The Global Shale Gas Initiative: Will the United States Be the Role Model for the Development of Shale Gas around the World?

I. INTRODUCTION II. OVERVIEW OF UNCONVENTIONAL GAS DEVELOPMENT AND TECHNOLOGY A. Types of Natural Gas Reservoirs B. Hydraulic Fracturing and Horizontal Drilling C. Hydraulic Fracturing Fluids III. SHALE GAS: THE GLOBAL ENERGY "GAME CHANGER" A. Shale Gas Development and Resources in the United States B. Shale Gas Development and Resources in Canada C. Shale Gas Development and Resources in the Rest of the World D. Challenges to Developing Global Unconventional Gas IV. THE GSGI: WILL THE UNITED STATES BE A MODEL FOR GLOBAL SHALE GAS DEVELOPMENT? V. ENVIRONMENTAL ISSUES ASSOCIATED WITH SHALE GAS DEVELOPMENT IN THE UNITED STATES A. Water Contamination Concerns B. Water Quantity and Flowback Concerns C. The EXXON/XTO Merger VI. REGULATORY FRAMEWORK FOR SHALE GAS DEVELOPMENT IN THE UNITED STATES A. The Safe Drinking Water Act B. Leaf v. EPA C. The FRAC Act D. EPA Study E. Other Congressional Actions: Disclosure of Frac Fluid Chemicals F. State Regulations and Actions Pending Potential Federal Action VII. CONCLUSION I. INTRODUCTION One of the most promising recent developments in the energy sector has been the dramatic increase in the production of natural gas from shale formations, or shale gas. (1) Although experts have known for years about the vast deposits of shale gas found throughout the world, technological difficulties and the high costs of producing shale gas made it impractical to consider as a serious energy source. (2) However, recent technological innovations combining hydraulic fracturing (also known as "fracing") and horizontal drilling technologies (3) have resulted in a tremendous increase in shale gas production in the United States over the past five years. (4) This boom seems likely to continue with leading energy experts proclaiming shale gas an energy "game changer" that will "revolutionize" global gas markets and help bridge the gap between conventional resources and the development of renewable energy sources. (5) Thus far, the United States has been the undisputed leader in unlocking the vast tracts of gas-bearing shale found throughout the lower forty-eight states, but Canada is also emerging as a potential major source of shale gas. (6) The so-called "shale gale," the strong wind blown by the technological advances in hydraulic fracturing and horizontal drilling, is not limited to North America. (7) Because shale formations exist in almost every region of the world, the potential for shale gas development is enormous and global in scope. (8) Because hydraulic fracturing is an essential part of developing global shale gas resources, (9) it is imperative that the industry ensures the process is safe and environmentally sound before it utilizes the technology in new areas of the world. (10) In the United States, numerous concerns have been raised about the potential environmental impacts of hydraulic fracturing, with a particular focus on the injection of hydraulic fracturing fluids in wells located near drinking water sources, (11) the quantity of water used in the process, and the disposal of waste or flowback water. (12) The U.S. response to these concerns will be closely watched around the world, and a well-crafted regulatory regime could serve as a model for foreign countries looking to responsibly develop their shale gas resources. (13) So far, Congress has introduced legislation known as the "FRAC Act" that, if passed, will place stricter regulations on the shale gas industry. (14) Additionally, in March of 2010, the U.S. Environmental Protection Agency (EPA) announced that it would conduct a comprehensive research study to investigate the potential adverse impacts that hydraulic fracturing may have on water quality and public health. (15) In the meantime, the hydraulic fracturing process continues to draw criticism from environmentalists. …