Shale Energy Development U.S. and Global Implications

Transcription

1 Shale Energy Development U.S. and Global Implications

2 New and Historic Energy Direction with Shale Increasing share of U.S. natural gas production. 50%? 70%? (2040) Energy security Geopolitical Workforce E&P, manufacturing, and beyond Environmental benefits-power gen. GHG advantage over coal Strategic fit with renewables Balance of trade benefit value add Opportunity for technical innovation Research to mitigate environmental and commercial risk

3 Marcellus Center for Outreach and Research Research Down hole technical issues Above ground risk(s) Air emissions Community impacts Socio-economic Agriculture, tourism Environmental Water lifecycle impacts Workforce Business dev l Regulatory Governance

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5 Fractures and Seals Source: T. Engelder, PSU Naturally jointed or fractured shale Limestone layer frac barrier

6 Surface/Groundwater Protection

7 Sources: J. F. Kenny, N. L. Barber, S. S. Hutson, K. S. Linsey, J. K. Lovelace and M. A. Maupin Estimated Use of Water in the United States in 2005, U.S. Geological Survey, Circular 1344 Graphic update based on Pennsylvania Angler & Boater. PA Fish & Boat Commission. January/February, 2011 *Shale estimate based on 1,200 wells per year at 4.5 million gallons per well = 14.8 mgd total water demand - ~3 mdg of water reuse Ladlee, 2013 marcellus.psu.edu

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9 Marcellus Center for Outreach and Research Outreach Stakeholder engagement Elected officials NGOs Industry Regulators (training) Social License General Public 64% polled favor but A conversation about risk Translating the science Process Technologies Regulations Global experiences Current moment

10 Conveying Benefit vs. Risk What are the reasons for producing the energy Demand for all energy Economic rewards New business dev l Workforce opportunities Bridge to something else Fossil vs. renewables all the above strategy Geopolitical opportunity Energy security Balance of payments What are the risks Possible vs. probable All energy risk Well failure Water contamination Chemicals Methane Air emissions Health Gaps in research??

11 Sources of Energy & Impact Over Time

12 Unconventional Development in NE U.S.

13 Marcellus Production

14 Unconventional Gas Production in Pennsylvania

15 PA Production Declines

16 Emerging Shale Targets

17 New Transmission Projects Western Marcellus Diamond East 2-3 bcf/d addition 450 miles of new pipe PennEast 1 bcf/d 100 miles Atlantic Coast 1-2 bcf/d 550 miles

18 Trends in Impacts Health care facilities First responders Workforce dev l Institutional capacity Lag in training vs. demand skill sets Infrastructure demands Roads, bridges, rail Materials, ie. stone, pipelines Assessment of current cond. Impact of social media Commercial property Community health Available housing assessments Trained legal community Land use/planning Informed political leadership Zoning/court challenge Regulatory Public official awareness Trained inspectors

19 Emerging Utilization/LNG Export Evolving interest/emphasis on transportation Conversion of fleets, rail, marine R&D on motors, tanks, and GTLs Fueling infrastructurepublic/private Petrochemicals/Fertilizer/Pharm. $110B investment in next 3 yrs. Newly competitive in world market Fuel cell tech innovation LNG-increasing demand, competition, enviro pushback

20 Canadian Imports/Exports

21 Gas Exports to Mexico

22 Power Gen Trends Coal and NG trading spots for top U.S. power gen fuel permanent?? 9 new natural gas power plants planned in Pennsylvania 8,000 total megawatts 15% of coal gen offline by yr low in CO2 emissions mainly market driven regulatory impacts New residential heat trends 43% gas 44% electric Greater onshore production Reduced offshore extreme weather price impacts

23 Hotel Tax Collected Hotel Taxes Collected $928,433 $993,786 $854, $756, $171,903 $222,524 $269,810 $344,314 $417,718 $418,533 $456,378 $525,702 $193,882 $242,000 $345,411 $422,696 $428,406 $348, Bradford Lycoming Tioga Counties

24 PA Shale Economic Impacts According to PA Department of Labor through 2012: Approximately new 20,000 jobs in "corerelated industries (direct jobs) Approximately 200,000 jobs supported partially by industry As of 4Q 2013 PA collected: Approx. $600M total in well impact fees Estimated $800M total by 4Q 2014 Approximately $2 billion in taxes from Questions: Externalities covered? Current tax protocols correct? Larger public share? Local jobs? Trained? Durability over time? Local business growth?

25 Workforce Assessment Assessment model by academics, industry, and gov t. The direct workforce to drill a single well (lifecycle) 420 individuals working in 150 different occupations Each well requires FTE workers annually. Gas processing increases from roughly two to four FTE s for every 10 wells drilled Multi-Well pads 83% of 2011 wells drilled on a multi-well pad 75% of jobs will be technical positions On the job training Certificate or 2 year degrees Source: Pennsylvania Marcellus Shale Workforce Needs Assessment

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27 Landscape Impacts -Tourism

28 Global Lessons Comprehensive plan for potential growth Social services Medical care First responder community Transportation infrastructure roads/rail/airports Water/sewer Local jurisdiction officials training Housing needs Capacity Rents fixed incomes Cyclical nature of development NG price, pace

29 Legal issues Global Lessons Land and/or community rights Bridge fuel How long is bridge? Not drill until technology advances? or No renewables until advanced storage technologies or better PV/wind turbines Who makes the decision? Externalities Local (road impacts by gas drilling traffic) Health considerations-perceived vs. diagnosed

30 Social License Contract of trust built at local level, carried to highest jurisdictional level First with individuals, then communities, then gov t Can have: Great revenue model with gov t Robust and modern regulation Most current technology to deploy But without permission from the community, the entire process stops NY Bulgaria NS

31 Social Media Statistics show that negative comments prevail The similar voices of the world can connect easily Build large networks of grass roots effort In some cases create own set of facts Resistance began when shale gas moved into areas with more politically liberal and media savvy people Often the conversation is framed on shale energy, when argument is about something else Perception of risk Aversion to change Issues such as climate Poor understanding of science

32 Responses Understanding of current situation Changing demographics Economic conditions Clear and basic messaging on process Sense of urgency with stakeholder groups Transparency of gov t permitting/inspection Honest discussion on risks/mitigation strategies Straightforward social media presence Expanding advocates of science of drilling Third party conveyance of information Build broad credibility in community

33 Local Implications

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