Center created to set Pennsylvania shale-drilling standards

A consortium of environmentalists, philanthropies, and energy companies that are frequently at odds over fossil-fuel development has created a certification program they say will hold shale-drilling companies to higher performance standards.

Much as the Leadership in Energy and Environmental Design certification program has become the gold standard for green buildings, the new Center for Sustainable Shale Development aspires to create a rigorous environmental seal of approval for companies developing the Marcellus Shale and other Appalachian formations.

"By working with companies, we think it set a standard by which others will be measured," said Robert F. Vagt, president of the Heinz Endowments of Pittsburgh, which supports the center along with the William Penn Foundation.

Participants in the venture, formally announced Wednesday in Pittsburgh, described a collaborative but contentious two-year process to find common ground on an issue that has dramatically reshaped the nation's energy landscape but polarized some communities.

Former U.S. Treasury Secretary Paul H. O'Neill, retired chairman and chief executive of Alcoa Inc., will serve as the center's chairman.

O'Neill will be joined by Christie Whitman, the former New Jersey governor and onetime head of the U.S. Environmental Protection Agency; Jared L. Cohon, departing president of Carnegie Mellon University; and Jane C.S. Long, former associate director of energy and environment at the Lawrence Livermore National Laboratory.

"These are serious nonaligned heavy-hitters," said Andrew G. Place, corporate director of public-policy research at EQT Corp., a Pittsburgh gas producer.

Place will serve as the center's interim director until a permanent executive is hired. The center will be based in Pittsburgh and have a budget of about $1 million.

Companies seeking certification must adhere to 15 performance standards based on state-of-the-art methods to reduce air emissions and wastewater from drilling. An independent contractor will audit the companies.

The standards address recycling and discharges of wastewater, as well as disclosure of chemicals used in the hydraulic-fracturing process. The standards require producers to adopt closed-loop systems to contain drilling fluids and to eliminate the use of open pits.

The measures aim to reduce emissions by capturing vapors in drilling and transmission processes, and by curtailing the use of diesel generators to power drilling and fracturing equipment.

"None of us out there can do all 15 standards right now," said Place, a former deputy director of Pennsylvania's Department of Environmental Protection and a Carnegie Mellon climate-change policy researcher.

In addition to EQT, three other energy companies helped devise the standards and will be represented on the board: Chevron Appalachia, Consol Energy, and Shell North America.

The environmental advocates that participated include Citizens for Pennsylvania's Future (PennFuture), the Environmental Defense Fund (EDF), the Clean Air Task Force, the Pennsylvania Environmental Council, and Group Against Smog and Pollution (GASP).

PennFuture, EDF, the Clean Air Task Force, and the Heinz Endowments will be represented on the center's board.

The center grew out of a recommendation by a shale-gas committee that reported to U.S. Energy Secretary Steven Chu in 2011. The committee called for regionally focused councils of excellence in effective environmental, health, and safety practices.

Former DEP Secretary John Hanger took up the call in Pennsylvania. The center was initially incorporated as the Institute for Gas Drilling Excellence, but the name was changed to reflect that producers are drilling for oil as well as gas.

Hanger bowed out after he became a Democratic candidate for governor last year.

Though the center's focus is specific to the geology and conditions of Appalachia, its organizers hope the prototype can be applied to other regions where shale development is taking place, such as Texas, Oklahoma, and North Dakota.

"As a process, we hope this is something that will be mimicked across the country," Vagt said of the Heinz Endowments.

The involvement of environmental advocates in a process designed to advance the gas industry is likely to be contentious in the green community.

As word of the center's agenda has leaked out in recent months, it has come under attack by some bloggers who say no drilling is safe and anything less than a moratorium is a sellout.

The environmentalists who participated in the process said they were being pragmatic - that the natural-gas industry has already invested billions of dollars in Pennsylvania, and that their aim is to make the industry behave responsibly.

"We don't support a moratorium, but we support environmentally conscious development of shale gas," said George Jugovic Jr., PennFuture president.

"In Pennsylvania, if you spend your time still pushing for a moratorium, it denies the fact that we have this very expansive industry that is already up and running," said Joe Osborne, legal director of GASP.

Heinz Endowments has funded shale-gas research and activists that have drawn industry attacks. Energy in Depth, an industry advocacy group, denounced Heinz last year as a "notorious funder of all things opposed to natural gas development."

Vagt said the new center's aim fits into the endowment's mission: to advance the economy and the environment in southwestern Pennsylvania.

"I would confess to you, when we first sat down 18 months ago with folks with whom we don't normally sit, I would have told you then I would have given us less than 50 percent chance of getting to where we are now," he said.

"We had a lot of heated conversations. It's been a hell of a process."