On The Road to Sustainable Development: Improving Environmental Regulation of China s Shale Gas Development

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1 On The Road to Sustainable Development: Improving Environmental Regulation of China s Shale Gas Development Jingjing Li Climate and Energy Policy Program Natural Resources Defense Council(NRDC) December 4, 2015

2 Composition of China s Energy Consumption in 2014 石油, 17.10% 天然气, 5.70% 一次电力及其他能源, 11.20% 煤炭, 66.00% 煤炭石油天然气一次电力及其他能源

3 Road to the Environmentally-Friendly Development of Shale Gas Recognize the environmental risks Improve the legal system Implement strict environmental management Encourage society to play a role in supervision Environmentally -Friendly Development

4 1. RECOGNIZE THE ENVIRONMENTAL RISKS

5 1.1 Recognize and Analyze the Total Environmental Impact Data Source: Global Shale Gas Development: Water Availability and Business Risks PAUL REIG, TIANYI LUO, AND JONATHAN N. PROCTOR WRI.ORG

1.2 Environmental Impact Table Assessment of Contents Strategy for Shale Gas Relevant Departments: Ministry of Environ mental Protection, National Energy Admini stration, Ministry of Land and

6 1.2 Environmental Impact Table Assessment of Contents Strategy for Shale Gas Relevant Departments: Ministry of Environ mental Protection, National Energy Admini stration, Ministry of Land and Resources, Ministry of Water Resources, China Earthq uake Administration. Develop a joint environmental impact asses sment strategy for shale gas resources Consider ecology, environment, water reso urces, soil quality, population density, and disaster risk to create overall environmental and resource limitations

7 2. IMPROVE THE LEGAL SYSTEM USED TO REGULATE SHALE GAS

US Shale Gas Environmental Regulation: Legal System

A ct, Clean Water Act, Resource Conservation and

Ambient Air Quality Standards, Poll utant Emission

Comprehensive Env ironmental Response, Compensation

Impact Assess ments National Environmental

unregulated areas need to b e strengthened Implement

for Oil an d Gas Development, Permitting Establish

Regulation: States are strengthening and rev ising

8 US Shale Gas Environmental Regulation: Legal System Federal Level Water Quality Regs Safe Drinking Water A ct, Clean Water Act, Resource Conservation and Recycling Act Air Quality Regs Clean Air Act, Ambient Air Quality Standards, Poll utant Emission Standards Environmental Emerge ncy Response Comprehensive Env ironmental Response, Compensation and Liability Act Env. Impact Assess ments National Environmental Protection Act Some important exemptions and unregulated areas need to b e strengthened Implement Federal R egulations State Level Set State Standards for Oil an d Gas Development, Permitting Establish state plans States Play a Key Role in Oil a nd Gas Regulation: States are strengthening and rev ising regulations River Basin Commissions and Local Government Follow federal and state regulations Can establish additional regulations

$US Shale Gas Environmental Regulation: State Permits States use oil and gas well and fracking permits and environmental permits to regulate environmental impacts and ensure standards are met,$

9 US Shale Gas Environmental Regulation: State Permits States use oil and gas well and fracking permits and environmental permits to regulate environmental impacts and ensure standards are met, including: Oil and gas well drilling permits/hydraulic fracturing permits Environmental permits (water use permits, waste water permits, air emission permits, underground wastewater injection, stormwater discharge permits, oil-based drilling fluid/mud and solid waste discharge permits, etc.)

China Shale Gas Environmental Regulation: Players and Roles National Level Laws and Technical Guidelines Environmental

Guidelines for Land-Based Oil and Gas De velopment Projects, Oil and Gas Development Pollution Prevention Technology Policy

development Industry Level Standards, rules, and recommended practices Enterprise Level Corporate Health, Safety, and

10 China Shale Gas Environmental Regulation: Players and Roles National Level Laws and Technical Guidelines Environmental Protection Law, Mineral Resource Law, Water P ollution Law, Air Pollution Law, Environmental Impact Assess ment Law EIA Guidelines for Land-Based Oil and Gas De velopment Projects, Oil and Gas Development Pollution Prevention Technology Policy Local Level Local Level Regulations Regulations for environmental protection for land-based oil and gas exploration and development Industry Level Standards, rules, and recommended practices Enterprise Level Corporate Health, Safety, and Environment (HSE) standards In practice Shale gas regulation in China characterized by: 1. EIAs as the Gateway for Entry 2. Oil and Gas Companies Self Management

