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Title Page Headline

The Fracking Debate

Six new issue briefs on the impacts and implications of the shale revolution

Daniel Raimi, Alan Krupnick, and Isabel Echarte

Resources for the Future

April 25, 2018

Raimi, Krupnick, and Echarte | April 25, 2018

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About RFF

• Resources for the Future (RFF) is an independent, nonprofit

research institution in Washington, DC

• RFF’s mission is to improve environmental, energy, and

natural resource decisions through impartial economic

research and policy engagement

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Introduction

What is Fracking?

Does Fracking Contaminate Water?

Will Fracking Make Me Sick?

Does Fracking Cause Earthquakes?

Is There Any Regulation on Fracking?

Is Fracking Good or Bad for Climate Change?

Will Fracking Make the US Energy Independent?

Is Fracking Good for the Economy?

Will Fracking Spread Around the World?

Do People Living Near Fracking Love it Or Hate it?

What's Next?


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5

10

15

20

25

30

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

U.S. Natural Gas Production (trillion cubic feet per year)

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Data source: U.S. EIA. Note: Shale production available only from 1/2007

Other gas

Shale gas


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1

2

3

4

5

6

7

8

9

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1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

U.S. Crude Oil Production (million barrels per day)

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Other oil

“Tight” oil

Data source: U.S. EIA. Note: Shale production available only from 1/2007


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Fayetteville

Eagle Ford

Permian

Green

River

Denver-

Julesburg

San Juan

UintahKern County

Woodford

Hugoton Utica

Piceance

Los Angeles

Anadarko

Miss. Lime

Bakken

Barnett

Haynesville

Marcellus

Map source: Drilling Info. Map shows all directionally and horizontally drilled wells. Data not available for Alaska.

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Horizontal or

directional well


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Water supply risks

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Impacts on water supplies are rare, but important

• There are very few cases where chemicals used during

fracking have affected water supplies

• However, improper well construction can lead to methane

migration, or “stray gas”

• Methane is essentially the same thing as natural gas

• There are hundreds of cases in Pennsylvania alone

• In many cases, the impacts can be mitigated

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Methane migration, aka “stray gas”

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Impacts on water supplies are rare, but important

• There are very few cases where chemicals used during

fracking have affected water supplies

• However, improper well construction can lead to methane

migration, or “stray gas”

• Methane is essentially the same thing as natural gas

• There are hundreds of cases in Pennsylvania alone

• In many cases, the impacts can be mitigated

• Wastewater management is also a challenge

• Spills from trucks

• Spills from impoundments

• Spills from pipelines

• Earthquakes (more on that in a few minutes)

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Economic impacts

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• Leasing revenue for mineral owners

• Employment opportunities for local residents

• Varies by region due to local workforce characteristics

• Increased economic activity for local businesses

• Magnitude of these effects vary regionally, and some studies

overstate the benefits

• Research on the longer term economic impacts is mixed

In the near term, oil and gas development benefits

local economies, with less clear long term impacts

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Public health impacts

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Implications for local and national public health

Local scale

• Existing evidence is limited

• But there are known risks

• Diesel and other air emissions

• Vehicle traffic

• Stress

• Impacts likely occur within close

proximity to well sites

• More research is needed

National scale

• Natural gas has displaced coal

• This has reduced criteria pollutants

• Public health benefits are

substantial, but diffuse

Effects diverge at different scales

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Health studies face methodological shortcomings

due to data limitations

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• This literature suffers from data limitations

• We believe the studies provide useful information but overall

show the need for further research

• When looking at the results for each impact (i.e., birthweight)

across studies, the results are inconsistent

• RFF.org/oilgashealth


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New research is working to address these

shortcomings

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Local government impacts

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Most local governments have experienced net

fiscal benefits, but the effects are mixed

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Key revenues Key demands for services

Property taxes Roads

Sales taxes Water and wastewater systems

Allocation of state severance taxes Public safety

Leasing revenue Assorted staff costs

In-kind agreements

Count of local governments reporting fiscal impacts

Net negativeRoughly

neutralNet positive

Lg. Med. Sm.23

Sm. Med. Lg.

6 5 8 44 38 39

19 (12%) 23 (14%) 121 (74%)

Data source: Raimi and Newell 2018


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Induced Seismicity

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Earthquake activity has grown rapidly in the

mid-continent

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0

20

40

60

80

100

120

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthly count of Oklahoma earthquakes, 3.0M or larger

Data source: US Geological Survey


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Wastewater disposal, not

“fracking”, has been the

primary cause

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Migrationpathway

Existing fault

Faultslip Basement rock

UIC well

• All oil and gas wells produce

wastewater

• Much of it is disposed of

deep underground via

underground injection control

(UIC) wells

• More oil and gas production

has led to more wastewater

• In some places, this new

wastewater has caused

quakes

Injection zoneOver-pressured injection zone


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Few Studies Look at Above-Ground Impacts

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Source: Krupnick and Echarte (2017)

RFF.org/seismicityimpacts


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Research Assessing Policies and Future Seismicity

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Source: Hincks et al. (2018)

Recent research includes:

• Walsh and Zoback (2016)

• Langenbruch and Zoback (2016)

• Hincks et al. (2018)


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Implications for climate change

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Decreased natural gas prices have displaced coal,

substantially reducing US CO2 emissions

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0

500

1,000

1,500

2,000

2,500

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Net electricity generation by fuel (TWh)

Natural gas

Coal

All other sources

Electricity CO2 emissions(million metric tons)

Data source: U.S. EIA.


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The effects of the shale revolution on climate

change are complex and controversial

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The shale

revolution has

dramatically

increased domestic

natural gas and oil

productionMethane

emissions

Lower

natural gas

and oil

prices

Natural gas displaces coal

Natural gas displaces

nuclear and renewables

Lower prices lead to higher

energy consumption

Policies can shape each of these effects

Net

climate

impact


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Several studies have sought to aggregate each of

these effects

• Over the longer term, studies find limited decadal effects

• Reduced CO2 from coal is largely offset by increased energy

consumption and competition with low-carbon sources

• But uncertainties remain over

• Methane emissions

• Aggregate energy consumption (elasticity of demand)

• Policy

• Low cost natural gas provides a window of opportunity for

climate policy

• Whether those policies are implemented is another question

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RFF’s Shale Research Clearinghouse (SHARC)

• The Issue Briefs derived from the Raimi book and from our WHIMBY website are built on libraries of original studies.

• Our intention is to become a clearinghouse for studies of the positive and negative effects of unconventional oil and gas development

• This project has begun

• Merging our libraries

• Re-doing classifications of topics (and prioritizing which topics to take up first and to what depth)

• Taking input from a stakeholder user survey

• Next will be to curate the high priority topic reviews

• Developing the web interface

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Phases II and III

With secured funding, we can

• Expand on the literature review topics and update

• Groundwater/Surface water

• Air Quality

• National Economy

• Community-Industry interaction

• Build on two existing models to create a new tool to facilitate

community-industry interactions:

• Schlumberger’s Shale Gas Development Impact Model

• EPA’s Benefit Mapping Model (BENMAP) that links pollution

concentrations to health and other physical impacts and their

economic value

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Literature curation

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Thank you

April 25, 2018

For more, visit:

www.rff.org/thefrackingdebate

www.rff.org/whimby

Daniel Raimi Alan Krupnick Isabel Echarte

[email protected] [email protected] [email protected]

http://www.rff.org/thefrackingdebate

http://www.rff.org/whimby

mailto:[email protected]



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