Cristina Madrid-Lopez

Center for industrial Ecology, Yale University.

Shale gas

for a low carbon economy?

The limitations we have to consider

INDEX

1. Background

2. Methodology

3. Viability

Local

State

Federal

4. Preliminary conclusions

INDEX

1. Background

2. Methodology

3. Viability

Local

State

Federal

4. Preliminary conclusions

1.1. THE IANEX PROJECT

Part

icip

ato

ry V

alida

tion

2015-2016 (Yale-Pennsylvania)

EU Fracking

Scenarios

Poland

UK

Spain

2017 (UAB-EU)

Integrated Analysis of the Nexus: The case of hydraulic fracturing

US Fracking

Biophysical

Diagnosis

Water

Energy

Climate

Geology

US Fracking

Social

Diagnosis

Economy

Health

Labor

Culture

(Geo)Politics

MAGIC Project

Assessment of Complex

Issues for Governance

EU H2020

www.iaste.info

2016-2020

1.2. THE LOW CARBON ECONOMY

1.3. HYDRAULIC FRACTURING

A step of well development

Extraction of unconventional fossil fuels (shale)

igs.indiana.edu

Site Preparation

Drilling Fracturing ‘Production’ Abandonment

igs.indiana.edu

“The Shale Gas Factory” (Stephenson 2015)

TransportProcessingExtraction

1.4. ‘JUST’ A STEP OF THE GAS INDUSTRY

Producer

Gas Plant

(Storage)

Pipeline

Company

Market

Centers

Hubs

Local

Distribution

Company

End User

Power

Stations

Imports LNG

Road

Transport

(Storage)

Processing

Manufacturing*

1.5. A ‘SIMPLE’ QUESTION

• Obama’s administration has committed to cut methane emissions from the oil and gas sector to 40% - 45% below 2012 levels by 2025

• Natural gas burning has lower emission rate than oil and coal

Is (fracking-led) shale gas development a recommendable option?

Socially desirable?

Economically viable?

Environmentally feasible?

Theguardian.com

INDEX

1. Background

2. Methodology

3. Viability

Local

State

Federal

4. Preliminary conclusions

2.1. ANALYZING METABOLIC PATTERN

MuSIASEM Framework (Giampietro 1994) to integrate:

Feasibility: MFA, DPSIR, GIS, LCA

Viability: Input-Output, Agent Base Modelling

Desirability: Network Analysis, Surveys

Feasibility: Biophysical

Environmental Constraints

Viability:

Biophysical Social

Constraints

Ecosystem Integrity Society’s Integrity

Desirability:Institutional Constraints

State (s)

Oil and Gas (s-1)

US (s+1)

Households (s-1)

Employment

Shale Gas (s-2)

Ecosystem (e)

Watershed Status

0

2

4

6

Wealth

Distribution0

10

20

30

40Climate Change

2.2. BOUNDARIES OF THE SES (MUSIASEM)

Koestler (1967)

Georgescu-Roegen (1971)

Allen (1986)

Kay (1984)

Giampietro (2003)

Gas

Gas

Wages

GDP

Inve

stm

ent

Tran

sfer

s

Water

Land Use

Emissions

Social Desirability

Economic Viability

Environmental Feasibility

Output flows

Changes in the land and water bodies

Changes in the biodiversity

Contributions to domestic economy/labor market

V.2. Coverage of biophysical needs

V.3. Ability to manage economic constraints

Fossil fuel dependence

Population with primary and secondary benefits/damage

Empowerment

Institutional network complexity

Perception about the activity

2.3. LIMITATIONS TO CONSIDER

Part of the analysis Indicator Example

V.1.Contribution to domestic economy/labor market

INDEX

1. Background and objectives

2. Methodology

3. Viability

Local

State

Federal

4. Preliminary conclusions

3.1. PENNSYLVANIA

Pennsylvania (s)

Oil and Gas (s-1)

US (s+1)

Households (s-1)

Employment

Shale Gas (s-2)

Ecosystem (e)

Watershed Status

0

2

4

6

Wealth

Distribution0

10

20

30

40Climate Change

3.2. BOUNDARIES FOR THE VIABILITY

Gas

Gas

Wages

GDP

Inve

stm

ent

Tran

sfer

s

Water

Land Use

Emissions

0

500

1000

1500

2000

2500

3000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Allegheny County Pennsylvania Washington County

3.3. LOCAL VIABILITY

V.1. Contribution to domestic economy/labor market

Wages in studied counties above the average

Economic labor productivity (ELP) increasing

Weekly wage in gas industry 2005-2014

0

10

20

30

40

50

60

70

80

90

0

10

20

30

40

50

60

70

80

90

2005 2014

ELP

($/h

)

