Framing Sustainability Questions for Marcellus Shale Development

Diana StaresWashington & Jefferson College

Center for Energy Policy & Mgmt.

Success of Natural Resource Development Depends on Context• Much natural resource development has

occurred in Boom & Bust cycles• Has often resulted in long term negative

impacts upon communities• Provides framework for evaluating

sustainability• Consider environmental, public health, social and economic impacts

Environmental Experience in Boom & Bust Scenario

• Many B&B experiences have occurred with little or no regulation

• External costs never addressed• Communities often left with scarred

landscape, contaminated air & water, industrial infrastructure left behind

• Impairs new economic development• Unhealthy environment

Environmental Issues in Marcellus Shale Development

Impacts of Development • Large surface water

withdrawals• Long-term effects of

hydraulic fracturing• Water & soil impacts from

fluids & materials handling on surface

• Air emissions• Habitat impacts

Impacts of NG Usage• Use as a transportation fuel,

instead of diesel and gasoline

• Use for power generation, displacing coal

• Can change our environmental/carbon footprint

Public Health Experience in Boom & Bust Scenario

• Poor health outcomes often plague residents of Boom & Bust communities

• Exposed to air and water contamination• Unhealthy lifestyles• Limited access to health care facilities

Public Health Issues in Marcellus Shale Development

• Exposure to contaminants in air and water • Effects of stress (experienced by residents

exposed to noise, disruption, feelings of helplessness)

• Mental health impacts• Lack of adequate health care facilities in

certain locations

Social Experiences in Boom & Bust Scenario

• Pressures from absorbing large numbers of new workers into a community:– Housing shortages– Increased demand for social services– Increased demand for health care services – Overcrowding in schools

Other Social Issues

• Infrastructure – damage to existing infrastructure and tendency to build additional, often unneeded and financially unsupportable, infrastructure in response to new residents – homes, roads, shopping malls

Social Issues in Marcellus Shale Development

• Housing shortages • Increased demand for social services• Increased demand for health care services • Damage to existing roads• Wealth inequalities – which can be expressed

in conflicts between residents who support the development and those who

oppose it.

Economic Issues in B & B Scenario• Crowding-Out Effect – pulls human & physical capital

from other industries; restricts economic diversity• Influx of Outside Skilled Labor – creates economic

leakages and benefits go elsewhere• Localized Inflation – increased demand for goods and

services makes them too expensive for long-term residents (e.g. housing)

• Infrastructural Overshoots – homes, roads, shopping malls built that are notlater needed and cannot be financially supported

Economic Issues in Marcellus Shale Development

• Measurable economic benefits generated:– Employment– Wealth generation– Generation of public funds, including Act 13 Fees

• Other potential economic benefits– Decrease in petroleum imports– Growth in manufacturing base

Economic Challenges • Assuring economic benefits inure to benefit of

communities/PA:– Local/state residents get jobs– Money is spent in communities/PA

• Assuring external costs are addressed• Fully balancing costs & benefits• Promoting economic diversification

Issues to Achieving Sustainability

• 1. How to assure communities achieve sustainability during and after natural resource development?

• 2. How to get the economics right?• 3. How to use the development as a bridge to

a comprehensive energy policy?

Community Sustainability

• Avoid long term infrastructure commitments• Protect community health and environment• Assure residents are trained for employment• Use public funds designated to address

impacts effectively• Evaluate whether communities are best

situated to address impacts• Diversify economy

Economic Sustainability

• Assure economic benefits that are generated flow to PA

• Assure external costs are addressed during development

• Allocate appropriate portion of public funds to diversify and expand economy