Posts under ‘Fracking’

• Terry Macalister
• guardian.co.uk, Thursday 2 February 2012 17.44 GMT

Shell has been accused of “moral bankruptcy” by unions after unveiling a 54% rise in full-year profits less than a month after shutting its final salary pension scheme to new employees in Britain.

The oil company reported global annual earnings of $28.6bn (£18bn) – more than £2m an hour – while paying out $10.5bn to shareholders during 2011 and promising to raise dividend levels further in the coming months.

Peter Voser, Shell’s chief executive, said “there is more [good profit] to come” as he outlined a new programme of increased global investment as well as cuts that he said would provide even better returns for investors.

“We have worked hard to generate a strong pipeline of investment opportunities for Shell … All of this is supported by efficiency gains from our continuous improvement programmes,” Voser said.

But Europe’s largest oil group was attacked for displaying “predatory capitalism” by Len McCluskey, leader of the Unite union. “Shell reminds us of the moral bankruptcy of the corporate elite. The company is needlessly closing its final salary scheme while posting colossal profits,” he said. “Rather than provide security to its future staff and still make a profit, it has chosen greed. Shell is not alone: Unilever is needlessly slashing its employees’ pension benefits when there is no financial reason for doing so.”

Shell, which has also upset staff by unveiling plans to shut its major research and development centre at Stanlow in Cheshire after disposing of its refinery there, said it was surprised by the attack.

A spokesman pointed out that most government and private pension schemes paid in Britain were supported by Shell, which provides 12% of all dividends from the FTSE 100 index of leading firms.

The Anglo-Dutch group is riding high on the back of surging oil prices – which were more than $30 per barrel higher last year than in 2010 – and booming demand for gas, but says it is making most of its money outside Britain and makes barely 1p per litre out of petrol sales.

Voser pointed out that two thirds of the UK pump price went straight to the government as tax. He blamed near record prices for forecourt diesel on global crude market conditions and said Shell’s UK retail operations continued to come under “very heavy competitive pressures”.

Shell would continue to invest in the North Sea in oil projects such as those it has west of Shetland, but said there was a need for the right “tax structures to keep the oil and gas industry alive here”.

The company was doing “our bit for balancing the books” of the Treasury through paying a heavy tax burden, it said, while denying that its recent sale of the Stanlow refinery to an Indian group had any impact on the wider refining and distribution problems that have recently hit the south-east of England.

Shares in Shell rose 11% last year while arch-rivals such as BP saw no growth at all but on Thursday the Anglo-Dutch group’s stock market valuation fell slightly as the City was disappointed by the financial performance in the last quarter of the year.

Shell reported three-monthly earnings of $6.5bn, which was up on the same period last year but down quite heavily on the third quarter.

Total oil and gas production in the fourth quarter was lower, at 3.3m barrels of oil equivalent per day compared with 3.49m barrels a year ago. Shell said it would increase annual production to 3.7m barrels by 2014, helped by a $100bn investment plan which started in 2010.

The company said it would put much of its drilling efforts into the US and it now claims to have become the biggest driller – but not producer – in the deepwater Gulf of Mexico where BP used to reign supreme. Since the government moratorium on drilling in the Gulf, imposed following BP’s Deepwater Horizon spill, was lifted, Shell has obtained permission to drill five wells during 2012.

The company said it was treading carefully, meanwhile, in the Middle East in the wake of the Arab spring, but hopes to reveal soon how its exploration programme has been going in Saudi Arabia and when it plans to get back to similar work in Libya.

Shale hopes

Shell is hoping to turn the “shale gas revolution” sweeping north America into an export earner but also expects to see the controversial new energy source taking off in Europe once an “emotional” debate dies down.

The Anglo Dutch oil company is looking at possible plans to ship surplus quantities of the fuel, as liquefied natural gas or “gas-to-liquid” processed fuel, from the US.

Natural gas prices in north America have fallen to a 10-year low due to the discovery that gas can be extracted from shale rock using a technique known as hydraulic fracturing or “fracking”. It uses an assortment of chemicals to release gas with tiny explosions and has upset environmentalists and some politicians.