Evolution of ELP ($/h) of Natural Gas Sector in Pennsylvania

Paint

PipesHandbags

3.4. STATE VIABILITY

V.2. Coverage of biophysical needs

Increasing number of wells

0

200000

400000

600000

800000

1000000

1200000

1400000

0

200

400

600

800

1000

1200

1400

6/1/2010

8/1/2010

10

/1/2010

12

/1/2010

2/1/2011

4/1/2011

6/1/2011

8/1/2011

10

/1/2011

12

/1/2011

2/1/2012

4/1/2012

6/1/2012

8/1/2012

10

/1/2012

12

/1/2012

2/1/2013

4/1/2013

6/1/2013

8/1/2013

10

/1/2013

12

/1/2013

2/1/2014

4/1/2014

6/1/2014

8/1/2014

10

/1/2014

12

/1/2014

Well production curve Mmcf

0

200000

400000

600000

800000

1000000

1200000

1400000

0

200

400

600

800

1000

1200

1400

6/1/2010

8/1/2010

10

/1/2010

12

/1/2010

2/1/2011

4/1/2011

6/1/2011

8/1/2011

10

/1/2011

12

/1/2011

2/1/2012

4/1/2012

6/1/2012

8/1/2012

10

/1/2012

12

/1/2012

2/1/2013

4/1/2013

6/1/2013

8/1/2013

10

/1/2013

12

/1/2013

2/1/2014

4/1/2014

6/1/2014

8/1/2014

10

/1/2014

12

/1/2014

Well production curve Mmcf

3.5. STATE VIABILITY

V.2. Coverage of biophysical needs

Residential gas consumption is decreasing

Increasing exports to densely populated areas

0

50

100

150

200

250

300

350

20

14

20

10

20

06

20

02

19

98

19

94

19

90

19

86

19

82

19

78

19

74

19

70

Residential Natural Gas Use (bcf)

0

500

1000

1500

2000

2500

3000

3500

4000

19

89

19

91

19

93

19

95

19

97

19

99

20

01

20

03

20

05

20

07

20

09

20

11

20

13

Natural Gas Deliveries from Pennsylvania (bcf)

NY US RoW

3.6. US VIABILITY – DESIRABILITY LINK

V.2. Coverage of biophysical needs

Higher wages not higher energy users

0 10 20 30 40 50

UT

WI

PA

HI

ND

NH

IL

VA

RI

CO

MN

MD

AK

NJ

CA

WA

NY

CT

MA

DC

ELP $/h

0.00 50.00 100.00 150.00

AR

MS

MT

WV

AL

KS

KY

OK

IN

SD

NE

TX

IA

ND

AK

LA

WY

EMR MJ/h

3.7. US VIABILITY – DESIRABILITY LINK

V.2. Coverage of biophysical needs

NIMBY effect

States with Ban or Moratoria

insideclimatenews.org

resourcefulearth.org/ yesmagazine.org

3.8. US VIABILITY – DESIRABILITY LINK

V.3. Ability to manage economic constraints

Lowering prices

0

500

1000

1500

2000

2500

3000

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

1/07

5/07

9/07

1/08

5/08

9/08

1/09

5/09

9/09

1/10

5/10

9/10

1/11

5/11

9/11

1/12

5/12

9/12

1/13

5/13

9/13

1/14

5/14

9/14

1/15

5/15

US Gas Production (bcf, right) vs Prices (Left, $ per 10^3 cf)

US NG Gross W US NG Gross W-Shale US Welhead NG Price

US LNG Import Price US Pipeline Import Price US Electric NG Price

US Commercial NG Price

INDEX

1. Background and objectives

2. Methodology

3. Viability

Local

State

Federal

4. Preliminary conclusions

Thermodynamical challenge

4.1 CONCLUSIONS

Thermodynamical challenge

4.1 CONCLUSIONS

Locally: Independent from Low Carbon Strategy

No previous biophysical constraints

Some counties did have issues employment constraints

Mana for Planners

Workers coming from other states

State: Viable due to the increasing investment from Federal

Contribution to good image of the state (Energy Heroes)

Improvement of wage average (Republicans vs. Democrats)

Important activity to maintain viability of US

Geopolitic Power and influence in global prices

Independence from external marketsmarkets

4.2 CONCLUSIONS VIABILITY

Shale gas

for a low carbon economy?

The limitations we have to consider

cristina.madridlopez@yale.edu

Main constraints in data availability and processing

Programming

Increasing Trust

Using hours connect scales

Helps define better the structure of the system than $

$, energy define the activity of the system, not its structure

Validation needed

Results

Indicators

4.3 FIRST CONCLUSIONS FRAMEWORK

WITH STRONG ECONOMIC IMPLICATIONS

psehealthyenergy.org

Highly depends on country and world prices of fossil fuels

USACANADA

Social Desirability

(W&J, NGO)

Economic Viability

(MCOR, DLI)

Environmental Feasibility

(DEP)

Output flows

Changes in the land and water bodies

Changes in the biodiversity

Contributions to domestic economy/labor market

V.2. Coverage of biophysical needs

V.3. Ability to manage economic constraints

V.4. Fossil fuel dependence

Population with primary and secondary benefits/damage

Empowerment

Institutional network complexity

D.4.Perception about the activity

NEXT STEPS

Part of the analysis Indicator Example

V.1.Contribution to domestic economy/labor market

Is (fracking-led) shale gas development a recommendable option?

Build Scenarios in the EU

Drilling/ Fracking Support% Not at all/

very little

% Quite a bit/

Very much

Support shale drilling 11 55

Support use of “hydraulic fracturing” 16 48

Support use of “fracking” 20 43

Understand what “hydraulic fracturing” entails 26 55

Understand what “fracking” entails 22 50

Believe support (shale drilling) influenced by political party 10 66

Shale drilling improving county economy 2 72

Shale drilling harmful to the environment 37 23

Problem Definition and Issue Contraction in Western Pennsylvania Fracking (Fifer & O’Neill, 2015)

D.4-PERCEPTION