Sustainability Framework for Marcellus Shale Development

1. Framing Sustainability Questions for Marcellus Shale Development Diana Stares Washington & Jefferson College Center for Energy Policy & Mgmt.

2. 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

3. 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

4. Environmental Issues in Marcellus Shale Development Impacts of Development 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 • Large surface water withdrawals • Long-term effects of hydraulic fracturing • Water & soil impacts from fluids & materials handling on surface • Air emissions • Habitat impacts

5. 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

6. 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

7. 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

8. 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

9. 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.

10. 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

11. 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

12. 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

13. 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?

14. 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

15. 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