Frank Clemente Ph.D.Professor of Social SciencePenn State University

1

Shale Gas: Environmental reality is a rapidly growing shadow

Note: This work is solely the responsibility of the author and presented totally independent from Pennsylvania State University

“there is virtually no federal regulation of hydraulic fracturing…”Henry Waxman and Edward Markey, U.S. Congress, 2010 (1)

Why Shale Gas Production Will Not Meet Expectations:

1. Methane releases from gas production invalidate the argument that “gas is 50% cleaner than coal”. Methane is 72-times more powerful than CO2 over any 20 year period—the correct time frame for shale gas development and production. (9 ,19)

1. Hydraulic fracturing has impacts on clean water supply and creates a stream of hazardous liquid and solid waste that requires disposal

1. Drilling will be restricted in the watershed of major cities—e.g. New York and Philadelphia--areas geographically isomorphic to major shale gas reserves.

1. Constraints on hydraulic fracturing on federal lands including the national forests –also areas geographically isomorphic to shale gas reserves

1. A 70% first year decline rate creates a never-ending treadmill of drilling that results in the “industrialization “ of rural areas---which are starting to rebel

1. Hydraulic fracturing is likely to soon be subject to the Safe Drinking Water Act –significantly raising the cost of production as well as reducing areas to drill

2

Say What ?

“Benzene and toluene are not used in fracturing operations” Independent Oil and Gas Association of NY (23)

“the companies (used) other chemicals in their fracturing fluids– such as benzene, toluene…and xylenes,” Henry Waxman and Edward Markey, U.S. Congress, 2010 (1)

“State regulators and community groups have linked shale gas hydraulic fracturing operations to water contamination in many states, and reports of contamination are increasing” Sierra Club testimony, 2010 (15)

?

?“Industry has proven it can develop shale plays safely” Natural Gas Supply Association (13)

“Based on the latest science and available technology horizontal drilling/high-volume hydraulic fracturing pose an unacceptable threat to the NYC water supply and cannot safely be permitted within the NYC watershed” Department of Environmental Protection—NYC, 2010 (20)

Catskill/Delaware Watersheds

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Why New York State Placed a Moratorium on Shale Gas Drilling

“Every activity in natural-gas drilling poses a risk to the water supply” Paul Rush, New York City Deputy Commissioner of Water Supply (2)

"Benzene is a high-risk carcinogen and was found in nearly half of all flowback waters ...(at) nearly 100 times the maximum contaminant level (5 μg/L) established by the EPA” NY State Water Resources Institute (38)

“the risk to clean, fresh water from gas hydrofracing in the New York City watershed is widely acknowledged, but the rest of New York is similarly at risk and deserves equal protection… the ability to drink the water from a private well or irrigate farmland may be taken for granted until it’s gone” Sierra Club, Atlantic Chapter (3)

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"Industrialization" of rural New YorkThe multiplicative difference between

one well and the eventual build out (20)

One well becomes 6,000

160 tons of chemicals expands toone million tons of chemicals

1,200 truck trips escalates to 7,200,000 truck trips

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“Because of the vast volumes of water utilized in hydraulic fracturing, 1 percent concentration of chemical additives to the fracking fluids results in 160 tons of “chemistry” [per well] ; some of it benign, some of it hazardous, and much of it unknown and undisclosed”

“Cumulatively, hundreds of tons per day of fracturing chemicals into the watershed over a period of several decades is unacceptable for a public water supply”

“Disposal options are further complicated by elevated levels of radioactivity in the wastewater”

“hydrofracturing and gas well operations will produce an industrial-strength waste stream”

Department of Environmental Protection– NYC: Shale gas, industrial waste and the watershed (20)

We need improved monitoring of methane releases from gas production

Methane Emissions from Gas and Oil Systems are greatly under reported by inspectors due to lack of infra-red equipment

Naked eye Infra-red (42)

• Methane is such a powerful GHG that it “is responsible for 75% as much warming as carbon dioxide measured over any given 20 years” (19)

• Natural gas is the source of 60% of all energy related methane emissions (coal = 28%) (30)

• Regulatory agencies are woefully behind the technological curve. New infrared cameras to find methane emissions cost $106,200 each. The Texas Commission on Environmental Quality has two such cameras to inspect over 85,000 wells plus an extensive infrastructure ranging from pipelines to compressors to storage facilities. (47)