Peter Voser, chief executive of Shell, said $6bn would be spent worldwide on different kinds of shale gas operation, half of this in the US. The heavily populated nature of Europe versus the US made it more difficult to “frack” this side of the Atlantic, Voser conceded, but he said governments should “not take fast and emotional decisions” to restrict shale extraction. Shell expects Poland and even Germany to proceed with shale gas exploitation but it is also looking at operations in Ukraine and China.

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Ohio Officials Putting In Place Earthquake Preparedness Plans

January 4, 2012 5:11 PM

PITTSBURGH (KDKA) — There were 11 earthquakes in eastern Ohio in 2011.

Most of them were not very powerful and caused little damage, but some people are asking about emergency plans if a major quake hits the area.

The new phenomenon of earthquakes in eastern Ohio is puzzling many people.

Some geologists say that discarded brine used while drilling for natural gas is being injected near fault lines. It acts as a lubricant, inducing the earthquakes.

Emergency management officials in and near Youngstown say they have a general plan that covers any and all emergencies.

“Specific to that, earthquakes are so broad in category that we don’t have a one-on-one say do this, do this, do this. It falls under that emergency operations plan,” said Clark Jones, of the Mahoning County EMA.

Jones says officials near Youngstown worked together to create a checklist for earthquake preparedness.

“It gives a general outline of what to do prior to earthquakes to be prepared for them if you’re in an area that’s prone to earthquakes, which we seem to be all of a sudden,” he said.

Officials say they have dealt with many different kinds of natural disasters, but never expected an earthquake like the one on New Year’s Eve. Their goal now is to better prepare in the future.

“So now, since Saturday, the fire department and myself and my fire officers are sitting down and we’re coming up… we have to come up with a preparedness plan. An earthquake specific disaster response plan for the Village,” said Chief Nick Kish, of the McDonald Village Fire Department.

Officials say they are monitoring the area carefully since Saturday’s earthquake, and although there’s no proof that fracking has anything to do with the earthquakes, they are also working with companies that are doing hydraulic fracking in the area.

“We have state meetings scheduled as soon as the 13th to make sure that our plans encompass everything,” Jones said.

The most powerful earthquake was on New Year’s Eve. It measured 4.0 in magnitude.

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In July, the Advertising Standards Authority of South Africa, an independent agency that sets guidelines for media companies, ruled that several of Shell’s advertised claims — including one that said fracking had never led to groundwater contamination — were misleading or unsubstantiated and should be withdrawn.

Chris Hayward, a South African farmer, says, “If our government lets these companies touch even a drop of our water, we’re ruined.”: Photo Credit: Liaan Pretorius for The New York Times

A version of this article appeared in print on December 31, 2011, on page A1 of the New York edition

By IAN URBINA

KAROO, South Africa — When a drought dried up their wells last year, hundreds of farmers and their families flocked to local fairgrounds here to pray for rain, and a call went out on the regional radio station imploring South Africans to donate bottled water.

Covering much of the roughly 800 miles between Johannesburg and Cape Town, this arid expanse — its name means “thirsty land” — sees less rain in some parts than the Mojave Desert.

Even so, Shell and several other large energy companies hope to drill thousands of natural gas wells in the region, using a new drilling technology that can require a million gallons of water or more for each well. Companies will also have to find a way to dispose of all the toxic wastewater or sludge that each well produces, since the closest landfill or industrial-waste facility that can handle the waste is hundreds of miles away.

“Around here, the rain comes on legs,” said Chris Hayward, 51, a brawny, dust-covered farmer in Beaufort West, quoting a Karoo saying about how rare and fleeting precipitation is in the area.

With his three skinny border collies crouching dutifully at his side, Mr. Hayward explained that he had to slaughter more than 600 of his 2,000 sheep last year because there was not enough water to go around.

“If our government lets these companies touch even a drop of our water,” he said, “we’re ruined.”

South Africa is among the growing number of countries that want to unlock previously inaccessible natural gas reserves trapped in shale deep underground. The drilling technology — hydraulic fracturing, or “fracking,” for short — holds the promise of generating new revenue through taxes on the gas, creating thousands of jobs for one of the country’s poorest regions, and fueling power plants to provide electricity to roughly 10 million South Africans who live without it.

