Aug 3 2011

Citizen Regulators 3

Citizen Regulators Are Key to ‘Social License to Operate’

Will Spectra Energy Share Gas Chromatography Test Results?

Will Results Support Company’s Statements to Property Owners & FERC?

As reported in Parts 1 and 2, there is a pattern of health, water and operational concerns among landowners who live near Spectra Energy’s huge compressor and underground natural gas storage facility in Clearville, Pennsylvania.1

Located in Bedford County, near the Maryland border, the Steckman Ridge heavy industrial facility is a 12-billion cubic feet natural gas reservoir in depleted gas wells in the Oriskany formation.  A nearly 5,000 horsepower compressor station sits on top to control the injection and withdrawal of gas in and out of the reservoir.

This is done via 13 injection/withdrawal wells.  Spectra Energy has permission to drill up to 23 wells at this facility.  It began phased-in operations in 2009.

We have reported on specific incidents, named property owners and shared comments from the Federal Energy Regulatory Commission (FERC), which has been forthcoming on the issues.

In addition, the Pennsylvania Department of Environmental Protection (DEP) is gathering information from appropriate staff in various offices and will provide a response to questions raised by this writer.

Spectra Energy Absent – Why?

Conspicuously absent from this discussion of stakeholder concerns is Spectra Energy.  Repeated requests for comment by phone and e-mail – dating back to July 12 – have resulted in no response to date.

Rather than feel aggrieved by questions asked of it, Spectra Energy executives should see this as an opportunity to engage its public stakeholders who are worried about what may be happening at its facility.  As a publicly held corporation, Spectra Energy’s Directors understand what socially responsible investors mean when they speak about a “social license to operate.”

Social License to Operate

Richard Liroff, Executive Director of the Investor Environmental Health Network, recently wrote about this in a blog post.  He notes:

“The price companies pay to earn the ‘social license to operate’ is more than just the regulatory fee for a drilling permit. … To earn and maintain their social license to operate, companies must candidly address public concerns and describe measurable performance goals they have set and concrete actions they are taking.”2

This would seem to align with Spectra Energy’s corporate principles on its website.  For example, consider this one from the company’s 2009 Sustainability Report:

“We conduct our business with integrity, transparency and accountability.  Our corporate governance systems are designed to be transparent ….” Link: http://www.spectraenergy.com/our_responsibility/2009-Sustainability-Report/ensure_strong_corporate_governance/index.html

Integrity, transparency and accountability sound good.  If there is a disconnect, where is it?

Share the Test Results

For example, in Part 1, we reported about James and Karla Levy’s water well head blowing off four times due to a build up of natural gas pressure, including methane.  Spectra Energy conducted a gas chromatography test and is said to have determined that the natural gas was not from the Steckman Ridge storage reservoir.  Despite that, the company installed a methane vent or separator on the Levy’s property.

Sharing the results of this test would support Spectra Energy’s claim that its facility and nearby injection/withdrawal wells are not responsible for the presence of natural gas including methane in the Levy’s home and water well.  To date, however, Spectra Energy has not responded to a request for a copy of the gas chromatography report.

Why not share the report to demonstrate integrity, transparency and accountability?  Unless the actual test results raise questions.

Do Test Results Raise Questions?

According to a source familiar with natural gas operations, chromatography results can depend on a number of factors including place and time of sampling.

For example, from where were the samples taken?  Our source says, “If they took it from gas being injected into the reservoir, this would be considered ‘pipeline gas’ and the gas chromatography would be different from gas taken out of the reservoir (‘storage gas’).”

“Gas chromatography can change daily if they are injecting and withdrawing frequently and who knows if the samples (landowners vs Spectra Energy) were taken on the same day and time.”

If Spectra Energy did not already do this, our source suggests hiring “a company like Praxair to add a tracer gas to the reservoir to see if it shows up in the landowner’s water well.”

For a better understanding of this, the Praxair website offers a downloadable pdf file titled, Seeper Trace Leak Detection for In-Situ Gas Storage Sequestration and EOR Sites.3 Here is an excerpt (emphasis added):

In-Situ Natural Gas Storage

“The addition of tracer to underground natural gas storage facilities can help answer a variety of questions.

• Identification of Faulty Wells. If gas is detected in near-surface water wells or monitoring wells, the injection well providing the pathway to the surface can be positively identified.

• Identification of Communication Between Strata.  If tracer chemicals are detected in strata either above or below the injection zone, the approximate area of the communication between strata may be indicated by the identity of the tracer.

• Identification of the Injected Gas.  The tracer chemicals provide a positive means of source identification where the injection needs to be distinguished from background or existing gas in the formation.”

Perhaps Spectra Energy did employ tracer gas – all the more reason to share its due diligence with property owner/stakeholders who are concerned about health, water and operational issues at the company’s large industrial facility.

If there are no issues at Steckman Ridge, why not resolve the concerns of neighboring property owners?

Socially responsible shareholders like Rich Liroff do not want to destroy the natural gas industry.  They do want the industry and companies like Spectra Energy to demonstrate best practices not best platitudes.

Integrity, transparency, accountability.

Links and Resources

1 Part 1 Link: http://www.spectraenergywatch.com/blog/?p=1328

Part 2 Link: http://www.spectraenergywatch.com/blog/?p=1342

2 The Real Story About the Risks of Fracking by Richard Liroff, July 18, 2011, published on GreenBiz.com – http://www.greenbiz.com/news/2011/07/15/real-story-about-risks-fracking?page=0%2C2

3 Praxair, Inc., website: http://www.praxair.com/praxair.nsf

Seeper Trace Leak Detection for In-Situ Gas Storage – pdf file:  P-9921

NOTE: This article is cross-posted on the Accountability Central website at this link: http://www.accountability-central.com/nc/single-view-default/article/voices-from-the-shale-citizen-regulators-are-key-to-social-license-to-operate-part-3/ Accountability Central is part of the Governance & Accountability Institute, Inc.

 

One Response

  1. wayne Says:

    wonderful!

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