Shale Gas Producers Going the Extra Environmental Mile, Range Exec Says

DULLES, Va.--()--Natural gas and oil exploration and production companies have heeded the call to improve transparency and institute better practices in the fast-developing shale resources, but there's more to do as the shale phenomena gets up close and personal in communities all across the continent, according to a Range Resources Corp. executive.

The industry as a whole also has "picked up the ball in best practices," Range Senior Vice President Ray N. Walker Jr. told NGI’s Shale Daily in an interview recently.

But, "we have to do things better. We can no longer be a compliant industry. We used to think, like a lot of industries, that regulators will tell us the rules and we'll play by the rules. Now we have to do more than that. We have to do more engineering, take more safety steps, develop new technology."

Range has been at the forefront of addressing the public's concerns in the Marcellus Shale, where 80% of its capital spending is directed. Many of the company's efforts have now become standard industry practice. Walker, who directs the environment, safety and regulatory compliance division, and is chairman of the Marcellus Shale Coalition (MSC), outlined for NGI’s Shale Daily what he thought the shale industry has done right and what it still needs to do to ensure success going forward. He also offered some insight into Range's long-term plans.

The industry is aware "the things that people are hearing about are new and oftentimes, a little bit scary," Walker said.

"Clearly, we have to address people's concerns" when it comes to hydraulic fracturing (fracking) and water sourcing. "We have, as an industry, a lot of answers. But, we have a real quandary. How do we connect the answers with the concerns in such a way that this diverse group in the public and the stakeholders will believe it? I think a lot of that is education, talking to people, being transparent."

For example, "in July 2010 Range was the first company in the industry, across the world, to publicly disclose all of the chemicals used in fracking jobs on a well-by-well basis. It's out there, you can find it on the website. As a result of that move, and it was a big move for a company the size of Range, today we've got industry-wide efforts like and a lot of national efforts to get more transparent about what we are putting into these completions. We're real proud of that. It's a good example of being transparent."

In fall 2009 Range began to recycle its drilling flowback water. "That was a technology that we worked on hard and we worked on how to make it work. We shared it publicly with the rest of industry.

"The folks in Pennsylvania, the regulatory agencies, the administration and legislature, everybody is starting to appreciate the fact that it can be done correctly. Organizations like the MSC have made tremendous progress in publicizing that, educating all members on what are the best techniques to construct water protection casing streams. There is sharing amongst all operators. Does that mean we'll never make a mistake? Of course not. It's an industrial activity. But we're trying to do the right thing and we're getting better and better at it.

"People in Pennsylvania aren't worried about sourcing water anymore."

The rapid buildup of the shale plays across the country caught everyone by surprise -- stakeholders and the industry, said Walker. "I was a really young engineer in 1982 and I had friends working at Mitchell Energy [& Development Corp.] talking about fracking Barnett Shale wells. I thought they were playing a joke on me." George Mitchell's company in the 1980s pioneered the technique to link horizontal drilling with fracking to produce gas. "We designed a pump in 1982 and about probably 2001 and 2002, that time frame, the Barnett lit up. Everybody then started looking for the next Barnett. Of course, we found the Marcellus in 2004. And from that point forward, it's unbelievable...There's not a week that goes by that some new play isn't being talked about."

Range, with more than one million net acres, is the second largest leaseholder in the Marcellus Shale. Without the yet-to-be-tested Utica, Range has an estimated 56 Tcfe in net unproven reserves, the major part of it in the Marcellus, but with resources also in the Upper Devonian, the Midcontinent, the Permian Basin and the Nora formation in Virginia. Also to consider, there's a "big liquids upside" to the leaseholds. "We just haven't had any time to get around to everything that we've got."

Rumors circulated last month that Range was being pursued by Royal Dutch Shell plc, and the companies have offered no comment. NGI’s Shale Daily asked Walker how the company viewed potential mergers or offers for joint ventures with a deep pocket company on some of its shale acreage, as some of its peers have done.

"We have internally what we call a long-range plan" to develop its huge resources, Walker explained. "We've got the ability to grow our company 10-15 times with what we believe to be world class economics in what we believe to be the best rock in the world in a prime market in gas or liquids.

“Unless someone can show us a better way to grow value for our shareholders, we'll stick to the path we've been on," he said. "We've cleaned up our balance sheet; we have $2 billion in liquidity...$1.5 billion in commitments from a diverse group of lenders. We're a well oiled machine. We think we have a really strong plan in place. I don't see any other options as being anything that would create any more value than we have in the works.

"That being said, if someone walks in with a viable offer, we have a fiduciary responsibility to our shareholders to look at that."

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Intelligence Press Inc., is an independent publishing company serving the energy industry since 1981 with real-time news and prices for the natural gas market in its publications: Natural Gas Intelligence, NGI's Daily Gas Price Index, and NGI's Weekly Gas Price Index. NGI natural gas price indices have been utilized for price discovery by energy producers, marketer, traders, utilities and end-users for more than 20 years.

NGI's new publication, NGI's Shale Daily -- -- is the first daily publication devoted exclusively to the unfolding shale revolution that is rewriting the energy outlook in North America. NGI has drawn upon its 30 years experience surveying and publishing natural gas prices to develop the first natural gas Shale Price Indices (SPI) for 11 key unconventional resource plays in North America.


Intelligence Press, Inc.
James Geanakos, 703-318-8848

Release Summary

Shale Gas Producers Going the Extra Environmental Mile


Intelligence Press, Inc.
James Geanakos, 703-318-8848