But many of the sites here and on other continents that are being considered for drilling by oil and gas companies and by governments short of cash are in fragile areas where local officials have limited resources, political leverage or experience to ensure that the drilling is done safely.

A Surge in Interest

The interest from big energy companies in South Africa and elsewhere means that shale gas may redraw the global energy map, according to many energy experts.

Michael Klare, a professor of world security studies at Hampshire College, said that the new sources of natural gas from shale may lessen the geopolitical importance of countries that historically have been the biggest producers of natural gas, including Iran, Qatar and Russia. The new drilling, which draws strong support from the United States government, represents a boon for American companies like Halliburton, Chesapeake Energy and Exxon Mobil that have greater experience with shale gas, and therefore are likely to win many lucrative contracts abroad.

More than 30 countries, including China, India and Pakistan, are now considering fracking for natural gas or oil, and the surge in gas production has spurred interest in building pipelines and terminals that liquefy the fuel so it can be shipped to far-flung markets. In the United States, shale gas has increased supply, driving prices down and benefiting industrial plants that use the gas for manufacturing and consumers who depend on it for electricity, heating or cooking.

But the enthusiasm abroad, especially in less-developed regions, does carry risks, according to many energy experts.

“The big problem is that all the excitement around shale gas, most of it fostered by the U.S., has also led some countries, especially in the developing world, to take a drill-first, figure-out-regulations-later attitude,” said Professor Klare, who has written extensively about the way that energy policies affect global security. “There is simply too much being taken on faith when it comes to company reassurances about the safety and costs of this drilling.”

The Indonesian government, for example, is considering allowing drilling for shale gas in a part of Java where, in 2006, drilling led to the eruption of a mud volcano that killed at least 13 people, and displaced more than 30,000 residents from 12 villages, according to a team of international scientists. Indonesia is a major exporter of liquefied natural gas, but it struggles to meet domestic demand, and supporters of the shale drilling project say it will help solve that problem.

Shale gas in Poland may represent more than a third of the natural gas resources in Europe, according to energy experts, and could help the country reduce its dependence on Russia, which now supplies about 60 percent of Poland’s gas.

But an April 2010 report by Bernstein Research, a market research group, raised concerns about the costs and risks of shale gas drilling because Poland is so densely populated, dependent on agriculture and farmers will have to compete with drillers for water.

“Europe and some of the countries with shale potential have significantly less renewable water resources than the U.S.,” the report warned.

A U.S. Initiative

In the United States, where the water-intensive drilling technique of fracking was invented, the government is taking a lead role in supporting the dissemination of the technology abroad, as well as promoting other energy projects, including building infrastructure to extract and transport liquid natural gas.

Over the past three years, President Obama has promoted shale gas during visits to China, India and Poland.

“We believe that there is the capacity technologically to extract that gas in a way that is entirely safe,” Mr. Obama said in a speech in May in Warsaw, where the American Embassy co-hosted an international shale gas conference.

The Export-Import Bank of the United States has financed some of its biggest gas projects over the last several years, including the largest transaction in the bank’s history — $3 billion approved in 2009 for hundreds of miles of gas pipeline and a liquid natural gas plant and terminal project led by Exxon Mobil in Papua New Guinea.

The United States Geological Survey has offered training and technology to geologists exploring shale gas in Europe.

In 2009, the United States and China signed an agreement to promote accelerated development of shale gas in China, which has major shale gas deposits in Inner Mongolia in the north and in the country’s restive western frontier, Xinjiang, which is characterized by severe droughts and a separatist movement.

The State Department’s Global Shale Gas Initiative, begun in 2010, has been advising many foreign countries on fracking. It has organized a half-dozen trips this year for foreign officials to meet with American energy experts and to visit drilling sites in the United States.

The Web site for the initiative says that its primary goals are “to achieve greater energy security, meet environmental objectives and further U.S. economic and commercial interests.”

Concern About Effects

Some economists and environmentalists say that while the governments of poorer countries may benefit from the new tax revenues and jobs, they may not be paying enough attention to the environmental risks of drilling. They also note that local residents — who bear the brunt of the air pollution, potential water contamination from spills or underground seepage, and truck traffic that come with drilling — may see few benefits.