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1. “Natural gas is being widely advertised and promoted as a clean burning fuel that produces less greenhouse gas emissions than coal …society should be wary of claims that natural gas is a desirable fuel in terms of the consequences on global warming”

1. “comparing the total emissions of greenhouse gas emissions from (hydraulic fractured) natural gas suggests that they are 2.4-fold greater than are the emissions just from the combustion of the natural gas”

1. “The leakage of methane gas during production, transport, processing, and use of natural gas is probably a far more important consideration.. Since methane is such a powerful greenhouse gas…even small leakages of natural gas to the atmosphere have very large consequences on global warming”

1. “total emissions from coal are probably quite similar to those for natural gas obtained from shale formations such as the Marcellus Shale”

Robert W. Howarth Atkinson Professor of Ecology & Environmental Biology, Cornell University

Shale gas is not 50% cleaner than coal:Methane Emissions from Shale Gas Cannot Continue to Be Ignored

From Cornell University, April, 2009:

(9)

Water and Shale Gas

10BRINE PIT (37)

Water Footprint of Shale Gas

Up to 7 million gallons of water per well (24)

320,000 pounds of chemicals per well (20)

Toxins such as hydrogen sulfide leached from bedrock (44)

Only about 30-50% of the fracking water is typically recovered (7,48)Naturally occurring radioactive

materials (NORM) leached from bedrock (24)

Benzene, a known carcinogen, was found in 14 of 29 wells tested in WV and PA (38)

“…the Marcellus water is the worst water on the planet" Mark Wilson, GE Water Technologies (40)

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Why is shale gas drilling exempt from the Safe Drinking Water Act ?

“If you buy a can of Coke, you get to see what the ingredients are” Amy Mall, NRDC (21)

160 tons per well (20)

Formaldehyde, Hydrochloric Acid, Ethane, Methanol and over 100 other chemicals known and unknown

Fracking Fluids

“The Energy Policy Act of 2005 exempts companies from being (required) to reveal what chemicals are in their fracturing fluids” The Christian Science Monitor (8)

“studies on chemicals in frack fluids in Colorado indicate 43% may be Endocrine Disrupting Compounds or have EDC potential ” National Park Service (6)

“It is much like asking Coca-Cola to disclose the formula of Coke” Ron Heyden , Halliburton (22)

Regulatory Lag with 10,000s of wells planned

These air pollutants may be released from natural gas flares: benzene, formaldehyde, naphthalene), acetaldehyde, acrolein, propylene, toluene, xylene, ethyl benzene and hexane (16)

Clean Air and Shale Gas (39)

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What 80% Reduction Requires

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“Gas doesn't get us there” Dave Hamilton, Director for Global Warming, Sierra Club (35)

Land and Shale Gas: 6,000 of these in New York alone? (20)

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Hickory, PA (37)

A Hydraulic Fracturing Stimulation on a Marcellus Shale Gas Well (5)

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The Shale Gas Drilling Treadmill

“Marcellus shale.. will require drilling tens of thousands of wells” The Wall Street Journal (11)

“The gas industry has not been gentle on Western landscapes …to displace coal with gas we’d need to complete 30,000 to 40,000 new wells a year for decades to come” Randy Udall, The Salt Lake Tribune (17)

“Devon has drilled 4,000 wells in the Barnett and is planning 4,000 more, at least” Devon Energy (18)

Shale gas wells decline more than 70% in the first year

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A perpetual treadmill of wells, rigs, trucks and pipelines—going on for decades

What a gas drilling treadmill really means (40)

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40 Acres and a Drill

Imagine the Environmental Impact

"... U.S. natural gas producers can increase supplies by 5% per year for at least the next decade” Testimony of Aubrey McClendon, Chesapeake Energy before House Select Committee (31)

What 5% annual growth over a decade would really mean:

•Twice the production of Texas

• Four Gulfs of Mexico

• 10 Louisianas

• Eight Alaskan pipelines

Gas industry’s claim

=

The Scale The Impact

• A never-ending treadmill of tens of thousands of wells with a 70% first-year decline rate

• Environmental impacts of untold magnitude on water, air, land and society

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+

21(45)

“Carl Pope, the Sierra Club's executive director, has traveled the country promoting natural gas's environmental benefits, sometimes alongside Aubrey McClendon, chief executive of Chesapeake Energy Corp., one of the biggest U.S. gas companies by production” WSJ, 2009

“Will the 20% of the membership that happens to live in places where drilling is happening be unhappy? I’m sure that’s true” Carl Pope, Sierra Club, WSJ, 2009

A Disconnect (4)

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What will happen when shale gas does not show up as predicted?

