Managing the Risks of Shale Gas:

Transcription

1 R e s o u r c e s f o r t h e F u t u r e s C e n t e r f o r E n e r g y E c o n o m i c s a n d P o l i c y ( C E E P ) Managing the Risks of Shale Gas: Identifying a Pathway toward Responsible Development S h e i l a M. O l m s t e a d N o v. 1 4,

2 A new RFF study focuses on shale gas development risks Managing the Risks of Shale Gas: Identifying a Pathway toward Responsible Development Funded by the Alfred P. Sloan Foundation $1.2 million, 18 month timeline

3 New RFF shale gas study: goal and tasks Ultimate goal: Develop recommendations for regulation & voluntary action by firms to reduce risks cost-effectively. Tasks, to that end: 1. Survey experts regarding the risks of shale gas development. 2. Survey public perceptions, preferences regarding the risks and benefits of shale gas development. 3. Assess drivers of and policy levers to reduce risks. 4. Assess current and prospective regulatory landscape.

4 Early work on task #1: assessing risks from experts perspective Developing risk matrices : catalogs of potential risks associated with specific shale gas development activities. Next step: develop pathways from shale gas development activities to their impacts on human health, ecosystems, markets, and quality of life. A survey of experts (academics, private industry, NGOs, and regulators) will be developed from this work. Which risks are most salient? Can risks be ranked, relative to each other, taking uncertainty into account?

5 Overview Activities Burdens Intermediate Impacts Final Impacts Activities are the components of the shale gas development process. They encompass potential sources of risk (from clearing land to sending the produced gas to a major pipeline and to well closure and abandonment). Burdens are created by the activities, such as air pollutants, drilling fluids, noise. They potentially have impacts that matter to people. Intermediate impacts are to the air, water, soil, etc. in which the burdens first reside. Final impacts are the ultimate damage to the environment, human health, etc. Off-road vehicle activity: bulldozers emits particulates reduces air quality may have health effects, e.g., increased risks of respiratory distress

6 Activities The shale gas development process has been broken down into nine steps, which will be used to identify sources of burdens and impacts. 1 Site development and drilling preparation 6 Flowback/produced water storage/disposal 2 Vertical drilling 7 Shutting-in, plugging and abandonment 3 Horizontal drilling 8 Workovers 4 Fracturing and completion 9 Upstream and downstream activities 5 Well production and operation

7 Sources of Burdens Site development and drilling preparation Vertical drilling Horizontal drilling Fracturing and completion Well production and operation Flowback/produced water storage/disposal Shutting-in, plugging and abandonment Workovers Upstream and downstream activities After locating a site, the area must be leveled, excavated and prepared for drilling. Sources of burdens include: Storage of equipment and materials Clearing of land for roads, well pads, pipelines, evaporation ponds, other infrastructure Construction of roads, well pads, pipelines, evaporation ponds, other infrastructure On-road vehicle activity Off-road vehicle activity

8 Sources of Burdens Site development and 1 drilling preparation Vertical drilling Horizontal drilling Fracturing and completion Well production and operation Flowback/produced water storage/disposal Shutting-in, plugging and abandonment Workovers Upstream and downstream activities This drilling technique bores a single well shaft vertically into the desired formation. Sources of burdens include: Drilling equipment operation at surface Drilling of wellbore underground Casing Cementing On-road vehicle activity Off-road vehicle activity Use of surface water and groundwater Venting of methane Flaring of methane Storage of drilling fluids at surface Use of recycled drilling fluids Disposal of drilling fluids Accidental releases from wellbore (e.g. blowouts) Disposal of drill solids, cuttings

9 Burdens The activities create burdens, such as air pollutants, drilling fluids, and noise, which have impacts that people care about. Air pollutants Fracturing fluids Condenser & dehydration additives Drilling fluids & cuttings Flowback constituents Habitat & community disruptions Saline water intrusion Produced water constituents Other? 11

10 Burdens Air pollutants Habitat and community disruptions Conventional air pollutants and CO2 Volatile Organic Compounds (VOC) Methane Hydrogen Sulfide Silica Others Habitat fragmentation Industrial landscape Light pollution Noise pollution Odor Population increase Road congestion Seismic vibrations Freshwater withdrawals Stormwater flows Other

11 Impacts Intermediate impacts are to the air, water, soil, etc. in which the burdens first reside. Groundwater Surface water Soil quality Air quality Habitat disruption Community disruption Occupational hazard Final impacts are the ultimate damage to the environment, human health, etc. Human health impacts Morbidity Mortality Market impacts Agriculture Tourism Water-using industries Other Ecosystem impacts Biodiversity loss Endangered species Other species population change Other Climate change impacts Quality of life impacts Recreation Aesthetics Time loss Other

12 Creating Impact Pathways Activities Burdens Intermediate Impacts Final Impacts Site development and drilling preparation Vertical drilling Horizontal drilling Fracturing and completion Well production and operation Air pollutants Drilling fluids and cuttings Saline water intrusion Fracturing fluids Flowback constituents (other than fracturing fluids) Groundwater Surface water Soil quality Air quality Habitat disruption Community disruption Human health impacts Market impacts Ecosystem impacts Climate change impacts Quality of life impacts Flowback and produced water storage/disposal Produced water constituents Occupational hazard Shutting-in, plugging and abandonment Condenser and dehydration additives Workovers Upstream and downstream activities Habitat/community disruptions Other 14

13 Creating Impact Pathways Activities Burdens Intermediate Impacts Final Impacts Site development and drilling preparation Storage of equipment and materials Clearing of land for roads, well pads, pipelines, evaporation ponds, other infrastructure Construction of roads, well pads, pipelines, evaporation ponds, other infrastructure On-road vehicle activity Off-road vehicle activity