“These projects have already started causing steep inflation in costs of local housing and services, and except for the lucky few who get temporary construction jobs, the economic conditions for local communities can actually get worse,” said Doug Norlen, policy director of Pacific Environment, an advocacy and research organization that tracks federal and corporate financing of energy projects abroad.

The direct benefits of new drilling to American landowners — they receive bonuses and royalties when they lease their land to drillers — will generally not be shared by landowners abroad. In South Africa and many other countries looking to embrace the drilling, the minerals under a property are more often owned by governments, not individuals.

Mr. Norlen added that the influx of foreign construction workers in these projects could lead to conflicts with local and tribal communities. In one example, he noted, the United States government-financed project in Papua New Guinea to extract and transport liquid natural gas recently led to violent clashes between residents and foreign contractors.

But Jan Willem Eggink, general manager for Shell in South Africa, said that the Karoo project could eventually produce millions of dollars in direct investment and thousands of jobs for South Africans, which would help lower the nation’s unemployment rate of about 25 percent.

“There is a huge energy problem looming for South Africa,” he added, explaining that energy demand is growing rapidly and that shale gas coupled with renewables could help meet that new demand while also lowering the nation’s dependence on Mozambique for gas.

Fracking involves injecting large amounts of water mixed with chemicals and sand at very high pressure deep underground to crack rock and release gas. After fracking, much of the water at each well returns to the surface mixed with toxic chemicals.

Shell’s plan is to drill at least six exploratory wells over the next three years, and if the gas reserves appear profitable, it will start production with at least 1,500 wells several years later. Martin Bell, the water manager for Shell’s Karoo project, said the company planned to recycle as much wastewater as possible, storing it temporarily in closed containers. Trucks will not be the primary method for moving waste or water, he said. Drilling waste, which could be especially toxic because the area is high in uranium deposits, will be shipped to disposal plants by pipes or by rail, Mr. Bell said.

Water needed for fracking may be brought in by rail from the coast, which is hundreds of miles away in some parts, or drawn from aquifers far below the ones that supply water for farmers. The company will tap into the aquifers that farmers use only if it can prove no adverse impact, Mr. Bell said.

In interviews, South African drilling regulators emphasized that producing and using more natural gas would help the country’s air pollution problems and avoid increasing its already heavy dependence on coal for electricity, since coal is dirtier than natural gas when burned.

But in this sun-flooded hinterland, where sheep outnumber humans and rusty windmills pumping water dot the horizon, many residents say they would prefer to see the government bring in wind or solar farms, not new drilling.

“It just takes one big spill, leaky pipe or crack underground that their studies didn’t catch, and a farm my family has run for four generations is done,” said Trenly Spence, 44, as he dug up a clogged irrigation pipe that carries water across his 3,300 acres to where his 3,000 sheep and goats graze.

Mr. Spence added that farmers had been frustrated by the lack of information from Shell officials about the chemicals they would inject into the ground during fracking.

Shell officials said that they would disclose what they could about fracking formulas if they started drilling, but that they might be limited by trade secrets of their subcontractors.

In the United States, some drilling companies have been reluctant to reveal the chemicals they use in fracking, saying the information is proprietary.

Officials from the State Department’s shale gas initiative have said that developing countries interested in fracking will need to create stronger protections for intellectual property rights so energy companies will think that they can safely maintain certain patents over their drilling techniques. Some environmentalists say that strengthening these intellectual property protections will only help energy companies argue that they do not have to disclose the chemicals they use in fracking abroad.

A spokesman for the State Department declined to answer questions about fracking and intellectual property rights. But he emphasized that the initiative’s goal is to help countries make informed decisions about their resources, rather than promoting shale gas abroad.

“The regulatory and financial climate is obviously important to companies considering an investment in unconventional gas,” the spokesman said in an e-mail. “But sound environmental regulations and policies are also critical, as is working with local communities and other stakeholders to understand the impact of shale gas on their lives.”

