Eastern Section Meeting

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Hydraulic Fracturing: Public Image and Strategies to Maintain a Social License


Unconventional oil and gas plays are typified by regionally-extensive wellpads hosting multiple horizontal wells each undergoing hydraulic fracture stimulation. Over the project life, thousands of wells may be drilled and completed. In host communities, generations of residents may be impacted by traffic, site development, and operations. As a result, there has been a very public discussion of the impacts of unconventional operations generally and the process of hydraulic fracture stimulation specifically. In the current communications environment, public opinion tends to evolve rapidly by reacting to different stimuli. Specific to unconventional oil and gas operations, hydraulic fracture stimulation is the lightning rod for many in the public. This has led to regulatory response in a number of jurisdictions, usually through a tightening of the rules. A recent report projects that the cost of a typical shale gas well may increase by 7% to address tighter regulation. For some operators, the cost may be higher due to delays from moratoria or outright bans. In response to concerns, many operators are developing corporate social responsibility (CSR) plans. Unfortunately, these plans are not followed which undermines the company's public image. To truly gain the social license to operate, firms needs to incorporate an integrated systems approach to meeting the expectations of communities and governments. Geologists are an important part of this process. Rather than a cost, this approach can reduce the bottom line by increasing organizational efficiency and reducing development delays. Given the multi-decadal relationship between operations and the communities, a proactive CSR program can go a long way towards meeting community expectations during the project lifecycle. Ultimately, firms can achieve their business objectives while meeting their social commitments.