Unconventional Natural Gas

1
Unconventional Natural Gas

• Hayley Dutka
• Colleen OCallaghan
• Cord Pennell

2
REVIEW

• Unconventional natural gas is gas that is coaxed
  from rock (shale, tight sandstone) or sources
  gt15,000' feet below the earth's surface.
• Our local form of natural gas is Marcellus shale,
  which is providing a significant amount of
  natural gas that is being shipped to various
  parts of the country to power electrical plants,
  heat homes, or be used by various industries.

3
REVIEW

• It is a cleaner domestic alternative to other
  fuels like coal and oil.
• It is a fossil fuel, and does create some
  greenhouse gas emissions.

4
More about Marcellus Shale

• Underlies an area of 95,000 square miles from
  southern New York across Pennsylvania, and into
  western Maryland, West Virginia and eastern Ohio.
  
• It is wedge-shaped as it is thicker in the east
  and thins to the west.
• The thicker sections are composed of sandstone,
  siltstone, and shale while the thinner sections
  consist of finer grained organic rich black shale
  interblended with organic lean gray shale.

5
Diagram
6
Economic Matters

• factors that affect shale gas production
• day-to-day production costs
• the costs of leasing land
• the productivity of the wells drilled
• and the mix of natural gas produced

7
Economic Matters

• Expected future revenues depend on how much a
  typical well is likely to produce over its
  lifetime and future prices.
• For example, wells that produce crude oil as well
  tend to be more profitable than wells producing
  just natural gas

8
Economics of Different Types

• Recent studies have estimated the total economic
  impacts of the development and exploration in the
  Haynesville, Barnett, Fayetteville and Marcellus
  shales.
• Loren C. Scott and Associates estimated that the
  Haynesville Shale extraction activities in
  Louisiana generated approximately 10.6 billion
  in new business sales in 2009.

9
Job Market

• Barnett Shale in the Fort Worth, Texas area in
  2008 generated 111,131 permanent jobs.
• There have also been employment due to Marcellus
  Shale development in Pennsylvania and West
  Virginia.
• Considine concluded that this development created
  over 57,000 jobs in Pennsylvania and West
  Virginia in 2009.

10
Job Market

• Considine also estimated the economic impact of
  Marcellus Shale development in New York,
  Pennsylvania, and West Virginia in 2020.
• His analysis shows a total employment impact in
  2020 at between 101,000 and 283,000 jobs.

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Data
12
International Matters

• U.S. oil and gas production is on the rise due to
  the remarkable surge in unconventional oil and
  gas development.
• By the end of 2013, the U.S. is likely to become
  the worlds top producer of crude oil and natural
  gas.
• This means that the U.S. is producing more
  hydrocarbons than Russia and Saudi Arabia.

13
International Matters

• In 2010, unconventional gas production reached
  around 15 of global gas production.
• Most of this comes from North America.
• The output of shale gas increased by a factor of
  11 over the last decade, just under one-third of
  total unconventional gas production in 2010.

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International Matters

• Soaring unconventional gas production led to a
  drop in import of Liquid Natural Gas (LNG)
  requirements and revised expectations in the
  United States has had a significant impact on
  global gas demand.
• In 2008, it was widely viewed that the import of
  LNG in the U.S. was likely to increase in the
  coming decades.

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International Matters

• This led to what is called a gas glut where
  there was more gas on the markets than was needed
  and gas spot prices in the U.S. and in Europe
  consequently dropped.
• Since 2010, global demand has recovered, but LNG
  imports have remained low in the U.S. due to
  growth in cheap domestic gas production.
• Because of this, the U.S. is no longer importing
  from the LNG market, but considering exporting
  LNG from places like Texas.

16
International Matters

• Although many countries are years behind the
  U.S., some have made great efforts in exploring
  their own unconventional gas sources.
• Australia has good Coal Bed Methane (CBM)
  potential, but is most likely to success in
  projects focusing on LNG from CBM.
• China, India, and Indonesia have produced small
  amounts of unconventional gas and are looking at
  ways to increase their respective volumes.
• Countries like Argentina, Algeria, and Mexico may
  also have large shale gas potential.

