The Last Barrel

 Vol. 233 No. 5

If one judges the state of fracing regulation in Western Europe by what has taken place in France, it would seem nothing short of a disaster. The French parliament, a year ago, voted 287-146 to ban hydraulic fracturing. The bill subsequently became law in June 2011, when the French Senate voted 176-151 to also pass the ban.

In a bit of bureaucratic double talk that would do the Obama administration proud, the new French law bans hydraulic fracturing, itself, but not “shale gas exploration.” The inability to frac wells is tantamount to a de facto ban on virtually all shale gas exploration, so who do French lawmakers think they’re kidding? And, just to throw a little extra “attitude” into the mix, and with an eye toward his re-election effort, French President Nicolas Sarkozy said last October that France would maintain a fracing ban until there is proof that shale gas exploration won’t harm the environment or “massacre” the landscape. 

Sadly, Sarkozy, the more conservative candidate vying to win the recent French presidential election, is against fracing, as is his opponent, Socialist François Hollande. As this issue of World Oil went to press, we did not know who would win that election run-off, but it was bad either way for fracing.

But hold on—there is evidence that French politicians may be doing their industry and public a disservice. Consider information revealed last year at the Shale Gas Environmental Summit in London by Klaus Sontgerath, head of Germany’s Lower Saxony State Authority for Mining, Energy and Geology. Sontgerath told that meeting, that ExxonMobil in Germany “has been fracking the Damme (shale gas field) since 2008 without incident.” Furthermore, said Sontgerath, Germany has been fracking since 1955 in the Schleswig-Holstein region, and since 1976 in Lower Saxony. As noted on the website, Natural Gas Europe, Sontgerath further explained that “this is mainly unconventional gas, with tight gas exploration at depths of 4,000-5000 m. And up until now, we do not know of any environ-mental incidents caused by fracing.”

Further evidence on fracing comes from the Netherlands Oil and Gas Exploration and Production Association (NOGEPA). On NOGEPA’s website, a factsheet on fracing states, “There are now more than 200 wells in the Netherlands, offshore and onshore, where fracing has been used. In the 2007-2011 period, fracing was used 22 times: 9 times at onshore locations and 13 times at offshore locations. In no single case have these fracing activities resulted in any detrimental consequences.”

Last, but not least, government advisors in the UK last month recommended that British fracing for shale gas resume, with reassurances that the technique is safe. The official governmental report, authored by three experts, one of whom is at the British Geological Society, gave the go-ahead to resuming fracing across the UK on a wide scale, with the proviso that it include “a smaller pre-injection and monitoring stage,” as well as “an effective monitoring system” for any seismic events.

So, it seems there are opposing philosophies on fracing in Western Europe, with the French on one side, and the Germans, Dutch and British on the other side. The evidence, itself, seems to contradict the French position. 

EPA administrator resigns under pressure. Last month, this column described how the Obama White House has a continuing problem with intellectual dishonesty, as regards the U.S. oil and gas industry. What this column did not discuss are the perpetually bad attitude and bad behavior that administration officials show toward the industry. Proof of this emerged last month, when staff members for Senator James Inhofe (Republican – Okla.) dug up a roughly two-year-old video on YouTube, showing EPA Region 6 Administrator Al Armendariz comparing his enforcement techniques for oil and gas to “crucifixion.”

In the video, taken at a local Texas governmental meeting, Armendariz says, “[O]il and gas is an enforcement priority, it’s one of seven, so we are going to spend a fair amount of time looking at oil and gas production.” He then adds, “I was in a meeting once, and I gave an analogy to my staff…the Romans used to conquer little villages in the Mediterranean. They’d go into a little Turkish town somewhere, they’d find the first five guys they saw, and they would crucify them. And then, you know, that town was really easy to manage for the next few years. And so you make examples out of people who are, in this case, not compliant with the law. Find people who are not compliant with the law, and you hit them as hard as you can and you make examples out of them, and there is a deterrent effect there. And, companies that are smart see that, they don’t want to play that game, and they decide at that point that it’s time to clean up.”

Reaction was predictably strong. Within two days of the video surfacing, a letter signed by 29 of the 42 U.S. representatives from states in Region 6 (Texas, Louisiana, Oklahoma, Arkansas, New Mexico), more than half of the congressmen from those states, called for Armendariz to “be relieved of his position” as regional administrator. Reps. Pete Olson (Rep. – Texas) and Steve Scalise (Rep. – La.), as well as the Texas Alliance of Energy Producers, called for him to be “fired.” In response, EPA Administrator Lisa Jackson was non-committal about Armendariz’s future. Fortunately, whether he was forced to do it or did it on his own, Armendariz resigned on Apr. 30 amid ever-growing pressure.

Armendariz’s remarks sounded like a common thug on the street. His behavior and tactics seemed to have more in common with Hugo Chavez and Che Guevara than with American democracy. This should not be a surprise, given the ideological slant of this administration, and the tendency of its members to run roughshod over anyone that gets in their way. One can only wonder what else is lurking under the surface.