The Future

Some legal experts say that the United States needs to be more concerned about environmental and other impacts as it promotes energy technology abroad. David Hunter, director of the Program on International and Comparative Environmental Law at American University, said, “Especially with energy projects, the U.S. and its funding institutions have a habit of promoting policies that foster a stable climate for foreign investors but that are not in the best interests of local populations.”

In Peru, for example, the United States Export-Import bank provided more than $400 million in loan guarantees in 2008 for a liquefied natural gas terminal to export gas from the Camisea gas fields, which are in the Amazon rainforest. The project for drilling and pipelines in the Camisea, which received separate financing from the Inter-American Development Bank, has been dogged by spills, accusations that company officials bribed lawmakers and criticisms about exporting the gas rather than using more of it to lower prices for domestic consumers.

Energy companies are using fracking technology in parts of Canada, bringing jobs and wealth to gas-rich provinces like Alberta and British Columbia. But residents near drilling sites have complained that natural gas has seeped into their water wells making their tap water flammable. Drillers have denied responsibility.

In South Africa, pressure is mounting to proceed cautiously.

After public concerns were raised this year about drilling in the Karoo region, South African drilling officials set a moratorium on new licenses for exploration until February so the government could conduct more research.

In July, the Advertising Standards Authority of South Africa, an independent agency that sets guidelines for media companies, ruled that several of Shell’s advertised claims — including one that said fracking had never led to groundwater contamination — were misleading or unsubstantiated and should be withdrawn. Shell said the advertisements were an accurate reflection of its opinion.

“The government is under a great deal of pressure to hurry up,” said Hein Rust, director of disaster management for the central Karoo region. “But I don’t think these decisions should be made on faith or until all the costs are known.”

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Related

Drilling Down: Learning Too Late of the Perils in Gas Well Leases (December 2, 2011)

Drilling Down: Rush to Drill for Natural Gas Creates Conflicts With Mortgages (October 20, 2011)

Drilling Down: A Tainted Water Well, and Concern There May Be More (August 4, 2011)

Private company Cuadrilla Resources has admitted that its activities probably caused two “seismic events” that occured in Blackpool earlier this year.

By Garry White 12:36PM GMT 02 Nov 2011

By HENRY FOUNTAIN

A version of this article appeared in print on December 13, 2011, on page D1 of the New York edition

YOUNGSTOWN, Ohio — Until this year, this Rust Belt city and surrounding Mahoning County had been about as dead, seismically, as a place can be, without even a hint of an earthquake since Scots-Irish settlers arrived in the 18th century.

But on March 17, two minor quakes briefly shook the city. And in the following eight months there have been seven more — like the first two, too weak to cause damage or even be felt by many people, but strong enough to rattle some nerves.

“It felt like someone was kicking in the front door. It scared the stuffing out of me,” said Steve Moritz, a cook who lives on the city’s west side, describing the seventh quake, which occurred in late September. It was the strongest one, with a magnitude of 2.7.

Nine quakes in eight months in a seismically inactive area is unusual. But Ohio seismologists found another surprise when they plotted the quakes’ epicenters: most coincided with the location of a 9,000-foot well in an industrial lot along the Mahoning River, just down the hill from Mr. Moritz’s neighborhood and two miles from downtown Youngstown.

At the well, a local company has been disposing of brine and other liquids from natural gas wells across the border in Pennsylvania — millions of gallons of waste from the process called hydraulic fracturing that is used to unlock the gas from shale rock.

The location and timing of the quakes led to suspicions that the disposal well was responsible for Youngstown’s seismic awakening. As the wastewater was injected into the well under pressure, the thinking went, some of it might have migrated into deeper rock formations, unclamping ancient faults and allowing the rock to slip.

As the United States undergoes a boom in the production of gas from shale, hydraulic fracturing, or fracking, has come under fire from environmentalists and others for its potential to pollute the air and contaminate drinking water. But the events in Youngstown — and a string of other, mostly small tremors in Arkansas, Oklahoma, Texas, British Columbia and other shale-gas-producing areas — raise the disquieting notion that the technique could lead, directly or indirectly, to a damaging earthquake.

