Monday, September 28, 2009

Natural Gas Industry Calls for Full Disclosure

Chesapeake, Range Resources call for disclosures

* Marcellus Shale a key natural gas development

* Industry says hydrofracturing process safe

By Matt Daily

NEW YORK, Sept 24 (Reuters) - Two top U.S. natural gas producers called on the industry to release data about the chemicals they use in the fast-growing Marcellus shale development to counter fears it was polluting water supplies.

The Marcellus, which stretches from West Virginia across most of Pennsylvania and into New York, could hold a 10-year supply of natural gas for the United States, but its development is sparking a backlash from some residents who say they are at risk.

New technologies have enabled gas drillers to tap into rock deposits and release natural gas using a process called "hydrofracturing" that injects water and chemicals into the deposits.

The vast energy potential of the field has drawn interest from dozens of companies, including Chesapeake Energy (CHK.N), who says the process is safe and will turn the Marcellus into a lucrative source of natural gas for decades.

"We as an industry need to demystify (hydrofracturing)," Aubrey McClendon, chief executive and chairman of Chesapeake, told an energy conference this week.

"We need to disclose the chemicals that we are using and search for alternatives to the chemicals we are using," he said.

Scientists have yet to find definitive evidence that drilling chemicals have seeped into ground, but dozens of anecdotal accounts have emerged that water supplies in gas-producing areas have been tainted.

People in gas-drilling areas say their well water has become discolored or foul-smelling, killing pets and farm animals who drink it and causing children to suffer from diarrhea and vomiting.

On Tuesday, Pennsylvania regulators cited Cabot Oil & Gas for spilling chemicals at a natural gas well. [ID:nN22368094]

Environmentalists have complained that the energy companies refuse to disclose the specific chemicals used in the fluids that are injected into wells and then later stored in pools before undergoing treatment.

That lack of disclosure prevents them from testing water and soil samples for specific incidents of pollution.

John Pinkerton, chief executive of Range Resources Corp (RRC.N), one of the first energy companies to enter the Marcellus, said producers' disclosures were limited by the oilfield service companies who do not want to release what they consider to be commercially sensitive information. Continued...

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