The two Colorado lawmakers leading the charge to clean up the controversial natural gas drilling process called hydraulic fracturing, or fracking, were pleased by a federal advisory panel’s findings Thursday urging greater transparency and disclosure of the chemicals used in the process. But both warned much more needs to be done.

“The subcommittee’s recommendations and its acknowledgement that changes need to be made are certainly a step in the right direction,” said U.S. Rep. Jared Polis, D-Boulder. “However, until legal shortcomings are fixed and voluntary recommendations become actual requirements, communities will remain without real assurance that their air, water and health are adequately protected.”

The Secretary of Energy Advisory Board Shale Gas Production Subcommittee released its report Thursday (pdf), calling for mandatory disclosure of the chemicals injected deep into natural gas wells along with water and sand to fracture rock formations and free up more gas. Critics say the process can lead to groundwater contamination while industry officials maintain it’s a safe process in which the chemicals often must remain secret for proprietary reasons.

The advisory panel also urged industry to move toward best environmental practices and to improve other aspects of drilling operations that have been proven to sometimes cause groundwater contamination.

“I support their call to develop best practices for casing and cementing jobs in fracking operations,” U.S. Rep. Diana DeGette, D-Denver, said. “Last year’s BP spill in the Gulf has been largely attributed to faulty casing and cementing, and, as I have repeatedly warned, the consequences of a similar tragedy in an onshore well could be even more catastrophic.”

Colorado regulators and industry representatives have consistently told the Colorado Independent that faulty cement jobs of gas wells and leaks from pipelines and holding ponds are more of a threat to groundwater than fracking itself, making chemical disclosure somewhat of a red herring.

Polis, who also has sponsored legislation aimed at better air-quality regulation of natural gas drilling, said he’s glad the panel report examined other aspects of the drilling process associated with fracking but warned federal regulators should not ignore the potential pollution impacts of the process itself.

“The subcommittee did the right thing in undertaking a broad evaluation of problems like toxic air pollution and faulty well casings, often not considered ‘fracking,’ by the industry,” Polis said. “However, the subcommittee shouldn’t be dismissive of water contamination directly attributed to fracking itself, with an EPA study currently underway, and recent news of just such a case.”

Polis was referring to an old West Virginia case in which EPA regulators found that fracking itself caused contamination of a drinking water well. Industry has long maintained that fracking itself occurs too far below groundwater sources to cause direct contamination.

Overall, DeGette said she was pleased that the panel recommended many of the same things contained in her Fracturing Responsibility and Awareness of Chemicals (FRAC) Act, which she wrote and has been trying to get passed for several years. Polis is a co-author.

DeGette was particularly encouraged by the panel’s recommendation to end the use of diesel fuel in fracking, which she has targeted as potentially one of the most damaging constituents in fracking formulas. She’s seeking a better definition of diesel fuel from the U.S. Environmental Protection Agency (EPA).

“Over the past several months, my committee has revealed extensive evidence of the use of diesel fuel in fracking projects across the nation,” DeGette said. “This report’s recommendation to cease use of diesel at all is a welcome development as we strive to make the fracking process safer.”

Dan Whitten, vice president for strategic communications for America’s Natural Gas Alliance, said he was happy to see the panel recommend ongoing use of voluntary chemical disclosure websites and independent review of state fracking regulations – a process Colorado is currently undergoing.

“While we will continue to study the details of the report, we are particularly pleased with the recommendation to bolster the role of the multi-stakeholder group STRONGER and the Ground Water Protection Council (GWPC) to work within the state regulatory framework,” Whitten said.

“The report also reinforces ANGA’s prior commitment to disclosure of hydraulic fracturing fluids through the state-based GWPC registry, FracFocus.org. ANGA member companies are committed to the safe and responsible development of our nation’s clean and abundant natural gas supplies.”

And the lone environmental representative on the panel, Environmental Defense Fund President Fred Krupp, defended its balance. A group of scientists earlier in the week questioned the panel makeup, charging it was weighted too heavily toward industry interests.