Environmental Impact Assessments Are Not Yet Playing An Effective Role Legal Basis Environmental Protection Law (amended in 2014) Environmental Impact Assessment Law EIA Type Construction Project EIA

the same time as the EIA is being conducted Projects may be broken into smaller parts so that EIAs can be approved at a lower level Shale gas development areas have not publicly released larger-scale

11 Environmental Impact Assessments Are Not Yet Playing An Effective Role Legal Basis Environmental Protection Law (amended in 2014) Environmental Impact Assessment Law EIA Type Construction Project EIA Category List List of Construction Projects Directly Approved by Mi nistry of Environmental Protection (2009) Shale gas projects require EIAs, but only on a per-well basis Development may occur at the same time as the EIA is being conducted Projects may be broken into smaller parts so that EIAs can be approved at a lower level Shale gas development areas have not publicly released larger-scale strategic/plan EIAs Technical Guidelines Shale Gas-Specific EIA Guidelines and Related Pollutant Control Standards do not exist At present, EIAs follow the Land-Based Oil and Gas Development Project EIA Technical Guidelines, which do not specify shale-gas/fracking specific concerns.

12 2.2.3 Environmental Management of Shale Gas Will Need Unified Standards and Effective Supervision The entrance of unconventional oil & gas companies and private capital will require a unified set of standards and guidance from t he central government Unconventional oil & gas companies and private enterprises don t under stand the substantial risk that shale gas poses to the environment Environmental supervision at drilling sites is not in place There aren t professional third-party groups that can supervise the entir e drilling process at each well

2.3 Establishing and Improving E nvironmental Table of Contents Management and L egislation Guidelines for shale gas environ mental impact assessments

13 2.3 Establishing and Improving E nvironmental Table of Contents Management and L egislation Guidelines for shale gas environ mental impact assessments Standards for shale gas pollutant emissions Provisional measures for environ mental management of shale gas Publication of the contents of hy draulic fracturing fluids

14 3. IMPLEMENT STRICT ENVIRONMENTAL MANAGEMENT MEASURES

15 Environmental Management is Needed for All Parts of the Drilling Process

16 4.3 Implement Strict Supervision f or Table the Entire of Contents Process of Shale Gas Development Exploration and site selection phase Availability of water resources Safe setback distances Environmental baseline testing

17 4.3 Implement Strict Supervision f or Table the Entire of Contents Process of Shale Gas Development Drilling Well casing and cement integrity Cement depth Well casing and cement monitoring

$4.3 Implement Strict Supervision f or the Entire Process of Shale Gas Table of Contents Development Fracturing Water procurement Publication of fracking chemicals Storage,$

18 4.3 Implement Strict Supervision f or the Entire Process of Shale Gas Table of Contents Development Fracturing Water procurement Publication of fracking chemicals Storage, treatment, and handling of fracking fluid Water storage pools/tanks Water recycling Underground injection Reduction of methane emissions from well sites (using green methods)

19 4.3 Implement Strict Supervision f or Table the Entire of Contents Process of Shale Gas Development Plugging abandoned wells Wellbore plugging Site restoration Safety markings Tracking system

20 4. SOCIETAL SUPERVISION OF SHALE GAS UNDER THE NEW ENVIRONMENTAL LAW

4.4 Societal Supervision of Shale Gas Table Under of Contents the New Environment al Law Obtain environmental information Publish all environmental reports Participate in

21 4.4 Societal Supervision of Shale Gas Table Under of Contents the New Environment al Law Obtain environmental information Publish all environmental reports Participate in environmental protection Public participation in environmental impact assessments Supervise environmental protection Report pollution behavior Environmental public interest legislation

22 ESTABLISH A COMPREHENSIVE SHALE GAS PILOT AREA AND IMPLEMENT INTERIM ENVIRONMENTAL REGULATIONS, DRAFT STANDARDS, AND ENVIRONMENTAL TECHNOLOGIES WITHIN PILOT AREA.

23 THANK YOU 李晶晶

China s Natural Gas Industrial Policy and Reform

China s Natural Gas Industrial Policy and Reform LIU Hong Deputy Director General of Oil and Gas Department 15 th November 2017 CONTENT I. The Status Quo of Natural Gas Industry in China II. The Prospects