturing activities take place on private lands.  This has the potential of creating a conflict of interest and can reduce the government’s credibility in monitoring these activities.  A good illustration of this is a quote from an Edmonton Journal article that appeared during our visit there: “’The government has a vested interest in the oil sands,” [Liberal Leader Raj] Sherman said. ‘They cannot be trusted.’”

Provided below is information on possible programs that may be worthy of consideration in Canada and Alberta.

(1) Center for Sustainable Shale Development: This organization's mission, overseen by a multi-stakeholder board,  "is to support continuous improvement and innovative practices through performance standards and third-party certification” for the hydraulic fracturing industry.  Performance standards thus far have been developed for air and climate (flaring limitations, green completion use, engine emission reduction, storage tank emission control) and surface & ground water performance standards (maximize water recycling, groundwater protection plan development, closed loop drilling, well casing design, groundwater monitoring, impoundment integrity, reduced toxicity fracturing fluid.)
Illustration of Difference between CCSD Performance Standards and Regulatory Standards
Source: Except from CCSD, as analyzed by Eckert Seamens
Setting up the organization has not been without controversy among all the stakeholders, however, it has developed practices that can immediately improve environmental protection without the delays that can be caused by awaiting laws to pass or permits.  Throughout our journey in Canada, I was told about compliance with the law and that new permits set the new standard.  However, what is really needed is continuous improvement in the existing practices and to take innovations that occur for new facilities and incorporate those ideas into older facilities – rather than grandfathering them in older regulations that are at least, several years old.  Improvements in technology are constantly changing.  Outside experts are needed for credibility – particularly from independent academics.

STRONGER, a non-profit, multi-stakeholder organization, that will, when requested, conduct a review of a state’s environmental protection – basically an audit to evaluate environmental protection strategies and opportunities for improvement based on innovative practices.  It is co-funded by federal energy and environmental agencies and a major trade association on a “no strings attached” basis. Volunteers provide reviews of the programs.  There is also longevity to the program as assessments occur over a number of years so the degree to which states are following recommendations can also be assessed.  Pennsylvania’s first assessment was in March 1992 and its most recent in September 2013.

Finally, these activities are not sufficient in Pennsylvania, and the following three groups have made recommendations to improve the process even further.  Some of these independent assessments and related recommendations would also be useful in Alberta and Canada as a whole.

(1) Shale Gas Roundtable Report:  This report, developed by a multi-stakeholder group, managed University of Pittsburgh’s Institute for Politics provides an independent assessment of the status of government regulations.  The report provides “eight core, overarching recommendations that emerged from the overall effort and specific recommendations within each of four focus areas – water, midstream, research, and unitization and conservation.”  Among its recommendations are:

  • The Commonwealth of Pennsylvania should increase investments in improving the accuracy, functionality, and transparency of its oil and gas data infrastructure.
  • The Pennsylvania Department of Environmental Protection should strengthen engagement with and support of various cross-sector and industry efforts to develop Best Management Practices.
  • Create a fund be to support rigorous and enhanced research to guide unconventional oil and gas development. The fund would have the following characteristics: diverse funding streams (state and federal governments, industry, and private philanthropy);  regularly updated multi-year strategic research plan; scientifically rigorous (competitive funding awards and peer review); transparency of funding and of research outcomes; strong government and stakeholder relationships; supportive of informed policy and practice based on state-of-the-art science; able to synthesize existing research for shorter-term consumption by decision makers; and adequacy of funding support and staffing to implement a multi-year strategic research plan,

  • (2) Carnegie Mellon University Scott Institute for Energy Innovation policymaker guide: Shale Gas and the Environment: Critical Need for a Government-University-Industry Research Initiative: Similarly to those who participated in the Shale Gas Roundtable report, CMU researchers believe that a government-university-industry initiative with regional clusters can provide a 'firewall' between the funding of research and research priorities, set a common basis for conflict of interest policies, reduce duplication of research efforts, and focus on policymaker information needs. Industry involvement is important in identifying research priorities, using research results to establish best practices, and providing the information researchers need to better understand shale gas operations. As a result, industry initiation and leadership are key criteria for the success of such an initiative. The proposed regional research centers are important because the geology as well as public concerns differ from one region to another. For example, while water scarcity is an issue in Texas, it is less so in Pennsylvania. This influences public concerns about the environmental challenges presented by issues such as oil sands and hydraulic fracturing.

    (3) Public Health Monitoring Data:  In "Potential Public Health Hazards, Exposures and Health Effects from Unconventional Natural Gas Development," an Environmental Science and Technology journal article.  As summarized in their abstract, there is a need for population-based studies: 

    "The rapid increase in unconventional natural gas (UNG) development in the United States during the past decade has brought wells and related infrastructure closer to population centers. This review
    evaluates risks to public health from chemical and nonchemical stressors associated with UNG, describes likely exposure pathways and potential health effects, and identifies major uncertainties to address with future research. The most important occupational stressors include mortality, exposure to hazardous materials and increased risk of industrial accidents. For communities near development and production sites the major stressors are air pollutants, ground and surface water contamination, truck traffic and noise pollution, accidents and malfunctions, and psychosocial stress associated with community change. Despite broad public concern, no comprehensive population-based studies of the public health effects of UNG operations exist. Major uncertainties are the unknown frequency and duration of human exposure, future extent of development, potential emission control and mitigation strategies, and a paucity of baseline data to enable substantive before and after comparisons for affected populations and environmental media. Overall, the current literature suggests that research needs to address these uncertainties before we can reasonably quantify the likelihood of occurrence or magnitude of adverse health effects associated with UNG production in workers and communities."

    Source: John L. Adgate, Bernard D. Goldstein, and Lisa M. McKenzie; “Potential Public Health Hazards, Exposures and Health Effects from Unconventional Natural Gas Development,” Environmental Science & Technology, Publication Date (Web): February 24, 2014.

    While here in Canada, there have been several news stories about public concern about potentially higher cancer rates and criticisms of a government report assessing this concern.  Industry has indicated its support for more health monitoring data.  Again, independent assessments are critical to credibility on this issue.  One last related example is an analysis from Resources for the Future that brought together a diverse of stakeholders to identify what areas of risk created the most concern for each group.  The twelve issues where there is overlap provides guidance on directing government and research efforts.

    Of course, there will never be 100% confidence in environmental protection by all parties, but reasonable efforts will improve the confidence of most.


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