“At a time when so much of the debate in Washington is characterized by discord and paralysis, it finds common ground and offers a clear consensus. The public’s right to clean water and clean air cannot be compromised,” Krupp said.

“The subcommittee’s recommendations won’t solve every problem overnight. But if implemented, they would make real progress toward developing this abundant energy source in ways that safeguard public health and the environment. Rigorous, well-designed standards and improved transparency and disclosure can help ensure that shale gas is developed responsibly now and in the future.”

Two years ago, former Colorado Sen. Tim Wirth delivered stern words to members of the Colorado Oil and Gas Association at their annual conference: You blew it.

The natural gas industry could have been part of the climate bill called Waxman-Markey, he said, but in fact it was mentioned just twice in more than 900 pages of legislation.

Last year, drillers heard Robert Kennedy Jr. and others say: You will learn to like regulation. Through regulation, they said, will come public acceptance of natural gas for more plentiful use.

This year came exhortations for drillers to take steps necessary to gain public trust and confidence – something clearly lacking, as evident not only in the movie “Gasland,” an Oscar-nominated documentary sharply critical of gas drilling, but also in reporting by the New York Times.

A study from Cornell University has also tarnished the luster of the industry, arguing that natural gas drilling causes lifecycle emissions of methane, a greenhouse gas, equal to that of burning coal – a contention hotly disputed by drillers, who claim faulty data were used. They also vigorously challenge “Gasland,” a movie that didn’t let inconvenient facts disrupt its storyline.

Still, the onus is on the industry to prove itself – which it can only do by becoming more transparent, said speakers. The word “trust” was used at every turn.

“The natural gas industry has huge credibility problems at the moment,” Mark Brownstein, deputy director of the energy program for the Environmental Defense Fund, said at the conference.

That same day, the New York Times reported fresh news from West Virginia that challenged the insistence of geologists and industry leaders that hydraulic fracturing to gas deposits found at great depths has never damaged drinking water drawn from shallow aquifers.

Brownstein recounted a trip to New York’s Adirondack Mountains this summer where, he said, others repeatedly brought up hydraulic fracturing without him ever divulging what he does for a living. One of them, he said, was an evangelical Christian motorcycle rider from Texas.

“These aren’t folks getting their news from the New York Times or from the Huffington Post, yet the news they’re getting isn’t good,” said Brownstein.

That same essential message was delivered time and again during the three-day conference, both from those outside the industry and from a few within.

The tone was set by the first speaker, Colorado Gov. John Hickenlooper, who jabbed at the New York Times but said the industry needs to be more transparent, “to make it easier for the broad population to trust us.”

The royal “we” of Hickenlooper’s talk reflects that he was a petroleum geologist but also the simple bulk of natural gas drilling in Colorado. The industry contributes 6 percent of the state’s jobs and is responsible for 10 percent of the state’s economic activity.

Hickenlooper outlined plans by Colorado to require that all constituents used in hydraulic fracturing be divulged for each well site. The state will not require the proportions be reported, thus allowing companies an element of their proprietary “secret sauce.”

COGA, the industry association, and Hickenlooper also announced a new industry-sponsored plan to have third-party experts analyze water samples from underground sources both before drilling and three years after.

The reports will be publicly disclosed. COGA – the trade association – has enlisted members to participate, and those 20 companies have drilled 90 percent of the wells in the last 18 months. COGA, not the state, will administer the program, which is modeled on one employed for the last 10 years in the San Juan Basin south of Durango. COGA representatives said they believe that the scientific data of the third-party testers will be adequate to gain public trust.

Mike Choropolos, land program director for Western Resource Advocates, says the plans by COGA and the state government do not go far enough.

A petroleum geologist in his first career, Hickenlooper said he had read one of the New York Times reports critical of natural gas drilling out loud to his wife, Helen Thorpe, while in bed. “There’s no science here,” he reported complaining to her.

Democrats and gas drillers have long had a conflicted relationship. Even in the late 1980s, Wirth was promoting natural gas and was among the first to outfit his SUV with a natural gas burning kit. But many drillers remain wary of government. Tellingly, while there were no standing ovations for any speakers, a few people did spring to their feet after Bill Owens, governor from 2000 to 2008 and a self-described moderate but conservative Republican, pinned blame on the federal government for the loss of jobs.