17
UNG and the Environment

• The Department of Environmental Protection
  (DEP), Office of Oil and Gas Management regulates
  the safe
• exploration, development and recovery of
  Marcellus Shale natural gas reservoirs in a
  manner that will protect the
• commonwealths natural resources and the
  environment.
• Commonwealth of Pennsylvania
• Department of Environmental Protection
• www.depweb.state.pa.us

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Possible Pollution

• The extraction and use of shale gas can affect
  the environment through
• the leaking of extraction chemicals and waste
  into water supplies
• the leaking of greenhouse gases during extraction
  
• the pollution caused by the improper processing
  of natural gas

19
Data

• Several studies show a wide range of leakage
  rates
• from less than 1 of total production to nearly
  8.
• Using data from the EPAs most recent Greenhouse
  Gas Inventory yields a methane leakage rate of
  about 1.4
• down from 2.3 from the EPAs previous
  Inventory.

20
Interesting Alternative

• Besides using water and chemicals however, it is
  also possible to frack shale gas with only
  liquified propane gas. This reduces the
  environmental degradation considerably. The
  method was invented by GasFrac, of Alberta,
  Canada.

21
Habitat Fragmentation

• Where coal exploration requires altering
  landscapes far beyond the area where the coal is,
  aboveground natural gas equipment takes up just
  one percent of the total surface land area from
  where gas will be extracted.

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A Quick Look
Fossil Fuel Emission Levels - Pounds per Billion Btu of Energy Input Fossil Fuel Emission Levels - Pounds per Billion Btu of Energy Input Fossil Fuel Emission Levels - Pounds per Billion Btu of Energy Input Fossil Fuel Emission Levels - Pounds per Billion Btu of Energy Input
Pollutant Natural Gas Oil Coal
Carbon Dioxide 117,000 164,000 208,000
Carbon Monoxide 40 33 208
Nitrogen Oxides 92 448 457
Sulfur Dioxide 1 1,122 2,591
Particulates 7 84 2,744
Mercury 0.000 0.007 0.016
Source EIA - Natural Gas Issues and Trends 1998 Source EIA - Natural Gas Issues and Trends 1998 Source EIA - Natural Gas Issues and Trends 1998 Source EIA - Natural Gas Issues and Trends 1998
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Effects on WaterThe Hydraulic Fracturing Water
Cycle
24
Another View
25
In the Community

• http//www.alternet.org/fracking/us-sues-exxon-fra
  cker-pennsylvania-over-polluted-drinking-water

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Videos

• https//www.youtube.com/watch?featureplayer_embed
  dedvdZe1AeH0Qz8
• https//www.youtube.com/watch?vnDjCsAlgSKcfeatur
  eplayer_embedded

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Weighing the Options

• PROS

• CONS

• Abundant fracking gas stabilizes energy prices
•   Availability of gas improves energy security
•  Gas, when replacing coal, improves environmental
  performance
• Wealth creation and growth due to selling
  drilling rights
• Industry growth through access to convenient and
  cost-efficient fuel
• Stimulates jobs economy
• Fracking gas gives more options to balance a
  variable, renewable-based electricity system.

• Creates minor earthquakes (2 on the Richter
  scale)
• Possible future earthquakes with structural
  damage to buildings
• Methane is a potent greenhouse gas, contributing
  the global warming
• Low-cost gas stops efforts on energy efficiency
• Fracking uses vast amounts of water and acids
• Risk of contaminating water supplies
•  Water needs to be cleaned

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Works Cited

• County oil and gas leasing just goes on on,
  The Athens (OH) News, December 15, 2011.
• http//codes.ohio.gov/orc/5749.
• World Energy Council, Survey of Energy
  Resources Focus on Shale Gas, 2010, page 14.
• http//www.worldenergy.org/documents/shalegasrepor
  t.pdf
• Chesapeake Energy, 2010 Annual Report, page
  4.?http//phx.corporate- ir.net/External.File?item
  UGFyZW50SUQ9OTEzODB8Q2hpbGRJRD0tMXxUeXBlPTMt1
• P. Kennedy, A Guide to Econometrics, 6th Ed.,
  (Malden, MA Blackwell Publishing 2009), pp.
  173-76.
• U.S. Energy Information Administration, Natural
  Gas Annual, 2011.
• http//www.iea.org/aboutus/faqs/gas/
• http//www.theguardian.com/environment/2013/oct/11
  /fracking-us-climate-credibility-shale-gas