14 Creating Impact Pathways Activities Burdens Intermediate Impacts Final Impacts Site development and drilling preparation Storage of equipment and materials Clearing of land for roads, well pads, pipelines, evaporation ponds, other infrastructure Construction of roads, well pads, pipelines, evaporation ponds, other infrastructure On-road vehicle activity Off-road vehicle activity Air pollutants Drilling fluids and cuttings Saline water intrusion Fracturing fluids Flowback constituents (other than fracturing fluids) Produced water constituents Condenser and dehydration additives Habitat/community disruptions Other

15 Creating Impact Pathways Activities Burdens Intermediate Impacts Final Impacts Site development and drilling preparation Storage of equipment and materials Clearing of land for roads, well pads, pipelines, evaporation ponds, other infrastructure Construction of roads, well pads, pipelines, evaporation ponds, other infrastructure On-road vehicle activity Off-road vehicle activity Air pollutants Conventional air pollutants and CO2 o Volatile Organic Compounds (VOC) Methane Hydrogen Sulfide Silica Others Habitat/community disruptions Habitat fragmentation Industrial landscape Light pollution Noise pollution Odor Population increase Road congestion Seismic vibrations

16 Creating Impact Pathways Activities Burdens Intermediate Impacts Final Impacts Site development and drilling preparation Storage of equipment and materials Clearing of land for roads, well pads, pipelines, evaporation ponds, other infrastructure Construction of roads, well pads, pipelines, evaporation ponds, other infrastructure On-road vehicle activity Off-road vehicle activity Air pollutants Conventional air pollutants and CO2 o Volatile Organic Compounds (VOC) Methane Hydrogen Sulfide Silica Others Habitat/community disruptions Habitat fragmentation Industrial landscape Light pollution Noise pollution Odor Population increase Road congestion Seismic vibrations Groundwater Surface water Soil quality Air quality Habitat disruption Community disruption Occupational hazard 18

17 Creating Impact Pathways Activities Burdens Intermediate Impacts Final Impacts Site development and drilling preparation Storage of equipment and materials Clearing of land for roads, well pads, pipelines, evaporation ponds, other infrastructure Construction of roads, well pads, pipelines, evaporation ponds, other infrastructure On-road vehicle activity Off-road vehicle activity Air pollutants Conventional air pollutants and CO2 o Volatile Organic Compounds (VOC) Methane Hydrogen Sulfide Silica Others Habitat/community disruptions Habitat fragmentation Industrial landscape Light pollution Noise pollution Odor Population increase Road congestion Seismic vibrations Groundwater Surface water Soil quality Air quality Habitat disruption Community disruption Occupational hazard Human health impacts Market impacts Ecosystem impacts Climate change impacts Quality of life impacts

18 Creating Impact Pathways Activities Burdens Intermediate Impacts Final Impacts Site development and drilling preparation Storage of equipment and materials Clearing of land for roads, well pads, pipelines, evaporation ponds, other infrastructure Construction of roads, well pads, pipelines, evaporation ponds, other infrastructure On-road vehicle activity Off-road vehicle activity Air pollutants Conventional air pollutants and CO2 o Volatile Organic Compounds (VOC) Methane Hydrogen Sulfide Silica Others Habitat/community disruptions Habitat fragmentation Industrial landscape Light pollution Noise pollution Odor Population increase Road congestion Seismic vibrations Groundwater Surface water Soil quality Air quality Habitat disruption Community disruption Occupational hazard Human health impacts Morbidity Mortality Climate change impacts Quality of life impacts Recreation Aesthetics Time loss Other

19 Creating Impact Pathways Activities Burdens Intermediate Impacts Final Impacts Morbidity On-road vehicle activity Conventional air pollutants and CO2 Noise pollution Air quality Community disruption Climate change impacts Aesthetics Road congestion Time loss

20 Impact pathway development: an interdisciplinary process The RFF team: several economists, one lawyer, one environmental engineer, research assistants Input from physical scientists who are consultants on the project (our panelists). Survey, itself, will tap an even broader range of expertise.

21 Early work on task #3: understanding risk drivers Some of this work will wait for results of expert and public surveys, so that we analyze drivers of risks identified as most salient (to both experts and public). Given 18-mo. project timeline, have started in two directions: Major data collection effort to support eventual empirical analyses of risk drivers Early focus on surface water quality impacts in Marcellus (PA/NY)

22 Shale gas wells, WWTPs, and water quality monitors in PA Marcellus

23 Surface water quality analysis, cont. Statistical analysis of relationships between: occurrence of surface water contaminants (e.g., TSS, TDS, Chloride) at monitors; and density of shale gas wells in a monitor s sub-watershed, shipments of waste to private and municipal WWTPs upstream. Statistical analysis of factors that may be driving these relationships, if any: well characteristics waste shipment characteristics firm characteristics regulatory environment

24 Several other analyses planned, with other topics TBD after surveys Would like to do similar analysis for groundwater, but haven t identified a large-n database of groundwater quality monitors (need pre- and post- drilling) Local road wear and tear/damage Air quality

25 Unique contributions of RFF study Focus on behavioral aspects of shale gas development risks How individuals assess risks and benefits How behavior of firms, well operators affect risks How regulations have affected risks to date and might do so costeffectively in the future Analysis of public preferences and perceptions Structured economic survey will simulate tradeoffs between risk reduction (firms, regs) and higher costs. Informs monetization of potential benefits of regulation/ voluntary actions by firms, to be balanced against costs.