“It is our friends in government who have made it virtually impossible to do anything new in this country,” he said.

“When is the last time we built a refinery in the Untied States?” asked Owens, who has had a long association with the oil and gas industry, both before be became governor and now as a member of the board of directors for several companies.

Citing a string of federal agencies, Owens charged that federal regulations have inhibited change, hampered productivity, and in the end have caused the export of jobs overseas. He concluded by noting cryptically that “elections will bring us back.”

But Democrats insist that more closely regulated drilling will, in the long run, serve the best interests of the natural gas industry, by increasing public trust, while displacing imported oil and also coal, which poses far worse pollution problems than natural gas.

“Obviously, red tape doesn’t help anybody, but some of the red tape exists because of these trust issues,” said Hickenloooper. He noted that the lag time for processing drilling permits has been reduced to 23 days, from a high of 70 days.

Former Gov. Bill Ritter, in whose administration the drilling regs were adopted, also spoke. “Tension might be too soft a word,” he said of the rocky relationship between his administration and oil and gas drillers. He acknowledged “some things that we could have done differently.”

But he didn’t back down from the regulations, continuing to insist that Colorado remains a template for other states. The regulations, he said, have resulted in clear burning fuel, extracted in ways that protect the environment, and is affordable to utility consumers.

The new rules continue to be blamed in places like Grand Junction for the slowed drilling of the last three years. Enactment of the new regulations and arrival of the recession were coincidental, but associated in the minds of many, he said. In fact, said Ritter, Colorado was second only to New Mexico among Rocky Mountain states in drilling rig counts as of three weeks ago.

During the boom that had Grand Junction and Rifle busy, the price of natural gas peaked at $13 per million Btu, before plummeting to $2. It’s now $4.43 at the Henry Hub in Louisiana, but the more difficult terrain in the upper Piceance Basin, northwest of Rifle, will require prices of $6.50 per million Btu, analysts say.

Noting the fuel-switching bill that will see coal generation in Denver and Boulder replaced by natural gas, Ritter said that Colorado now becomes the gold standard by becoming completely transparent in its drilling. “If you look at hydraulic fracturing, those problems are absolutely solvable,” he said.

Trust was also mentioned by Jim Martin, the Denver-based chief of Region 8 of the Environmental Protection Agency and a key official in the Ritter administration responsible for Colorado’s regulations.

“We have to find some space for dialogue, to find that pathway that allows us to develop the tremendous oil and gas resources in this country and region while at the same time instilling in the public the confidence necessary to allow that to occur.”

For Tisha Conoly Schuller, the director of COGA, the speaking lineup for the annual conference, called Energy Expo, is no doubt a tricky balancing act. Her constituency certainly is not of one mind.

“We don’t want to be an industry echo chamber,” she said before introducing a speaker from the Department of Energy. “We have to understand their perspectives, whether we agree with them or not.”

Occasionally, though, the same message came from speakers within the industry.

“There is such a thing as a social contract,” said George E. King, a Houston-based global technology consultant with Apache.

He labeled much of the criticism as “hysteria and hype,” but said that “You need to go out and talk about what you’re doing, and you need to do it in a polite manner.”

King and other speakers also described technological progress responsible for increasing extraction. Several decades ago, 1 percent of gas could be recovered from vertical wells. By the 1990s, that had increased to 2 percent, then 3 to 5 percent by 2002 — and now, in some cases up to 40 percent.

But one of the raps against the predicted natural gas bonanza of the last several years was the rapid depletion rate. In other words, wells declined production so quickly that more had to be sunk. King said that the new technology may lower that decline rate from 75 and 80 percent down to about 50 percent.

Drillers are also producing more gas from new formations very quickly. He said that it took 27 years to maximize production from the Barnett shale around Fort Worth. In other fields across the country, it’s just 2 to 3 years.

Water remains a crucial issue in natural gas drilling, and Apache has been reporting the ingredients of every fracking operation to a central groundwater monitoring database launched last year.

