Natural Gas from Shale: Potential Economic, Community, Environmental, and Health Implications

Transcription

1 Natural Gas from Shale: Potential Economic, Community, Environmental, and Health Implications Aimee Curtright Ph.D. Physical Scientist RAND Corporation, Pittsburgh, PA Ohio Grantmakers Forum March 2, 2012 The opinions and conclusions expressed in this presentation are the author s alone and should not be interpreted as representing those of the RAND Corporation or its clients. Contents of this briefing should not be distributed, cited, or quoted.

2 RAND's Mission Is to Help Improve Policy and Decisionmaking Through Research and Analysis RAND is an independent, non-partisan, nonprofit research institution Our findings reach key decisionmakers and the general public and contribute to significant changes in policy and practice Our work addresses issues at or near the top of the national policy agenda RAND works in a number of policy areas, including energy and environment 2

3 Purpose of Today s Discussion Provide background and context for the shale gas debate Discuss the potential opportunities, concerns, and risks associated with extracting and using natural gas from shale deposits in the U.S. Present information you can use and generate a good conversation 3

4 Agenda for Today s Discussion Potential benefits of using natural gas Basics of extracting natural gas from shale formations Potential economic benefits and costs of shale gas development Potential environmental and health impacts of shale gas development What are the remaining questions? 4

5 Agenda for Today s Discussion Potential benefits of using natural gas Basics of extracting natural gas from shale formations Potential economic benefits and costs of shale gas development Potential environmental and health impacts of shale gas development What are the remaining questions? 5

6 Natural Gas Is A Domestic, Cleaner Burning Fossil Fuel The U.S. has a large domestic resource of natural gas The U.S. has existing infrastructure for natural gas Widely used for heating in some regions Provides about 20% of electricity Infrastructure for use in cars and trucks is not widespread natural gas can t substitute for petroleum without infrastructure change Natural gas is relatively clean to burn for energy Half the greenhouse gas emissions of coal Much lower criteria pollutants, e.g., sulfur, particulate matter (PM), than coal 6

7 Agenda for Today s Discussion Potential benefits of using natural gas Basics of extracting natural gas from shale formations Potential economic benefits and costs of shale gas development Potential environmental and health impacts of shale gas development What are the remaining questions? 7

8 Regional Shale Formations of Interest Image source: 8

9 Regional Shale Formations of Interest Image source: Image source: 9

10 Geology of Conventional Gas and Shale Gas 10

11 Activities at a Typical Shale Gas Extraction Site 11

12 Aerial View of Development of a Well Pad Image source: 12

13 Site Ready for Hydraulic Fracturing 13

14 What s Different About Extracting Natural Gas from Shale in Ohio? Western Marcellus and Utica Shales have wet gas Natural gas liquids, e.g., ethane, propane, butane Historically low prices for natural gas (methane) have increased the importance of liquid value Ohio has geology appropriate for disposal of wastewater by injection PA has limited sites for wastewater injection, has moved to wastewater reuse Potential advantage of Ohio shale development Earthquakes are a concern 14

15 Agenda for Today s Discussion Potential benefits of using natural gas Basics of extracting natural gas from shale formations Potential economic benefits and costs of shale gas development Potential environmental and health impacts of shale gas development What are the remaining questions? 15

16 Potential Benefits and Costs of Shale Gas Extraction Benefits Jobs, short- and long-term Direct and indirect economic activity for both companies and individual landowners Tax revenue: direct ($0.025 per thousand cubic feet + $0.005 for conservation fund) and indirect Costs Infrastructure: damage to roads and bridges, additional roads and pipelines Increased demand on public services/resources Other public impacts: traffic, aesthetic damage Safety 16

17 Some Estimates of Economic Benefits For Pennsylvania, Penn State estimated direct benefits from the natural gas industry: $11.2 billion in regional GDP in 2011 $1.1 billion in PA tax revenue in 2011 Creation of about 140,000 jobs since 2009 Anticipated 20,000 to 30,000 additional jobs between 2011 and 2014 Value of the total U.S. technically recoverable shale gas resource, 480 trillion cubic feet (Tcf): Today at $2.50/mcf: $1.2 trillion value In 2008 at $10+/mcf: $4.8+ trillion value 17

18 Potential Environmental, Community, and Health Impacts from Shale Gas Extraction Water resources: use of freshwater Water pollution: leaks, spills, disposal Air pollution: fracturing fluids, diesel emissions Habitat disruption Other public adverse impacts: noise, light 18

19 Some Potential Health Impacts: Water Fracturing fluid contains ~98+% water and sand, plus ~1% chemicals Not toxic at this concentration, but chronic effects of many are not known Includes known and suspected carcinogens and chemicals regulated in the Safe Drinking Water Act for their risks to human health Produced water (10-30%) also contains naturally occurring chemicals found in the shale Total dissolved solids or TDS (mostly salts) can be 3 to 600+ times the maximum in the Safe Drinking Water Act for human consumption Naturally occurring radioactive materials, metals 19

20 Some Potential Health Impacts: Air Volatile organic fracturing fluid additives may leak or evaporate from tanks, ponds 1000s of heavy truck trips, pumps, compressors, fueled with diesel Pollutants in diesel exhaust include: PM, SO 2, NO x Well-known negative effects on property, aesthetics, environment, and health Health: premature mortality and morbidity (e.g., chronic bronchitis, asthma) Clear negative health impact near extraction, potential positive impact with fuel substitution at point of use net effect is uncertain 20

21 Agenda for Today s Discussion Potential benefits of using natural gas Basics of extracting natural gas from shale formations Potential economic benefits and costs of shale gas development Potential environmental and health impacts of shale gas development What are the remaining questions? 21

22 What Are the Remaining Policy Questions? Costs and benefits What are the costs and benefits? Who bears the burden or reaps the rewards? Water How likely are leaks and spills? How can they best be minimized? Remediated? How dangerous are the added and natural chemicals in hydraulic fracturing wastewater? How can the wastewater be treated? How much will it cost? Who will treat it? Air: What are the net effects on air quality from increased extraction and use of natural gas? 22

23 Additional Resources General: d=the-truth-about-fracking Economics and tax issues specific to Ohio: On Ohio earthquakes: hio-earthquake-likely-caused-by-fracking 23

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