Scientists say the likelihood of that link is extremely remote, that thousands of fracking and disposal wells operate nationwide without causing earthquakes, and that the relatively shallow depths of these wells mean that any earthquakes that are triggered would be minor. “But still, you don’t want it to happen,” said Mark Zoback, a geophysicist at Stanford University.

Others point out that among the thousands of small earthquakes in central Arkansas since last year that were thought to be linked to disposal wells was one of magnitude 4.7, and that a disposal well at the Rocky Mountain Arsenal in Colorado — for wastewater from weapons production, not gas drilling — was tied to numerous quakes in the 1960s, including several of magnitude 5.0 or higher that caused minor damage in Denver and other cities. Deeper geothermal wells have caused damaging quakes as well.

“It’s true that you can’t have an earthquake larger than a given fault can provide,” said Serge Shapiro, a professor at the Free University of Berlin who has studied what scientists refer to as induced seismicity. “But an earthquake even of magnitude 4 in a populated area can be an unpleasant thing.”

Officials with D & L Energy, the Youngstown company that has been disposing of the waste, and with the Ohio government say there is no proof of a link between the disposal well and the earthquakes. “Right now we can’t definitively say yes or no,” said Tom Tugend, deputy chief of the gas and oil division of the Ohio Department of Natural Resources. But the state has asked the company to plug the bottom 250 feet of the well with cement as a precaution, to ensure that it is sealed from the deeper rock where the earthquakes are thought to have occurred.

State officials are also working with researchers from the Lamont-Doherty Earth Observatory, a part of Columbia University, who have installed four temporary seismometers within several miles of the well. If more earthquakes occur, the instruments will help determine location and depth more precisely. “It should help us make the case one way or another — is this related or not,” said John Armbruster, a Lamont seismologist.

C. Jeffrey Eshelman, a spokesman for the Independent Petroleum Association of America, said that as far as the industry was concerned, “it has been impossible to determine whether hydraulic fracturing has anything to do with” the quakes like those in Ohio.

“But it’s in our best interest to understand what’s going on,” he said. “Although they are minor incidents, they are still something to be taken seriously.”

Scientists say that although it is known that wells — and reservoirs and quarries, among other things — can induce earthquakes, it can be difficult to prove a connection because there is not enough data. So specific cases often become a subject of debate.

“Scientific research needs to be done to understand the data on fluid injections and volumes,” said William Leith, senior science adviser for earthquake and geologic hazards at the United States Geological Survey, which has re-established a project to study induced seismicity in response to the string of suspicious quakes in shale-gas areas.

In Arkansas, the State Oil and Gas Commission was concerned enough about a possible link between disposal wells and earthquakes that in July it ordered that one well be shut down, and it placed a moratorium on new ones in an 1,100-square-mile area. Three other disposal wells closed voluntarily. While small earthquakes are still occurring in the area, their frequency has declined substantially.

In Oklahoma, a state seismologist concluded that there was a “possibility” that a series of small quakes in January about 50 miles south of Oklahoma City were induced by a nearby fracking operation. “The reason I can’t make any real conclusive statements is just because of the limitations of the data,” the seismologist, Austin A. Holland, said.

In northwestern England, however, an independent report commissioned by a drilling company, Cuadrilla Resources, concluded that two quakes of magnitude 1.5 and 2.3 near the city of Blackpool last spring were related to a fracking well. The report suggested several ways to avoid further quakes, including monitoring and limiting the pressures and volumes of fluid used.

Fracking is known to cause very slight tremors — far weaker than even the Youngstown quakes — when the fluid is injected into the shale under high pressure. Drilling companies often send sensitive instruments called geophones into the drill holes to analyze these tiny tremors because they indicate whether the rock is fracturing as expected.

But the larger earthquakes near Blackpool were thought to be caused the same way that quakes could be set off from disposal wells — by migration of the fluid into rock formations below the shale. Seismologists say that these deeper, older rocks, collectively referred to as the “basement,” are littered with faults that, although under stress, have reached equilibrium over hundreds of millions of years.

“There are plenty of faults,” said Leonardo Seeber, a seismologist with the Lamont-Doherty Earth Observatory. “Conservatively, one should assume that no matter where you drill, the basement is going to have faults that could rupture.”

