marcellus shale and hydraulic fracturing drew p. cobbs maryland petroleum council november, 2013

MARCELLUS SHALE AND

HYDRAULIC FRACTURING

Drew P. CobbsMaryland Petroleum Council

November, 2013

State Distribution of the Marcellus Shale Play

State Areal % of Marcellus

Maryland 1.09

New York 20.06

Ohio 18.19

Pennsylvania 35.35

Virginia 3.85

West Virginia 21.33

Sources: U.S. Energy Information Administration, “Review of Emerging Resources: U.S. Shale Gas and Shale Oil Plays,” July 2011.

Marcellus Shale Formation

Marcellus Shale in Maryland

Shale Gas Offsets Declines in Other U.S. Natural Gas Production Sources

Natural gas is clean burning

Most emissions Middle emissions Least emissions

Source: R.W. Beck

Tons per year perthousand households

Biomass (Wood)

Coal Natural Gas Nuclear & Renewables

Carbon Monoxide (CO) 51 5.8 1.5 0.0

Carbon Dioxide (CO2) Low 9,362 3,558 0.0

Nitrogen Oxides (NOx) 28 3.4 0.3 0.0

Particulate Matter 2.7 0.9 0.0 0.0

Volatile Organic Compounds (VOC) 5.6 0.2 0.0 0.0

Sulfur Dioxide (SO2) 2.8 5.0 0.2 0.0

Mercury 0.0 0.0001 0.0000001 0.0

Natural gas generates cleaner power.

“The Potential Economic & Fiscal Impacts of Natural Gas Production in Western Maryland ,”study issued 3/1/12 for the Maryland Petroleum Council finds that:

•Approximately 365 wells would be operating over that period and, according to the Marcellus Shale Education and Training Center, it requires approximately 420 individuals across 150 occupations to bring a single Marcellus well online.

•In 2025 – the peak year of drilling activity – 1,814 Marylanders will enjoy employment opportunities related to well drilling and maintenance, royalty payments and expanded state and local government spending.

•Western Maryland could produce $300 million annually in natural gas output in constant $2011 by the year 2025.

•The State of Maryland would collect $214 million in revenue over the course of developing the Marcellus Shale play.

•Garrett County would collect approximately $162 million and Allegany County $65 million in revenue.

•Roughly $441 million in 2011 constant dollars of total positive fiscal impact would be experienced over the course of the Western Maryland Marcellus Shale development.

• Landowner Benefits –Signing Bonuses–Lease Payments–Royalties

Adequate natural gas supply at competitive prices helps grow the U.S. economy

Lower gas prices have helped U.S. industry

Chemical and fertilizer facilities are seeing increased utilization with lower gas prices

Energy-intensive industry can be more competitive in the global market

Additional potential demand from natural gas vehicles

U.S. Industrial Demand for Natural Gas

Source: Wood Mackenzie

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2000 2005 2010 2015 2020 2025 2030

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Proper well construction provides groundwater protection

1220 L Street, NW • Washington, DC 20005-4070 • www.api.org

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Horizontal Drilling = Lower Impact


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Timeline of a WellHYDRAULIC FRACTURING3 – 5 DAYS

PLANNING12 – 18 months

EXPLORATION3-5 years

SITE & WELLCONSTRUCTION

2-3 months

PRODUCTION30 + Years


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Managing Risks Effectively

Records of the Pennsylvania Department of Environmental Protection show that from 2008 to 2010, the typical Marcellus shale gas well generated:

$14,000 in mainly reversible environmental impacts

$4 million in economic benefits

http://www.manhattan-institute.org/pdf/eper_09.pdf


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State laws are carefully tailored for unique local concerns.

•Geology

•Hydrology

•Property Rights

•Water Laws

•Communities

Former Environmental Protection Agency (EPA) Administrator: THERE IS NO “PROVEN CASE WHERE THE FRACKING PROCESS ITSELF HAS AFFECTED WATER.” --- Lisa Jackson

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Environmental Protection Agency (EPA) Administrator: “I AM NOT AWARE OF ANY DEFINITIVE DETERMINATIONS THAT WOULD CONTRADICT THOSE STATEMENTS [BY LISA JACKSON, REFERENCED ABOVE].” --- Gina McCarthy

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Former Secretary of the Interior: [HYDRAULIC FRACTURING] IS CREATING AN ENERGY REVOLUTION IN THE UNITED STATES ALONE … I WOULD SAY TO EVERYBODY THAT HYDRAULIC FRACTURING IS SAFE” --- Ken Salazar

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WHAT THEY’VE SAID ABOUT HYDRAULIC FRACTURING

WHAT THEY’VE SAID ABOUT HYDRAULIC FRACTURING

Secretary of Energy: “TO MY KNOWLEDGE, I STILL HAVE NOT SEEN ANY EVIDENCE OF FRACKING, PER SE, CONTAMINATING GROUNDWATER.” --- Ernest Moniz

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Former U.S. Secretary of Energy: “DRILLING FOR SHALE GAS CAN BE DONE SAFELY, AND AT LEAST ONE PROMINENT STUDY ABOUT THE RISKS IS NOT CREDIBLE … THIS IS SOMETHING YOU CAN DO IN A SAFE WAY.”

--- Steven Chu

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Former Secretary of State and New York Senator: Regarding an EIA report that stated the U.S. is on track to surpass Russia in domestic oil and gas production by the end of 2013. “WHAT THAT MEANS FOR VIABLE MANUFACTURING AND INDUSTRIALIZATION IN THIS COUNTRY IS ENORMOUS.” --- Hillary Clinton


The Shale Gas End Game

ENVIRONMENTAL IMPACTS

Smaller production footprints.

Lower lifecycle emissions for electricity generation

Lower lifecycle water use for electricity generation.

ECONOMY

U.S. energy security.

Domestic jobs.

Revitalize chemical and manufacturing sector

Cheaper natural gas for consumers.

For more information visitwww.api.orgwww.strongerinc.orgwww.fracfocus.org www.energyfromshale.org To Learn More:

Drilling Videohttp://www.youtube.com/watch?v=AYQcSz27Xp8&feature=relmfuFracturing Videohttp://www.youtube.com/watch?v=7ned5L04o8w

THANK YOU

marcellus shale and hydraulic fracturing drew p. cobbs maryland petroleum council november, 2013

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