Unfulfilled optimism is common in the gas industry: In 1998, the American Gas Association predicted U.S. production would exceed 25 TCF in 2010. The EIA now estimates that 2010 production will only be 20 TCF -- a difference of three Oklahomas (46, 26)

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Our Staggering Bet on Shale Gas as the Source of New Supply (26)

New supply from:

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U.S. supply needed based on EIA projections

U.S. supply from domestic production and Canadian imports, assuming no new shale gas

If Shale Gas Production Does Not Deliver (26)

By 2020 LNG imports from

foreign nations would exceed the production of the

Gulf of Mexico plus Oklahoma

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EIA Forecasts of Nominal Oil Price By Year Price of Natural Gas Indexed off Oil

The Globalization of Natural Gas Prices:LNG prices will be linked to oil prices over coming decades

Our [LNG] projects are long term [and] linked to oil prices… in the coming two or three years there

will be a shortage of gas” Qatari Minister of Energy, 2010 (36)

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(47)

Rest of the World41%

RussiaIran

QatarVenezuela

Algeria59%

A Five Nation Cartel Would Control Almost 60% of the World’s Natural Gas (41)

"We are creating something similar to OPEC but with gas"

Hugo Chavez on the formation of a gas cartel (2009) (32) 27

Place Your Bet

Business News Network (April, 2010): “Chesapeake Energy Turns Tail on Natural Gas---the nation’s second-largest natural gas producer, plans to shift more of its 2010 capital spend towards oil exploration...The economics just compel you to look for oil rather than natural gas right now,” Aubrey McClendon

U.S. Natural Gas Production by 2020

But don’t go too far out on the Chesapeake Transition Bridge (14)

If Chesapeake is Correct

If EIA is Correct

If no Incremental Shale Gas

34Tcf 20

Tcf17Tcf

?

• “Natural gas generation of electricity could be expanded to meet a substantial portion of U.S. electricity demand--if there were no concerns about the behavior of world natural gas markets and prices and about further increasing CO2 emissions and U.S. import dependence." (28)

• “The results for electricity from natural gas strengthened this conclusion: … [gas] can be one of the lowest cost – or one of the highest cost - sources of electricity." (28)

• “Electricity use and gross national product [are] strongly correlated. The relationship … is so important that it should be considered in developing … energy and economic policies (to ) lower the real cost of electricity supply.” (27)

We have been warned by the best scientists in the nation

National Academy of Sciences

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“Without required environmental research and regulatory oversight, Pennsylvania would be making the same choice made in the natural gas booms of the past -- leave the environmental damages created by the current boom to the next generation to remedy” Joel Tarr, Professor of Environmental History, Carnegie Mellon University (25)

The Seductive Lure of Windfall Revenues

Marcellus cash “has become the crack cocaine of state government…. The state forest has been used to balance the state budget two years in a row…..We will see a degradation of Penn’s Woods the likes of which is unprecedented in the history of the state” John Quigley, Secretary of PA Department of Conservation and Natural Resources (10)

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Nightfall (39)

Endnotes for References1. Chairman Henry Waxman and Subcommittee Chairman Edward Markey, Feb. 18, 2010, Re: Examining the Potential Impact of Hydraulic

Fracturing, U.S. House of Representatives: Committee on Energy and Commerce, available from

http://www.ngsa.org/newsletter/pdfs/22%20-%20Natural%20Gas%20from%20Shale%20to%20Double%20w%20graphic.pdf

2. Allen Amateau, Nov. 3, 2009, “More water worries over state’s drilling safeguards,” The Villager, available from http://www.thevillager.com/villager_339/morewaterworries.html

3. J. Helm , Jan. 7, 2010, in “DEC's Marcellus Shale Gas Mining SGEIS ‘Deeply Flawed’ NY officials, Sierra Club Atlantic Chapter, environmental groups tell Governor Paterson,” PR LEAP, available from http://www.prleap.com/pr/145846/