Drilling and disposal companies do not usually know that those faults exist, however. Seismic surveys are costly, and states do not require them for oil or gas wells (although larger companies routinely conduct seismic tests as part of exploration). Regulations for disposal wells are concerned about protecting aquifers, not about seismic risk. The federal Environmental Protection Agency, which regulates oil- and gas-related disposal wells unless its cedes its authority to the states, has no seismic requirements for its disposal wells, an agency spokeswoman said.

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By Pierre Bertrand | December 12, 2011 5:47 PM EST

A version of this editorial appeared in print on December 12, 2011, on page A22 of the New York edition

After several crowded and often raucous hearings, Gov. Andrew Cuomo agreed to give the public until Jan. 11 to comment on 2,000 pages of environmental analysis and proposed regulations designed to govern natural gas drilling in deep shale formations in New York State. The extension makes sense. The drilling decision is a momentous one, for the environment and the economy, and it is vitally important to get it right.

The issue is not the fuel. There is little doubt in our minds that natural gas, which is cheap, plentiful and cleaner than coal, could help greatly with the country’s energy and climate problems.

The question is whether it can be safely extracted by a technique called hydraulic fracturing, which involves blasting water, sand and chemicals deep into rock formations to dislodge the gas. Done carelessly, the technique poses threats to water quality, local landscapes and the atmosphere that other states, including Pennsylvania, have failed to address adequately.

That’s where the rules from the state’s Department of Environmental Conservation come in. They must establish detailed safeguards for hydraulic fracturing and ensure regulatory oversight. The proposed rules have been months in the making but still need to be improved to better protect the environment and public health. Here are several concerns:

URBAN WATER SUPPLIES The rules rightly forbid drilling inside the two major unfiltered watersheds serving New York City and Syracuse. But New York City officials warn that hydrofracturing outside the watershed boundaries could set off tiny subsurface shocks, cracking the aging tunnels that bring water to the city and allowing water to leak out of the tunnels and gas to seep in. The proposed rules would limit drilling within 1,000 feet of the tunnels; some experts believe that a setback of several miles will be necessary.

HAZARDOUS WASTEWATER A federal panel found recently that the biggest risks arise from “flowback” — the huge volumes of water laced with naturally occurring toxic pollutants that drilling brings to the surface along with the natural gas. In Western states, these and other wastes are sometimes safely stored underground, but this may not be possible in New York’s geological formations. Sewage treatment plants are not equipped to handle these wastes, open pits are out of the question, and surface storage — even in airtight steel tanks — may be no more than a temporary solution. State officials concede that they don’t have an answer, but until they do, not a single well should be drilled.

OVERSIGHT When fully operational in a decade, the industry could be drilling hundreds of wells a year. Two questions arise, neither addressed in the proposed regulations: First, who’s going to police all this activity? The minerals division of the Department of Environmental Conservation has fewer than 20 employees. Joe Martens, the commissioner, says he wants 140 more, but even that doesn’t sound like enough. Second, who’s going to pay for the regulatory machinery? The obvious answer is the industry, which is growing rapidly and can easily afford permit fees or a volumetric tax on the gas or both. The state needs to ensure an adequate financing stream dedicated to monitoring and enforcement.

There are other issues that need meticulous examination. One is the danger of underground leaks of chemicals or methane gas. The Environmental Protection Agency reported on Thursday that wells in a remote valley in Wyoming may have been contaminated this way. Another issue is above-ground gas leaks that would add to global warming (methane is a potent greenhouse gas). Still another is what industry should be required to do to restore the landscape to its original condition after wells go dry.

There is no reason to hurry the rule-making or the drilling. The only way New York can safely move ahead with hydrofracturing is by designing and executing a tough regulatory program that could also serve as a model for the rest of the nation.

Oil industry executives appearing Tuesday at the World Petroleum Congress in Doha, Qatar.

DOHA, Qatar (CNNMoney) — Just three years after fears of an energy supply shortage, executives of the world’s leading oil companies now foresee a bonanza of oil and natural gas on the horizon.

First Published: December 6, 2011: 11:32 AM ET

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