Canada's energy industry, under pressure to prove that its drilling techniques do not contaminate water, is setting environmental reporting guidelines for natural gas companies in a bid to dampen concerns about hydraulic fracturing.
The Canadian Association of Petroleum Producers is focusing on so-called fracking as regulators, landowners and green groups increasingly highlight the risks of dirtying aquifers with dangerous chemicals. Natural gas and other toxins, critics charge, have leaked into water sources as the energy industry drills deep for rich reserves of gas and oil .
In response to the criticism, the energy lobby group on Monday released six "operating principles" it expects natural gas companies to follow, while disclosing a swath of information about their drilling processes.
Because the guidelines are voluntary, however, and don't establish any firm rules about hydraulic fracturing, it's not clear that companies will follow the group's suggestions.
"It is performance expectations," Dave Collyer, CAPP's president, said in an interview. "We've talked about what we expect industry to do in terms of operating practices and then we've talked about collecting and being more transparent about reporting metrics such as water use [and water]recycling."
The industry could follow with targets, he said, noting that the first step is to gather baseline data.
Unless the natural gas industry can prove its operations are safe, it risks more vocal criticism and a clampdown from regulators. The U.S. Environmental Protection Agency, for example, alleges that drilling led to water contamination at a site in Wyoming run by Calgary's Encana Corp.
CAPP wants its members to reveal which chemicals they use when extracting natural gas by fracking; test water wells near drilling sites and release the results; disclose information about how they build wellbores; explain how they transport, handle and store fracking fluids; make their water sourcing, measurement, and recycle practices publicly available; and report their processes for creating well-specific risk management plans for fracturing fluid.
David Schindler, an ecology professor at the University of Alberta and critic of how oil sands players deal with water, said that for the natural gas guidelines to prove useful, companies must test for a sweeping range of chemicals and gases before and after drilling.
If studies examining a broad range of indicators fail to demonstrate water contamination, there would be no need for a fresh round of regulations, Prof. Schindler said.
"It is probably a small step in the right direction," he said, adding that he believes some data show hydraulic fracturing contaminates water, although the extent of the contamination is unclear. "I think the industry is finally paying attention … The thing about the debate is, nobody really has good widespread data."
The new guidelines, which build on principles CAPP released last September, are not expected to add major new operating demands for most companies in the industry. "We believe the majority of wells drilled in Canada already adhere to these best practices," Jamie Murray, an analyst at Desjardins Securities, said in a note to clients.