4. Ben Casselman, Dec. 22, 2009, “Sierra Club’s Pro-Gas Dilemma,” The Wall Street Journal, page A6

5. David Soeder and William Kappel, May 21, 2009, “Water Resources and Natural Gas Production from the Marcellus Shale,” U.S. Geological Survey, available from http://pubs.usgs.gov/fs/2009/3032/

6. Rick Harris, Dec. 31, 2009, Re: Comments on the Draft Supplemental Generic Environmental Impact Statement on the Oil, Gas, and Solution Mining Regulatory Program, U.S. Department of the Interior, available from

http://www.riverkeeper.org/wp-content/uploads/2010/01/NPS-Comments-on-NYSDEC-dSGEIS-12-31-09.pdf

7. Christina Callicott, Nov. 23, 2007, Halliburton talks frac'ing with BLM" Telluride Watch, CO

8. Mark Clayton, Sept. 17, 2008, “Controversial path to possible glut of natural gas,” The Christian Science Monitor, available from

http://www.csmonitor.com/Environment/Living-Green/2008/0917/controversial-path-to-possible-glut-of-natural-gas

9. Robert Howarth, April 1, 2010, “Preliminary Assessment of the Greenhouse Gas Emissions from Natural Gas obtained by Hydraulic Fracturing,” Cornell University, available from

http://www.technologyreview.com/blog/energy/files/39646/GHG.emissions.from.Marcellus.Shale.April12010%20draft.pdf

10. Donald Gilliland, April 21, 2010, “State DCNR chief wants Marcellus monitoring,” The Patriot-News (Harrisburg), available from

Endnotes for References11. Ben Casselman, Aug. 11, 2008, “Natural-Gas Firms Seek Outlet for Growing Supplies, The Wall Street Journal, available from

http://online.wsj.com/article/SB121841402609028471.html

12. Rigzone, March 16, 2009, “Mainland Resources Reports on Gas Flow for Haynesville Shale Well, Rigzone, available from

http://www.rigzone.com/news/article.asp?a_id=74036

13. Natural Gas Supply Association, Oct. 8, 2008, “Natural Gas from Shale Could Double in Next Ten Years,” available from

http://www.ngsa.org/newsletter/pdfs/22%20-%20Natural%20Gas%20from%20Shale%20to%20Double%20w%20graphic.pdf

14. David Phillips, April 6, 2010, “Chesapeake Energy Turns on Natural Gas, Looks for Oil Instead,” BNet, available from

http://industry.bnet.com/energy/10003815/chesapeake-energy-lookin-for-oil-that-is-black-gold-texas-tea/

15. Craig Holt Segall, April 7, 2010, “Oral Comments of the Sierra Club,” EPA Science Advisory Board Meeting on Hydraulic Fracturing, available from

http://yosemite.epa.gov/sab/sabproduct.nsf/012848841789D4F8852576FC0078969D/$File/Oral+Statement+by+C+Segall+for+Sierra+Club-4-5-10+for+EEC+Apr+7-8+2010+Meeting.pdf

16. Ventura County Air Pollution control District "Gas Flaring" Ventura CA www.vcapcd.org

17. Randy Udall, Aug. 18, 2009, “Can natural gas save the world? Well, it’s better than coal,” The Salt Lake Tribune, available at http://www.sltrib.com/opinion/ci_13152405

18. Steven Mufson, Dec. 3, 2009, “An energy answer in the shale below?” The Washington Post, available from

http://www.washingtonpost.com/wp-dyn/content/article/2009/12/02/AR2009120204305.html

19. Robert Watson and Mohamed El-Ashry, Dec. 28, 2009, “A Fast, Cheap Way to Cool the Planet,” The Wall Street Journal, available from

http://online.wsj.com/article/SB10001424052748704039704574616130812043404.html

20. NYC Department of Environmental Protection, March 9, 2010, “Impact Assessment of Natural Gas Production in the New York City Water Supply Watershed" http://csis.org/files/attachments/100309_PRush_NYDEP.pdf

Endnotes for References21. David Williams, Sept. 18, 2009, “Wyo. fracking contamination case eerily similar to Colorado’s Divide Creek accident,” The Colorado

Independent, available from http://coloradoindependent.com/tag/wyoming

22. “House Bill Eyes Shale Gas Drilling,” The Observer, available from http://www.wvobserver.com/2010/03/house-bill-eyes-shale-gas-drilling/

