GREEN
12/27/2011 01:35 pm ET | Updated Feb 26, 2012

U.S. Shale Oil Boom Fought By Green Groups

* Green groups seen slowing development

* Success in fighting pipeline energizes efforts

* Shale oil and gas industry on defensive

By Ayesha Rascoe

WASHINGTON, Dec 27 (Reuters) - A resurgent green
movement is launching a multi-pronged counter-attack against the
shale oil and gas boom in the United States that could slow,
though ultimately not stop, development.

Building upon their unexpected success in the battle against
the Keystone XL pipeline, a renewed onslaught from
environmentalists is putting the shale industry on the defensive
while adding to costs, limiting expansion and potentially
scuttling major projects.
"I think it's the totality of what's going on all
at once, that's the biggest concern," said Barclay Nicholson, a
lawyer for the Washington-based Fulbright & Jaworski law firm,
which has represented companies involved in shale development.

With new oversight pending from federal and state authorities
and lawsuits, Nicholson said critics of shale development have a
plethora of avenues to fight back.

Environmentalists, alarmed at what they see as unchecked industrialization of rural areas, say they are working to secure more regulation of the rapidly growing shale industry to protect fragile areas from damaging practices.

PIECE MEAL APPROACH

After legislation aimed at addressing climate change failed
to make it into law last year, green groups have been forced to
take a more piece meal approach to energy policy.

That strategy worked well against TransCanada's proposed
Canada-to-Texas Keystone XL pipeline, which environmentalists
successfully turned into a potent symbol of the threat of
carbon-intensive oil sands crude.

In November the Obama administration delayed the project,
once described as a "no brainer" by Canada's Prime Minister
Stephen Harper, after a wave of protests erupted in Washington
and on the campaign trail.

The decision was like a shot of adrenalin for the green
movement and groups are planning more creative and high profile
efforts to fight a range of energy projects.

Republicans in Congress maneuvered to keep
Keystone alive by including a provision in tax legislation that
would force the White House to make decision on the project
within 60 days.

But green groups have vowed to fight on and the administration has already said it cannot approve the project because of the time needed to study new routes. "For the moment we're stuck fighting one pipeline, one gas well at a time," said Bill McKibben, who rose to prominence with his staging of huge protests against Keystone and is now using his influence to attack the fracking bonanza.

FRACKING IN THE SPOTLIGHT

Oil and gas companies are using advanced drilling techniques
to unlock vast stores of shale fuel across the country, which is
bringing legions of rigs, trucks and workers to areas unused to
such activity.

The companies employ the controversial "fracking" drilling
process, that involves fracturing rock formations by shooting
vast and often secret cocktails of water and chemicals deep
underground to free a trove of hydrocarbons.

The oil and gas industry argues that the fracking technique
has been used safely for years and advances in the practice have
set off a revolution that is creating jobs and boosting U.S.
energy security.

But, environmentalists warn against downplaying their
concerns about fracking.

"I'm not sure that they really want a Keystone XL fight on
their hands, because the public is strong and they're not going
to back down on this issue," said Deb Nardone, director of the
Sierra Club's natural gas reform campaign, which formally
launched this year.

Worries about shale output have already prompted the
Environmental Protection Agency and the Interior Department to
begin crafting new regulations that address issues such as
wastewater disposal and disclosure of chemicals.

Green Groups have made headway with their appeals in New
York, where authorities have imposed a temporary moratorium on
shale drilling. Environmentalists also cheered a decision by
regulators to delay a vote on lifting a ban on shale drilling in
the Delaware River basin that affects the states of New York,
Pennsylvania, Delaware and New Jersey.

John Sachs, a director at energy investment bank
Taylor-DeJongh, said the economic and domestic energy benefits
of access to cleaner burning natural gas will ultimately win
out, but green groups may be able to make inroads in some areas.

"It may slow down some of the development in some states," Sachs said. He said such delays would not necessarily be negative for development, because it would allow industry and regulators to address some of the public concerns.

CHANGING THE MAP

American Gas Association president Dave McCurdy recently
told reporters that while there were some legitimate concerns
about development, the problems were manageable.

"None of those are going to halt the production of shale gas
in this country," McCurdy told reporters earlier this month. "It
is changing the political and economic map."

Still, the expansion of shale production has spawned dozens
of local groups and activists focused on combating development.

Scott Ely, a resident of the small town of Dimock,
Pennsylvania, very much at the epicenter of the fight over shale
production, said he is trying to spread his story.

Green groups have rallied in support of Ely and 10 other
families in Dimock that say their water was contaminated after
Cabot Oil and Gas began drilling in their area. Cabot has denied
responsibility.

"As far as the oil industry goes, this is a machine you're
probably not going to be able to stop because the world needs
its gas," Ely said in Dimock in December where supporters in a
publicity event delivered fresh water to the families. "But
because of what we did three years ago, when we started coming
out, they've already started making changes in the way they
operate."

(Reporting By Ayesha Rascoe; Editing by Bob Burgdorfer)

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