Chevron, Green Groups Agree Set Standards for Shale Gas

Chevron Corp. (CVX) joined natural gas producers and environmental groups to form an independent center that will set standards for drilling by hydraulic fracturing in the U.S. Appalachian region.

Gas output in Pennsylvania, Ohio and West Virginia is booming as drillers unlock shale deposits using the process, also called fracking, that shoots water, sand and chemicals underground to crack rock and free trapped gas. The process has spurred complaints from landowners and environmental groups about increased air pollution and water contamination.

“Shale gas has transformed our nation’s energy mix, while both offering environmental benefits and posing serious environmental challenges,” Fred Krupp, president of the Environmental Defense Fund, a group that's part of the venture, said today in a statement.

The Center for Sustainable Shale Development, being formed today in Pittsburgh, will provide independent evaluations of gas producers that join the effort. The center’s standards will limit flaring, encourage maximum water recycling and reduce the toxicity of the fracking fluid.

Domestic production of natural gas has boosted the U.S. economy by lowering the cost of the fuel used in manufacturing. The Marcellus Shale, which runs along the Appalachian Mountains from New York to Virginia, is the nation’s largest-producing gas field, according to energy company Range Resources Corp. (RRC)

Industry groups for chemical, fertilizer and steel companies are touting economic gains as natural gas supplies become more accessible. Low-cost natural gas could generate $72 billion in capital investment as petrochemical companies relocate or boost investments in the U.S., according to the American Chemistry Council.

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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