Jamie L. Jost and Jill D. Dorancy 2017-12-07 15:53:31
As oil and gas development begins to occur closer to residential communities and as individuals begin to move closer to existing oil and gas development, assessing the social impacts of oil and gas operations can play a larger role in building stakeholder participation and involvement and strengthening the relationship between the oil and gas industry and the public. Even if an actual assessment is not completed, utilizing the tools of a social impact assessment allows for more efficiency in the development process, provides more relevant information for regulators, policy and decision-makers, and allows for more inclusion of stakeholder interests. In addition, utilizing social assessment tools can be an effective means to build understanding, trust, and relationships between project proponents and affected stakeholders, including local governments and their citizens. Oil and Gas Development Oil and gas development is generally defined as any field activity or operation associated with the exploration, production, processing, treatment operations, or transmission facilities, including activities necessary to prepare a site for drilling and for the movement and placement of drilling equipment. Many oil and gas operators are primarily utilizing horizontal drilling to maximize hydrocarbon production. Horizontal drilling is a process in which the well is turned horizontally at depth. It is normally used to extract hydrocarbons from a source that runs horizontally, such as a layer of shale rock. The benefit to drilling at an angle as opposed to vertical is that horizontal wells can hit targets, deliberately intersect fractures, construct relief wells and stimulate reservoirs in ways that simply cannot be achieved with a vertical well. In these cases, the ability to accurately steer the well in directions and angles that depart from the vertical well is valuable. Perhaps the most important role that horizontal drilling has played is in development of the natural gas shale plays. With technological advances, hydraulic fracturing is now widely used to initiate oil and gas production in unconventional oil and gas formations that were previously uneconomical to produce. Hydraulic fracturing is done after a well is drilled and involves injecting large volumes of water, sand (or other proppants), and specialized chemicals under enough pressure to fracture formations holding the oil or gas. The pressure from injection results in a network of interconnected fractures, held open by the proppant which allows the oil or gas to flow freely out of the formation and into production casing. In combination with horizontal drilling, the application of hydraulic fracturing in the extraction of natural gas from tight gas sands and unconventional shale formations has resulted in the marked expansion of estimated U.S. natural gas reserves and production in recent years. This rapidly increasing and geographically expanding use of this well stimulation process also creates flexibility for locating infrastructure with horizontal drilling in ways that can reduce a variety of impacts, but has led to calls for greater oversight and more research on its potential impacts to surrounding communities. In certain cities and counties in Colorado, the residents are not in favor of development in their communities and have raised lack of stakeholder participation among their concerns with the industry. Guidance for Developing Socially There is a wide range of issues that operators face when making decisions about the social investment that early engagement can and should address. Oil and gas development can be viewed by surrounding communities as a double-edged sword. Oil and gas development is portrayed as both benefitting companies, governments and communities by providing essential energy for societal development, while at the same time being criticized as a detriment to the environment and social life. Although oil and gas development presents challenges to local communities, it can also be considered acceptable when any potential negative effects are resolved quickly and efficiently and when socioeconomic benefits contribute to the well-being of the local community. The key factor is engaging the public and local governments early enough to encourage healthy communication and meaningful participation. The benefit to early engagement with local communities is that it continues the momentum within the industry to support stakeholder participation with the goal to analyze, monitor and manage the social aspects and consequences of development, particularly in residential communities, leading to a more efficient and more promising relationship between the industry and the public. Using Local Governments Assessing the social impacts on communities is equally important as assessing the environmental and health impacts of oil and gas development. These assessments can assist in ensuring the transparency of decision making. Further, by using a participatory process, engaging stakeholders can lead to better decision-making by incorporating local knowledge of the land use process and parameters. Strengthening the relationship between the industry and the public requires several different approaches. Using local governments as a conduit to their respective communities and viewing them as stakeholders is the first step in ensuring a healthy relationship. Stakeholder dialogue and perspectives can help to ensure that the information is relevant, accessible and credible. Although local governments have been preempted by some state laws from enacting ordinances that seek to ban fracking within their city limits, operators can find that local government feedback may provide valuable insight on land use strategy, governance and approach. Local governments also provide essential information regarding the make-up of the population with respect to socioeco-nomics, education