OIL AND GAS:

Industry tries to show soft side in face of enviro worries, regulatory heat

PITTSBURGH -- The oil and gas industry is trying to lose some of its swagger.

Worried that "fracking" has turned into an epithet for some, chastised by a federal panel for being dismissive of public fears and mindful of its migration from cowboy country to the coal towns of the Northeast, the drilling trade is looking at ways to improve its image and reduce the damage it inflicts on the landscape.

Industry officials are giving more attention to courting communities new to drilling. They are sometimes taking a less combative approach to new regulations. Some have also come to recognize that their "jobs, jobs, jobs" message isn't resonating with some who aren't benefiting from the nationwide surge in drilling.

"It has generated some concerns and raised some questions, particularly, can it be done safely and how will it affect my community," Jack Gerard, president of the industry's top trade association, the American Petroleum Institute, said at a conference here this week. "These are legitimate questions."

That is a change in tone for an industry that has vehemently resisted new regulations and knocked the Obama administration back on its heels even in the wake of the worst oil spill in U.S. history in the Gulf of Mexico last spring.

The new, softer side of Big Oil was on display this week at the API conference, held in the former steel town that has become the business capital of the Marcellus Shale. API joined with a bevy of other industry groups to hold a workshop called "Commitment to Excellence in Hydraulic Fracturing."

"This conference," Gerard explained, "is just one way to show we're committed to doing this right."

But the new change is sure to raise questions about whether the industry is changing its actions or just its words.

One of the few representatives of an environmental group to attend the conference welcomed the change in emphasis but questioned whether speeches at a fancy hotel in Pittsburgh will resonate with roughnecks and roustabouts on the well pads.

"In many respects, industry best practices are very impressive," said Scott Anderson of the Environmental Defense Fund. "But it remains to be seen whether all companies have the willingness or the ability to implement in the field what their operating manuals say they should do."

Under an ornate ceiling in a famously restored hotel here, engineers and geologists discussed ways to prevent their trucks from creating rural gridlock, the importance of recycling wastewater and how to explain to people unfamiliar with fracturing that it occurs a mile or more beneath drinkable groundwater. And there was a reminder to do "basic housekeeping" to keep well pads looking neat and clean.

One API official talked about how, beyond the regular permits, companies now must also seek a "social license to operate." They even used terms more commonly uttered by environmentalists, such as the need to look at "cumulative impacts" -- the numerous side effects of rapid growth and industrialization.

'It comes down to what's feasible'

To explain the need for another recently drafted standard for fracturing, one presenter put up a slide of displays from the anti-drilling documentary "Gasland," along with protesters waving anti-fracking signs.

Introducing the conference, Gerard noted his standards-setting institute is developing recommendations for drillers on how to introduce themselves to the communities where they are going to operate. When finished, it would be added to a library where detailed tomes on the width of pipe threading are more common.

Beyond the Pittsburgh conference, industry officials have voiced a cautious acceptance to the need for U.S. EPA's new air rules governing oil and gas production. And they fell in behind Pennsylvania Gov. Tom Corbett's call for impact fees on drilling and new rules. But environmentalists have criticized the Republican's proposals as weak.

The industry took some heat from a panel assembled by the Obama administration to look at the safety of drilling and hydraulic fracturing. The group's initial report said the industry risks jeopardizing its own success if it does not do a better job of responding to concerns.

API said the panel underestimated the amount of regulation of drilling but conceded that the industry has a perception problem.

Anadarko engineer Rebecca Thingelstad stressed that good practices bring more benefits than warm feelings and good publicity.

"If everyone's comfortable with it, you can get your permits through faster," Thingelstad said. She said company's managers have been supportive of better environmental practices, explaining, "We don't get pushback from management if it's really protective."

But the limits of the new attitude were also in view. One questioner asked if they would approve a proposal that would increase costs, perhaps waiting on production until pipelines can be laid for wastewater recycling. The answer was less absolute.

"It comes down to what's feasible," she said. "To what makes sense."

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