23. Independent Oil & Gas Association of New York, “Get The Facts on Hydraulic Fracturing,” Marcellus Facts, available from

http://www.marcellusfacts.com/pdf/HydraulicFracturingQ&A.pdf

24. Susan Riha, Feb. 22, 2010, “Natural Gas Drilling: Potential Environmental and Community Impacts,” Cornell University, presented for the New York State Water Resources Institute

25. Joel Tarr, Aug. 2, 2009, “The Next Page: There Will Be Gas,” Pittsburgh Post-Gazette, available from http://www.post-gazette.com/pg/09214/987834-109.stm

26. Energy Information Administration, Dec. 2010, Annual Energy Outlook 2010 Early Release Overview, U.S. Department of Energy, available from http://www.eia.doe.gov/oiaf/aeo/index.html

27. Committee on Electricity in Economic Growth, Electricity in Economic Growth, National Academy Press: Washington D.C., 1986

28. The National Academies, America’s Energy Future: Technology and Transformation, The National Academies Press: Washington D.C., 2009

29. Robert Casey Jr., June 9, 2009, “Casey, House Members Introduce Companion Bills to Protect Drinking Water from Natural Gas Fracking,” Robert P. Casey Jr. U.S. Senator for Pennsylvania, available from

http://casey.senate.gov/newsroom/press/release/?id=3d78271c-e412-4b63-95b8-419e75ce2bb6

30. Energy Information Administration, Dec. 8, 2009, “Emissions of Greenhouse Gases Report: Methane Emissions,” U.S. Department of Energy, available from http://www.eia.doe.gov/oiaf/1605/ggrpt/methane.html#total

Endnotes for References

31. Aubrey McClendon, July 30, 2008, “Written Testimony of Aubrey K. McClendon,” U.S. House of Representatives: The Select Committee on Energy Independence and Global Warming, available from

http://www.globalwarming.house.gov/tools/2q08materials/files/0125.pdf

32. Kiraz Janicke, Sept. 9, 2009, “Venezuela’s Chavez Promotes Organisation of Gas Exporting Countries during Tour,” Venezuela Analysis, available from http://venezuelanalysis.com/news/4784

33. BP, “Responsible Development,” available from http://www.bp.com/bodycopyarticle.do?categoryId=1&contentId=7052055

34. National Energy Technology Laboratory, available from http://www.netl.doe.gov/

35. Steve Hargreaves, March 29, 2010, “Natural Gas: Fuel of the future,” CNN Money, available from http://money.cnn.com/2010/03/29/news/economy/natural_gas/index.htm

36. Reuters, March 25, 2010, “Qatar doesn’t plan to cut gas output to buoy price-,” available from http://money.cnn.com/2010/03/29/news/economy/natural_gas/index.htm

37. http://www.donnan.com/Marcellus-Gas_Hickory.htm

38. New York Water Resources Institute, 2010, “The Marcellus shale and natural gas” Cornell University

39. http://www.marcellus-shale.us/gas_flares.htm

40. The Pennsylvania Budget and Policy Center, “Responsible Growth: Protecting the Public Interest with a Natural Gas Severance Tax,” available from http://www.pennbpc.org/severance-tax

41. BP, June 2009, BP Statistical Review of World Energy June 2009, London, UK

42. Andrew Revkin and Clifford Krauss, Oct. 14, 2009, “By Degrees: Curbing Emissions by Sealing Gas Leaks,” The New York Times, available from http://www.nytimes.com/2009/10/15/business/energy-environment/15degrees.html

43. David Hill, Tracy Lombardi, and John Martin, 2004, “Fractured Shale Gas Potential in New York,” Northeastern Geology And Environmental Sciences, Vol. 26

44. Lisa Sumi, May 2008, “Shale Gas: Focus on the Marcellus Shale,” Earthworks, available from

http://www.earthworksaction.org/pubs/OGAPMarcellusShaleReport-6-12-08.pdf

45. http://blogs.reuters.com/environment/2010/02/18/goldilocks-and-the-three-fuels/

46. See Gas Daily, July 2, 1998 and aga.org/stats Studies, 1998

47. http://www.dallasnews.com/sharedcontent/dws/dn/yahoolatestnews/stories/041110dnmetbarnettshale.4044fed.html

48. US Department of Energy, Modern Shale Gas , Office of Fossil Fuel, April 2009