and other community aspects. They can address issues relating to social and physical infrastructure, land uses, available resources and property with cultural, historical or religious significance that may impact the location of a project. Defining the Stakeholders The relevant stakeholders for purposes of this article is the community where the development is proposed. These are people likely to be affected by the project or who can impact the project such as local governments or representatives of local communities. Generally, much of the determination of who and how many people will be affected are identified by state rules and regulations. For example, in Colorado, the Oil & Gas Conservation Commission rules identify who is entitled to notice of a particular development project and the setbacks of oil and gas locations from residential building units. Providing Relevant Information Operators should provide relevant information that will meet the needs of the community, and articulate the operator’s vision and strategy in a manner that is clear, understandable and coherent. Disseminating information results in enhanced trust and credibility and creates value for the communities. Explaining an operator’s principles and policy commitments regarding safety and reliability of operations, innovation and technological solutions, care for the environment and communities as a proactive stance to development produce better development outcomes. Further, assisting stakeholders to identify development goals and ensuring that positive outcomes are maximized, can often be more important than minimizing harm from negative impacts. Providing a Forum for Dialogue and Investment Stakeholders engaged in the process benefit by being given access to the operator to express their views and give suggestions in the decision-making process as a result of effective consultation. The operators and community members can identify opportunities for economic development and use of local resources through the supply of goods and services from the stakeholders—thereby giving the stakeholders a sense of involvement and investment in the project. These forums may include, for example, neighborhood or community meetings, regularly scheduled telephonic or in-person meetings with key stakeholders, or a dedicated email address for comments and suggestions regularly checked and responded to by an operator representative. Facilitating Stakeholder Engagement Consultation is one of the most effective methods of facilitating stakeholder engagement. It allows operators to make local communities aware that the information sought is for the purpose of mitigating future impacts, identifying opportunities for improvements as well as maximizing project benefits with action plans. Consultation also helps to ensure that no relevant groups are excluded and that meaningful discussions occur to develop culturally appropriate and effective engagement with relevant groups. Once potential social issues are identified, operators and key stakeholders can work together to analyze land use impacts, health, safety, environmental and community objectives and identify potentially affected groups. Conclusion Oil and gas development projects can generate anxiety and fear in communities and, in many instances, the unknown, perceived impacts anticipated from the planned development are greater than the actual impact. As such, how the operator introduces itself to the community where it plans to develop has the potential to determine the strength of the relationship for years to come. Ultimately, identifying the actual impact is significant, but incorporating the perspectives of local governments and communities can increase effectiveness in decision- making, create positive relationships and promote successful and sustainable oil and gas development for the community, state and nation. Jamie L. Jost is the Founder and Managing Shareholder of Jost Energy Law, P.C. where she focuses primarily on matters relating to exploration, development and production of oil and gas, as well as local, state, and federal permitting and regulatory issues in the Rocky Mountain Region. In addition, she assists clients with legislative and policy strategy planning, land and mineral title and due diligence, and eminent domain matters. Jamie received her J.D. from the University of Wyoming and her undergraduate degree, cum laude, in Environmental Science and Industrial Hygiene from Indiana State University. She is a member of the Colorado Bar Association, Wyoming Bar Association, New Mexico Bar Association, the U.S. District Court of Colorado, the U.S. District Court of Wyoming, and the 10th Circuit Court of Appeals. Jamie practices in front of the Colorado Oil & Gas Conservation Commission, the Wyoming Oil & Gas Conservation Commission, the New Mexico Oil Conservation Division, as well as federal and state courts on various energy issues. Jill D. Dorancy is Senior Counsel at Jost Energy Law, specializing in oil and gas regulatory matters and energy-related litigation. She enjoys helping oil and gas companies navigate local, state and federal regulations. Prior to this position, she was a Hearings Officer for the Colorado Oil and Gas Conservation Commission. In that capacity, she reviewed and presided over matters involving spacing, pooling, exception locations, unitizations and other oil and gas regulatory matters. She earned her J.D. from the University of New Mexico School of Law and her Bachelor’s degree from Binghamton University. She holds a certificate in Petroleum Land Management from the University of Denver, Daniels College of Business and is certified as an Environmental Sustainability Professional through the Institute for Sustainable Infrastructure. She is admitted to the bars of Colorado, New Mexico, Maryland, and the U.S. District Court for the District of Colorado.
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