Marcellus shale drilling operation

Cumulative environmental and employment impacts of the shale gas boom

Article by E. Mayfield, J. Cohon, N. Muller, I. Azevedo & A. Robinson, Nature Sustainability, Vol. 2, Pp. 1122–1131(2019)

ABSTRACT — Natural gas has become the largest fuel source for electricity generation in the United States and accounts for a third of energy production and consumption. However, the environmental and socioeconomic impacts across the supply chain and over the boom-and-bust cycle have not been comprehensively characterized.

To provide insight for long-term decision-making for energy transitions, we estimate the cumulative effects of the shale gas boom in the Appalachian basin from 2004 to 2016 on air quality, climate change and employment.

We find that air quality effects (1,200 to 4,600 deaths; US$23 billion +99%/−164%) and employment effects (469,000 job-years ±30%; US$21 billion ±30%) follow the boom-and-bust cycle, while climate impacts (US$12 billion to 94 billion) persist for generations well beyond the period of natural gas activity.

Employment effects concentrate in rural areas where production occurs. However, almost half of cumulative premature mortality due to air pollution is downwind of these areas, occurring in urban regions of the northeast.

The cumulative effects of methane and carbon dioxide emissions on global mean temperature over a 30-yr time horizon are nearly equivalent but over the long term, the cumulative climate impact is largely due to carbon dioxide.

We estimate that a tax on production of US$2 per thousand cubic feet (+172%/−76%) would compensate for cumulative climate and air quality externalities across the supply chain.


CMU study suggests taxing natural gas to offset environmental damage

Article by Paul J. Gough, Pittsburgh Business Times, December 10, 2019

PHOTO in ARTICLE: A drilling rig stands about 100 feet tall on a well pad being developed in the Utica shale play near Marietta, Ohio. From Jeff Bell | Columbus Business First

A Carnegie Mellon University study said a $2 per thousand cubic foot tax on natural gas production would help compensate for the climate and air quality impacts of drilling and hydraulic fracturing in the Appalachian basin and elsewhere.

The study, co-written by former CMU President Jared L. Cohon and Princeton University’s Erin N. Mayfield, was published in Nature Sustainability, an academic journal published by the same company that owns the globally respected journal Nature. The article, published in Nature Sustainability’s December 2019 issue, looks to reconcile what it said was the environmental and socioeconomic costs of drilling not just in the field, but through the supply chain.

The researchers found benefits and costs on both sides of the equation, including economic development and job gains, while at the same time an increased amount of deaths from air quality related to the shale gas activity. The study estimated between 1,200 and 4,600 premature deaths due to shale activity between 2004 and 2016, and about 469,000 job years in the period. Job years are defined in the study as a part-time or full-time job over a year.

The analysis projected $12 billion to $94 billion in additional climate impacts over the course of 30 years. It also found long-term impacts further away from the shale drilling areas, with what it said was half of the premature mortality happening downwind in the Northeast. The drilling activity modeled occurred in Pennsylvania, West Virginia and Ohio between 2004 and 2016.

“The cumulative effects of methane and carbon dioxide emissions on global mean temperature over a 30-year time horizon are nearly equivalent but over the long term, the cumulative climate impact is largely due to carbon dioxide,” the study said.



CHEVRON premier assets after purchase of Atlas Energy in 2012

Chevron plans to leave Appalachia, following the footsteps of other giants

From an Article of the Pittsburgh Post Gazette, December 11, 2019

California-based energy company Chevron Corp. is putting its Appalachian oil and gas business up for sale, the company reported this week.

It has about 400 employees in the unit and a regional office in Coraopolis. Chevron controls about 890,000 acres in the Marcellus and Utica shales across Pennsylvania, West Virginia and Ohio.

The Appalachian shale operations contributed to more than half of a massive impairment charge that the company revealed for the fourth quarter. That charge, which writes down the value of assets on Chevron’s books, will be between $10 billion and $11 billion, the company disclosed Tuesday.

Chevron burst onto the scene in Appalachia in 2011 with a $4.3 billion acquisition of shale gas firm Atlas Energy Inc. Two years later, it paid $17 million for a stretch of land in Moon Township where the company planned to build a new regional headquarters.

In 2014, those plans were put on indefinite hold and never materialized. The following year, the energy giant cut more than 150 positions from its Appalachian division as natural gas prices slumped.

In leaving the region, Chevron follows in the footsteps of other multinationals that tried out the Marcellus and Utica shale regions but moved on in favor of other projects around the globe.

Indian conglomerate Reliance Industries Ltd bought Pennsylvania Marcellus assets in 2010 only to sell them off for a third of the price in 2017.

Noble Energy Inc., a Texas-based firm that also has projects in West Africa and Israel, made a bet on Appalachia with its $3.4 billion joint venture with CNX Resources in 2011. Six years later, it sold its stake in the venture and left this region.

Royal Dutch Shell, the Dutch giant whose chemicals subsidiary is building a massive ethane cracker plant in Beaver County, shelled out $4.7 billion for Warrendale-based East Resources in 2010. For years now, its drilling activity in Pennsylvania has been pared down significantly after underwhelming results and asset sales.

Yet smaller oil and gas firms are instead going all in on Appalachian shales.

Southwestern Energy Co., which began as an oil and gas driller in Arkansas, sold the last of its assets there last year to focus on its Appalachian portfolio in Pennsylvania and West Virginia.

Texas-based Range Resources Corp., too, pulled back on its operations in Louisiana after its ill-fated 2016 acquisition and rededicated itself to its program in Appalachia.

As did Downtown-based EQT Corp. when its dalliance with geographic diversification resulted in a $2.3 billion impairment charge — meaning the Permian Basin assets in Texas that EQT bought in 2014 and its holdings in Kentucky’s Huron Shale were actually determined to be worth that much less than what the company had on the books.

The Marcellus Shale, in particular, has taken the mantle as the most productive natural gas play in the U.S., and one of the most cost-efficient. Even so, the current price slump is a result of all that productivity — there is too much supply and not enough demand to soak it up.

Oil and gas price slump hanging around

So, with gas coming out of the ground faster than the U.S. can use it, gas producers are rushing to export their product abroad. Those closest to export terminals — most are on the Gulf Coast — have an advantage, according to Bloomberg Intelligence. Last month, Bloomberg analyst Vincent Piazza predicted that the Haynesville Shale in Oklahoma would see a resurgence because of that dynamic.

The low price of oil and gas — both global commodities at this point — means companies are looking to other aspects of their portfolios to set them apart, and those with more options can get picky.

“Good isn’t good enough,” Chevron’s CEO Michael Wirth said in an interview on CNBC’s show Squawk Box this week, explaining the massive write-down of the company’s Appalachian assets. “The assets in the Northeastern U.S. simply don’t compete as well for our investment dollar as others do,” he said, adding, “some of our assets may work better for others.”


See also: Chevron’s $11 billion write-down could hit the entire market, CNBC, December 11, 2019


See also the court challenge for farm damages:

Legal Case of Six Counts Seeing Jury Trial ….
Fayette County Court of Common Pleas
Docket # 2176 of 2019 GD, October 4, 2019
Brent G. and Wanda Y. Broadwater v. Chevron Appalachia, LLC et al

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