But as drilling expands, sheer volume of water has become an issue in places – such as in Texas and Oklahoma this year, where Apache has had to curtail some drilling for lack of water.

However, drilling often produces water, usually very salty, from the deep formations that also contain gas. King said Apache is experimenting with being able to take this produced water and, after treatment, using it for fracking purposes.

Still unclear as natural gas gains market share in energy, edging out coal, is the price stability. The price has been notoriously unstable, as witnessed by the swing from $13 to $2 per million Btu in recent years.

Susan Arigoni, vice president of fuels for Xcel Energy, said her company wants to see improved reliability of natural gas supplies, so that it can be counted on to produce electricity. Some of the uncertainty is due to the controversy about fracking and the response of regulatory agencies.

The division of Xcel that serves Colorado sees natural gas increasing from 27 percent of its fuel base to 38 percent by 2020. Coal will drop from 61 percent to 43 percent. Renewables will grow from 12 percent of the fuel mix to 19 percent.

Ritter also was scheduled to present his New Energy Economy blueprint to the board of trustees of the Environmental Defense Fund and make a presentation to the Center for American Progress called “Meeting the Energy and Climate Challenge: A View from the States.”

Sponsored by the BlueGreen Alliance, the Good Jobs-Green Jobs conference was also attended by Secretary of Labor Hilda Solis and Speaker of the House Nancy Pelosi. Here’s the full text of Ritter’s speech:

Bill Ritter

Thank you to the BlueGreen Alliance, all the conference sponsors, and everyone here today for leading America to what we in Colorado call a New Energy Economy. What a privilege to hear from Speaker Pelosi and Secretary Solis this morning. Two amazing women leading the fight for strong policies to strengthen working families.

This is the first of 3 appearances I’m making in DC today to share Colorado’s success story at creating thousands of green jobs, diversifying our energy portfolio, and protecting the environment. We want to share lessons learned and provide clear steps other states, Congress and the Administration can take to make America a global clean-jobs leader.

When I was running for Governor, I knew Colorado wasn’t achieving its full economic and job-creation potential around renewable, sustainable energy. So we coined the phrase New Energy Economy and made it a pillar of the campaign. And then we made it a pillar of my administration by creating the Governor’s Energy Office, and tying it to our Economic Development Office.

As a result, we have transformed Colorado’s economy.

Our successes now provide a roadmap to a future that is more economically secure, environmentally secure and energy secure. A few key components:

• Research and development – both public and private;
• Business development and job creation;
• Workforce development and education;
• Strong partnerships with businesses, utilities, others;
• Forward-thinking, visionary public policy; I’ve signed more than 40 clean-energy bills into law.

One of those first bills, which I signed within my first 100 days in office, doubled the state’s renewable energy mandate for major utilities to 20% by 2020. Earlier this year, we increased it again, to 30% by 2020. We now have the second-highest renewable energy standard in the country. And we added two new elements to foster good, green jobs for working families.

First, we added a solar certification program so that both consumers and workers can benefit from standards that support well-trained, responsible solar installers.

Second, we added a best-value contracting provision. This ensures that bids for future projects built by Colorado’s biggest utility – Xcel Energy – will take into consideration training, wages, benefits and other factors.

Another key part of Colorado’s New Energy Economy is natural gas. We spent almost two years updating our oil and gas drilling regulations, many of which are now a national model. We established a balanced set of rules that encourage responsible energy development while also protecting workers, air, water, wildlife and public health.

That was really a foundation we had to lay in order to take the next step in establishing a broader New Energy Economy. With that foundation in place, two weeks ago I signed the Colorado Clean Air-Clean Jobs Act. This new law will ensure the early retirement and replacement of old and inefficient coal plants – the first law of its kind in the country.

A total of 900 megawatts of coal-fired generation in the Denver area will be retired and replaced with natural gas over the next few years.

This bill is a national model for retiring coal-fired power plants. And we did it with strong bi-partisan support, and we talked about it in a way people can relate to: cleaner air from cleaner energy; stable energy prices; and more jobs.

