Thursday, December 24, 2009

Water rights 101 for gas producers


Using the focus on hydraulic fracturing to expand on the idea of water as a limiting constraint in energy production...

According to the Congress & Law Blog, "gas producers must arrange to procure the large volumes of water required for hydraulic fracturing in advance of their drilling and development activity". Congress & Law then proceeds to detail the law applicable for the acquisition of water rights in the Eastern USA (globally riparian - Professor Tarlock is even referenced!).

This is a clear example of the issues gathered under the idea of Water Energy Nexus, where increases in demand for energy increase demand for water, and increases in demand for water increase demand for energy, thereby doubling the acceleration towards unsustainable levels of natural resources exploitation.

Interestingly, water scarcity does not seem to be a physical constraint on energy production in the relatively water abundant Eastern USA. However, the legal framework determining access to water acts as the constraint on productive inputs.

Friday, December 18, 2009

The water energy nexus is still under the spotlight


Just a quick post on the issue of hydraulic fracturing and contamination of underground drinking water already explored in a previous post. This article shows the potential repercussions of the internalisation of pollution costs on energy and gas producers. If the Amercian Congress regulates to protect groundwater, a merger between energy producers might be threathened. However, Congress is unlikely to act, as quoted analysts report...

Thursday, December 17, 2009

Precaution and prevention to avoid cancer?

(by HUGO)

The amazing New York Time series on Toxic Waters continues, this time with an article by Charles Duhigg on drinking water pollution in the U.S.A.

Basically, you have an outdated drinking water law from a few decades back that regulates less than 100 substances, while 60,000 chemical compounds from human sources are currently used in America. The effects of these substances on human health are mosly or totally unknown and good health research cannot keep pace with technological development:

«Many contaminants are hazardous only if consumed for years. And some researchers argue that even toxic chemicals, when consumed at extremly low doses over long periods, pose few risks. Other argue that the cost of removing minute concentrations of chemicals from drinking water does not equal the benefits.

Moreover, many of the thousands of chemicals that have not been analysed may be harmless. And researchers caution that such science is complicated, often based on extrapolation from animal studies, and sometimes hard to apply nationwide, particluarly given that more than 57,400 water systems in this contry each deliver, essentially, a different glass of water every day.»

This appears to be a clear case where the conjoined application of the principles of precaution and prevention could lead to a salutary ban on the introduction of new chemical substances unless positively proven harmless through comprehensive and exhaustive scientific studies. The European Union has recently taken steps in this direction with the new regulation on chemicals REACH.

Wednesday, December 9, 2009

HRBA to gas? -- On the fragmentation of legislations (Mova)

I would like to add more points on Hugo's post. Another thing that will exacerbate the problem is the fragmentation of legislations covering groundwater. Under Indonesian Law for example, the regime for dewatering for mining activities is not covered by the regulation on groundwater, it falls under the mining law. Geothermal had a separate law and I have yet look deeper into how this issue is addressed under the implementing regulation of the Geothermal law. But looking at the mining experience and the volume of water used, there might be temptation for regulating it separately from the water law regime.

HRBA to gas?


Access to water or access to gas. Which one do you choose?

In other words, is it better to protect access to water for domestic use or to allow gas extraction companies to proceed with hydraulic fracturing?

The choice is not binary, but hydraulic fracturing raises mainy issues in water management because of the water pollution it creates. Peter Gleick defines hydraulic fracturing as follows:

«Hydraulic fracturing, or fracking, is a technique that releases natural gas trapped in undergound shale formations by injecting water, chemicals, and so "frack" the rock structures and release the gas.»

This extraction technique is currently under the spotlight because it pollutes groundwater. The New York Time reports that pollution from gas companies exploiting America's biggest shale deposit (the Marcellus shale which stretches from Virginia to New York in Eastern U.S.A.) could critically damage supplies of water used for drinking and for agriculture.

This example is interesting to keep in mind when discussing the Human Rights-Based Approach (HRBA) to water. This management approach purports that access to water for domestic uses must be prioritised over other water uses.

Hydraulic fracturing appears to run contrary to the aims of the HRBA: the gas companies' use of water for extraction is prioritised over domestic and agricultural uses. This is the result of a political choice made by the American Congress. The New York Time reports that:

«In a 2004 study, the E.P.A. decided that hydraulic fracturing was essentially harmless. Critics said the analysis was politically motivated, but it was cited the following year when the Republican-led Congress removed hydraulic fracturing from any regulation under the Safe Drinking Water Act.»

Hydrogeological complexity of groundwater dynamics blur causality between pollution by gas extraction and contamination of domestic water supply. Can a plaintiff with a contaminated well file an action with any chance of success?

If yes, is reparation sufficient or prevention through tighter regulatory controls better? But then, is preventive regulation adequate or useful at all to protect water resources? Another article from the New York Time raises worrying issues on this subject...

Finally, could the user-pays principle inform the situation? Legal frameworks for drinking water usually hold water providers responsible for ensuring water quality to required standards. Should municipalities bear the costs of decontamination from gas extraction chemical contaminants? Or should the polluters pay for decontamination of the groundwater sources?