January 2011 Vol. 238 No. 1


Shale Gas Issues Yield To Adroit Community Relations Efforts

Curtis Campbell

Interest in shale gas is being driven by concern about peak oil, pressure to develop secure domestic energy supplies and a need to reduce greenhouse gas emissions. Shale gas is also called tight gas or shallow gas. And, members of the conventional gas industry are experiencing some new challenges in the exploration, production and pipelining of this shale gas energy source.

Geography makes a difference. While in some instances, gas-bearing formations are found in areas where there has been long-standing oil and gas activity (such as northeastern British Columbia), much of the attention has been focused on shale gas areas where experience with the oil and gas sector has been mostly as an energy user. This means that, in many cases, local authorities, landowners, environmental groups and other stakeholders are unfamiliar with the industry and the safeguards it has developed to prevent unplanned emissions and pipeline breaks. This means they may oppose development without knowing the facts.

Some major formations such as the Marcellus Shale are found in areas with a population density higher than for many areas of conventional energy production activity, meaning more stakeholders whose concerns must be dealt with. In these areas, it is common to have farms and residential developments that are on smaller parcels of land than in western Canada or the U.S. This means that there will be more landowners for each mile of pipe, whose property will be affected by development activities and pipelines. These landowners may be concerned about the way that gas activity will impact farming, their personal safety and their water supply. This calls for greater investment in community relations and consultation.

In these more populated regions, the legal structure of landholding is more likely to be freehold, in which the landowners own not just surface rights but mineral rights. This poses additional challenges for gas developers.

All these issues may mean that gaining access to land may be more time-consuming – and raise more community concern – than project proponents are accustomed to.

In many conventional areas, there is widespread community support for oil and gas extraction, in part because many local people depend on the industry for their livelihood either directly or indirectly. As well, the industry is known to provide a substantial amount of the tax base. This may be less the case in the new shale gas areas, so the industry faces more of an uphill climb to gain acceptance.

Not paying attention to these matters can mean that a company gets mired in litigation, opposition from the local community and local politicians, and difficulty obtaining access to land. This may mean higher costs and longer timelines, rendering what might have been a success into a costly “learning opportunity.”

Earn a social license to operate. These factors mean that in many shale gas projects, proponents must be willing to invest in the time, money and management attention needed to build a “social license to operate.” This is broad-based acceptance and support from stakeholders, which can include local farmers, communities, businesses and politicians.

Credible environmental, social and economic studies. One of the first steps is to lay the groundwork by determining ahead of time what the environmental, social and economic impacts of the project will be. While some of this work can be done in-house, the findings often indicate greater acceptance if the research, analysis and reporting are done by a credible third party that offers independence as well as the right skill-sets. While having knowledge of local situations is helpful, it is vital that the third-party firm or firms doing the work have the experience, technical expertise and reputation for independence. There are also fewer chances for error – consultation with stakeholders can avoid problems such as a costly delayed stream crossing or a rare-species habitat obstacle. Being able to convey information effectively is important, and external professional advisers should have the tools and experience needed to support the company’s stakeholder-relations work.

Extra time in the schedule. Many environmental, social and economic studies take time to complete. It could be that many months’ worth of site-specific measurements including surface water quality, plant and animal populations, and meteorology are required. For air emissions impacts, running the computer-based models under several scenarios may be time-consuming as well. Also, the sometimes-slow process of building community support must be factored into the schedule.

Demonstrate good stewardship. Companies need to make it clear how they will manage potential impacts. This includes their emergency response measures, but also other ways they manage impacts, such as keeping their wellheads grouped together so as to minimize the number of platforms required.

Build local support. As well as reducing local opposition to a project, it may be possible to build support from landowners who will receive a fee for the use of their land, from constituents who will be glad to see improvements in their roads and from local businesses who are in position to benefit from the activity.

The investment in the “soft” side of the business, in addition to the “hard” side such as seismic surveys and exploratory drilling, can pay off in fewer problems and a faster transition to profitability.

Curtis Campbell, M.Sc.
, is an associate and environmental planner with Golder Associates Ltd. in the Calgary, AB, office. He can be reached at 403-299-5600 or curtis_campbell@golder.com.

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