Jobs – that’s been the biggest win for Colorado out of the New Energy Economy. Even in the depths of the recession, Colorado has been able to add thousands of new clean-energy jobs and attract hundreds of new clean-tech and clean-energy companies:

• We now have the fourth-highest concentration of clean-energy workers in the country.
• We attracted the third-highest amount of clean-tech venture capital funding over the past two years.
• We are home to more than 1,500 clean-energy companies, an 18 percent increase since 2004.
• Denmark-based Vestas Wind Systems has made Colorado its North American manufacturing hub – good jobs for 2,500 Coloradans.
• SMA Solar is opening its first manufacturing plant outside of Germany in Colorado this summer – 700 good jobs for Coloradans.
• And last month we opened the EcoTech Institute, the nation’s first private, two-year college aimed specifically at educating and training the clean-energy workforce of tomorrow.

What does it all mean? In Colorado, the New Energy Economy has kept the recession at bay. Our unemployment rate has stayed well below the national average. We’ve been able to demonstrate that Colorado has not just a pro-business environment, but also a pro-worker environment and a pro-environment environment.

Families, businesses and institutions are realizing that a green economy means good jobs, a cleaner environment and more efficient use of energy resources. It means a sustainable future.

But we need to move quicker. Instead of talking about decades down the road, we need to be talking year. A telling T- shirt I saw on a college student recently said “How old will you be in 2050?” We have a responsibility to implement a course correction now for our nation, for our children and for our future.

Organizations like the BlueGreen Alliance and those of you here today are working shoulder-to-shoulder and leading that transformation even as we speak.

Thank you.

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The San Jose Mercury News last week reported that Whitman, seeking the Republican nomination to succeed Gov. Arnold Schwarzenegger in 2010, filed a 2008 tax return revealing a $1.15 million contribution to the campaign to preserve Telluride Valley Floor.

Anyone familiar with T-Ride knows Valley Floor is the nearly 600-acre parcel that for years was the subject of a bitter battle to either preserve it as open space or develop it in typical resort-town condo-schlock style. Whitman’s campaign swears she only contributed to its preservation after developers had received $50 million for the parcel in town condemnation proceedings.

That’s not a good enough excuse for a government land grab in the opinion of state insurance commissioner Steve Poizner, who’s also seeking the GOP nod to replace the term-limited Schwarzenegger. His campaign also pointed to Whitman’s $200,000 contribution to the Environmental Defense Fund for its work in preserving a California river delta while publicly opposing the project.

“What we see now is that Meg Whitman is a dishonest billionaire and writes huge checks to opponents of California farmers while telling campaign lies,” Poizner spokesman Jarrod Agen told the Mercury News. “Will the real Meg Whitman please stand up?”

Whitman spokesman Tucker Bounds fired back: “That statement is from a hysterical spokesman of a campaign that’s on the ropes.”

Whitman’s own website claims she’s in a dead heat in polling with the only major Democrat still in the race, former Gov. Jerry Brown.

The Telluride Watch newspaper riffed on the controversy by pointing out that being conservative and supporting conservation are not mutually exclusive. Nor is environmentalism an inherently Democratic value. This from the Watch:

“’The party is coming off of two straight election losses,’ said Jim DiPeso, policy director for Republicans for Environmental Protection, who suggested that the GOP is in the midst of trying to figure out whether it’s the ‘big tent of Ronald Reagan’ or a ‘straight jacket’ where only people who adhere to certain strict ideologies need apply.

“’Since when is it not conservative for a Republican to care about land conservation?’ he said.

“’Conservatives pioneered the conservation of open space,’ he continued, noting Republican President Theodore Roosevelt’s role in expanding the national forests, parks and wildlife refuges, and that President Herbert Hoover proclaimed the Black Canyon of the Gunnison National Monument.

“’Clearly Teddy Roosevelt knew that the protection of our natural heritage was important for keeping the country strong,’ he said.

“And not for nothing – Richard Nixon signed the Clean Air Act, the Endangered Species Act, the National Environmental Policy Act, and also established the Environmental Protection Agency, the REP website notes.”

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